Peter Drucker and His Role in Modern Management

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Table of Contents

Introduction
Thesis Statement
Discussion
Summary
Conclusion
Works Cited

Introduction

There is no doubt that Peter Drucker is the guru of management. And rightly so; his theories, experience and knowledge of management that he acquired throughout his life, especially while working at General Electric have truly transformed the way organizations were previously being run in the early 20^th century (Schlender, 1998). At the heart of the 35 or so books that he has written, lie extremely valuable concepts of management. His work started with an analysis of corporate structure in General Motors that led to his analysis and discussion of the implications of decentralized decision making and long-term strategy via management by objectives (MBO) (Boudreaux, 2005). This was not the end of his contribution to management; in 1950, Peter Drucker wrote several more books (such as The Practice of Management) and articles that proved at least equally fruitful to his previous work. This literature provided significant details to the concept of what Drucker calls the knowledge worker and its role in the professional environment. Quite simply, Drucker’s work recognizes and emphasizes the role and importance of managers in business organizations. While it is extremely difficult to incorporate all of management theory and apply it to the Electronics Management environment, the author argues that three areas of management are the most relevant and should be addressed by electronic co-operatives: the importance of the knowledge worker, the role of boards and managers as well as organizational renewal and self-development. Together, these concepts have the power of determining the competitiveness and performance of electronic co-operatives. Also, central to this discussion of these concepts of management is the understanding of Peter Drucker’s definition of management. It is within this context that all the implications of management theory will be analyzed.

Thesis Statement

Every organization should be a knowledge organization where knowledge, science and the ability to organize and analyze information are its central drivers.

Discussion

Before conducting any analysis of management theory and its implications on electronics management, it is important to discuss the context within which management theory was established. Till the middle of the 20^th century, a rather myopic view of management existed that was known as scientific management (Boudreaux, 2005; Daft, 2000). Frederick Taylor proposed that supervisors should break down complex tasks into smaller routine tasks that would be easy for unskilled workers to follow. These management practices followed from the command-and-control activities that existed in the then most visible organizations i.e. the government, the military and church. All directions and information flow were downwards and only from the top. In other words, the employees had no direct contribution to organization affairs rather than simply doing as they were told.

Peter Drucker’s approach, however, was completely opposite to the scientific management model. This approach meant that there was in fact little use of command and control style management practices for both large businesses and not-for-profit organizations. The employees that these organizations required were not unskilled workers with an overall perspective of the organization and its strategy. The task of management, therefore, “is to make people capable of joint performance, to make their strengths effective and weaknesses irrelevant.” (Drucker, quoted by Bourdeaux, 2005). In other words, the fundamental role of the manager is to get work done through others and not just through a few others, but getting many people together to jointly perform organizational goals. As mentioned earlier, this definition is central to understanding any management concepts as every concept is somehow related to two main areas of focus in this definition i.e. joint performance and building on strengths. It will be shown that the three core concepts mentioned in the initial argument, the importance of knowledge workers, the role of boards and managers and organizational renewal and self-development are all based on addressing these two areas i.e. enhancing or maintaining joint performance and building individual strengths.

Peter Drucker clearly discussed the impact and importance of the information revolution on the way businesses would function in the future. He predicted that the overall economy will ideally transform into “a knowledge economy, in which knowledge, science and ability to organize and analyze information are the central drivers. Scientific innovation will take precedence and transform the nature of business itself thereby also creating knowledge workers” (Drucker, 2000). These knowledge workers must focus not on efficiency but on effectiveness i.e. they must on focus on doing the right things. Knowledge seeking and learning must be embraced as a central tenet vital for their functioning in organizations. Furthermore, they must actively strive to understand the nature of business, changing customer expectations, the impact of new technology and competitors’ roles as well. This has serious implications for the electric co-operatives as well. Employees in electronic co-operatives are actually knowledge workers. The changing nature of the industry is such that the older electromagnetically controlled grid is being transformed into an electronically controlled smart grid. Linemen have considerably increased use of computers as a part of their job that involves digitized mapping and system automation, a process that Drucker calls ‘routinization’ (Drucker, 1999). This shows the impact that technology has on the continuously evolving role of the knowledge worker; one that organizations must embrace if they are to progress. Secondly, employee interaction with consumers is also expected to transform the traditional role of the employee. It involves understanding the perspective of the consumer and providing information or services based on the needs of the consumers. This effectively requires that employees must actively seek knowledge; they can not be truly i.e. do things the right way unless there is an initiative for knowledge-seeking by both the organization and the employee. At a time when energy costs are extremely high, it is also the consumer’s duty to ensure that there is little wastage of energy. Consumers must be made to understand the difference energy savers can make in conserving energy. And this is where the role of the knowledge worker becomes increasingly important. It becomes the duty of the employee or knowledge worker to communicate this information and share their knowledge on vital issues such as energy saving.

Similarly, the role of boards and managers must be clearly understood by organizations as well. Drucker argues that boards must actively be a part of the activities of the organization but only to a certain extent. When it comes to strategic decision-making, the manager or the chief executive must take the initiative and ensure that the course of action he or she believes to be true should be followed. This is supported by the argument that it is the manager who has a thorough understanding and knowledge of the organization’s operations compared to directors that remain partially involved in the operations business. However, the role of directors is also important, especially in two areas i.e. bringing power supply contract decisions up for board discussion in a simple language (contract decisions remain an important issue for electronic co-operatives). Also, directors must assume the responsibility of incorporating new members to the board whose contribution will be of great value to the success of the organization.

Lastly, the focus of electronic co-operatives should be on the self-development of individuals. It is here that we refer back to the definition of management set out at the beginning of this paper. The focus of any organization should in fact, not be on the personality of employees and their weaknesses rather it is the work of the employees that should be valued i.e. goal accomplishment. Drucker argues that personality does not matter that much compared to the positive results employees bring to the organization (Bourdeaux, 2005). Also, feedback procedures that focus too much on employee weaknesses are completely missing the point. The idea to be embraced is that self-development and organizational renewal can only be achieved when organizations focus on the strengths of their employees and further build upon these as well. With this perspective, organizations can ensure that their employees can truly be effective rather than just being efficient.

Summary

Drucker’s ideology was completely different from the ones we find in other schools of management. The concept of work breakdown and division and specialization of labor was being considered when Drucker proposed that a ‘man is a complex being’. There was no need to focus on leadership styles or organizational structures. Rather the focus should be on the knowledge, science and ability of an employee to organize and analyze information and work to achieve organizational goals. Acquiring knowledge should be a routine in the workplace while changing oneself towards technology should be integrated into the routine. The top-level managers should realize this and give opportunities to the lower staff to develop themselves with respect to this change.

Conclusion

Three main concepts that are vital to the performance of electronic co-operatives have been discussed: the importance of knowledge workers, the role of directors and managers and organizational renewal and self-development. Although these concepts can widely be applied to other areas of management and industries as well, they are particularly important for electronic co-operatives because of the continuously changing trends in technology, consumer attitudes and perception and competitive firms. Therefore, it is essential that electronic co-operatives understand and implement these concepts to achieve organizational goals and their long-term strategies.

Drucker instilled these ideas when nobody was prepared for a change and adopting a complicated and illogical framework (for that time) seemed to be a waste of time and resources. However, soon managers started to realize the importance of two things. One was the flexibility that needs to be given to the employees and the other was the involvement of technology in routine work. Thus Drucker’s efforts to bring a rethinking process were finally integrated into organizations and even today these concepts are alive, with the proof that employees are being called intellectual assets while technology is the business driver.

Works Cited

Boudreaux, G. (2005). Peter Drucker’s Continuing Relevance for Electric Cooperatives. Management Quarterly, 46 (4), p18-32, 15.

Daft, R., Marcic, D. (2004). Understanding Management. Vanderbilt University. pp. 608.

Drucker, P. (2000). Knowledge Work. Executive Excellence., pp. 11-12.

Drucker, P. (1999). Beyond the Information Revolution. Atlantic Monthly, 284 (4), pp. 47-57.

Schlender, B. (1998). Peter Drucker Takes the Long View The original management guru shares his vision of the future with FORTUNE’s Brent Schlender.

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