Contribution of Peter F Drucker

Contribution of Peter F Drucker

1. Contribution of Peter F Drucker
By
Dr.R.Sridevi
AssistantProfessor
DepartmentofCommerce with
ProfessionalAccounting
SriRamakrishnaCollegeofArtsand
Science
Coimbatore

2. Who is Peter F. Drucker?
PeterFerdinandDrucker(1090-2005)
wasanAustrian-born,American
managementthinker,professor,and
author.
HealsospentpartofhislifeinEngland
andattendedalecturebyJohn
MaynardKeynes.Afterwardshesaid,
“IsuddenlyrealizedthatKeynesand
allthebrillianteconomicstudentsin
theroomwereinterestedinthe
behaviourofcommoditieswhileIwas
interestedinthebehaviourofpeople.”
In1954,helaunchedoneofhismost
illustriousbookstilldate:ThePractice

3. ofManagement.Whilehewasworking
onthisbook,herealisedhewaslaying
downthefoundationsofanew
discipline.Thisbookledtopeople
hailinghimasthe‘fatherof
management’.
Druckerhadadecoratedcareerand
wasawardedwithnumerousawards
andhonours.Someoftheseare
mentionedbelow:
. Godkin Lecturer at Harvard
University
. Presidential Medal of Freedom .
Honorary Member of the National
Academy of Public Administration

4. Drucker’s contributions
management:
to
Natureofmanagement:
Drucker opposed bureaucratic
managementandwasinfavourof
creativemanagement.Accordingto
him,theaimofmanagementshouldbe
toinnovate.Thiscouldbedoneinthe
formofcombiningoldandnewideas,
developingnewideas,orencouraging
otherstoinnovate.

5. Management functions:
AccordingtoDrucker,managementis
thekeyorganofanyorganisation.In
hisopinion,managementisperformed
throughaseriesoftasks.Amanager
hastoperformseveralfunctionssuch
assettingof
objectives,increasingproductivity,
organisingandmanagingsocial
impactsandresponsibilities,and
motivatingemployees.Druckergave
importancetotheobjectivefunction
andspecifiedthedivisionswhereclear
objectiveisnecessary.Theseare
innovation,productivity,market
standing,financialresources,
profitability,managerialperformance
anddevelopment,employee

6. performance,
responsibility.
and social
Organisationstructure:
AccordingtoDrucker,therearethree
characteristicsofaneffective
organisationstructureasexplained
below:
.Theinstitutionmustbestructuredto
achievemaximumperformance;
.Itshouldcontainleastpossible
numberofmanageriallevels;
.Itmustberesponsibleforthetesting
andtrainingoffuturemanagers.

7. Therearethreeaspectsinorganising
thatareundermentioned:
.Activityanalysisexplainsthework
thathastobedone,whatkindof
workneedstobedone,andwhat
importanceneedstobegiventothe
work.
.Decisionanalysisdeterminesor
decidesatwhichleveladecision
canbemade.
.Relationanalysisassistsindefining
theorganisationalstructure.

8. Federalism:
Druckerisinfavouroftheconceptof
federalism.Itreferstocentralised
controlinadecentralisedstructure.A
decentralisedstructurecreatesanew
organisationalstandard.Itissimilarto
therelationshipbetweenacentraland
stategovernment.Federalismtrumps
othermethodsoforganisinginthe
followingways:
.Itallowsthetopmanagementto
focusontheimportantfunctions;
.Itdefinestherolesand
responsibilitiesoftheemployees;
.Itsetsabenchmarktocalculatethe
successandefficiencyofthe
employees.

9. Management by objectives (MBO):
Thisisconsideredtobeoneofthe
mostimportantcontributionsmadeby
Druckertothefieldofmanagement.
Managementbyobjectives(MBO)isa
management approach where
equilibriumisrequiredtobeachieved
betweentheobjectivesofemployees
andtheobjectivesofanorganisation.
Therearecertainconditionsthatmust
bemettomakeMBOmanagementa
success.Takealookatthese
conditionshere:
.Theobjectivesaresetafter
discussionsbetweenthemanagers
andemployees;
.Thesetobjectivesarequantitative
andqualitativeinnature;

10. .Dailyfeedbackmustbegiventothe
employeeswithregardstotheir
performance;
.Employeeswithhighperformance
mustberewarded;
.Theguidingprincipleshouldbe
growthanddevelopment.
AccordingtoPeterDrucker,
managementbyobjectivescanbe
employedbyfollowingfivestepsas
explainedbelow:
Defineorganizationalobjectives:
Settingorganisationalobjectivesisthe
firststepininitiatingmanagementby
objectives.Theseobjectivesshouldbe
inlinewiththe

11. organisation’svisionandmission
statement.
Informtheemployeesaboutthe
organizational
objectives:AccordingtoMBO,the
objectivesmustbeinformedtothe
employeesatalllevels.Thisenables
theemployeestounderstandtheir
rolesandresponsibilities.
Communicationisanotherimportant
aspectinthisstep.Highperforming
employeesshouldbegivenpositive
feedback,whichisreinforcedinthe
formofrewards.

12. Involve the employees in
determiningtheobjectives:
Involvingtheemployeesinthe
decision-makingprocesshelpsthemin
understandingwhycertainthingsare
expectedofthem.Thisincreasesthe
commitmentandthemotivationof
employees.
Monitoringtheobjectives:The
objectivesneedtobemeasuredona
regularbasistoensurethattheworkis
beingdonekeepingtheobjectivesin
mind.Thedetectionofproblemsmust
bedoneinadvancesothatthe
problemcouldbepreventedoreasily
sorted.InMBOmanagement,each
objectiveshassub-objectivesandso

13. on.Themanagersmustmotivateand
encouragetheemployeestocomplete
thesub-objectives.
EvaluationandFeedback:Thisisan
importantaspectofmanagementby
objectives. A comprehensive
evaluationsystemmustbeinplace.
Employeesmustbegivenhonest
feedback,andhighperformanceneeds
toberewarded.
OrganisationalChanges:
AccordingtoPeterF.Drucker,swift
technologicaldevelopmentwillresultin
speedychangesinthesociety.He
expressesconcernabouttheeffectof

14. theserapidchangesonhumanlife.He
saysthatthesechangescanbe
counteractedbydevelopingdynamic
organisationsthatareadeptat
absorbingchange.
Theaforementionedcontributionsare
alsoconsideredtobetheprinciplesof
managementasdescribedbyDrucker.
Peter Drucker’s management
principlesareextremelyimportantin
today’stime.Hence,histeachingsare
apartofthecurriculumatToronto
SchoolofManagement(TSoM).

15. Thank You