Father of Modern Management

A Peter Drucker is one of the most important management thinkers of the past century. The publications of about 40 books and thousands of articles demonstrated his intel-lectual excellence in the field. He devoted himself to the mission to make the world understand how essential management is. ‘Management is the organ of institutions – the organ that converts a mob into an organisation, and human efforts into performance.’ Did he win? The scope of his influence was very large. Wherever people grapple with tricky management problems, from big organisations to small ones, from the public sector to the private, and increasingly in the voluntary sector, you can find Drucker’s fingerprints.

B His first two books – The End of Economic Man (1939) and The Future of Industrial Man (1942) – received praise from readers, including Winston Churchill, but they annoyed academic critics for the wide range over so many different subjects. Nevertheless, the second of these books grabbed attention with its strong view that companies had a social dimension as well as an economic purpose. His third book, Concept of the Corporation, became an instant bestseller and has remained in print ever since.

C The two most interesting arguments in Concept of the Corporation practically were tan-gential to the decentralisation in his time. They ran through his work. The first argument placed emphasis on ‘empowering’ workers. Drucker suggested companies not treating workers as costs but rather as resources. He harshly criticised the assembly-line pro-duction system that dominated the manufacturing industry at that time – partly because the speed of assembly lines was incredibly low and partly because individual workers could not get involved in any creative tasks. The second one was related to the rise of knowledge workers. Drucker argued that the world was moving from an ‘economy of goods’ to an ‘economy of knowledge’ – and from a society dominated by an industrial proletariat to one dominated by brain workers. He insisted that this had profound impli-cations for both managers and politicians. The conventional practice of treating workers like gears in a giant machine should be abandoned, and workers needed to be treated as brain workers. In return, politicians had to understand that knowledge, and hence education, was the only most important resource for all advanced societies. Drucker also believed that knowledge workers themselves got influenced by this economy. They had to come to terms with the fact that they were neither ‘bosses’ nor ‘workers’, but something in between: entrepreneurs who had responsibility for developing their most important resource, brainpower, and who also needed to take more control of their own careers, including their pension plans.

D However, there was also a hard side to his works. Drucker was in charge of developing one of the rational school of management’s most successful products – ‘management by objectives’. In one of his most substantial works, The Practice of Management (1954), he stressed the importance of managers and corporations setting clear long-term objectives and translating those long-term objectives into more immediate goals. He insisted that companies nurture an elite team of general managers, who set these long-term objectives, and then a group of more professional managers. Critics said this was a retreat from his original belief in the soft side of management. For Drucker it was all perfectly consistent: if you rely too much on empowerment you are likely to run into anarchy, whereas if you rely too much on command-and-control you sacrifice creativity. The trick is to get managers to set long-term goals but allow their employees to work out ways of achieving those goals. If Drucker contributed hugely to making management a global industry, he also contributed to its application beyond the business base. He was not simply a business thinker, but definitely a management one. He believed that ‘management is the defining organ of all modern institutions’, not just companies.

E There are three persistent criticisms of Drucker’s works. The first is that he focused on big organisations rather than small ones. Concept of the Corporation advertised big organisa-tions in many ways. As Drucker said, ‘As we know it today, in modern industrial produc-tion, particularly in modern mass production, the problem in the small unit is not just its inefficiency, but its lack of production capacity.’ The book helped set off the ‘big organisa-tion boom’ which dominated business thinking for the next 20 years. The second criticism is that Drucker’s advocacy of management by objectives narrowed the development space for businesses. They prefer to allow ideas, including ideas for long-term strategies, to bubble up from the bottom and middle of the organisations rather than being imposed from on high. Thirdly, Drucker is criticised for being a maverick who has increasingly been left behind by the increasing rigour of his chosen field. We cannot find a single area of academic management theory that he made his own.

F There is some truth in the first two arguments. Drucker never wrote anything as good as Concept of the Corporation upon entrepreneurial start-ups. Drucker’s work on man-agement by objectives showed contradictory ideas to his earlier and later writings on the importance of knowledge workers and self-directed teams. But the third argument is short-sighted and unfair because it ignores Drucker’s pioneering role in creating the modern profession of management. He was one of the leading scholars in carrying out systematic studies on big companies, and he pioneered the idea that ideas can help galvanise companies. When evaluating Drucker’s influence, we cannot neglect the problem that so many of his ideas have gradually become conventional wisdom. By this, I mean he is trapped by his own achievements. His writings on the importance of knowledge workers and empowerment may sound a little trite these days. But they certainly weren’t trite when he first came up with them in the 1940s, or when they were first applied in the Anglo-Saxon world in the 1980s. Furthermore, Drucker did not give up his endeavour to create new ideas until his 90s. His work on the management of voluntary organisations is still at the leading edge.

Questions 14 – 19

Reading Passage 2 has six paragraphs, A–F.

Choose the correct heading for each paragraph from the list of headings below.

Write the correct number, i–ⅸ, in boxes 14–19 on your answer sheet.

List of Headings

i The popularity and impact of Drucker’s works

ii Finding fault with Drucker

iii The impact of economic globalisation

iv Government regulation of businesses

v Early publications of Drucker

vi Drucker’s concept of balanced management

vii Drucker’s rejection of big businesses

viii An appreciation of the pros and cons of Drucker’s works

ix The changing role of the employee

14.Paragraph A
15.Paragraph B
16.Paragraph C
17.Paragraph D
18.Paragraph E
19.Paragraph F

Questions 20 – 22

Do the following statements agree with the claims of the writer in Reading Passage 2?

In boxes 20–22 on your answer sheet, write

YES if the statement agrees with the claims of the writer

NO if the statement contradicts the claims of the writer

NOT GIVEN if it is impossible to say what the writer thinks about this

20.Drucker thought that in a period of social transition, managers and politicians would dominate the economy.
21.Drucker believed that workers should not just put themselves just in employ-ment relationships, but also take the initiative to develop their own intellectual resources.
22.Drucker’s works on management is out of date in modern days.

Questions 23 – 24

Choose TWO letters, A–E.

Write the correct letters in boxes 23 and 24 on your answer sheet.