Wednesday, December 1, 2010

5. Modern Management /Recent contribution to management thoughts:

Peter Ferdinand Drucker (November 19, 1909–November 11, 2005):
He was a writer, management consultant, and self-described “social ecologist.”
Widely considered to be "the father of modern management,” his 39
books and countless scholarly and popular articles explored how
humans are organized across all sectors of society—in business,
government and the nonprofit world.
His writings have predicted many of the major developments of the late twentieth
century, including privatization and decentralization; the rise of Japan to economic
world power; the decisive importance of marketing; and the emergence of the
information society with its necessity of lifelong learning. In 1959, Drucker coined
the term “knowledge worker" and later in his life considered knowledge work
productivity to be the next frontier of management.
Basic ideas:
 Decentralization and simplification: Drucker discounted the command and control
model and asserted that companies work best when they are decentralized.
According to Drucker, corporations tend to produce too many products, hire
employees they don't need (when a better solution would be outsourcing), and
expand into economic sectors that they should avoid.
 Respect of the worker: Drucker believed that employees are assets and not
liabilities. He taught that knowledge workers are the essential ingredients of the
modern economy. Central to this philosophy is the view that people are an
organization's most valuable resource and that a manager's job is to prepare and
free people to perform.
 The need to manage business by balancing a variety of needs and goals, rather
than subordinating an institution to a single value. This concept of management
by objectives forms the keynote of his 1954 landmark "The Practice of
 A company's primary responsibility is to serve its customers. Profit is not the
primary goal, but rather an essential condition for the company's continued
 An Organization should have a proper way of executing all its business processes.
 A belief in the notion that great companies could stand among humankind's
noblest inventions.


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