Contribution of Peter Drucker in development of management thoughts

CONTRIBUTION OF PETER
DRUCKER IN DEVELOPMENT OF
MANAGEMENT THOUGHTS
Dr. Minal Bhandari.
Pratibha College of Commerce and Computer
Studies, Chinchwad

Contents
 Introduction of Peter Drucker
 Major contribution
 Some of the books written on
management by Peter Drucker

Introduction of Peter Drucker
 Born on 19th November 1909,Vienna, Austria
 Died on 11th November 2005, Claremont, California, United
States
 Influenced by F.W.Taylor, Mary Parker Follet etc.
 Awards : Presidential Medal of Freedom, Henry Laurence Gantt
Medal
 "Management is a multi-purpose organ that manages business
and manages managers and manages workers and work."
 Management by Objective, a technique or philosophy introduced
by Drucker

MajorContribution
a. Nature of Management
b. Management Functions
c. Organization Structure
d. Federalism
e. Management by Objectives (MBO)
f. Organizational Changes

a. Nature of Management
 Drucker is against bureaucratic management
 Emphasis on creativeness and innovation
 Drucker treated management as a discipline
which has its own tools, skills, techniques and
approaches, as a practice and a liberal
profession.

b. Management Functions
 Setting of objective
(8 areas require a clear objective setting function
viz., market standing,
innovation,
productivity,
physical and financial resources,
profitability,
managerial performance and development,
worker performance and attitude
and public responsibility)
 Decision making
 Organizing
 Motivating

c.OrganizationStructure
 Emphasis on innovative structure
 Identified 3 basis aspects of organizing structure
1. Activity analysis: It shows what work has to be performed,
what kind of work should be put together, and what emphasis is
to be given to each activity in the organization structure.
2. Decision analysis:The degree of futurity In the decision, the
impact of decision over other functions, number of qualitative
factors that enter into it, and whether the decision is periodically
recurrent or rare.
3. Relation analysis: Defines the structure and also to give
guidance in manning the structure.

d. Federalism
 It refers to centralized control in
decentralized structure.
 It emphasizes on close links between the
decisions adopted by the top management
on one hand and by the department on the
other through following methods of
organizing:
 Top management should devote itself to its
proper functions.
 It defines the functions and responsibilities of
the operating people.

e. Management by Objectives
 Management by objectives (MBO) is a strategic
management model.
 It aims to improve the performance of an organization by clearly
defining objectives that are agreed to by both management and
employees.
 According to the theory, having a say in goal setting and action
plans encourages participation and commitment among
employees, as well as aligning objectives across the organization.
 MBO includes methods of planning, setting standards,
performance appraisal and motivation.
 MBO philosophy has revolutionized the management process.

Steps of MBO
1. To determine or revise organizational objectives for
the entire company. (Vision & Mission)
2. To translate the organizational objectives to
employees.
3. To stimulate the participation of employees in
setting individual objectives. Employees should be
encouraged to help set their own objectives to
achieve these larger organizational objectives.
4. Monitoring the progress of employees.
5. To evaluate and reward employee progress.
This step includes honest feedback on what was
achieved and not achieved for each employee.

What Are Some Drawbacks of
Using MBO?
 Entirely focused on goals and targets, it
often ignores other parts of a company like
corporate culture, worker conduct, a
healthy work ethos, environmental issues,
and areas for involvement and
contribution to the community and social
good.

f. Organizational Changes
 Change in business environment is natural.
 Organization needs to develop a dynamic
organization which can absorb changes.
 Accept the changes and take them as
challenges for making society better.

Someofthebooksonmanagementby
PeterDrucker
 The Effective Executive
 The Changing World OfThe Executive
 Managing Oneself
 Management:Tasks, Responsibilities, Practices
 The Essential Drucker
 Innovation And Entrepreneurship
 Managing For Results
 Management Challenges ForThe 21st Century

Contribution of Peter Drucker in development of management thoughts

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