Peter Drucker: Founder of Modern Management

Knowledge Worker

The works of Peter Drucker (1909-2005), Austrian-born American management consultant, educator, and author, have not simply had a profound influence on me as an entrepreneur and business owner, but have had that same influence on the world at large. Drucker was a primary influence on Fredmund Malik, whose management approach we fully utilize here at Pipeliner CRM. Drucker has often been called “the founder of modern management.”

Drucker’s writings predicted many events and changes in the late 20th century. These included corporate decentralization and privatization; the decline of the blue collar worker; the concept of outsourcing for businesses; Japan’s rise to the position of global economic power; the focus on marketingMarketing Marketing is the field, set of actions, or practice of making a product or service desirable to a target consumer segment, with the ultimate aim of effecting a purchase. as an important business function; and the evolution of the information society. As long ago as 1959, Drucker coined a term which has become a central theme in today’s economic and management discussions: “knowledge worker.”

A prime focus of Fredmund Malik’s work is management by objectives—a term first popularized by Peter Drucker in his 1954 book The Practice of Management. Management by objectives is the process of defining objectives within an organizationOrganization Organization is a cohesive group of people working together and formally bound by a shared identity (e.g., one team, company, club, etc.) and a common purpose (e.g., business growth, athletic victory, etc.). in such a way that management and employees can agree on them. They can then gain a mutual understanding of strategies and tactics needed to achieve these objectives.

Today sustainable economics is a hot topic—a view of economics in light of its effects on the culture and ecology. Drucker was a pioneer in this field. In his later years, he voiced concern about the kind of capitalism that focuses only on profit, saying: “Free enterpriseEnterprise Enterprise (in the context of sales) is a relatively large organization typically composed of multiple levels, locations, and departments which need multi-layer software systems that support collaboration across a large corporate environment. cannot be justified as being good for business. It can be justified only as being good for society.”

Drucker’s economic views were heavily influenced by now-legendary economic voices he knew growing up in Vienna. Regular guests in his childhood home included Austrian School economists Joseph Shumpeter, Friedrich Hayek, and Ludwig von Mises. It is no surprise, then, that Drucker’s writings throughout his life centered on the relationships between human beings instead of conventional economic theories.

World powers listened to Drucker. From the 1940s on, Drucker consulted not only major corporations such as General Electric, Coca-Cola, Citicorp, IBM, and Intel, but also many U.S. and foreign governmental and non-governmental organizations. His name became nearly legendary in Japan, where he provided considerable assistance to many of the country’s post-World War II business leaders in rebuilding and restructuring.

Throughout his life, Peter Drucker authored some 39 books, many of which were highly influential. Here are three that I personally recommend: