Among all the contemporary management thinkers, Peter Drucker outshines all. He has varied experience and background of psychology, sociology, law, and journalism. He has developed an insight of managerial problems. He has written many books and papers.
The main contribution of Peter Drucker is as follows:
1. Nature of Management: Peter Drucker was against bureaucratic management and he has emphasized management with creative and innovative characteristics. It may include development of new ideas, combining of old and new ideas, adaptation of ideas from other fields and encouraging others to carry out innovation. He treated management as a discipline as well as a profession. Drucker may be placed in ‘empirical (experimental) school of management’.
2. Management Functions: Peter Drucker has an opinion that management is the organ of its institution. It has no functions in itself, and no existence in itself. He sees management through its tasks.
Accordingly a manager must make his contribution for
i. specific purpose and mission of the institution
ii. making work productive and the worker achieving
iii. managing social impacts and social responsibilities.
All these functions are performed simultaneously within the same managerial action.
3. Organization Structure: Peter Drucker has emphasized three basic features of an effective organizational structure.
They are
i. enterprise should be organized for performance
ii. it should contain the least possible number of managerial levels and
iii. it must make possible the training and testing of tomorrow’s top managers by giving responsibilities while he is young.
He has identified three basic aspects in organizing. They are activity analysis, decision analysis, and relation analysis.
4. Federalism (Centralization): Federalism refers to centralized control in decentralized structure. He has emphasized the close links between the decisions adopted by the top management on the one hand and by the autonomous unit on the other. In the federal organization, local managements should also participate in the decisions that set the limits of their own authority.
5. Management by Objectives: Peter Drucker’s most important a contribution to the discipline of management is Management by objectives (MBO). He introduced this concept in 1954. MBO includes method of planning, setting standards, performance appraisal and motivation. According to Drucker, MBO is not only a technique of management but it is a philosophy of managing. It transforms the basic assumption of managing from exercising control to self-control.
6. Organizational changes: Drucker has visualized rapid changes in the society. These changes are because of rapid technological development. Though he is not opposing changes, he feels concerned for the rapid changes and their impacts on human life. Some of the changes can be absorbed by the organizations but not the rapid changes. To accept the changes by the society there should be development of dynamic organizations, which are able to absorb changes much faster, then static ones.
Peter Drucker’s contributions have made tremendous impact on the management practice.