Peter F.

Drucker The Father

of Modern Management
Presented By
Goutam Singh
Alari Basumatari
Shubodip Mitra
Subash kumar

AGENDA

Introduction about Peter Drucker
Contributions made
Relevance in present context
Questions

Peter Ferdinand Drucker (1909 2005)

Management Consultant
Born in Kaasberg (Vienna),Austria
Doctorate in International Law,
Germany
1937 Moved to U.S
Professor - N.Y.University (1950-
1971)
Professor Claremount Graduate
University (1971 - 2005)
Career . . .
Started as business thinker (1945) General Motors.
created Concept of Corporation.
Author of thirty books.
Editorial Columnist Wall Street Journal (1975 1995)
Contributor to
- Harvard Business Review.
- The Atlantic Monthly.
- The Economist
Consultant to businesses and non-profit organizations
Awarded Presidential Medal of Freedom by U.S President.

Seminal works in management
Concept of Corporation
The Practice Of Management
Technology Management and Society
The changing World of Executive
The Frontiers of Management
The End of Economic Man
Peter Drucker on the Profession of Management
Management Challenges of 21
st
Century

Ideas through Druckers Writings
A profound skepticism about macroeconomic theory. Drucker contended that
economists of all schools fail to explain significant aspects of modern
economies.
A desire to make everything as simple as possible. According to Drucker,
corporations tend to produce too many products, hire employees they don't
need (when a better solution would be contracting out), and expand into
economic sectors that they should stay out of.
The need for "planned abandonment." Corporations as well as governments
have a natural human tendency to cling to "yesterday's successes" rather than
seeing when they are no longer useful.
The lasting contribution of the "father of scientific management", Frederick
Winslow Taylor,Although Drucker had little experience with the analysis of blue-
collar work (he spent his career analyzing managerial work), he credited Taylor
with originating the seminally important idea that work can be broken down,
analyzed, and improved.
He wrote extensively about Management by objectives
A company's primary responsibility is to serve its customers. Profit is not the
primary goal.
Contributions made
Druckers primary contribution is not a single
idea, but rather an entire body of work
that has one gigantic advantage: nearly all
of it is essentially right. Drucker has an
uncanny ability to develop insights about
the workings of the social world, and to
later be proved right by history
The timeline
It was Drucker who introduced the idea of decentralization -- in the
1940s -- which became a bedrock principle for virtually every large
organization in the world.

He was the first to assert -- in the 1950s -- that workers should be
treated as assets, not as liabilities to be eliminated .

He originated the view of the corporation as a human community --
again, in the 1950s -- built on trust and respect for the worker and
not just a profit-making machine, a perspective that won Drucker an
almost godlike reverence among the Japanese

The timeline.Contd
He first made clear -- still the '50s -- that there is "no
business without a customer," a simple notion that
ushered in a new marketing mind-set.
He argued in the 1960s -- long before others -- for the
importance of substance over style, for institutionalized
practices over charismatic, cult leaders.
And it was Drucker again who wrote about the
contribution of knowledge workers -- in the 1970s --
long before anyone knew or understood how knowledge
would trump raw material as the essential capital of the
New Economy.

Some more insights from the oracle
Drucker and MBO
A manager's primary task is to manage for
results by translating corporate objectives
into departmental, group and individual
measures of performance.


Drucker and Marketing
His most famous book is The Practice of Management,
published in 1954.
Three questions that every company seeking to establish
a brand must ask itself:
What is our business?
Who is our customer?
What does our customer consider valuable?

I am more an insultant than a
consultantI scold people for a fee.
Marketing should have just one concern the
customer.
Consider this: The purpose of business is not to
make a sale, but to make and keep a customer.
The aim of marketing is to know and
understand the customer so well the product or
service fits him and sells itself.
Best of all: "Marketing is the whole business
seen from the customer's point of view."
Peter Drucker The Information Age
Competitive advantage is created through information-based
organizations
Four Critical Areas:
Develop rewards, recognition and career opportunities that
stimulate information sharing
Create a unified vision of how the organization will share
information
Create the management structure that enables cross-
boundary information sharing
Ensure the continuous supply and training of staff and
volunteers that can use the information
Learning org- Org DNA
Information Decision Rights
Motivators Structure
Decision
Rights
Information
Structure
Motivator
s
Strategic
Plan
Clear decision
rights and
accountability
Efficient
information flows
Strong motivators
aligned to goals
Lean structures

Weak
information flows
Over-layered
structures
Unclear
decision rights
Misaligned
incentives and measures
Decision
Rights
Information
Structure Motivators
Strategic
Plan

Unhealthy versus Healthy
Drucker and the Non-Profits
The Drucker Foundation
Non-profit groups can build communities while providing
valuable services and fostering innovation.
"Convert donors into contributors."
Non-profit groups as leaders in the knowledge-driven
enterprises that would characterize all economic activity
in the future.
Triple Bottom Line Reporting (TBLR).
Market Positioning.
Management by Objective (MBO).
Value & Target Costing.
Strategic Planning.
Market Segmentation.
Knowledge Workers.
Corporate Governance.
Dynamics of profit.
Relevance of Peter Drucker Theories

Organizations are not only an economic entity
but Socio Economic entity.
It Works on Triple Bottom Line Reporting (TBLR).
Bottom line 1 : Financial Performance - Profit
Bottom Line 2 : Environmental Performance Planet
Bottom line 3 : Social Performance People (CSR)
Relevance of Peter Drucker Theories

Marketing Positioning
Who is our competitor?? Aviation Industry ( Air Deccan &
Railway), Beverages (Coco cola , Nestle, ITC, Amul)




Relevance of Peter Drucker Theories
Cost
Service
quality
Air Deccan
Spice Jet
Perceptual Space
Management by objective (MBO)
MBO as a means of managerial self-direction &
self control. Here objective means long term
vision.

Long term objectives Annual milestones Strategies

Relevance of Peter Drucker Theories
TACTICS QUARTERLY
OBJECTIVES
Management by objective (MBO)

Relevance of Peter Drucker Theories
Hierarchy of Goals
Company vision
Mission statements
Strategic objectives

Target Costing & Value chain Re-engineering
Peter defined one of the mission to be
what is of value to the customers.
Relevance of Peter Drucker Theories
What is of
Value to the
Customers?
Target
Pricing
Target Costing
Value Process
Re-engineering
Corporate Governance

Basel II, SOX, Clause 49 of Listing Agreement, Section
292 A of the companies Act, 1956, etc are all inclusive
list of Corporate Governance after Enron, Zerox
scandal.

Relevance of Peter Drucker Theories
Knowledge Workers :
Mr Peter suggested to create smarter organizations
by hiring the right people, giving them training they
need & providing them avenues for sharing their
knowledge so it benefits the entire organization.

Relevance of Peter Drucker Theories
Learning & tech to
Deliver and track
training
HR planning,
Career planning &
Performance mgmt
Knowledge
management

Smarter
Organization
Strategic Planning
Peter Drucker categorically mentioned the survival
objectives of an organization under following
points :-
Market Standing
Human Resources Management
Innovation
Profitability
Social Responsibility.
Business strategy of organizations still include
above points. It still relevant as of now.


Relevance of Peter Drucker Theories
Market Segmentation:
Mr. Peter explanation of Who is our customers still have a
relevance in today's age. And it forms the basis of
segmentation.
Relevance of Peter Drucker Theories
Dynamics of profit:

Profit is not the only measure of business success. Its
other unidentifiable factors such as SWOT analysis, externalities etc
are equally imp.

future cost, cost to cover today's unintended operating crisis
& tomorrow uncertain innovative decisions.

Amt paid towards workers are not cost but investment. Profit
is a means not an end.


Relevance of Peter Drucker Theories
Peter Drucker Quotes
The art of Leadership is to align the systems strengths and
thereby make the system's weakness irrelevant.
The most valuable assets of a 21
st
Century institution, whether
business or non business will be its knowledge workers and their
productivity.
MBO works ---if you know the objectives. 90% of the time you
dont.
The rate at which organization learn may become the only
sustainable source of competitive advantage.


Questions?
Thank you for your Patience.