Management theories are a dime a dozen. Almost every manager, entrepreneur and scholar has one. However, these theories are often based on the prevailing conditions of the time period in which they were created, and so their usefulness is limited in new or changing conditions. Peter Drucker was not interested in inventing another theory or philosophy of management — he wanted only to solve problems as they arise. His approach is timeless and his writing has been called “a landmark event in the history of our literature.
Here are the top 12 ideas of Peter Drucker’s management theory.
1) Planning — the main role of a manager is to plan. Managers need to have an eye for the future, and should never forget that “a plan means nothing unless it relates to real needs”.
2) Effective Human Relations — Within a company there are many different people with different personalities, needs, and backgrounds. Managers need to be able to relate to their employees as human beings and not treat them like means simply directed towards one end. Drucker asserted that effective human relationships are the most important aspect of management. If a manager can solve problems between employees and make productive suggestions then they will “get maximum results” from their workers.
3) Knowledge — Drucker emphasized the importance of knowledge in a company. He claimed that without access to knowledge it is impossible to be successful. Undernormal circumstances, knowledge is often “hidden” or difficult to access. Drucker believed that people need knowledge on how to find their way in the world and skills so that they can learn on their own. When everyone has access to information there will be no problems for them.
4) Management by Objectives — In order for managers to monitor performance they need to identify what they are trying to accomplish. Drucker explained that if you don’t know what you are trying to accomplish then your course of action will not always be clear either.
5) Innovation — Drucker believed that innovation is the key to finding new solutions and overcoming problems. Without innovation companies will not be able to develop new products or find new strategies that work.
6) Social Responsibility — The management team should be responsible for planning how to create a productive society. The company should work with their employees to achieve this goal of improving society. It is important for the company to become aware of what they can do and what they cannot do in order for them to function better within their own institutions. Companies need to have rules and structure in place so that they can carry out their plan. Drucker stressed the importance of human rights and social responsibility when it came to having a successful business.
7) Organizational Effectiveness — Drucker stated that companies should not have “one size fits all” rules for their employees. Too often companies fail to see the differences between their employees and thus treat them similarly. Different people have different needs and work styles which means that “Drucker believed that what is good for one person is not necessarily good for another”.
8) The Individual — Drucker asserted that the whole is greater than the sum of its parts. He claimed that it is important to pay attention to the individuals within a company as he said that “no single person can do what one person cannot do”.
9) Coolness — Drucker sought to avoid “friction”. Instead he suggested that companies should strive towards a culture of “coolness” in order to avoid bias and conflict. He believed that there are two types of people within a company — there is the “within group” who have to work together and there is the “outside group” who doesn’t belong to the inside group. Without these two different sets of coworkers there will be much friction and many problems will arise within the company.
10) Communication — Drucker believed that “an important management tool was the ability to communicate”. Managers should use “all their skills and knowledge to work on improving communication within the company so that it is always open and free of bias”. Effective communication lies at the core of getting things done correctly in a company.
11) Forward-looking and Creative — Managers need to be prepared to “think ahead into the future”. Drucker believed that “most problems are solved in years, not months”. He also believed that it is important to be creative and approach problems from different angles so that they can be solved.
12) Challenge and Change — Managers need to know how they should react when change occurs within their organization. They need a structure which allows them to respond properly when there is “too much change, too many new people, or too many different ideas”. Drucker was very concerned with creating an environment where you have an opportunity for growth and being able to handle change so that you don’t become stagnant.
Conclusion:
Drucker’s management philosophy is still valid and useful today. His ideas have been proven to be sound by many companies who have used them successfully. Drucker’s main point was that people within a company need to be treated like individuals and not like means towards an end. He aimed to develop remote control, not autonomous, management at the company level.
Drucker believed it was important for managers to form an effective relationship with their employees because they were the ones that needed to be managed in order for them to get the most out of them. It is vital for managers to know how each employee works and what will motivate them so that they can make sure they are working as productively as possible.
