management organisation exam

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Prof. Ph. Dr Tadeusz Oleksyn 31.03.2020

PETER F. DRUCKER ON MANAGEMENT

About Drucker

Peter F. Drucker (1909 – 2005) is acknowledged to have been the most

outstanding man of management that has ever lived. He has been named “the

father of modern management”, “the pope of management”, while also “the

genius of management”. Although born and raised in Vienna, he spent most of

his life in the USA. He worked in several universities, the longest tenures being

as a professor at New York University (22 years) and Clermont University in

California (34 years). In addition, he was the author of umpteen much-talked

about books on the field of management and several books on the methods of

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management that are important to this very day, including the most widely

applied methods of the “Management by Objectives”.

His research devoted to the work and roles of professional managers

conducted in General Motors in the 1940s was much talked-about (GM was the

largest automotive producer worldwide for 70 years – until 2012, when Toyota

company overtook them).

The research of Drucker and the book that was created from it entitled “The

Practice of Management” (1946) was of a breakthrough nature in terms of

professional management.

Together with Prof. James Burnham, a sociologist from New York

University, he created the notion of managerialism and professional managers.

An important book by Burnham published in 1942 was entitled “The

Managerial Revolution”.

His university career, writing career and success as a highly rated consultant

was aided by his broad horizons and interdisciplinarity: It is true to say that he

had vast knowledge in the fields of management, economics, political science,

philosophy, ethics, art, as well as literature. Apart from this, he knew the

practice of management as he had worked in several banks and insurance firms

in Great Britain and in the USA.

In addition, he maintained direct contact with outstanding entrepreneurs and

managers, while also serving as an advisor for a range of public organizations.

Indeed, he is widely read not only because of the fact that he wrote competently

about important issues, while also co-creating a new reality. It was also due to

the fact that he wrote in a simple and comprehensible way. It is true to say that

he could get to the point very quickly in terms of what was the most important

and grasp and expound the essence of the issue at hand. The sense of being

communicative was a consequence of his youth when he worked for some time

as a journalist in Europe.

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He gave an accurate diagnosis and predicted the directions of the development

of management. Generally speaking, he had a great impact on the quality of

management, education of managers, the development of our civilization, the

effectiveness of the economy and living standards in a global dimension. In fact,

he remains the most highly rated authority in the field of management on all the

continents and a figure that is particularly often drawn closer to pupils of

management.

Some of the most important statements by Peter F. Drucker on the subject

of management:

Goals

To manage is to define and execute objectives that match the needs. It is

necessary to concentrate on the most important objectives.

Eight areas

These are eight areas for which it is particularly important to establish goals

and results: (1) the market position of the enterprise; (2) entrepreneurship; (3)

innovativeness; (4) resources (personnel, material, financial); (5) profitability,

(6) managers – their competences and development; (7) the efficiency of

employees and their approach to work; (8) corporate social responsibility (The

Practice of Management).

Who manage

Not only owners and top managers manage. A manager ranked lower in the

hierarchy must execute the same type of work as the boss of a partnership

company, or chairman of a government department, namely: plan, organize,

integrate, motivate and evaluate. His competences may be limited, yet - within

certain boundaries – he is a manager. However, they do not only manage

department heads, but also a multitude of specialists that are not formally

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speaking, heads. They conduct multiple cases completely independently, while

also bearing responsibility and taking decisions [The Effective Executive].

Different managers are effective

There is no singular effective managerial personality. No universal effective

personality exists. The effective managers I have come to know in my life

differed from each other by way of temperament and abilities, what they did and

how they did it, as well as personalities, knowledge and interests. In sum, they

differed in everything. They had one common feature: they could lead to what

needed to be done.

Five features of effective managers

There are five features of effective and efficient managers as follows:

1) They know what they are devoting their time to and try not to waste it.

2) They rather concentrate on the results than on the work itself. They start

more frequently with the question of what results we can expect rather

than what is to be done.

3) They build on advantages – on the strong sides of their own, superiors,

colleagues and subordinates – and on the advantages of a particular

situation. They do not build on weaknesses, nor do they start with things

they are unable to do.

4) They concentrate on these several areas in which great accomplishments

may bring outstanding results. They try not to lose time on trivial cases.

5) They take rational, correct and effective decisions. They know that it is,

above all else, a matter of the system – the correct steps in the correct

sequence. They know that it is easier to get to the right decision on the

basis of diverging views than on agreement. Likewise, they know that

taking multiple decisions, especially fast ones, signifies taking bad

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decisions. It is necessary to have a correct strategy than tactics that come

down to sitting on a seesaw1.

Personnel policy

The correct personnel policy is extraordinarily important. This involves the

following:

1) the selection of people with the appropriate competences, while also

matching the team;

2) avoiding the promotion of new and little known people for difficult

positions, as this is too risky; even more so, it is essential not to promote

new, little known people who are not tried and trusted to positions where

there are few opportunities to provide help; excessive speed with

promotion to an excessively difficult position destroys even the most

promising people;

3) the creation of the appropriate organizational structure and good teams;

4) thinking in categories of tasks in terms of development and promotion of

people: it is necessary to know what tasks a person can cope with and

what tasks he has to be prepared for, as well as what tasks would exceed

his abilities;

5) asking several department heads who had worked with the particular

person previously for opinions; the opinion of only one is unreliable.

Many forms of management

There is no single form of management and furthermore it evolves over time.

Every organization consists of different people, while having its own specifics,

history and culture, in which they may check different things. It is necessary to

become familiar with this and understand it. It is necessary to manage

1P.F. Drucker, op. cit., s. 36 – 37.

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intelligently and flexibly. Moreover, different people should be managed in

different ways.

Nevertheless, it is worth remembering that modern-day people do not want to

be “coordinated” or “managed”; nor treated as “subordinates”.

Management is not only management in business

Everything points to the fact that in the 21st century, the sector of growth in

developed countries will not be connected with the sphere of business only. It

will most probably be geared towards profit in the public sector.

Management in the new reality

You must learn how to manage in situations in which you do not have power

and you cannot give orders, in cases where you are neither controlled, nor do

you control. This was a fundamental change. Handbooks on management still

only talk about the management of subordinates. However, this standard no

longer has such significance as the degree of the complication of work, the

information used and created in it, while also the variety of ties that are essential

for the execution of work. Today enterprises grow by means of alliances, all

types of risky agreements and joint ventures, which are understood by only a

few people. This new type of growth makes the traditional manager

apprehensive, as he is convinced that he must possess or control the resources

and markets.

Management is not a bag full of tricks and social engineering

It is much better described by the following features:

• it enables people to achieve the chosen common goals together;

• it makes use of their advantages and makes their disadvantages

insignificant;

• it is deeply embedded in culture;

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• it is based on values;

• it should create the possibility of growth and development for the

organization and its members;

• every enterprise is to be a learning institution;

• it is necessary to build mutual agreement and individual responsibility;

• all the people creating an enterprise should know what they want to

accomplish.

Management requires evaluation

Management requires evaluation of its quality and results. It is worth adopting

the following principles:

• the evaluation is to be built into the enterprise and its management;

• the results should be measured, evaluated and is subject to constant

improvement;

• the results exist solely on the outside. The performance of a firm is its

satisfied client. The performance of a hospital is a cured patient. The

performance of an academy is an educated graduate who can cope at

work. Within an organization, there are only costs.

Management is neither humanities nor technics

Management is neither humanities nor technics. It relates to action and

application and this refers to performance. Management is rather the process and

technology.

Drucker on Werner Siemens

Drucker acknowledged the German industrialist, Werner Siemens (1816–

1892) as the first industrialist who took advantage of the available technologies

and created a modern enterprise based on research & development. He was the

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first to understand the significance of scientific research for industry. In effect,

not only was a new type of enterprise formed, but also the German chemical

industry, the American electronics sector, as well as the automotive and

telecommunications sectors, etc. were formed too.

Drucker on the necessity of global competitiveness

All institutions must adopt the achievement of global competitiveness as a

strategic goal. No organization, regardless of whether it is an enterprise,

university or hospital, will survive on the market, not to mention achieve

success, if it does not pursue the standards specified by the market leaders in a

particular sphere.

An organization is threatened by low effectiveness. Low personal costs have

ceased to be so beneficial in order to compensate for low labour efficiency and

in a broader sense, low effectiveness.