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Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

 Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

Drucker (a German- born American) is the father of modern management (pictured right).

He has written many outstanding books, but The Practice of Management and this book are his most influential.

More than any other books they brought to people’s attention the importance of management.

He once said that his life’s work centred on balancing continuity and change in organizations

He died in 2005.


See also...

Peter Drucker in the Management Gurus section. 


Book summary


What is management?


“Management is a practice rather than a science” based on:


a) people

Management is what managers do (see below), particularly getting results through people.Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

So management success is dependent on the:

“vision, dedication and integrity of managers” .


b) responsibilities

Managers must have responsibilities to:

  • achieving organizational objectives like customer satisfaction (“responsibility for contribution”).
  • society (social responsibilities – see below).


c) tasks and practices

See below.


Tasks and practices of effective managers


1. Define the organization’s purpose

This should be related to maximizing productivity (the most effective use of resources like people, time and money) in a business’s two basic functions:

 Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

a) marketing (customer creation)

An organization’s purpose is “to create a customer” and management must create an organization-wide commitment to achieving it.


b) innovation

Finding new and better ways of creating customers - for example:

  • new products
  • new uses for old products. 
  • improvements in every organizational activity like production.

Profit is the result (not the cause) of these two functions.

So profit is a barometer of success, not an objective.


2. Customer driven planning and strategyPeter Drucker, Management: Tasks, Responsibilities, Practices (1973)

“Strategic planning prepares today’s business for the future”.

So successful strategy requires knowing:

  • what your business is.
  • what it should be.
  • what it will be in five or ten years time.

Key strategic questions are:Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

  • who is the customer?
  • what does the customer buy?
  • what is value to the customer?
  • how large a market will we have in five or ten years?
  • what factors (particularly population changes) will affect our market?
  • which customer wants remain unsatisfied in other markets?


3. Manage for the present and the futurePeter Drucker, Management: Tasks, Responsibilities, Practices (1973)

Managers must be:

  • administrators (stewards of what already exists).
  • risk taking innovators and entrepreneurs (creators of tomorrow).

So they must:

  • accept the “planned abandonment” of products and activities that don’t satisfy customers.
  • exploit the “new realities” that success always creates. Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

But success can easily become failure, because success:

  • encourages organizations not to change.
  • “always outdates the behaviour that achieved it”.


4. Motivating people

Employees must be encouraged to take responsibility for their work by making it stimulating and productive through:

  • feedback on performance.
  • job and income security.
  • a continuous learning experience.


Every manager must ask two questions:

What do I, and the organization, do to help, or to hinder, you in your job?

How can I help you do the best job for the organization?

 Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

Managers’ integrity must create the “spirit of performance” based upon:

  • each person pursuing excellence.
  • avoiding “safe mediocrity”, where people fail to challenge themselves to achieve excellence.

Employees, who are no longer useful, should be transferred to another job, not fired.

Dismissals harm managers’ integrity, reducing their ability to motivate.


5. Managing the organization’s social responsibilities

An organization is “an organ of society and exists for the sake of society”.

Social responsibilities arise from:Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

  • the organization’s negative impact on society (its social costs).
  • the problems of society.

It is managers’ responsibility to:

  • minimize social costs
  • ask “is what we do what people in society and the customer pays us for?”
  • turn society’s problems into business opportunities.


But there are limits on social responsibilities:

  • management’s primary responsibility to make a profit, because “managers are servants” of the organization.Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)
  • areas that the organization doesn’t have authority over like government policy (although business does have a responsibility to make its relationship with government effective).


Managers should follow doctors’ Hippocratic Oath:

“Above all, not knowingly to do harm”.


6. Organizing

Managers must:

  • select the right people. Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)
  • structure their work.

An organization’s structure must:

  • follow (i.e. be determined by) strategy.
  • give people autonomy.
  • be as simple as possible to maximize people’s performance with the least amount of effort.


7. ControllingPeter Drucker, Management: Tasks, Responsibilities, Practices (1973)

Management controls (like budgeting) must be:

  • economical on effort.
  • meaningful (related to objectives, rewards, results and strategy).
  • appropriate to what is being measured and actually happening.
  • timely (controls shouldn’t be so frequent or rare that they’re ineffective).
  • simple (to save confusion).
  • operational (focused on action).


8. Decision making

Managers’ decision making must:Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)


a) inspire effective action

Inspiration comes from:

  • involving everyone in decision making.
  • taking into account their opinions.


b) encourage creativity and new solutions

(through constructive disagreement).Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)


c) be made at the lowest possible level

Solutions to problems must be found by the people facing them.


d) remember the consequences of doing nothing

(which sometimes is the best option).

 Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

e) consider anything relevant

Management decisions must take into account:

  • all relevant facts and opinions.
  • people’s capacity to carry out a decision.


f) ask four questions

Who has to know of this decision?

What action has to be taken?

Who is to take it?

Can it be implemented?

 Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

9. Developing people

Managers must enable people (including themselves) to learn and improve through, for example:

  • training.
  • feedback from appraisal.


Key quote on management

The ultimate test of management is performance (there is the same quote referring to “business performance” in Drucker’s book, The Practice of Management).


Key quotes on organizational objectives

The question: ‘what is our business?’ can, therefore, be answered only by looking at the business from the outside, from the point of view of the customer and the market.

The purpose of an organization is to enable ordinary human beings to do extraordinary things.


Key quote on business success and production

Efficiency is concerned with doing things right. Effectiveness is doing the right things.


Key quotes on marketing

The aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits her and sells itself.

Marketing should result in a customer who is ready to buy.


Key quote on decision making

The effective decision maker...organizes dissent.


Key quotes on strategy

The aim of strategic planning is action now.

Long range planning should prevent managers from...dedicating their resources and energies to the defence of yesterday.


Key quote on finance and management

Controls follow strategy. 

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