Special issue symposium on the contributions of Peter Drucker to management ­ part one

Citation

GazeIl, J.A. (2000), "Special issue symposium on the contributions of Peter Drucker to management ­ part one", Journal of Management History (Archive), Vol. 6 No. 1. https://doi.org/10.1108/jmh_arc.2000.15806aaf.001

Special issue symposium on the contributions of Peter Drucker to management ­ part one

James A. GazeIl San Diego State University, San Diego, California, USA

Peter Drucker is no doubt one of the most respected theorists in management history. His contributions date from the 1940s when he began consulting for such industrial giants as General Electric, General Motors, and Sears; corporations outside the United States; nonprofits such as hospitals and universities; government agencies in Canada, Japan and the USA. His experiences led him to develop the profession of management based on assumptions that managers are made, not born; that management is a body of knowledge; that it is generic in its applications; that such knowledge can be taught; and that he knew how to do so.

Surprisingly, despite Drucker's lofty status, there has been no scholarly symposium, or even a forum of popular magazine commentaries, with respect to his corpus of management writings. The absence includes business publications, even the Harvard Business Review, to which he has contributed 31 articles over the last half-century. The omission extends to nonprofit-oriented publications despite his efforts to illuminate the growth and significance of that sector and to public administration outlets despite his position as the founder of the privatization movement that has been spreading throughout the nation over the last two decades. Maybe this omission is an historical accident. Or perhaps such an undertaking was deemed superfluous in light of Drucker's obvious fame.

Thus now is an appropriate time for a symposium on Drucker. He is 88 years of age. He has authored 32 books and scores of articles and continues to write. Still, the bulk of his work is behind him ­ hence, a symposium entitled "The contributions of Peter Drucker to management". It consists of six, blind-reviewed, and acceptable articles ­ some after revisions ­ by scholars with backgrounds in the areas of organization theory and management. The authors were permitted to select any facet of Drucker's oeuvre that interested them as long as the topics were relevant to the symposium and did not directly conflict.

Although the contributions are indeed discrete, their conclusions reveal common threads. For instance, they respect Drucker's body of work and his enormous reputation. But they question Drucker's attitudes toward generic management (the ideas that management is essentially management, regardless of organizational sector, and that managerial philosophy and precepts are mostly transferable from one sector to another, particularly from business to governments and nonprofits). The writers see the value of his management writings as resting largely in the realm of business and only secondarily outside that world. However, they especially acknowledge his progress in gradually coming to understand and appreciate the unique features of government management. But to them his evolution in outlook does not go far enough since he continues to espouse a prescription that contradicts this premise ­ the application of business concepts to the government sector.

Before summarizing the symposium articles, one should note that they were arrayed on a spectrum from the general to the particular.

The first contribution, "The unfashionable Drucker: ethical and quality chic", by James S. Bowman and Dennis Wittmer, places the work of the management authority in the broadest context: the propriety of the ends and means of management ­ taking the right action (ethics) in the right way (quality). The symposium starts with this article because the subject matter is patently fundamental. Ethics are a point of departure for assessing the significance of anyone's life and work. The authors note that Drucker wrote few articles directly on this issue, although his viewpoint runs implicitly through his voluminous writings. To keep the topic manageable, Bowman and Wittmer confine their analysis to his explicit explorations of this subject. They report that Drucker argued for a univeral code of ethics, one applicable to all human actions, including business enterprises. He opposed the popular position that there should be a dual system of ethics: an ordinary framework but a special set for the business sector because of competitive pressures on the latter for success. To him there were ethics per se ­ not business ethics or any other kind. He believed that businesses should not be held to a higher standard of behavior but also should not be able to excuse their misconduct because of responsibilities to stockholders and employees.

According to Bowman and Wittmer, Drucker espoused an ethical philosophy consisting of five dimensions:

1. 1.

   the universality of precepts, equally applied;

2. 2.

   a respect for cultural differences and a willingness of executives to adapt to other cultural norms and practices (a belief that seemingly contradicts the first standard by leading to a single system of ethics disparately applied or a melange of particularistic systems);

3. 3.

   the role of managers as example setters for their organizations;

4. 4.

   a recognition of organizational interdependence; and

5. 5.

   the golden rule.

Furthermore, say the authors, Drucker applied his monistic system not only to individual conduct but also to social responsibilities of institutions. These include accountability for the impact of their products and services on society; involvement in finding market or, as a last resort, non-market solutions to community problems; and the assumption of community leadership roles as long as they do not neglect their own organizations and do not function beyond their authority and competence.

Bowman and Wittmer also explore quality as a compliment to ethics. Managers must not only know and want to do what is right but also have the technical ability to do so. They also view Drucker as a harbinger of total quality management (TQM), which he ironically regarded as a fad to perpetuate the status quo in organizations. They credit him with at least six contributions under this rubric:

1. 1.

   his understanding of the need to synthesize tasks into a process;

2. 2.

   his focus on contributions to organizational performance;

3. 3.

   his emphasis on activities that add value to an enterprise;

4. 4.

   his stress on the importance of work coordination;

5. 5.

   his recognition of an organizational psychology that maximizes individual strengths while minimizing weaknesses; and

6. 6.

   his appreciation of organizations as learning environments.

Moreover, they perceive considerable overlap between Drucker's ideas on quality and those of his peer, W. Edwards Deming, but also note that the latter was concerned with processes as well as philosophy. In addition, the authors think that Drucker should have considered whether the complex decisions faced by managers required special ethics, especially in a post-Watergate environment, and explored (rather than dismissed) the importance of TQM. They imply that Drucker does not fully appreciate recent developments in the areas of ethics and quality.

A second contribution, "If apples were oranges: the public/nonprofit/business nexus in Peter Drucker's work", by Mary E. Guy and Janice R. Hitchcock, narrows the subject matter from the philosophical to the interdisciplinary. They argue that Drucker's basic outlook toward the various sectors is flawed. Valid comparisons among the sectors is impossible because they are, in reality, fundamentally different. Therefore, attempts to run non-business organizations (governments and nonprofits) as if they were businesses should not be made. Such efforts, if tried, will fail. The authors view Drucker's writings as mostly perceptive elucidations of the corporate world. They cite three concepts running through his business-sector works as applicable to public management: the knowledge worker, management by objectives (MBO), and mission-focused management.

Exploring these cross-sector themes in detail, Guy and Hitchcock state that Drucker's consideration of them marks the value of his writings. Furthermore, the authors emphasize the last concept as they trace the evolution of his thoughts toward nonprofits and his increasingly favorable outlook toward them. He saw mission-focused management for nonprofit organizations as a surrogate for the market-performance test that most businesses face. The authors point out that he has repeatedly noted differences between the business and government sectors but, paradoxically, has still wanted to apply business standards to government. He has come to acknowledge external constraints imposed on government agencies but has not divested himself of the idea that they can still be managed like businesses. Moreover, he has yet to examine the implications of those restrictions on the ability of government agencies to manage themselves with greater effectiveness.

The writers see a parallel in Drucker's thinking toward nonprofits and government. As he has learned more about each of them, he has gradually come to appreciate their respective importance. Guy has recently gone a step further by crediting Drucker with a still improving outlook toward government management. Her presidential acceptance speech to the American Society for Public Administration, in July 1997, praised Drucker's efforts to encourage government agencies to focus on missions and to assess public managers and their subordinates in terms of their competence, not seniority or test scores (Guy, 1997).

Nonetheless, to Guy and Hitchcock, Drucker continues to see the business world as the center of the managerial universe and as the benchmark for evaluating the performance of all other organizations. To them, he has yet to recognize that the differences between the business and government sectors override their similarities, that evaluations of government performance according to tests designed for business, sets up government agencies for failure, and that the work of the various commissions over the decades to improve government management and performance deserves his attention. Thus they caution public administrators not to depend too much on Drucker's vision of effective management.

A third contribution, "Drucker on effective management", by James A. Gazell, is not so broad in scope as Guy and Hitchcock's, since he explores Drucker's work from the vantage point of the nonprofit and government sectors but, unlike them, excludes the business world. Moreover, GazeIl views Drucker's writings on these sectors more favorably than they do. Of all the articles in the symposium, this one is no doubt the most laudatory to him. The other contributors are generally critical of his work, probably for the variety of reasons cited in the following articles. The author points out that management historians have devoted attention to Drucker's thoughts about directing businesses successfully but may have overlooked (or been unaware of) his appreciation of the inherent difficulties in managing public sector institutions effectively.

Drucker has written extensively in recent years about the two components of the public sector: nonprofit organizations and the federal government. With regard to the first category, he was among the earliest writers to discern the growing salience of nonprofits. As early as 1968, he perceived the existence of a third sector (an organizational sphere between the realms of business and government) that performed notable services. Later, in broad strokes, he delineated its parameters, which encompassed health, educational, religious, community, and cultural organizations and set the stage for empirical study by others.

Drucker understood the need of nonprofits to be managed successfully and a set of impediments to this goal that businesses did not face. For instance, nonprofits not only lack a bottom line, as Guy and Hitchcock point out, but also difficulties in concentrating on a single purpose. Nonprofits have yet to find a substitute for budget size as a measurement for performance. They need to find ways of combatting those with vested interests in keeping ineffective but still favored programs. And, as Guy and Hitchcock also note, they must adopt a pragmatic (cost-benefit) perspective rather than a moralistic, absolutistic approach toward the pursuit of their objectives. Drucker urged nonprofits to set up clear organizational structures, missions, methods of measuring results, and systems of accountability. He also foresaw the growing salience of the nonprofit sector and envisioned it as a replacement for government activities to the greatest extent possible.

According to GazeIl, Drucker was more cognizant of the apples-and-oranges comparison than one may realize. The management doyen understood that the federal government (like nonprofits but unlike businesses), also faced inherent obstacles. These fell into two categories. One was external, the limited ability of the federal government to run a national economy. To him, the market functioned as the main source of national prosperity and was so vast and complex that it was beyond the ability of the federal government to guide it successfully. Furthermore, the very size of the national economy precluded extensive, rational federal management. The other category was internal, those affecting its ability to run itself and other programs. Drucker discussed five such restrictions:

1. 1.

   the broad scope of federal governmental responsibilities;

2. 2.

   the frequent inability of government at this level, because of vested interests, to abandon ineffective activities;

3. 3.

   the monopolistic status of governmental agencies;

4. 4.

   unclear missions and priorities; and

5. 5.

   insufficient experimentation at lower governmental levels and feedback before making policies and programs national in scope.

The author concludes that Drucker still had much to say about government even though his comments make up only a small part of his literary output. He recognized complicating factors that governmental agencies face in their quest for greater effectiveness. Finally, he possessed an underlying respect for the role of government and a desire to strengthen it by focusing its missions and priorities on what it must do and on what it does best and by identifying what it does poorly and should consequently transfer to the nonprofit and business sectors.

A fourth contribution, which will appear in Vol. 6 No. 2 of this journal, "On the margins of public administration? a quasi-empirical analysis of Peter Drucker's impact", by Steven W. Hays and Rebecca Russ-Sellers, moves from the interdisciplinary emphasis in the second and third articles to a consideration of one field. They state that his most lasting contribution to public administration centers on one of its subfields: public management. To Drucker, management is just as vital for government as it is for institutions outside this domain. Like Bowman and Wittmer, Hays and Russ-Sellers report on the explicit manifestations of his outlook. However, they go a step further by measuring the extent to which his writings have been cited in public administration textbooks and journals and thus signify his influence. Of course, such measurement cannot capture the possibility of his potentially vast uncredited sway.

The writers surveyed 91 pertinent texts published over the last 29 years, which in their view constitute an accurate reflection of general public administration sources. To their surprise, the authors found the reality of his acknowledged impact far less than his putative influence on the field. They assumed, as many scholars probably would, that his hold was pervasive. They found a paucity of citations to Drucker's writings, even though they are encyclopedic in their range. They posited that the incidence of citations would be proportionate to the volume of his work. They discovered that the citations fell under three rubrics: leadership and motivation, organizing, and social ecology. Moreover, they learned that 80 percent of the references came from only four of the 34 books that he has written, although this tetrad may represent his most original and popular writings: The Practice of Management, (1954); The Effective Executive, (1966); The Age of Discontinuity, (1968 ); and Management: Tasks, Responsibilities, Practices, (1973). In addition, even his two articles in Public Administration Review, the pre-eminent journal in the field, drew few references ­ an average of once out of every three issues (Drucker, 1976, 1980). Furthermore, the authors found that other relevant journals mention his works only slightly more than once per year.

Why such a dearth? Hays and Russ-Sellers discuss seven possible reasons.

1. 1.

   Much of the public administration world sees no relevance of Drucker's writings.

2. 2.

   An anti-government, anti-public-administration outlook, a concomitant of the first reason, runs through his works.

3. 3.

   He tends to make statements about subjects he explores without citations as if he were making original observations and as if he were unfamiliar with, or dismissive of, previous research.

4. 4.

   His writings have a journalistic flavor with the oversimplications and triteness, all of which may suggest to public administration readers that his comments should not be taken seriously.

5. 5.

   He faces a depth-versus-breadth dilemma: Because he concentrates on sketching a big picture, he lacks the space to examine particular facets at length.

6. 6.

   He is an outsider to the profession of public administration, a status that ipso facto may make his writings suspect.

7. 7.

   He is a renaissance figure, a polymath with eclectic interests and consequently no disciplinary home. He is not a specialist in any respect but, rather, a homeless generalist. He is in management because he really fits nowhere else.

The authors conclude that Drucker's main impact lies outside public administration and will continue to shape external attitudes toward government management. To them he is, significantly, a prominent part of a vast skeptical audience that remains to be convinced that government has numerous valid purposes, which can be effectively fulfilled.

A fifth contribution, The Federal Government and Public Management: The Druckerian Approach, by Donald C. Dahlin, restricts the domain of analysis further from one field to one of its levels: the federal government. According to Dahlin, Drucker has popularized, not originated, two significant insights about the efficacy of the national government. One is that this level of government has grown too large to be mostly effective. However, Drucker uses this observation as a prelude to his call for a new political theory to describe and justify what the federal government can do and what it should do ­ in that order. But what can it do? Unfortunately, he has not tried to answer his own call, although such an undertaking is daunting. His second insight is that non-governmental organizations ­ for instance, businesses, hospitals, and universities ­ have ended the federal government's putative monopoly on power and created a form of pluralism, a society of diverse organizations and diffused power.

Dahlin does not directly challenge these insights but regards them as examples of Drucker's tendency to make overstatements about the federal government. To Dahlin, these fall into at least eight categories.

1. 1.

   Its deficiencies are overdrawn, since it has also had some critical successes in areas such as civil fights, the environment, medical care for the elderly and the indigent, and management of the national economy.

2. 2.

   Drucker's proclivity for focusing on economic standards as the only valid measurement of the federal government's performance, understates the efficacy of that web of institutions. Ironically, he criticizes economists for the same tendency.

3. 3.

   He tends to view federal government performance as a paramount end and to ignore the broadly accepted point that the federal government was deliberately set up not to be highly effective because liberty was valued more than performance.

4. 4.

   Federal administrative agencies are not nearly so powerful as he alleges.

5. 5.

   He exaggerates the efficacy of privatization, since business providers of public services, like governments, will also have to follow bureaucratic procedures to discourage waste, fraud, and abuse and since the termination of ineffective programs is difficult, regardless of who is carrrying them out. After all, large amounts of money, numerous jobs, and the well-being of many communities are at stake.

6. 6.

   Drucker's belief that the pressures of traditional economic interest groups on public policies are abating is not well founded because of the ubiquity of political action committees.

7. 7.

   Drucker is overconfident about the ability of his society of organizations to be mostly apolitical and concerned with the common good and performance. To Dahlin, Drucker's knowledge workers are as political as other kinds of employees and are as subject to having their outlooks shaped by their particular positions as other types of workers are.

8. 8.

   Drucker shows excessive faith in the legitimacy of nonprofit organizations to serve as surrogates for the federal government in providing for the welfare of a whole society. Nonprofits can fulfill the needs of only some segments of a society. The author concludes that the main value of Drucker's writings on the federal government lies in his consideration of this subject at the level of political theory rather than management.

A sixth ­ and final ­ contribution, Can Elephants Fly?: Peter Drucker and Governmental Reform, by Charles Garofalo, takes Dahlin's analysis a step further ­ from one level (the federal government) to one of its particular functions: its responsibility for managing the national economy. The title of the article derives from the famous economist Adam Smith's comment that expecting government to manage an economy is as likely as expecting an elephant to fly. The author notes that Drucker also shares Smith's observation. Garofalo examines whether the elephant of business can become airborne in government ­ a different metaphorical approach to discuss what Guy and Hitchcock covered under apples-and-oranges. According to Garofalo, Drucker thinks that the federal government has not and cannot manage the national economy effectively for a spate of reasons: its web of vested interests and pressure groups, its resulting inability to abandon anything, its tendency to overpromise and to attempt too much (with the welfare state as allegedly the worst example), its obsession with procedures, its inertia, and its tendency to view its undertakings as absolutistically rather than pragmatically. The federal government's optimal role is that of a decision maker, not a doer. Its job is to set goals, priorities, targets, deadlines, measurable performance, and areas of abandonment.

Garofalo's critique is wide-ranging. Like Hays and Russ-Sellers, he states that Drucker typically makes assertions with no documentation or with only anecdotes for support. Other criticisms include:

1. 1.

   no knowledge of the vast literature on the nature of the public and private sectors and the connections between them;

2. 2.

   indiscriminate espousal of market solutions (like anti-bureaucratic statists in the political world and public choice theorists in academia) as a panacea to government's alleged woes;

3. 3.

   no recognition of inconsistency between greater managerial freedom and public accountability;

4. 4.

   no concern whether an emphasis on the bottom line is compatible with public service;

5. 5.

   no appreciation that much of the federal government's unsatisfactory performance ultimately stems from political decisions that no amount of administrative reform can rectify;

6. 6.

   understatement of the scope of government's inherent functions, which cannot be responsibly privatized and which underestimates the risk that privatizing public functions may put the producers and providers beyond constitutional restraints;

7. 7.

   no concern for the numerous problems that have accompanied privatization welfare;

8. 8.

   no perception of a contradiction between government's need to be bureaucratic owing to its concern with accountability and procedures and the consequent inapplicability of market standards for evaluating its performance;

9. 9.

   no understanding of the differences between ­ and within ­ the public and private sectors and the inadvisability of trying to manage them in the same fashion;

10. 10.

    no recommendations for increasing governmental capacity as public management reformers have offered; and

11. 11.

    no appreciation that a fundamental purpose of government ­ prevention of the arbitrary exercise of power rather than effectiveness' ­ limits the ability to reform.

To complete this symposium, the special-issue editor expresses his deepest gratitude to the following academics (listed alphabetically) who generously gave their time and effort to conduct thorough blind reviews and to furnish perceptive recommendations for the six articles found acceptable ­ some after revision ­ for publication. Their recommendations were closely followed and thus greatly enhanced the quality of the contributions. The reviewers were: Gerald E. Caiden, University of Southern California; Matti F. Dobbs, San Diego State University; Brian R. Fry, University of South Carolina; John J. Gargan, Kent State University; Stuart H. Gilbreath, San Diego State University; Robert T. Golembiewski, University of Georgia; Florence A. Heffron, University of Idaho; Robert L. Stock, San Diego State University; G. Frederick Thompson, Willamette University; Robert J. Waste, California State University, Chico; and Patricia A. Wilson, San Diego State University. David K. Hart, Brigham Young University, also deserves recogntion for his valuable advice. Finally, the Drucker symposium would never have started and reached fruition without the strong encouragement and support from the editor of this journal, Jack Rabin.

This article is part of a special symposium issue on the contribution of Peter Drucker to management, guest edited by James A. Gazell.