Peter Drucker Real Guru

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  • Peter F. Drucker The Father of Modern Management Venkat ram Prabhash Jha Bikash Gupta
  • 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.
    • At least once every five years every form should be put on trial for its life .
  • 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?
    • What is the point of bringing a 200 pound body downtown when all you want of it is only 8 pound brain?
  • 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
        • HBS review as one of top Business Ideas in 2005
    Information Decision Rights Motivators Structure
  • Unhealthy versus Healthy Decision Rights Information Structure Motivators 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
  • 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.
    • The Non-Profits spend far less for results than governments spend for failure
      • 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