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1.
Nature of Management:
Drucker is against bureaucratic management and has emphasised
management with creative and innovative characteristics. The basic
objective of management is to read towards innovation. The concept
of innovation is quite broad. It may include development of new
ideas, combining of old and new ideas, adaptation of ideas from
other fields or even to act as a catalyst and encouraging others to
carry out innovation.
He has treated management as a discipline as well as profession. As

a discipline, management has its own tools, skills, techniques and
approaches. However, management is more a practice rather than a
science. Thus, Drucker may be placed in ’empirical school of
management’.
While taking management as a profession. Drucker does not

advocate to treat management as a strict profession but only a
liberal profession which places more emphasis that managers
should not only have skills and techniques but should have right
perspective putting the things into practice. They should be good
practitioners so that they can understand the social and cultural
requirements of various organisations and countries.
2. Management Functions:
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According to Drucker, management is the organ of its institution. It

has no functions in itself, and no existence in itself. He sees
management through its tasks. Accordingly, there are three basic
functions of a manager which he must perform to enable the
institution to make its contribution for:
(i) the specific purpose and mission of the institution whether
business, hospital or university;
(ii) making work productive and the worker achieving; and
(iii) managing social impacts and social responsibilities.
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All these three functions are performed simultaneously within the

same managerial action. A manager has to act as administrator
where he has to improve upon what already exists and s already
known. He has to act as an entrepreneur in redirecting the
resources from seas of tow or diminishing results to areas of high or
increasing results.
Thus, a manager has to perform several functions: setting of

objectives, making, organising and motivating. Drucker has
attached great importance to the objective setting function and has
specified eight areas where clear objective setting is required. These
are: market standing, innovation, productivity, physical and
financial resources, profitability, managerial performance and
development, worker performance and attitude, and public
responsibility.
3. Organisation Structure:
Drucker has decried bureaucratic structure because of its too many
dysfunctional effects. Therefore, it should be replaced. He has
emphasised three basic characteristics of an effective organisation
structure.
These are:
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(i) Enterprise should be organised for performance;
(ii) it should contain the least possible number of managerial levels;
(iii) it must make possible the training and testing of tomorrow’s

top managers—responsibility to a manager while still he is young.
He has identified three basic aspects in organising activity analysis,

decision analysis, and relation analysis. An activity analysis shows
what work has to be performed, what kind of work should be put
together, and what emphasis is to be given to each activity in the
organisation structure.
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Decision analysis takes into account the four aspects of a decision:

the degree of futurity In the decision, the impact of decision over
other functions, number of qualitative factors that enter into it, and
whether the decision is periodically recurrent or rare. Such an
analysis will determine the level at which the decision can be made.
Relation analysis helps in defining the structure and also to give
guidance in manning the structure.
4. Federalism:
Drucker has advocated the concept of federalism. Federalism refers
to centralised control in decentralised structure Decentralised
structure goes far beyond the delegation of authority. It creates a
new constitution and new ordering principle. He has emphasised
the close links between the decisions adopted by the top
management on the one hand and by the autonomous unit on the
other.
This is just like a relationship between federal government and state

governments. In a federal organisation, local managements should
participate in the decision that set the limits of their own authority.
Federalism has certain positive values over other methods of
organising.
These are as follows:

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(i) It sets the top management free to devote itself to its proper
functions;
(ii) It defines the functions and responsibilities of the operating

people;
(iii) It creates a yardstick to measure their success and effectiveness

in operating jobs; and
(iv) It helps to resolve the problem of continuity through giving the

managers of various units education in top management problems
and functions while in an operating position.
5. Management by Objectives:
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Management by objectives (MBO) is regarded as one of the

important contributions of Drucker to the discipline of
management. He introduced this concept in 1954. MBO has further
been modified by Schleh which has been termed as management by
results’. MBO includes method of planning, setting standards,
performance appraisal, and motivation.
According to Drucker, MBO is not only a technique of management

but it is a philosophy of managing. It transforms the basic
assumptions of managing from exercising cattalo to self-control.
Therefore, in order to practice MBO, the organisation must change
itself MBO has become such a popular way of managing that today t
is regarded as He most modern management approach. In fact, it
has revolutionalised the management process.
6. Organizational Changes:
Drucker has visualised rapid changes in the society because of rapid
technological development. Though he is not resistant to change, he
feels concerned for the rapid changes and their impact on human
life. Normally, some changes can be absorbed by the organisation
but not the rapid changes.
Since rapid changes are occurring in the society, human beings

should develop philosophy to face the changes and take them as
challenges for making the society better. This can be done by
developing dynamic organizations which are able to absorb changes
much faster than static ones. Drucker’s contributions have made
tremendous impact on the management practices.

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1.

He has treated management as a discipline as well as profession. As

While taking management as a profession. Drucker does not

According to Drucker, management is the organ of its institution. It

(ii) making work productive and the worker achieving; and

(iii) managing social impacts and social responsibilities.

All these three functions are performed simultaneously within the

Thus, a manager has to perform several functions: setting of

(i) Enterprise should be organised for performance;

(ii) it should contain the least possible number of managerial levels;

(iii) it must make possible the training and testing of tomorrow’s

He has identified three basic aspects in organising activity analysis,

Decision analysis takes into account the four aspects of a decision:

This is just like a relationship between federal government and state

These are as follows:

(ii) It defines the functions and responsibilities of the operating

(iii) It creates a yardstick to measure their success and effectiveness

(iv) It helps to resolve the problem of continuity through giving the

Management by objectives (MBO) is regarded as one of the

According to Drucker, MBO is not only a technique of management

Since rapid changes are occurring in the society, human beings

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