Druckers Contribution to Management Theory and Practice - Assignment Example

a) In order to critically analyse Peter Drucker’s major contributions to management theory and practice (1899-2005), it is imperative to beginby defining the term management. According to Kleynhans et al (2006), management is defined management is defined as the process of working with people and resources to achieve organisational goals. In this particular case, managers ought to be good at planning, organising, leading and controlling as well as making decisions and they should be able to analyse situations and find solutions to the problems that may exist. As noted in the above definition of management, it is primarily concerned with getting things done through people. Thus, effective management is tied to the organisation’s overall performance and is mainly seen as a twofold process where the managers seek to accomplish the task and satisfy the employees at the same time. He invented most if not all of the modern management concepts. Drucker was interested in the growing understanding that organisations should run on the basis of knowledge management than employees doing the work using their hands. Knowledge management is a virtue in the running of an organisation. The employees must be equipped with knowledge or given the opportunity to acquire the much needed skills to perform various tasks expected of them. This can be achieved through socialisation of the employees. Thus, socialization posits that individuals are quick to learn through interaction. Through his cognitive learning theory, Vygotsky (1962, 1968) believes that social growth is caused mainly by social interaction. Psychologically, an individual can use his mind to learn something with the aim of changing behaviour towards something while external factors can as well play a pivotal role in influencing the behaviour of somebody. In this way development is meant to improve the welfare of an identified target group which share common values and norms. Knowledge is relative in most cases and the culture of an organisation constitutes the individual’s symbolic world to which meaning and sense are ascribed during the learning process. In their quest to gain knowledge, members of the organisation ought to engage in collective learning that creates norms, shared assumptions and beliefs that become organisational culture. An organizational culture is created by the members who learn and gain experience of doing things from those around them in a given situation. To enhance an organisation’s cohesion, it is imperative to create a culture that promotes innovative ways of identifying a problem and finding a solution (Locke and Kirkpatrick, 1995). Thus, open communication between members of that particular organisation should be built on the basis of creating mutual trust and an atmosphere of respect. Thus, learning can be effective where organisational culture can integrate with individual’s values, perceptions and capabilities in the workplace. It is the duty of the management to ensure that they put structures in place that promote collective learning among the members of an organisation. Drucker suggested that the effectiveness of the organisation is mainly determined by the performance of the employee. There is every need to treat the employee as a valuable asset to the organisation than treat him as a mere person who ought to perform the organisational tasks as assigned. Workers should meet certain standards of performance so as to ensure that they achieve the organisational goals. Measures such as training the workers to meet the expectations of the organisation’s operations ought to be put in place so as to ensure that the organisation maintains its competitiveness by upholding similar standards of performance. Employee performance can be increased by motivating the workers. Basically, motivation is the enthusiasm employees have for their jobs and factors which influence how hard they may try to do the job (Armstrong 1999). The employee must be persuaded and inspired to do the job since he would know that he would get some form of reward for the effort put. Essentially, each organisation is tasked with meeting the organisational goals set and there ought to be proper management to ensure that the organisation achieves its goals. The managers ought to create flexible working conditions which can motivate the workers to put optimum performance in their day-to-day operations as away of improving the effectiveness of the organisation’s performance. The managers should also be better positioned to develop their employees as well as put measures in place that would ensure staff retention. The managers should also be accommodative to different cultural values of different people from different cultural backgrounds as a way of minimising conflict among the employees. Peter Drucker also suggested that the aspect of organisational structure plays a very significant role in the effectiveness of the organisation. He advocated decentralised structures to be considered. Centralised organisation is different from those which are decentralized and this has a bearing on the way the employees would relate to each other. Organisations with a central structure are a little bit restrictive since the employees cannot freely engage each other or just consult their superiors with regards to issues arising at work (Carrell et al 1995). Where everything is centralised, it is very difficult to learn if not impossible since the order of the day in such an organisation would be characterised by that top down communication style. This type of organisational structure does not promote learning in an organisation since interaction would be minimised by the barriers that may exist between the levels of the model. Indeed, in a decentralized organisation, action can be taken more quickly to solve problems and more people would provide input to decision making and the employees are likely to feel less alienated from those who make decisions that affect their daily operations at work. Adaptive organisational forms which emphasize the flexibility to adapt to change can enhance better performance while bureaucratic structures will inhibit it (Kleynhans 2007). There ought to be open channels of communication where there is free flow of information and the employees should take a role in contributing towards decision making as a way of creating a sense of belongingness. The system to be employed ought to be accommodative to a diverse range of cultures that distinguish people across the globe from one another. Drucker understood that leadership is an essential component of management and often very rare among the people. There is need for leadership to clearly define the line of authority as well as proper communication channels where there is possibility for feedback from both ends. In an organisation where there are clearly defined channels of communication, it would be easier to communicate any important information about any changes that may be effected within a short period of time. The main advantage is that communication forms the back bone of successful operations of any given organisation. Without proper communication, there would be high chances of conflict and misunderstanding hence efforts should be made to ensure that all the workers are well informed about the developments that would be taking place in an organisation. Drucker’s contribution to management theory and practise was also influenced by the fact that we are living in a dynamic environment that is characterised by constant changes hence the need for the leaders to keep a close eye on these changes. The leadership and the employees ought to work hand in hand in order to achieve the vision of the organisation. A leader often takes a leading role in developing and inspiring staff to improve their performance which in turn leads to increased productivity in terms of offering satisfactory products and services to the customers with the aim of achieving organisational goals. A leader should always display positive traits that can be emulated by the juniors who are followers in the company. A leader should always motivate the workers so as to minimise the chances of conflict in the organisation which can negatively impact on its effectiveness. b) Drucker also suggested that there is every need to treat the customer as king during the organisation’s operations. He is the one who invented the idea that there is no business without a customer which ushered in a new marketing mindset based on research. Marketing plays a vital role in attempting to bridge the gap between the organisation’s need to achieve its goals as well as the need to satisfy the needs of the customers in the market. This can be achieved through the effective use of different marketing techniques which are guided by research with the aim of gaining knowledge about the market structure. During the contemporary period, businesses are faced with inevitable challenges in the market such as competition hence new strategies ought to be promulgated and monitored constantly so as to ensure compliance with the set goals and objectives of the organisation. For instance, the entrance of other competitors in the industry has often seen the destabilisation of pricing structure in the market place whereby the prices are forced down in some cases. It is against this background that an organisation ought to consolidate its profitability by way of reducing the costs of production if it means that it would be forced to reduce its prices. This would also include making major improvements in the manufacturing sector while at the same time cutting costs on production but striving to maintain high standards. Reaching different customers in different markets requires concerted efforts such as making use of modern communication technology during the contemporary period. Use of new communication technology can be a very effective communication strategy that would be aimed at targeting particular groups of people likely to be potential customers. This endeavour calls for precision on market segmentation which is defined as the process of grouping people into segments on the basis of their interests, level of income, age and even geographical location, Kotler. (1999). There is need to identify the targeted audiences which can make marketing relatively easier as the company would know its specific target group hence easy to reach them. Drucker also argued on the importance of substance over style where the organisation is also seen as part of the community in which it operates hence it has to be responsible. “The concept of social responsibility is the concept that maintains that businesses are part of the larger society in which they exist and are accountable to the society for their performance,” (Strydom 2004 p. 11). In other words, there is need for marketers to strike a fine balance between the needs and interests of customers, needs of the environment and the need for business to realise their profitable financial goals. This goes hand in hand with the concept of ethics, which is loosely defined as an attempt to differentiate between something good and bad. First and foremost, it is every company’s obligation to know that it is operating within a certain social set up with its own norms and values that play a vital role in maintaining the fabric of that society. The success of any product would therefore depend on the amount of respect that exists between the organisation and the customers. The most appropriate methods which can be used in this case to monitor progress would include performance management as well as monitoring the statistics of revenue generated through sales if there would be any improvement. Having decided to implement some major strategic changes to spruce up the performance of the firm, there ought to be some kind of mechanism in place that can be used to monitor progress of the organisation’s performance. In order to monitor performance of an organisation which would be undergoing a facelift in its strategic operations, there would be need for that organisation’s management to closely monitor the ongoing process. Performance management therefore, is the process of total quality management (TQM) programs using all of the tools including performance appraisal to ensure achievement of performance goals (Carrell, R. et al 1995). In this particular case, tools such as reward systems, job design, leadership and training should all be regarded as part of a comprehensive approach to performance. Thus, according to Carrel et al (1995), research has shown that the number one desire of HR executives is to design performance management systems to achieve business goals. Another effective method of monitoring progress on the key success factors would involve a constant check on the statistics of sales. One easy and simple method of monitoring progress of a profit making business organisation would involve an analysis of the sales statistics in comparison with the previous records. If ever there is an increase in the number of sales within the current period compared to the previous periods, then it would mean that there is positive development as far as performance appraisal is concerned. In most cases the number of sales is the simple method that is used to determine the extent to which the organisation would be developing positively. A decline in the number of sales compared to the same period during the previous year would mean that the company is badly performing during the stipulated period of implementing the strategic changes that would have been initiated. On the other hand, the profitability of the organisation would also be determined by the total revenue generated from the total sales. There may be a decline in sales in some cases but the organisation would remain profitable considering that the prices would be fairly high to outweigh the limited number of sales. For instance, lowering costs in production may result in the reduction of the overall prices of the product offered on the market. Therefore, it would be expected that this move would likely generate more sales since the prices would have been lowered hence a good method to measure performance and ultimately profitability. Indeed, more customers would be attracted to buy quality products with a lower price compared to the ones with higher prices on the market. From this assertion, it can be noted that this is one of the simplest ways of monitoring progress of the changes initiated as a result of the strategic decisions proposed. Having carefully undertaken the plan to embark on major strategic changes within the operations of the organisation in strategic decisions, it is imperative for the organisation to constantly reflect on its performance in comparison to its previous status before the major changes. During the period effecting changes to the organisation, there should be remarkable change in the overall performance of the organisation. Positive growth in terms of sales and profits should be witnessed since the initiative would be meant to lower the prices thereby attracting more customers to buy the product. Failure to witness this positive development would mean that there would be little change with regards to the company’s overall performance which would be a negative development. Over and above, it can be noted that Drucker significantly contributed to management theory and practice which has shaped the operations of modern management. He introduced the idea of decentralization in the 1940s which has become the back bone of the principles of virtually all the large organisations the world over. He also introduced the idea of treating the worker as a valuable asset rather than just a profit making machine. He is also the one who wrote about knowledge as a virtue among the workers in the 1970s. He suggested that there is no business without a customer which has resulted in new marketing ideas being generated. Bibliography Armstrong M.(1999), Human Resources Management Practice, 7th Edition, Kogan Page Limited, USA. BusinessWeek (November 28 2005). “The man who invented management: Why Peter Drucker’s ideas still matter. Available at: http://www.businessweek.com/magazine/content/05_48/b3961001.htm Accessed 18 April 18, 2010. Buhler P. (2001). Teach yourself management skills in 24 hours. USA. 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