In a classic, “Peter Drucker”, there is a brilliant article by L. Urwick.
“Drucker has written a row of books. In the writer's study they occupy a position immediately behind his desk, in the shelf he reserves for those volumes to which, as a student of management, he wishes to refer repeatedly. They are, in short-with Frederick Taylor, Henry L. Gantt, Henri Fayol, and a few later writers-among the books he would take with him if he were banished to a desert island and limited to a single box for reading.
If he were asked why? he would reply:
(1) Because Drucker writes clear, economical, vivid, readable English. Considering that English is not the language to which he was born, that, in itself, is a very great achievement. Very few people known to me, and no one else who is writing about management currently, writes so well.
(2) But good writing is that and no more, unless the ideas it expresses are of intrinsic value. Drucker's ideas are always original, interesting, and challenging. His latest book, The Age of Discontinuity, is full of challenges, not least to those who, since he is a professor at New York University, might be described as "his own reference group," the academic fraternity.
(3) While Drucker has his eyes on the future-his latest book is full of looking forward-his work is as firmly rooted in the present as it has grown out of the past. We may live in an "age of discontinuity," but the end of all knowledge in the individual is wisdom, and wisdom knows that people cannot be forced to change. They can only be led to accept change and be helped to keep up with its consequences.
(4) Thus Drucker, who for part of his life has been a consultant to great business corporations, has written about management with insight and foresight. And again he has not neglected the past. While too many writers about management are busy "seeking a bubble reputation" (did Shakespeare mean "that bauble reputation"?) by showing how mistaken their predecessors were, Drucker sees knowledge as a continuum. It is a cathedral growing slowly through the centuries to which each generation adds its contribution-an extra aisle, a tower here, a buttress there. It is not a jerry-built block of apartments to be ripped out to the foundations every decade or so because new techniques enable us to erect double the rentable value on the same site.
Because this writer's academic experience was cut short by World War I and he was thereafter preoccupied, first with a practical business career and then in building a management consultancy partnership, the book of Drucker's which he has found most valuable is his Practice of Management, first published in 1954.
The author refers to it constantly and always finds new insights and fresh suggestions. Drucker is a big thinker, unconfined by current academic fashions or economic shibboleths.
THE PURPOSE OF BUSINESS
Quite early in the book, Peter Drucker deals with the cant that profit is the purpose of business. If business has any social purpose at all, any aim which justifies society in retaining it as an institution, it cannot be its advantage to particular individuals. "It is irrelevant for an understanding of business behavior, including an understanding of profit and profitability, whether there is a profit motive or not. That Jim Smith is in business to make a profit concerns only him and the Recording Angel. It does not tell us what Jim Smith does and how he performs."
And he continues "The concept of profit as a purpose is worse than irrelevant. It does harm. It is a major cause for the misunderstanding of the nature of profit in our society and for the deep-seated hostility to profit which are among the most dangerous diseases of an industrial society."
He states clearly and succinctly what the purpose of business is with the proviso that that purpose “must lie in society since a business enterprise is an organ of society.” “There is only one valid definition of business purpose-to create a customer.”
And he returns to the point (in Practice of Management) after almost four hundred pages. "No society can lastingly be built on the belief, originally stated by an English pamphleteer Bernard de Mandeville, that private vices become public benefits. For in a good, a moral, a lasting society public good must always rest on private virtue. . . Every leading group must . . . be able to claim that the public good determines its own interest. This assertion is the only legitimate basis for leadership; to make it reality is the first duty of the leaders."
"The hostility to capitalism and capitalists is moral and ethical. Capitalism is being attacked not because it is inefficient or misgoverned but because it is cynical. And indeed a society based on the assertion that private vices become public benefits cannot endure."
"Today it has become possible if not commonplace in this country the United States of America to assert the opposite principle that the business enterprise must be so managed as to make the public good become the private good of the enterprise. . . . That more and more of our managements claim it to be their responsibility to realize this principle in their daily action is the best hope for the future of our country and society, and perhaps for the future of Western society altogether. To make certain that this assertion does not remain lip service but becomes hard fact is the most important, the ultimate responsibility of management."
That is the clearest statement of the purpose of the economic element in a "free society" known to this writer.
THE DEFECT IN “HUMAN RELATIONS” AND "PERSONNEL MANAGEMENT"
Because he has this clear view of the purpose of business, Drucker is equally clear about the human conditions which must be satisfied if that purpose is to be realized. I have always found his chapter "Is Personnel Management Bankrupt?" (Practice of Management) the most constructive analysis he has ever read of the present halfway house in which we are trying to live with reference to the human factor in business undertakings.
Drucker answers the question posed by his own title-“No, it personnel management is not bankrupt. Its liabilities do not exceed its assets. But it is certainly insolvent, certainly unable to honor, with the ready cash of performance, the promises of managing worker and work it so liberally makes. . . . Perhaps the biggest working capital is the things we have learned not to do, but what banker ever lent on such collateral?"
And his touch is equally sure when he analyzes the reasons for this unsatisfactory condition. "Personnel management is still regarded as a specialty, something one tacks onto a business," not as an essential element, indeed the most important element, in every manager's job.
He distinguishes between personnel management and human relations, but what he has to say about the one applies to the other. Both suffer from being treated as "accidental and incidental," when in reality they are fundamental. Both avoid "the two most important areas in the management of workers: the organization of the work and the organization of people to do the work." They accept "both as they find them."
The writer's first experience of organization on any large scale was as a very junior officer in what Wilhelm II of Germany called "that contemptible little Army," initially a force of six divisions that Great Britain sent to France in 1914. Four and a half years later, when the carnage drew to a close and the British army was nearer one hundred divisions, he noted one curious fact. With the exception of the American army, which was engaged in the holocaust only in its last year, the British army was the only army in that war which at some stage of the long struggle did not come close to dissolution in mutiny or near mutiny.
And the writer was driven to the conclusion-a conclusion to which he came unwillingly-that the ability of the British army to endure the strain without losing cohesion must be traced to the rather special relationship between officers, especially junior officers, and other ranks, which was built up in the British long-service professional army in the nineteenth century. It was a relationship illustrated by a sentence in an official British Army Training Manual published in World War II-"The first duty of an Officer is to care for, that is to know, his men."
But it was only when the writer read Drucker's chapter that he appreciated why this was so. In business we regard personnel administration and human relations as "something one tacks on to a business," that is to say, as something extraneous to the "real work" business exists to do, not as something essential to getting that work done properly.
In the British army, as the writer knew it, all the specialized departments supplying personnel services found in a good modern business-medical services, supply services, recreational arrangements, pay arrangements, and so on-were what Drucker describes as "the things the personnel administrator in business is typically responsible for, necessary chores."
But, in addition to these specialized services, there was a tradition that the officer in immediate command of the unit or formation in which the soldier was serving was responsible, that he was not only a good soldier, but also proud of his platoon, his company, his battalion, his brigade, his division, and the army in which he served. And this lesson was rubbed home with young officers from the moment they joined the army. To this condition of cohesiveness military writers have applied the term "morale," which has been defined as "moral condition, especially as regards discipline and confidence." An experienced officer can tell whether morale of a military unit is high, average, or dangerously low within a very short period of becoming acquainted with it. To maintain the morale of his command is the first duty of an officer at all levels.
This meant that personnel administration was treated, not only as a “line” function, but, next to fighting and training for fighting, as the most important function. The dilemma which arises when it is treated as a specialty did not exist. As Drucker points out, where it is treated as a specialty, "either personnel administration has to usurp the functions and responsibility of the operating manager or operating managers, in self-defense, have to confine personnel administration to the handling of incidental chores."
Where it was treated not only as a “line” function, but as a line function that was an essential preconditon of fighting efficiency, the conflicts which so often arise in business between "the line" and the specialized services were rare. And when they occurred it was not because the specialized services were interfering with the "authority" of line management but because they were not performing their specialized functions adequately. The line officers recognized to a man that those functions were essential to fighting efficiency. In business, good personnel management is essential to working efficiency. But it cannot be good if it is in competition with line management for the control of the worker. It can only be good if line managers at all levels regard it as an essential part of their own work and see the specialized personnel departments as existing to help them to discharge their responsibility.
THE VALUE OF THE PAST
It is also in the same chapter that Drucker shows his own deep sense of respect for the past. He refers to scientific management as developed by Taylor and his immediate followers as "all but a systematic philosophy of worker and work. Altogether it may well be the most powerful as well as the most lasting contribution America has made to Western thought since the Federalist Papers."
Since the middle 1940s there has been a growing chorus of academic disapproval of F. W. Taylor. Where it is not blatantly ignorant of what Taylor did and wrote, it is spiteful. Regarded as serious criticism much of it is absurd. As Professor Harold Koontz, speaking officially as president of the American Academy of Management, noted in 1961, some "writers seem to have become overly concerned with downrating and sometimes misrepresenting what anyone else has said or thought or done."
Previous work is described as "classical" or "traditional" Of course, these terms, in the fast-moving climate of American academic opinion, are pejorative. Their implication is “out of date,” “superseded.” Drucker will have none of this contempt for the past. His passage on Taylor, already noted from Practice of Management, is one example.
Another was his comment on being awarded the Taylor “Key” in 1967:
The popular game of belittling Taylor makes not much more sense than a belittling of Newton because all he did was to create the science of physics without, 300 years ago, being able to anticipate quantum mechanics. Indeed just as we can only have quantum mechanics because a Newton gave us classical physics, we can only have today all the new shiny tools and concepts of modern management theory because a Taylor founded the study of work and the study of organization 75 years ago.
That was well said-a truly constructive contribution to the study of management.
Signs are not wanting that other students of management are beginning to follow Drucker's lead. At the annual meeting of the American Academy of Management in 1969, Professor William M. Fox of the University of Florida in a paper "What Are the Classicists?" observed: "I feel that the classical label is neither accurate nor useful. To date, this same conclusion appears to have been reached by all of the graduate students to whom I have assigned the task of defining what a classicist is." Put crudely, "classicist" means someone who ventured to write about management before the unique thoughts of the author using the term were launched upon an indifferent world.
Probably Drucker's most valuable contribution to the study of management is his reiterated emphasis on integrity as the quality essential in a manager. Thus:
In its practice management must demonstrate that it realizes that integrity is the one absolute requirement of a manager.
Management should not appoint a man who considers intelligence more important than integrity. For this is immaturity. . . . If he lacks in character and integrity-no matter how knowledgeable, how brilliant, how successful-he destroys. . . . In appointing people to top positions, integrity cannot be overemphasized.
And again, in more than a dozen other places throughout the book, we find a similar emphasis on integrity.
What does this word "integrity" mean? A standard American dictionary gives the following definitions: “Integrity 1. Soundness of and adherence to moral principles and character; uprightness, honesty. 2. The state of being whole, entire or undiminished. 3. Sound, unimpaired or perfect condition.” The Concise Oxford Dictionary is briefer: "Integrity: wholeness, soundness, uprightness, honesty."
Why is integrity so important? A man of a very different background than Drucker's has put it in a sentence. As governor general of Australia in 1953, Field Marshall Sir William Slim, who commanded the Allied forces in Burma in World War II, in a luncheon address to the Sydney Division of the Australian Institute of Management, said that there were five qualities essential in a leader in any walk of life: courage, will-power, flexibility of mind, knowledge, and "the last quality on which all the other qualities have to be based is Integrity-the thing that makes people trust you."
He was merely endorsing a much earlier comment by a chief of staff of the United States Army, Gen. Charles P. Sunnerall: "the leader must be everything that he desires his subordinates to become. Men think as their leaders think and men know unerringly how their leaders think."
This is only a positive statement of Drucker's view, already quoted, that "capitalism is being attacked. . . because it is cynical." No one wants cynical subordinates, individuals who say, either overtly or to themselves, "I'm all right, Jack. . . I don't give two cents what happens to the rest of the outfit or to the corporation." The man who tends to think, "I don't care what happens to the United States, or to my city or even to my next door neighbor, so long as my bread is well buttered," is a poor citizen of his nation and of his neighborhood, and he is, almost inevitably, a poor worker. For one consequence of modern technology is that intricate cooperation between worker and worker is far more essential than it has ever been in the past. And a philosophy of untrammeled self-interest on the part of an individual prevents him from being even a moderately useful citizen of an industrial society.
A critical subordinate is relatively harmless if the sentiment of the remainder of his group is relatively contented. A superior who is cynical about the pursuit of his own interests destroys the moral basis of his own authority because authority derives from one source and one source only: the demands of the job to be done. Authority is necessary to cohesive action for a common aim. As the late Chester Barnard pointed out, "the decision as to whether an order (communication) has authority or not lies with the persons to whom it is addressed." Authority comes from below: it is given. And it is never given to an individual who is known to be pursuing ends of his own rather than the common purpose for which the group has been set up.
In other words, "an ounce of example is worth a ton of precept." It is because he saw and expressed this truth so dearly that Drucker's Practice of Management is, in the writer's opinion, the best book on the subject which has been published since F. W. Taylor wrote The Principles of Scientific Management.
Of course, this definition of the responsibility inherent in authority is not all that is in the book. It is only the core of its philosophy. But it is this, coupled with his insistence on integrity, which gives the whole work its unity and its value.
SCOPE OF OUTLOOK
Drucker's second great quality is his breadth of outlook. Most students of management confine themselves to business. This is a restricted approach. Public administration, military administration, hospital administration, and a score of other callings all use management knowledge. As the late President Franklin D. Roosevelt remarked in 1937, "a government without good management is a house built on sand."
Ten years ago, the writer was asked to contribute to the decennial study organized by the American Society of Mechanical Engineers: "Ten Years' Progress in Management." In this context, the ASME asked about fifty eminent professors and students of management in the United States to write me a letter answering certain questions. One of these questions was, "What is the best book on management published in the last decade?"
Two of the correspondents chosen by the ASME, one of whom was Drucker, replied that it was Philip Woodruff’s two-volume memorial study of the former British Indian Civil Service, The Men Who Ruled India. Coming from the United States that selection at first seemed astonishing. Why did these two American professors find Woodruff's book and the evolution it records so interesting and pertinent? In the United States, British rule in India has traditionally been considered a bad example of bureaucratic imperialism.
We live too close to these events to see them in the round. But will that be the verdict of history? Reading through Woodruff for a second time and considering Drucker's opinion, the writer came to the conclusion that he might well be right. British rule in India was a remarkable example of enlightened administration. In little more than a century and a half it had welded a continent of conflicting religions, warring factions, and scores of petty sovereignties into the two emerging nations of India and Pakistan.
There was, of course, an element of force-the Anglo-Indian army. But in comparison with the size of the continent, the intricacy of the problem, the mixture of warlike and less warlike people who had to be protected from each other, the clutter of native princelings often proud, jealous, and mutually hostile, its size was minimal. It seldom exceeded 250,000 men. There was one mutiny. But that was largely checked by native troops who remained loyal.
The writer dined with the engineer colonel of an Indian Royal Engineers' workshop about ten years after the liberation. He told the story of an English lieutenant colonel, formerly in command of an Anglo-Indian battalion, who had been visiting with his old regiment a couple of years before. Toward the end of dinner he turned to his host, the Indian lieutenant colonel then in command, and said, "You know, if I shut my eyes, it might be eight years ago: nothing has changed." The Indian lieutenant colonel replied, "Thank you very much for the compliment. That's just how we're trying to keep it."
Behind the force, which was really no more than a police force, was a small but handpicked group of dedicated administrators-the former British Indian Civil Service. It is perhaps typical of the spirit in which this service was developed that in this century it was just as open to Indian nationals as to British-born entrants, provided they could pass the extremely exacting entrance examination which was necessary to qualify for selection. It is in memory of and about these men that Philip Woodruff has written.
How were they trained? Not, to be sure, in all the new tools and concepts of modern management. Most of them had never heard of Frederick Winslow Taylor. But they were highly educated men. The entrance examination for the former British Indian Civil Service was a tough hurdle. Some of them were educated at Balliol College, Oxford. And for many years after his death in 1893, Balliol reflected the breadth and dedication of Benjamin Jowett.
What did they learn? Many of them took the intermediate examination known as "honour moderations" and the final examination described as litterae humaniores, popularly known as “greats.” “Honour moderations” covered the languages of Greece and Rome, "greats" the philosophies, religions, arts and politics of these two peoples. "Greats" taught scholars both detachment and an ability to see a problem in its setting as a part of a total environment. Then, after more special training in the languages and outlook of some of the Indian peoples, they were sent to India, often to assume large administrative responsibilities at quite an early age.
TEACHING OR RESEARCH
They were superbly taught. Jowett's biographer has reported that "at the time of his death, several of the Fellows of Balliol wished more leisure for the pursuit of their own studies and researches, less concentration on preparing their pupils for the schools, a pursuit of knowledge more for its own ends and less for ulterior ends, however valuable."
Jowett never concealed his own view that education, not research, was the first and final function of a tutor. Research, he seems to have thought, was more often than not a self-indulgence, an agreeable escape from more urgent, if more tedious, duties. If it was other than that for some exceptional teachers, if a room in a tower was essential to them, then they should make the kind of sacrifice in order to work in it and return to it that he himself made throughout his life. It was wrong to use public money to make their choice easy. If teaching was their function, they must put their pupils first and do their research in their spare time. The phrase "the kind of sacrifice" refers to the fact that Jowett never married.
“A MAN FOR ALL SEASONS”
Here again Drucker seems to belong to "the great tradition of knowledge" rather than to its more modern counterparts. In the concluding chapter of The Age of Discontinuity, "Does Knowledge Have a Future?," he points out that the emphasis in a society based on knowledge places a special responsibility on those who control the sources of knowledge-the universities. "Where there are large sums of money floating around, one always has to guard against the smart operator. If the knowledge community will not do this by itself, the safeguards will be imposed on it. Similarly, immorality is not to be excused simply because no one makes a profit out of it."
Students all over the world are in revolt. Why? In a pamphlet circulated over a year ago, Professor Courtney C. Brown, dean of the Graduate School of Business Administration at Columbia-and Columbia has had its troubles-suggested part of the answer:
Students have sensed a lack of faculty commitment to work in the classroom, a propensity to place other commitments ahead of classroom commitments and office hours: they have complained of classes where discussion is desirable but prevented by the size of the enrollment and of other practices that have accompanied the growth of what has been described as 'academic professionalism.’ . . . These characteristics of faculty have been evident in differing degrees on most university campuses. Commitment to the institution and its students has too frequently been given second priority to a personal professional interest with an inevitable growing reliance for classroom work on preceptors, teaching assistants, and other types of junior instruction. This has happened at a time when the costs of education have greatly increased. The student has tended to feel short-changed.
A colleague of Professor Brown's, Professor Neil W. Chamberlain, sharply criticized this view for displaying a "misunderstanding of the educational process."
Among the institutions which are most under attack by students is the Western-style business corporation itself. But neither students nor any other group risk their futures and make their present unprofitable because of what may happen to them. Their protest is always sparked by present conditions. They have occupied offices at Columbia, not the offices of business corporations in New York. And if the teaching at Columbia has been such as to make them so dissatisfied with their present circumstances as to lead to open revolt, it is futile for those same teachers at Columbia to point to other unsatisfactory features of our society. It is ancient wisdom that men should "First cast out the beam out of thine own eye: and then shall thou see clearly to cast out the mote out of thy brother's eye."
Drucker, though a professor himself, does not make this mistake. He says flatly "a group in power either takes responsibility for its morality or it is corrupt and corrupts." And he asks the pertinent questions:
Can the requirement of the Ph.D. be justified (except perhaps in the physical sciences)? Is there any evidence that the Ph.D makes a man a better teacher or even a better scholar? Or is the main reason for this requirement that it reserves access to appointments and enrollments to people who have paid their fees in time and money at the academic toll-gate?
In this writer's experience, the Ph.D. in business administration is a direct obstacle in teaching the oncoming generations of men and women. Experienced practitioners of management have no opportunity to teach without academic credentials. The Ph.D. is a craft-union "ticket," not any kind of test of good workmanship as a teacher. The insistence on it by the universities in the field of management is a clear example of what the French describe as deformation professionelles.
Because he sees these issues and expresses them clearly, Drucker strikes a chord in the experience of every man who has carried heavy practical responsibilities. To quote his two concluding sentences:
The shift to knowledge as the foundation of work and performance imposes responsibility on the man of knowledge. How he accepts this responsibility and how he discharges it will largely determine the future of knowledge. It may even determine whether knowledge has a future.
That is why the writer has described him as: “The Managers' Professor.””