The Practice of Management (1955) by Peter Drucker

Peter Drucker wrote the book The Practice of Management in 1955.

 

 

Some Important Points made in the book.

 

Management is an economic organ, indeed the specifically economic organ on an industrial society.

 

 

Management has three jobs: Managing a business, managing managers, managing worker and work.

 

A business enterprise is created and managed by people.

 

A business must have a purpose. The purpose must lie outside of the business. Every business enterprise is an organ of society and it must have customers. It is the customer who determines what is a business.

 

A business is different from all other human organizations by the facts that is markets a product or a service. Any organization that exists for marketing a product or service is a business.

 

Every business has two basic functions: marketing and innoation. They are the entrepreneurial functions.

 

Innovation is the provision of better and more economic goods and services.

 

Business has the function of utilzing wealth producing resources productively. This is the administrative function of business.

 

Our Business - Important Questions

 

What is our business? Who is the customer? What is the value to the customer? What will our business be? And What should it be?

 

The Objectives of a Business - Objectives are needed in many areas.

 

At least in eight areas objectives of performance and results have to be set in an organization.

1. Market standing, 2. Innovation, 3. Productivity, 4. Physical and financial resources, 5. Profitability, 6. Manager performance and development, 7. Worker performance and attitude, and 8. Public responsibility.

 

It is important to highlight that Drucker emphasized that there has to be objectives related to public responsibility for a business organization in 1955 itself.

 

 

The productivity problem is always one of seeing the range of alternative combinations of the various resources, and of finding the combination that gives the maximum output at minimum cost or effort.

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