Monday, November 14, 2005

Peter Drucker – 1909 – 2005

Peter Drucker, world renowned management guru, died this past Friday, November 11th, at the age of 95.

Born in Vienna in 1909, he received his doctorate in public and international law from Frankfurt University in 1931. In Frankfurt he worked as a financial reporter for the Frankfurter General Anzeiger newspaper. In 1933 he fled Hitler's Germany and moved to England where he worked as a securities analyst for an insurance company. In 1937 he came to the United States and accepted a teaching position at Sarah Lawrence University.

Drucker is best known for his books and articles on modern management. His writings were not only ahead of their time when published but remain relevant classics to this day.

I remember reading a piece by him in the Wall Street Journal in the 1970s in which he pointed out that Karl Marx's dream of worker ownership of the means of production had been realized in the United States of all places. This was achieved not through the nationalization of industry as in the then Soviet Union and other communist countries nor through utopian communities where all productive resources were owned in common with "each taking according to his needs, and each contributing according to his ability" as envisioned by Marx. Rather it was businesses competing for workers with a combination of pay and retirement pensions and funding the pensions with investments in corporate stocks. In this way the majority of stock, which represents ownership in corporations, in American corporations came to be owned by workers indirectly through their pension funds. Today, thanks to IRA's, 401(k)'s, 403(b)s and other worker directed retirement accounts the percent of corporations owned by the workers of America is probably greater than when Drucker described this in his article.

Drucker was also ahead of his time in stressing the importance of worker's training and knowledge in modern production. "Human capital" as we now describe it. Drucker himself was a part of the great wave of human capital that fled Nazi dominated Euope and flowed into America in the 1930s and 1940s. Hundreds of scientists, academics, artists, filmmakers, etc. fled to the U.S. to escape Hitler's wrath and the U.S. economy benefited greatly from this in migration of foreign knowledge and talent.

Drucker has left behind a couple of generations of managers trained in his innovative ideas and, through books and articles he has left behind, he will continue to influence future generations of managers. Despite his passing, the American economy will continue to employ his insights and ideas to continue its remarkable growth.

No comments:

Business Management Daily Quote