In this classic management book, Peter F. Drucker
(the author) discusses the evolution of management especially how the approach
of management has changed over the decades and foretells the future of
management. Thus, Drucker deliberates on how the new paradigms of management have
transformed over the years and continue to undergo changes. Most of the issues
discussed by Drucker in this book have already manifested in some developed
countries and a few developing countries as well. In the words of Drucker (1999,
p.195), the content of this book which can be considered as a masterpiece in
the field of management,
go way beyond management. They go way beyond
the individual and his or her career. What this book actually dealt with is: THE
FUTURE OF SOCIETY.
This piece of work can be considered as a
history book for Management because Drucker narrates the history of management
and how Management has changed over the years. In other words, Drucker
discussed how Management used to be understood by organizations, management practitioners
and management scholars in the past and how the terminology must be understood
by organizations in the 21st century. Drucker in this book also challenged some
of the misconceptions that both laypersons and scholars have about Management.
Drucker argued that the term Business Management started to be associated with
government agencies and departments in the United States of America after the
Great Depression as they attempted to dissociate themselves with the term
business due to the negative reputation or perception that people had about
Peter Drucker in this book also mentioned the
contributions of great Management scholars such as Frederick Winslow Taylor,
Mary Parker Follett and others. Drucker asserted that the contributions of some
of these scholars were not given enough recognition during their lifetime
however; after several decades, scholars and practitioners now revere and
appreciate their contributions to the field of management. Drucker asserts that
the role of management in business will continue to grow in all types of organizations
but especially in the non-business sector. Drucker also argues that in the 21st
century, the non-business sector will seek to implement more effective and
efficient management practices to help them to grow, expand, gain competitive
advantage and become more profitable.
Drucker also challenged the erroneous
assumption and position of some scholars that there is only one type of
management approach. Drucker argues that even though some scholars have
promoted this idea over the decades, it is far from correct and that different
organizations will require different management approaches or structures in
other to excel or succeed. Hence the idea of a single or sole type of
management structure cannot be true and should not be promoted. Drucker also
argues that even though teams are very important in modern organizations,
leaderless teams will be counterproductive. Hence organizations must always ensure
that teams always have a clearly designated leader or a boss with a veto power
to take final decisions in times of emergencies or crises. As a result, Drucker
(1999, p.11) posits that
in any institution there has to
be a final authority, that is, a “boss”—someone who can make the final
decisions and who can expect them to be obeyed. In a situation of common
peril—and every institution is likely to encounter it sooner or later—survival
of all depends on clear command. If the ship goes down, the captain does not
call a meeting, the captain gives an order. And if the ship is to be saved,
everyone must obey the order, must know exactly where to go and what to do, and
do it without “participation” or argument. “Hierarchy,” and the unquestioning
acceptance of it by everyone in the organization, is the only hope in a crisis.
Drucker also argues that the position of
employees in the organization has never been fixed in the field of management,
but rather different Management theories and scholars have their own positions
or viewpoints on the issue. The author asserts that in the 21st century, organizations
must consider employees as partners and not just as a mere group of people
serving the organization. Drucker points out that in the 21st century,
employees are not solely dependent on their employers or organizations as has
been the case for several decades but rather, employees have their own
independent private lives outside of the workplace. This is because employees
in the 21st century have their own skills and knowledge which can easily be
transferred to other organizations and therefore makes them highly mobile unlike
employees in the past who were mainly manual laborer’s and hardly changed jobs.
Drucker also asserts that the 21st century comes with its own challenges for
organizations. The author argued that the advancement in technology and the
advent of the internet poses different challenges to organizations. Drucker
mentions that social media for instance is a very important tool that connects
millions of people around the globe and organizations must take advantage of
its immense benefits. Drucker argues that organizations that fail to catch up
with technology will find it difficult to compete in the 21st century.
CHAPTER BY CHAPTER REVIEW OF DRUCKER’S BOOK
Management Challenges for the 21st Century
was divided into six chapters and each of those chapters dealt with specific
management issues or themes. Hence it is deemed important that some few
paragraphs are devoted to each of the chapters to enable readers of this book
review to also get an overview of the contents of each of the six chapters and
the precious words of management wisdom that Drucker attempted to convey to
Management scholars, students and even lay people who have interest in reading.
Chapter One: Management’s New Paradigm
Peter Drucker in this chapter asserts that
there is fundamentally a vast difference between a natural science and social
science. Drucker (1999, p.4) argues that
a natural science deals with the
behavior of OBJECTS. But a social discipline such as management deals with the
behavior of PEOPLE and HUMAN INSTITUTIONS. Practitioners will therefore tend to
act and to behave as the discipline’s assumptions tell them to. Even more
important, the reality of a natural science, the physical universe and its
laws, do not change (or if they do only over eons rather than over centuries,
let alone over decades). The social universe has no “natural laws” of this
kind. It is thus subject to continuous change. And this means that assumptions
that were valid yesterday can become invalid and, indeed, totally misleading in
no time at all.
Moreover, Drucker stated two different sets
of assumptions which he considers to be outmoded. Overall, Drucker in this chapter
highlighted seven old assumptions of management. Drucker (1999, p.5) claimed
that there are three old assumptions with respect to the discipline of
management which are:
1. Management is Business Management.
2. There is—or there must be—ONE right
3. There is—or there must be—ONE right way to
(1999, p.5) also highlighted four other old assumptions associated with the practice
1. Technologies, markets and end-uses are
2. Management’s scope is legally defined.
3. Management is internally focused.
4. The economy as defined by national
boundaries is the “ecology” of enterprise and management.
Regarding the seven assumptions stated above,
Drucker (1999, p.5) further argued that
By now all of them have outlived
their usefulness. They are close to being caricatures. They are now so far
removed from actual reality that they are becoming obstacles to the Theory and
even more serious obstacles to the Practice of management. Indeed, reality is
fast becoming the very opposite of what these assumptions claim it to be. It is
high time therefore to think through these assumptions and to try to formulate
the NEW ASSUMPTIONS that now have to inform both the study and the practice of
Drucker (1999, p.39) concluded the first
chapter of his book by asserting that
the center of a modern society,
economy and community is not technology. It is not information. It is not
productivity. It is the managed institution as the organ of society to produce results.
And management is the specific tool, the specific function, the specific
instrument to make institutions capable of producing results.
Chapter Two: Strategy – The New Certainties
Drucker (1999, p.43) argues that every
organization operates based on a certain set of assumptions (ie. theory of the business)
however it is a strategy that “allows an organization to be purposefully
opportunistic”. Drucker (1999, p.43-44) further argues that for any
organization to become successful in the 21st century, it must abide by the
following five certainties which are to a large extent social and political but
1. The Collapsing Birthrate in the Developed
2. Shifts in the Distribution of
3. Defining Performance.
4. Global Competitiveness.
5. The Growing Incongruence Between Economic Globalization
and Political Splintering.
Drucker (1999) also posits that currency
exposure is one issue that organizations would have to learn to manage. As a
result, Drucker (1999, p.67) cautions that
every business, even a purely
local one, is in the world economy today. As such, it is subject to currency
fluctuations even if it does not sell outside its own country, or does not buy
Chapter Three: The Change Leader
In this chapter Drucker asserts that change
should be the norm for any organization that wants to excel in the 21st century
and not the exception. Drucker (1999, p.73) argues that
unless it is seen as the task of
the organization to lead change, the organization – whether business,
university, hospital and so on—will not survive. In a period of rapid
structural change, the only ones who survive are the Change Leaders.
to Drucker (1999, p.73), a Change Leader is essential to help organizations to
effectively manage the challenges of the 21st century and the person that
occupies that position must be someone who
… sees change as opportunity. A change leader
looks for change, knows how to find the right changes and knows how to make
them effective both outside the organization and inside it
Furthermore, Drucker (1999, p.73) states that
to have an efficient and effective Change Leadership, there are four requirements
1. Policies to make the future.
2. Systematic methods to look for and to
3. The right way to introduce change, both
within and outside the organization.
4. Policies to balance change and
Moreover, Drucker (1999) cautions that change
that is introduced without weighing the views of major stakeholders such as
customers, employees and others is bound to fail. As a result, Drucker (1999)
advises organizations to introduce change by starting with a small pilot test
and then after the change is introduced, the organization must commit to
continuous improvement. Furthermore, Drucker (1999, p.93) argues that “the only
policy likely to succeed is to try to make the future”. Thus, organizations must
be proactive and always look into the future by equipping the research and
development (R) departments as unexpected changes can quickly lead some
organizations into liquidation.
Chapter Four: Knowledge-Worker Productivity
Drucker asserts that sooner than later
organizations and society will be overwhelmed by the new information
revolution. Drucker (1999, p.97) argues that this new information revolution
will radically change the MEANING
of information for both enterprises and individuals. It is not a revolution in
technology, machinery, techniques, software or speed. It is a revolution in
Moreover, Drucker (1997, p.97) contends that
… for fifty years, Information
Technology has centered on DATA—their collection, storage, transmission,
presentation. It has focused on the “T” in “IT.” The new information
revolutions focus on the “I.” They ask, “What is the MEANING of information and
its PURPOSE?” And this is leading rapidly to redefining the tasks to be done
with the help of information and, with it, to redefining the institutions that
do these tasks.
According to Drucker (1999), the world is
currently in the fourth information revolution in history. Drucker (1999) argues
that the first information revolution happened when writing was invented; the
second was with the invention of the written book; and the third was with the
invention of the printing press by Gutenberg. Furthermore, Drucker (1999, p.127-130)
suggested five popular ways of organizing management data which are summarized
1. Key events upon which
performance hinges or depends
2. Probability Theory to identify
events outside the normal probability distribution ie. information
3. Threshold Phenomenon to
organize information by screening data until they pass a specific threshold
4. Scrutinize unusual events and
ascertain their importance or impact
5. Obtaining meaning direct observation
in a form which is truly outside information
According to Drucker (1999, p.110), in the 21st
century organizations must “learn to organize information as their key
resource”. Moreover, Drucker (1999, p.130-132; bracketed
comment is my own addition) asserts that in the 21st century
Executives have to learn two things: to
ELIMINATE data that do not pertain to the information they need; and to
organize the data, to analyze, to interpret—and then to focus the resulting
information on ACTION. For the purpose of information is not knowledge. It is
being able to take the right action. Furthermore; in the long run,
information about the outside may be the most important information executives
need to do their work. At the same time, it is the one that still has to be
Chapter Five: Knowledge-Worker Productivity
Manual workers were very important in the
20th century but in the 21st century, the knowledge worker is the most
important asset of the organization. Drucker (1999, p.135) made this assertion that
“the most valuable asset of a 21st-century institution, whether business or
nonbusiness, will be its knowledge workers and their productivity”. Drucker
also contends that Scientific Management, Industrial Engineering, and Total
Quality can all trace their roots from the pioneering study of Frederick
Windslow Taylor’s study of manual labour that led to the revolution in
manufacturing especially with respect to manufacturing efficiency. Drucker
(1999, p.142), suggested six major factors that will firmly decide the future productivity
of the knowledge-worker which are:
1. Knowledge worker productivity
demands that we ask the question: “What is the task?”
2. It demands that we impose the
responsibility for their productivity on the individual knowledge workers
themselves. Knowledge workers have to manage themselves. They have to have
3. Continuing innovation has to
be part of the work, the task and the responsibility of knowledge workers.
4. Knowledge work requires
continuous learning on the part of the knowledge worker, but equally continuous
teaching on the part of the knowledge worker.
5. Productivity of the knowledge
worker is not—at least not primarily—a matter of the quantity of output.
Quality is at least as important.
6. Finally, knowledge-worker
productivity requires that the knowledge worker is both seen and treated as an
“asset” rather than a “cost.” It requires that knowledge
workers want to work for the
organization in preference to all other opportunities.
Drucker (1999, p.157) argues that the “Knowledge-worker
productivity is the biggest of the 21st century management challenges”.
According to Drucker (1999, p.149; bracketed comment is my own addition), this
becomes even more challenging because
knowledge workers own their own
means of production. It is the knowledge between their ears. And it is a totally
portable and enormous capital asset. Because knowledge workers own their means
of production, they are mobile.
Chapter Six: Managing Oneself
The initial five chapters of Drucker’s book
Management Challenges for the 21st Century were about issues not directly
related to human beings but rather focused on changes in the environment such
as society, politics, economy and technology. However, the individual was the
focus of the final or concluding chapter (ie. the sixth chapter) of Drucker’s
book. In the final chapter of the book, the author posits that there will be
some radical demands on knowledge workers in the 21st century. Hence, according
to Drucker (1999, p.164), the five key demands that knowledge workers will be
faced with in the 21st century are:
1. They have to ask: Who Am I? What Are My
Strengths HOW Do I Work?
2. They have to ask: Where Do I Belong?
3. They have to ask: What Is My Contribution?
4. They have to take Relationship
5. They have to plan for the
Second Half of Their Lives.
Drucker (1999) promotes the idea of feedback
analysis in the sixth chapter of his book which he believes is the best way to
identify or discover the strengths of any individual. According to Drucker
whenever one makes a key decision
and whenever one does a key action, one writes down what one expects will
happen. And nine months or twelve months later one then feeds back from results
to expectations. I have been doing this for some fifteen to twenty years now.
And every time I do it I am surprised. And so is everyone who has ever done
Drucker (1999) in this chapter also
emphasizes the importance of value systems to organization in the 21st century.
Drucker argues organizations with the appropriate manners, ethics and trust are
the ones that will excel in the 21st century. Furthermore, Drucker (1999)
cautions all employees to start planning for the second half of their lives
(ie. retirement) long before they get to that era because that is the only way
they can alleviate or eliminate the challenges often faced by retirees in a
Considering the unique challenges that the
21st century brings to individuals, organizations, and the society at large;
this great piece of work by one of the most renowned management scholars in the
modern era is surely worth reading. As stated by Drucker (1999); albeit this
book is generally about management, it goes far beyond just business management.
The emergence of knowledge as a vital resource of the economy (Drucker, 1999) should
be a wake-up call to developing countries that have very low literacy rates to
prioritize education by allocating more resources towards providing formal
education to their citizens. Even though no human being can accurately or
precisely envisage the unknown future, Drucker’s forecasts of the 21st century should
be taken seriously since some of his predictions have already manifested in
many parts of the world both in developed countries and some emerging economies.
Drucker, P. F. (1999) Management Challenges for the 21st Century.
London: HarperCollins Publishers Ltd.