It was difficult to totally separate those ideas of Drucker’s that were refinements of previous ideas from those that were completely new. An illustration was Knight and Schumpeter’s contributions when Drucker wrote, “by and large we have not yet developed an adequate theory of industrial
economics.” Even though the pioneer studies of Knight in his 1921 book Risk Uncertainty and
Profit and of Schumpeter in his 1911 book Theory of Economic Development were both written
more than thirty years ago (1950:30). It could be argued that this was a new idea, or an extrapolation of the role of the innovator.
In Economic Man the one-‘maybe hope’ for Europe was a new society based upon American free market capitalism. Drucker now accepted that – “One fact alone makes American reality totally
untranslatable into European terms” (1950:329-330), which was that one in eight American
workers, excluding farm hands, were investors in industrial shares. Consequently Capitalism American-style did not have a translatable meaning in Europe (ibid:331). It remained unique, as it did in Tocqueville’s day. Europe could not have capitalism on the American model. What was making the European conversion so difficult was that it had a proletariat that was difficult to convert. America never needed the conversion because it never had a proletariat. With Russia and the Eastern Bloc countries in mind Drucker concluded that for Marx’s ideas to work, an agricultural proletariat was required (ibid:208-210). Although there were problems in American society, it was the Americans’ responsibility to make it work by developing “a functioning and
free industrial society” (ibid: xxvii). It would be the enterprise that would shape the system
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Drucker’s idea of American capitalism was market-competitive free trade, not “old
capitalisation”, which still operated “carriage trade” capital markets that prevent the mass
production and mass consumption system from operating (ibid:188). The tax system, which was in cahoots with the central banks resulting in young and growing enterprises being burdened by full taxes, was akin to expecting a boy to be as strong as a man. The actions of tax and the bank “effectively disbars the new venture from access to risk capital” (ibid:325) (see previous GM dealer “character loans” and Drucker’s comment regarding small business taxation (1946: 111, 282 & 283).
Drucker saw his task for the future as developing a tradition and standard of “management”, for which “there is not even a word for it except in English”2 (ibid:194) despite the emergence of “professional” management (1950:22).
Drucker examined “Why Managers Don’t Do Their Jobs?” (ibid:194) His answer was that there was a lack of ability to view the whole enterprise. Managers were still performing as specialists rather than as generalists (ibid:196), and were restricted by one-man rule and over-centralisation (ibid:200). A “management attitude” was required, with a need to spread it throughout the
organisation by the new industrial middle class who were the middle management technicians and supervisors that were “the nerve and circulatory systems of the enterprise” (ibid:143). But always there must be clear boundaries between workers and management, because it was the role of management to manage (1950:269).
One of the many timeless ideas put forwarded by Drucker was his statement of management’s first responsibility “What is Our Business?” “It is management’s responsibility to decide what
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the manager a total focus. Later he would turn the question on its head; “Peter Drucker –
professor, management guru, and a formal consultant to GE – greatly influenced Welch by writing. If you weren’t already in the business, would you enter it today? Welch pondered the question deeply, and acted on the answer. He insisted that every GE Business be No1 or No2 in the market vowing to ‘fix, close, or sell’ any that did not meet this standard” (Tichy & Sherman
1993:13 & 14).
It was in Society that Drucker’s fundamental idea that the cement of all the activities of a manager was integration. As Drucker’s ideas were formulating he began with his ideas being confined to the worker and his tasks (1950:2, 4-8 & 141-142)
What Society had done, was attempt to integrate the enterprise and its people into modern society within a free market democracy. Metcalf and his contributors had similar ideas in their 1926 book
Scientific Foundations of Business Administration. They were not as developed as Drucker’s
ideas but they were just as contemporarily applicable in their time. Their aim was for a “fair
balanced society” with an approach that included a philosophical, biological and psychological
foundations incorporated into the basic principles of management all focusing on a practical approach. This new approach would replace the “ugly” society, which presently existed. Metcalf’s contributors included H A Overstreet, O W Caldwell, Thomas Nixon Carver, M P
Follett, H S Pearson, Henry S Dennison.
The initial impact of Society was recorded in nineteen reviews that were tabulated in The Book
Review Digest 1951. Listed only are Robert Merrion in the Chicago Sun; Philip Dodd in the
Chicago Sunday Tribune; John Maurice Clark (1884-1963), in The Yale Review, who was one of
Drucker’s influences. J E Cross in the Library Journal, R V Holt in the Hibbert Journal; David Fellman in the New Republic, Cleveland Open Shelf, Current History, and US Quarterly.
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Of the following reviews that are quoted, all were complimentary and were generally anonymous, with the minority otherwise identified. “A society for America that is neither capitalist nor
communist” New Yorker. “Deserves wide reading” Churchman. “The book of the year in socio- economics - be sure to read” Commonweal. “ A provocative, interesting book” Kirkus.
“Substantial contribution more ambitious that Economic Man” C E Noyes Nation. “It is
stimulating, valuable and provocative” (as before) S E Harris New York Herald Tribune. “What he has to say is so important that he is deserving of the widest possible audience”. “He uses a natural commonsense” L M Hacker New York Times. “Penetrating social-economic analysis” P
F Brissendon Political Science Quarterly (see full review in Chapter 7). “Well organised analysis
of the most serious problems of our time” J N Jackson San Francisco Chronicle. “Mr Drucker is regarded as one of America’s leading experts on economic, social and political problems and his wide experience as a foreign correspondent, college teacher, international banker and consultant to large business concerns. His scholarly book is a sound endorsement of the American way of life holds out” and “…hope for the future” (as before) H H Springfield Republic.
Of the nineteen reviews detailed, all were complimentary to Drucker. Their compliments and their numbers confirm that he had achieved national recognition within his chosen field. The unanimity of the reviews confirmed that his message was being understood.
The strength of Drucker’s work was his willingness to tackle the most difficult aspects of management, which was the integration of people into the enterprise by rationally related
principles, functions and policies. He accepted that he was only at the start of the journey and was not even approaching the destination. Much had still to be evolved but a ‘gadget’ would never resolve the problem.
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By identifying that people were the nucleus of all management, Drucker had a basis to “discover(ed) management”. His next task was to make people more productive or effective through management. When Alan Kantrow wrote - Why Read Peter Drucker? One of his answers was “Integration of thought” (Kantrow Jan/Feb 1980:77). It was an appropriate description for Society.
By the publication of Society Drucker had recorded that he was immersed in management rather than being the tentative outsider when he first started his research with GM for Concept. The weakness of Society, if it was a weakness, was that Drucker asked many “questions”, which he left unanswered. However unanswerable questions of society about its own future were and were always likely to remain unanswered in a democracy, which was central to Drucker’s vision of society. The precise future of a democratic society was always impossible to predict. The strength of the book was that it acknowledged that management was part of an unpredictable society, and therefore the manager’s preparation should involve the widest self-development possible in readiness for his tasks. What my thesis established at this point was what Drucker knew about management and what his views were on society. It was from this foundation that he embarked on his further preparation before writing Practice
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