The Practice of Management

Peter Drucker published this in 1954 and it established management as a subject that could be studied and taught. Before it, books about business addressed either specific functions or the personal qualities of executives; Drucker treated management as a distinct body of knowledge with its own principles.

The famous formulations are here. The purpose of a business is to create a customer, from which it follows that marketing and innovation are the only functions producing results and everything else is a cost. Management must answer the question what is our business, and the answer must come from the customer's perspective rather than the producer's, which Drucker illustrates with the argument that a railway company defining itself as being in the railway business rather than the transport business has answered wrongly. A business must set objectives in multiple areas simultaneously, because optimising any single measure damages the others; Drucker lists eight, including market standing, innovation, productivity, physical and financial resources, profitability, manager performance and development, worker performance and attitude, and public responsibility.

The book also introduces management by objectives and self-control, in which managers set objectives for their own units in line with the enterprise's goals and measure their own performance against them, which Drucker distinguishes sharply from management by targets imposed from above. It covers the manager's job, the structure of the organisation, and the development of managers. The specific industrial examples are dated and the treatment of the worker belongs to its period. The framing questions have not been superseded.

Management writer and consultant; professor at Bennington, NYU and Claremont Graduate University

He invented management as a field of study, and The Practice of Management and The Effective Executive remain the primary sources every later writer builds on.

NYU, Claremont Graduate University