American Capitalism: Social Thought and Political Economy in the Twentieth Century

5. The Prophet of Post-Fordism: Peter Drucker and the Legitimation of the Corporation

The Prophet of Post-Fordism: Peter Drucker and the Legitimation of the Corporation Nils Gilman Given that most people consider running a business to be the very definition o f a practical matter, it's a bit perplexing to consider h o ~ v "management " emerged in the second half o f the t~ventieth century as a discipline ~vith intellectual aspirations as great as medicine or l a ~ r As late as the 1950s, there were only a few thousand graduate students o f business administration anywhere in the ~vorld, and much o f the senior management at large American companies had not been to college,much less to graduate school. By the end o f the twentieth century, ho~vever, over 100,000 MBAs were being minted annually in the United States alone. T h e Leadership Initiative at Harvard Business School recently found that ~vhereas10 percent o f the bosses and founders o f large ,hesican companies in the 1960s had an MBA, by the 1990s almost 60 percent had a professional management degree.' Accompanying this professionalization o f management has been the emergence o f a vast literature, both popular and academic, o n the art and science o f management. Although much o f this literature (especially the popular titles sold in airport bookstores) is schloclzy, some o f it has also aimed for and achieved significant theoretical and analytical rigor. It is high time that intellectual historians began to take seriously ideas about management and business.' T o begin unpaclzing the intellectual origins o f this neJvest o f modern professions, this chapter examines the early ~vorlz o f the founding father o f modern management theor!; Peter Ferdinand Drucker. "Uthough "scientific" approaches to industrial operations trace baclz to the ~vork o f engineer Fredericlz T~Vinslo~v Taylor at the beginning o f the nventieth centur7 ; Drucker is, quite simply the most important figure in the field. "In 110 Sils Gilman most areas o f intellectual life nobody can quite decide ~ v h o is the top dog," John Mickleth~raitand Adrian TlVooldridge observe. "Inthe ~vorldo f management gurus, ho~vever, there is n o debate. Peter Druclzer is the undisputed alpha male."' TlVith over 30 published articles, Druclzer is the most prolific individual contributor to the Hat.-oatdEfusinessRri~ieu~, the most influential publication o n the theory and practice o f management. Drucker Tras the first pro-capitalist to analyze ~vorlzers as resources rather than costs, and he coined the term "kno~vledge ~vorkers" in 1959. He Jvas the first to emphasize that capitalists create their customers, rather than merely responding to a priori marlzets. He conceived and evangelized the notion o f "management by ol?jectives," used by a great many American corporations toda7;~vhereby ~vorkers and management negotiate team and individual goals.4 Business leaders such as Bill Gates o f hlicrosoft,Jaclz Welch o f GE, and Andy Grove o f Intel-perhaps the three most admired American businessmen o f the late twentieth century-cite Druclzer as a lzey influence.%According to one commentator, "Searly everyone in the business ~vorldis familiar ~vith Druclzer, either through his boolzs or his columns in The VVIc~lll Stt~etJout.na1. He is a household name among l\IBLAs,corporate executives and business students. Drucker is the world's most sought-after business consultant."" Moreover, Druclzer's ideas have guided more than just businesses. For example, the cniversities o f Michigan, Minnesota, Io~ra, and hlichigan State in the late 1940s all reorganized according to the principles o f administrative decentralization enunciated in Drucker's Concept of the Cotgotntio~l Figm-r 1. Professional degrees in the L-nitrd States, 1935-1996. Source: L.S. Del~artnient of Education. T h e Prophet o f Post-Fordism: Peter Drucker 111 (1943).So did Cardinal Francis Spellman when reorganizing the k c h diocese o f S e w Yorlz in the 1950s. Druclzer has also exerted great influence in the political sphere. Co~lcept ~ras required reading for the first-year class o f France's elite Ecole National d'Administration when that school opened in 1946. In the late fifties Druclier became the first to use the term "privatization " to describe the goal (~vhich he advocated) o f ending government management o f industrial enterprises. Richard Nixon urged Druclzer's ideas o n government administrators; Ne~vt Gingrich hailed Druclzer...