DRUCKER’S PROFILE
Born - 19th of November, 1909 Vienna, Austria
Died - 11th of November, 2005 United States of America
Most influential corporate Guru
Formed “Concept of Corporation/ Decentralization of Management”
Created principle “5 step MBO Process” (Management by Objectives)
Proposed “SMART” objectives
Proposed the “Equity Theory of employee motivation”
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CONCEPT OF CORPORATION
Drucker explained for the first time, how and why decentralization worked. Drucker said
decentralization was good because it created small groups where people felt that their contribution
was important.
Managers should delegate tasks in order to empower employees.
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5 STEP MBO PROCESS (1954)
The principle : When employees are involved
with the goal setting and choosing the course of
action to be followed by them, they are more likely
to fulfill their responsibilities.
Every level of management in the organization
participates in the strategic planning process and
creation of performance systems
Each managerial level identifies their goals for
every area they are responsible for. These goals
are shared then with their individual units
There is external and internal control in this system
with routine assessments. An evaluation is done to
understand as to which extent the goals have been
met
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DRUCKER’S SMART
METHOD
Specific
Measureable
Achievable
Realistic
Time bound
Effective Executive by Peter Drucker
5
EQUITY THEORY OF EMPLOYEE MOTIVATION (1974)
WHAT CAN WE DO TO MOTIVATE THE KNOWLWDGE WORKER!
Positive reinforcement / high expectations
Drucker says “An attempt to balance what they
put in to their jobs and what they get from them,
will unconsciously assign values to each of his
various contributions”
Discipline and punishment
Treating people fairly
Satisfying employees' needs
Setting work related goals
Restructuring jobs
Base rewards on job performance