The quality of an organization’s managers is the most important determinator of results and prosperity. Managers make or break organizations. They also make or break employees and societies. The Practice of Management is an overview of the disciplines of management, by the greatest management and business consultant, Peter Drucker. His thesis is that management practices can be learned and applied. His purpose is to help managers–and those who aspire to become managers–practice management disciplines so that businesses, employees, and societies prosper.
The important sections are “Managing a Business”, “Managing Managers”, and “The Structure of Management.” Drucker reveals the questions and practices of great executives. He explains the behaviors and structures of great organizations many of which he observed and consulted, including General Motors. Critical topics include organizational purpose, functions, objectives, decisions, culture, management structure, and leadership.
Executives can use the book productively by asking the strategic questions in chapter 6, including what is our business and what should it be? They can implement the requirements for growth in chapter 7 by setting and managing objectives. They can review the management structures in chapters 16-18, pick one that suits the company’s size and goals, and adopt solutions to common problems.
One of the critical ideas of the book is that executives and the entire chain of command should set objectives (121) to achieve business goals. To achieve them there must be measures, standards, performance reviews, and rewards. This approach is needed for all areas that require results such as “innovation” and “manager performance and development.” (63)
Another idea is the practice of “bedrock analysis” or making long-term decisions based on past or present events that will shape the future. (91-92)
Lastly, the practice of building the right management structure is explained in detail, in particular, the federal decentralization of large businesses. He lists the benefits of and rules for creating autonomous business units within a large organization to increase agility, profit, and leadership development opportunities. For decentralization to work business units must serve their own markets or provide unique products (202-217).
Although some content is dated (chapter 8), the majority of the content is timeless and relevant. Executives and managers will get an integrated management strategy ordered for results.