Drucker & Social Responsibility

This week on Facebook: Last week in It’s only money! I quoted Peter Drucker, for those who may not be familiar with his works, and perhaps the younger millennials in particular, this week is devoted to my take on the man. On his death (aged 95) in 2005 he was described by a Bloomberg Business Week article as The Man Who Invented Management, I much prefer the subheading ‘Why Peter Drucker’s ideas still matter’.

His main intellectual legacy is likely to be his structuring of thinking about management and his emphasis on the subject’s essential connections to its broader context and meaning. The question of how to achieve social integration in the face of the new pressures generated by the global economy is for Drucker’s successors. Here his thought will remain an important part of the debate on the legitimacy and functions of the corporation but as part of a world increasingly different from that in which he developed his ideas. Peter F. Drucker: The Ethics of Organisations¹ 

The following is an amalgam from the links provided and represents (in part) my own views on Drucker’s contribution to social responsibility², which I would contend that corporate functions of a government and business — generally — have yet to practice. In a broader context and meaning Drucker referred to the ethics of prudence and self-development, which he claimed plays an appropriate role in a society of organisations and influences their approach to social responsibility. Yet such an ethics cannot serve as a major source of elements of an ethical code. It can easily degenerate into a mere concern with appearances (which it has done). Moreover it is an ethics of authority applying to an elite (which it has become) and thus has an ambiguous status within the universally applicable Western moral tradition.

Drucker was also opposed to conferring excessively broad social responsibilities on business, since this involves the danger that business will eventually acquire power and authority in areas best reserved for action by the government, individuals, or other institutions. The limits of corporate responsibility are reached when the demands for social responsibility in response to social problems would impair the performance capability of the business, exceed its competence, and when it would usurp legitimate authority (such as that of government) or would involve illegitimate authority.

The bottom line of every social sector organisation is changed lives, which is possibly why Peter Drucker said that the social sector that may yet save the society. Adding that this can only be done by moving beyond the walls that preclude collaboration with partners in the private and public sectors, walls that prevent the building of this essential, cohesive community.

This cohesive community is yet to materialise at a national or a global level, despite the claims by many in the private and public sectors to exercise social responsibility. The collaboration needed to build the essential cohesive community that Drucker envisaged has many walls to be breached if it is ever to be realised nationally — and particularly globally.

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Monday — The Impact of Peter Drucker on Management Theory: Peter Drucker believed in the guiding principles of ethics and morals in business. This article will look at the history that shaped many of Peter Drucker’s beliefs, his contributions to management theory, and how he helped businesses by asking them the five most important questions.

 Tuesday —  Peter Drucker on Sustainability: While other business leaders felt that social responsibility was the the responsibility of business, Drucker felt that social responsibility was not only a duty but could provide a competitive advantage beyond simple public relations. Sound familiar? Competitive advantage versus Greenwashing. Drucker saw that CSR could provide flexibility for an organization, allow companies to attract and retain talented employees, reduce employee turnover, provide a return on investment (ROI), and yes; Increase sales and profit.

Wednesday — Drucker on the ‘bounded goodness’ of corporate social responsibility: Drucker’s writing richly and extensively sheds immense light on business and other institutions and their management, remaining as fresh and relevant today as it did decades ago. This is no less true of his writing on social responsibility.

Thursday — How Did Peter Drucker See Corporate Responsibility? The world continues to be more connected and more than ever the actions of organizations are scrutinized by the media and the public. Having an effective appreciation and approach toward corporate social responsibility and ethical, principled leadership is essential. The need to make a profit should be balanced with fair trade, sustainability, corporate social responsibility, and other ethical principles.

Friday — ‘Inclusive growth and prosperity’ – for whom? Inclusive growth and prosperity, the theme for this year’s Global Peter Drucker Forum in November, sounds like the ultimate motherhood and apple pie. Who could be against it, and where’s the problem? We just reboot the processes that have fuelled 200 years of capitalist progress which has sucked billions of the world’s population out of poverty and into the cycle of expanding economic and social wellbeing.

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¹Peter F. Drucker: the Ethics of Organisations (English & French pdf):  Drucker starts here from the position that the first task of a business’s manager is to ensure the success of its primary mission, economic performance. This task entails the overriding condition that any decision involving assumption of social responsibility must be compatible with the enterprise’s competence. But the objective of ensuring economic performance should not be defined too narrowly or in too reductionist a way. The social impacts of the enterprise clearly have to be managed.

²What Drucker Taught Us About Social Responsibility (pdf): Peter Drucker recognised and preached that people are not a cost; they are a resource. He was one of the first to do so as an aspect of management. He concluded that considerations for workers in and out of the workplace were the responsibility of the corporate leader just as much as the profits, survival, and growth of the business or organisation.