Peter Starbuck
"Reclaiming Drucker" - Page 5

Rational management

One of the most important influences on Drucker.s ideas on business management is the German polymath, Walther Rathenau (1867-1922), an intellectual, philosopher, diplomat, politician, social thinker, industrialist and banker, and author of over 20 books. Rathenau was Jewish by birth and, despite his family.s wealth, he was excluded from certain political and military posts. After a brief period of military service he completed a doctorate on Light Absorption of Metals at Berlin University, then joined the family business Allgemeine Elektricitats-Gesellschaft (AEG), one of the German electrical giants. By applying his organisational ability and banking skills, he reorganised much of German heavy industry and was the German equivalent to the US firm, JP Morgan. As a devout patriot, he organised war materials in Germany during World War I, and later helped to negotiate the Versailles peace treaty. Then, as a minister of state, he negotiated the Rappallo Treaty with Russia in 1922. He was assassinated shortly after in Berlin in June 1922, the first Jew to be killed by the Nazis. Ironically, many of Rathenau.s ideas on how an industrial society should be organised were integrated into the Nazi programme, albeit in a manner that he never intended.

Rathenau.s most important management ideas were on rationalisation. Quality and the elimination of waste were key elements, which were then linked to continually improved productivity. He recognised that society had not developed in a manner that complemented the way that people now worked, and proposed that the new society should be found within the workplace. Drucker adopted this idea for his own concept of the "autonomous self governing plant community", but he rejected Rathenau.s prescriptive control over peoples. lives.

Rathenau and Drucker disagreed on other ideas as well. Rathenau regarded the entrepreneur as a parasite, whereas Drucker followed Schumpeter and found entrepreneurs to be essential. Rathenau also supported cartels and monopolies. In Drucker.s view, they stifled trade and progress. The areas on which they did agree, however, were considerable, to the extent that Drucker ranked Rathenau equal in importance with the American Frederick Winslow Taylor and the Frenchman Henri Fayol as pioneers of management thought.