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•Six Greatest Management Thinkers 109

Starting from the heart of business life he says ‘There is only one valid defini-
tion of business purpose: to create a customer. Markets are not created by God,
nature or economic forces but by businessmen. The want they satisfy may have
been felt by the customer before he was offered the means of satisfying it. It may
indeed, like the want of food in a famine, have dominated the customer’s life and
filled all his waking moments. But it was a theoretical want before; only when the
action of businessmen makes it an effective demand is there a customer, a market.’
Such views are commonplace now, but they were originally propounded and tested
by Drucker. This means that the only essential functions are marketing and innova-
tion, a truth brought very much home to the people compiling this book of the
greatest ideas.

From such philosophical beginnings, Drucker quickly gets to the specific prac-
tices required to run a thriving organisation:

‘1 There must be high performance requirements; no condoning of poor or me-
diocre performance; and rewards must be based on performance.

‘2 Each management job must be a rewarding job in itself rather than just a step
on the promotion ladder.

‘3 There must be a rational and just promotion system.
‘4 Management needs a ‘charter’ spelling out clearly who has the power to make

‘life-and-death’ decisions affecting a manager; and there should always be some
way for a manager to appeal to a higher court.
‘5 In its appointments, management must demonstrate that it realises that integ-
rity is the one absolute requirement of a manager, the one quality that he has to
bring with him and cannot be expected to acquire later on.’

Probably the idea from The Practice of Management that was most seized and acted
upon is the idea of management by objectives. It is interesting to note, in Drucker’s
description of this, the overlap with McGregor’s The Human Side of Enterprise. Only
a theory Y company could live by Drucker’s statement ‘A manager’s job should be