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CPR-impulses from the management thinker Peter Drucker

Updated: Jan 11



Winfried Weber teaches management at Mannheim University of Applied Sciences and heads the Mannheim Institute for Applied Economic Research. Weber is the author of numerous books and articles on the theory and practice of management, with a focus on SMEs and East Asia. He also initiated the Peter Drucker Society of Mannheim, which promotes value-oriented management.


What lessons can be drawn from the thought of Peter Drucker about the socio-political role of companies?

 

What makes Peter Drucker particularly interesting is his unusual path to management: after an apprenticeship as a banker, he completed a doctorate in international law and became a refugee in the United States. In his book, The End of Economic Man, published in 1939, he wrote about the decline of German civil society and the failure of the liberal economic model during the rise of National Socialism. The success of the book led to his appointment as a consultant with General Motors. His entry into the world of management came about in a roundabout way—as a bystander, Drucker initially took on the role of an interested spectator.

 

When evaluating his time at General Motors and in his book The Practice of Management, Drucker argued that companies also have a mandate to stabilize society. According to him, even if they are primarily concerned with profit, they should also deal with social issues.

 

In a series of articles in The Economist, Drucker, who always saw management as a humanity, argued that in a post-capitalist future, companies should not only focus on the interests of their shareholders, but should act as "social systems" by keeping in mind the welfare of all stakeholders. In fact, many young people share this opinion. The question of the meaning of one's own work was often neglected in the past, but today it is becoming increasingly important.

 

What role can political sustainability play in defining a company's purpose?

 

At the Purpose Summits organized by the Drucker Society of Mannheim, there tend to be formats in which these and similar topics are discussed. Reactions have varied. In private, many business leaders express skepticism towards socio-political commitment and abide by Milton Freedman's dictum that "the business of business is business".

 

An important question in this context is who actually influences managers' thinking. I have found out in an empirical study that it is not just consultants or academics. Instead, there exists a different significant source of collective managerial intelligence. Managers form a highly interconnected, mutually influential milieu. That is why it is important for individuals to set a good example. However, there are still few public statements of a political nature, particularly in the SME sector—sometimes these are withdrawn at the last minute or after the event. While there are staffs for political communication at the corporate level, there are major differences among SMEs: from complete abstinence to active participation in public discourse and great clarity among individual business leaders.

 

I personally view political sustainability as a business case. But there is diversity here too: a cement supplier with predominantly local customers will currently have little interest in implementing a corporate purpose. Even if the public image of SMEs is beginning to change, many of them still fly under the public radar. Some large corporations, on the other hand, are no longer held in high regard by the next generation.

 

What opportunities does socio-political engagement offer to SMEs, which are often firmly rooted in their home region?

 

From my work with SMEs, I would assess the current situation as such that many decision-makers would struggle with responsibility concepts such as those we are discussing here. However, if you adjust the wording, you will quickly notice that many SMEs are already taking on political responsibility at a local level. A good example of this is the Main-Kinzig-Kreis in Hesse, which has one of the world's highest densities (measured per head of population) of successful SMEs. The region, like many others in Germany, has a decentralized, intact economic and social structure and is characterized by a pronounced loyalty of employees to their companies.  Socio-political engagement takes place here at the regional level and is of great importance, also for the protection and resilience of a liberal society.

 

How can German companies active on the Chinese market defend their values against that country’s dictatorship?

 

As the classic, export-based success model of the German economy is coming to an end (that is, produce here and sell elsewhere in the world), some SMEs have set up production sites in Asia; hundreds of German SMEs have established themselves in the region of Taicang alone. They benefit from low production costs there, but also manufacture cheaper products for local customers. Overall, these companies are behaving very cautiously, they do not capitulate in the face of current geopolitical tensions but are nevertheless trying to stick to their values.

 

With regard to China, it is often claimed that the West’s strategy of stimulating political change through trade has failed. I don't quite see it that way. Many Chinese companies are still dependent on trade with Germany. Building bridges with this country naturally has its limits, but the bridges should not be completely torn down. Peter Drucker once said that learning works best on an equal footing. For business with China, this means that we should try to learn from our Chinese partners, especially in the area of future technologies. However, the German media landscape is highly polarized on this topic, as could recently be seen in the case of the insolvent, Munich-based robotics company Franka Emika, which was taken over by a Chinese competitor, Agile Robots. I don't think we should generalize here: takeovers are a normal process of doing business. In this case, there were good reasons for a merger going back right to the company’s founding. The founders of Agile Robots, Zhaopeng Chen and Peter Meusel, previously developed robot technologies together with the founders of Franka Emika: Sami and Simon Haddadin as well as Sven Parusel at the German Aerospace Center. The two firms have similar concepts, in this case: using lightweight robots to take on smaller assembly tasks.

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