Reviewing Peter Drucker’s Book Post-Capitalist Society
- Author Aggrey Nzomo
- Published November 13, 2023
- Word count 5,106
Peter Drucker is undoubtedly one of the most celebrated businessmen and authors in the 21st century. His book Post-Capitalist Society which was published in the year 1994 by the HarperBusiness publishers in New York has remained influential and a great source of reference for many scholars interested in studying the transformations that have befallen the capitalist society. This book was a success in terms of sales since over 50,000 hard copies were sold by the year 1998. The book has been recommended for reading in many academic settings including online library databases. With the fulfillment of the various prophetic statements and postulations about the present and the future society the sales for this book can only increase.
Possessing the two rare skills of commerce and writing is an enviable combination which affords one to experience the real world of business and still have the ability to analyze and communicate it in the best way possible. Drucker, in his latest masterful work titled the Post-Capitalist Society- the Knowledge Society, ponders on the key changes taking place in the world and their implications on the society. In a nutshell, Drucker asserts that the post-capitalist society is in dire need of the contrary that influential deconstructionists, abrasive feminists and the anti-west proposed. His vehement attack on the danger posed to the society by the knowledgeable capitalist is immense and seems to ask the society to reject all ideas from those educated on the universal school of thought. He explores the society from the past, into the present and eventually projects its status in the future. He reviews the eras of commerce the society is leaving behind that were characterized by capitalistic tendencies, analyze the present transformations and finally explores the risks of future survival faced by those who are not informed on this transformations.
Drucker believes that only when people and organizations have understood how the current paradigm shifts and transformations in the society are, will they be assured to survive the future. He values knowledge (also termed as information in some sections of the book) as a major resource in the society. It is this overreliance on knowledge and information that qualifies the current society as a disguised capitalistic society. In making us understand the real value of knowledge as a resource, Drucker further asserts the importance of a knowledgeable individual in the days to come. He insists that though most information will remain stayed in books, databases and other artificial archives of knowledge, the person remains the greatest bank of it all since all knowledge and information is embodied in him/her.
There are other themes that Ducker explores in this masterful piece of writing. Of great significance is the manner in which the book is overemphatic on knowledge and information. Ducker explores the various trends in the modern industries and organizations. He reveals that as industries and organizations continued changing from manufacturing to service provision, they have tended to demand the labor markets to provide lesser workers whose skills are purely depended on manual work. They have created more space for individuals who have knowledge and information on how various means of production are carried out. The manual worker is slowly getting extinct as the society gets more and more over depended on the use of machines. Industries have adopted advanced and sophisticate machines that are able to assure them of mass production of products in relatively less amount of time as compared to manual workers. As such, demand in the labor markets has slowly shifted to seeking informed individuals to work in emerging sectors within the industries like human resource management, advertising, risk management, public relations and the like. The importance of knowledge has evidently been embraced across many industries and organizations in the 21st century. While various organizations will differ in culture and philosophy, the current trend remains the overemphasis on the need for knowledge of work.
The theme of experience has also been discussed in this book. Ducker, in his commitment to analyze the post-capitalistic society out rightly asserts experience as key assert in acquiring knowledge. The virtue of knowing can never be divorced from experience. The organization that has stayed around trade for a long time will have a lot of experience in the sector than a newly formed organization. In addition, experiencing a particular area of operation for a longer time affords an organization a chance to know and gather a lot of information than a new entrant. In this regard, Ducker informs us that, older individuals who have been in an industry for long have a lot of information and knowledge than younger individuals who have just joined the industry. As a result of this, older and knowledgeable individuals are easier to get senior positions than younger persons who have not experienced the same. That is why a phrase is coined in the text that the old can afford to be bold since they can easily elaborate their position on various issues in th society while the younger feels constrained and threatened and inexperienced enough to elaborate their position. It is, however, good to note that many organizations have appreciated that sometimes knowledge and information is not depended on how long one has lived or worked in an organization. Several factors like IQ, level of education, organizational culture, flow of information and complexity of information influence the way people acquire knowledge. This has made the concept of knowledge to only be measured at an individual level and thus the importance of the person with knowledge.
In his broader themes touching polity and society, Ducker approaches the future of policy making and thee industrial man through the analysis of the present. He holds that, while predicting the future may not be easy, analyzing the present and the major paradigm shifts that have taken place in the past and predict it. In the past the main resource was capital but transformations have slowly seen knowledge take the center stage as the lead resource. Since knowledge has become the main resource, people have dropped the traditional belief that they can be salvaged by the society. Individuals have, with time, accepted that they are ones to salvage depending on their levels of knowledge. With time, Ducker predicts, the society will become decentralized and non-socialistic since it will be a society comprised solely of organizations. Drucker, under polity evolution, claims that the revolution that industries have long endured in the manufacturing productivity is long over. The manual workers have gotten extinct and in their place a new crop of knowledge informed workers have perfectly fitted. In addition, Drucker invites readers to celebrate the extinction of abject capitalism and its various classes which have now been replaced by two functions dubbed as the knowledge and service workers.
Management is another theme that Ducker explores in this book. He analyzes the transformations that have taken place in the concept and practice of management. In the past, Drucker observes, the capitalist society viewed management under the virtues and practice of surveillance where the manager was supposed to ensure that manual workers delivered milestones and goals. In this era, the manual worker was expected to stay long hours on the job mainly ensuring that the industry met its mass production goals. In the current state of affairs, Drucker says, the manual workers have nothing to deliver since machines have taken their positions. An excellent manager is no longer the non-tolerant, strict and authoritative personality but one who is able to manage various applications and the excellent execution of knowledge. The knowledge workers are expected to show-case unparalleled knowledge on the work they are assigned to.
3.0 Chapter Analysis
Drucker’s book is divided into 12 chapters whose discussions contribute to the wider area capture in the book title. In these chapters Drucker wants expound on the various ways through which the society we live in is restructuring with regards to politics, social life, expectations and values (Karl, 01). It is this changes that Drucker believes result to the post-capitalist society. From the entire discussion, it is discernible that Drucker holds that there are no innovations or creations in the current society that imitate those of the past. The society is busy innovating and inventing new products and services. He predicts the next stage after the elimination of the capitalist society which as the knowledge society whose evidences can be gathered from various aspects of the modern society. He ultimately seeks to invite readers to accept that the tendencies of the society to glory and over rely on capital, natural resource and labor are out fashioned and should instead focus on knowledge and particularly its accurate application. To ensure sustainability of the knowledge, Drucker believes that the universal education and literacy will soon be affordable to people of the world and possess the ability to motivate people to yarn for it.
The 1st chapter of this book is titled The Transformation. In this chapter, Drucker recaptures the advent of industrial revolution. He points out that many managers of industries and organizations shared the same school of thought that techniques and manual ability was the backbone of productivity. Under the then rigid and inconsiderate bureaucratic structures, managers and investors expected workers to be skilled on how to deliver and assure constant mass production. However, Drucker points, the emergence of technology and its acceptance in industrialization became the accelerator of the industrial revolution which threatened to maintainance of status quo. As time went on, experience that made many manual workers bold and marketable became irrelevant as knowledge asserted its significance productivity.
In this chapter, the writer revisited various scholars like Karl Marx. He notes that while Marx was convinced and held that the manual worker was the victim of the society due to his vulnerability to exploitation, various other thinkers like Taylor rubbished this assertion. Taylor held that Marx’s employer-employee wars were unnecessary since employees in this era were not knowledgeable and thus were required to work more hours, deliver the goals and get higher salary. Taylor expressed fear that the inherent tensions that Marx dispelled were due to the fact that the manual worker had area of specialization. In addition, their lack of specialization made it impossible to rise to the top management since they could not analyze and organize the application of knowledge required in top management. Taylor exemplified this thinking through revisting how 60 trained workers were able to repair and build war shipe during the US-German war. In fact, Drucker states, Taylor’s call for application of knowledge was later proven when his views on enhancing knowledge among employees through training paid off by increasing productivity and the quality of work done. Drucker therefore concludes unlike the application of knowledge to work among manual workers, the white-collar class of workers require the application of knowledge of work to knowledge. The application of knowledge on equipment, work place procedures and human resource is what Drucker terms as the revolution of management. As a proof to what Drucker claims in this chapter about knowledge, management changed its definition in 1950s to the manager is the one charged with the implementation and performance of knowledge unlike in the past when it simply meant the one in supervising the subordinates.
The 2nd chapter of the book is titled the Society Organizations. In this chapter Drucker expounds on the importance of managing knowledge and ensuring that all persons working in an organization are assimilated to one another to have an organizational culture. Various workers have different areas of specializations and knowledge which an organization must know how to ensure that all workers are accommodated and that their different qualities add value to the organization. In this chapter Drucker seeks to track the management styles that organizations have and with which they attempt to contain and take advantage of their pluralistic characteristics. He adds that transformation of the concept of management has been necessitated by the realization that though people working in an organization are different and with different objectives, they share a common goal of delivering the organizations objectives.
Unlike the organizations of the past, Drucker observes, the modern organization has not honor for hierarchies since all people, workers and managers alike, are equal partners geared towards a common goal. The post-capitalist society that Drucker talks of has slowly regenerated existing processes, equipments and products as it forms new versions.
In this chapter Drucker also talks of the decentralization of the post-capitialist society. The need for decentralization has been caused by the fact that the society needs to make quick decisions. In addition, choices have to be made quickly so as to ensure that petty issues and challenges are resolved in the shortest time possible. This need to make quick decisions in organization that has led to decentralization is exemplified by multinational corporations in the modern society that have pitched tent in various countries of the world but are decentralized and managed differently across the world. In this society, Drucker adds, employees have become very important and influential in the decision making process of the organizations or industries in which they work.
The 3rd chapter of this book is titled Labor Capital and its Future. In this chapter Drucker explores the employee welfare in the United States and Japan. He observes that the two nations have different forms of considerations for their employees. The thought among many human resource scholars in Japan argue that the number of educated young people searching for manual work from the 3rd world countries will always be more than the demand and supply of labor while in the U.S, they believe that industries are increasingly lacking the knowledge workers. The U.S predicts that the competitive edge of nations will be determined largely by the availability and willingness of knowledge workers to work in their home organizations and industries.
In this chapter, the trends of the pension funds in many organizations of the world. Drucker notes that every 100 pension scheme funds represent a third of the fund assets in this organization. It is this trend that compels Drucker to conclude that there is need for financial control in many organizations and industries. While the pension scheme funds are legally owned by workers, it is the investors who manage and operate the funds. Many of these investors, Drucker notes, are the owners of capital who possess large pools of capital reserves. This trend informs Drucker’s conclusion that the pension scheme funds have made organization to practice capitalism without the capitalists.
The 4th chapter of the book is titled The Productivity of New Forces. According to this chapter, the many objectives of the post-capitalist society to ensure that there is endless production of services and the knowledge workers. In the rush to compete and bridge the gap between them and the developed countries and increase employee productivity, many 3rd world countries have invested in equipment technology. However, the productivity of employees has been reducing yearly despite this attempt to embrace sophisticated equipment. The evidence for this decline is seen in many government work places in which over 50% of the working population works. Drucker juxtaposes knowledge and simple productivity. In knowledge productivity, the workers are charged with determining which method and team is fitted for every task and the risks involved. In addition, there are three types of equipment the first being the team of workers who work on the computer in different positions, the team work that imitates the football team with a team leader and the double team like that of a tennis whose overall productivity represents that of all individual workers.
The different methods of managerial and productivity explored in this chapter represent practices in various parts of the world. In the Unites States for instance, Drucker reveals that organizations are designed like the baseball team where every individual worker is performing a different task. In this regard, the productivity of an organization’s workers depends on the ability of managing knowledge and ensuring that workers specialize and concentrate on specific tasks. There is also the need for management to ensure that conditions for maximum application of knowledge are set and defined through activity procedures and policies. For there to be maximum productivity, Drucker notes, a precedence of continous learning among workers that is defined by its learn-and-teach pattern has been set across all organizations of the world.
There is dependence between organizations. There are cases of organizations hiring workers from our organizations which have come to be termed as outsourcing. Outsourcing has been applied and thus acquired meanings ranging from hiring outside the country and from other organizations. This approach to productivity has stressed as the importance of employees through empowering them economically with more pay and increasing their self-worth. For instance, companies are endlessly outsourcing for legal advice, repair of equipment, project evaluation and other services.
In the 5th chapter Drucker analyzes the organization based on the liability. According to Friedman (05), for a company to have a liability its economic output has to be greater or equal to the cost of its working capital. In the modern day society, the business organization has a responsibility to the community in which it operates. This is called the corporate social responsibility. This responsibility includes the liability to ensure an organization takes part in environmental conservation, boasts the social lives of the community and above all, uplifts the welfare of its employees.
In the post-capitalist society the political class is always pressurizing the business organization in terms of decision making for its own benefit. In developing countries, the influence of corruption in government, including judiciary and legislation, has been a major hindrace on the productivity of many business organizations. There is a general trend in the post capitalist society for organizations to incur expenses in forms of bribes and incentives trying to appease various institutions of governments as to have ample time in operations and production. While many nations have carried out massive anti-corruption campaigns, this has been accompanied by formulation of bureaucratic government policies and procedures making it difficult if not expensive for organization to run their daily businesses. The solution for this, Drucker proposes that organizations be given adequate and not excessive power to operate and carry out its function, legislation of friendlier rules and the emergence of a corruption free and impartial government institutions.
In the 6th chapter, Drucker looks into the factors that led to eminent collapse of many colonial empires that had operated for close to 50 years. He notes that they didn’t have well organized political, social or economic organizations to propel them and cushion them from the overwhelming pressures of societal change. He further notes that many managers in this era failed to act as power integrators. This created the basis of the necessity to create a nation, solely to protect the life and liberty of citizens and by extension the workers.
A number of countries that were able to achieve the then coveted status of mega state in this period, such as the United States (mid-19th century), started self-regulation with hope to salvage their economy from pressures of change. With the establishment of government regulations on infrastructure, banks and businesses, the United States was able to stand tall compared to other economies of the time. States whose economy was affected by the Second World War adopted the U.S style of government regulations as a measure to restore their ailing economies. The biggest historical achievement of mega states was the prevention of World War III. If a nations wants to sharpen its competitive edge, asserts Drucker, it should spend more on productive sources of income like Japan. On the contrary, the United States of America has committed itself to researching and developing military weapons and defense technology. Consequently, inflations, which is a deficit between productivity of the country and control, have become the order of the day in the U.S. Almost all nations have since the Second World War ensure their military forces and technological advancement is able to protect their economy while restricting this tools to the use on crises of both national and international concerns.
In the 7th Chapter, Drucker discusses the importance of securing the interests of citizens through protection of the environment, security against terrorism and other forms of organized crime. Freedoms should be well guarded and people constantly cushioned from dictatorship and exploitation. The nation should be charged with the responsibility of serving the citizen and protecting their welfare. It is the love of citizens from the government that ultimately ensures that organizations do not take advantage of legislations to exploit their workers. In addition, clear and humane legislation ensures that illegal products like illicit drugs and contraband goods do not get into the country and be sold to citizens. In many parts of the world, Drucker observes, government institutions have been formed and given power by governments to carry out this functions. These institutions have been evolving with time and broadening their national functions towards attaining international responsibilities. As these different institutions serving similar goals slowly get globalized, so does universality is achieved and thus elevated and sophisticated measures are adopted on security against crimes.
In the 8th chapter, Drucker is asserting the need for the powers of the government to be decentralized. It is clear that centralization of power that translates to fewer people being economically empowered has become the breeding grounds of corruption. Independent government agencies then need to be established so that the society benefits more. In addition, Drucker informs the readers that the knowledge economy demands for, as a remedy for our economy, investing in long term investments such as human resources, improving infrastructure, embracing technology in production facilities.
In the 9th chapter Drucker attackes the capitalist manager and explores the various differences between him/her and the 21st century post-capitalist manager. In this chapter, Drucker reports that the capitalist era manager operated under the remote control policy. The dictatorial tendencies exhibited by the bearer of the title ‘manager’ in the capitalist era made this position less productive and constructive to the organizations of this era. Operations in this era were defined by this influential position that was simply dictating and issuing instructions without taking part in the meaningful execution of the instructions and command.
Drucker celebrates the birth of the post-capitalist manager. The post-capitalist manager is informed and thus a knowledge worker. Instead of dictating and issuing endless commands, the post-capitalist manager exhibits a patient authority and takes part in the implementation of procedures and policies. Since the post-capitalist organization is characterized by specialization, the manager is not seen as ruler but a team leader who leads by action. He/she shows the employees how to go about things by participating in the work done. The evolution of management has seen the emergence of the management of knowledge which has redefined tasks of management as being based of responsibility and participatory leadership.
In the 10th and 12th chapters, Drucker addresses the individual knowledge worker. He reckons that while knowledge is vital in the modern society, it is its accurate application that sets good workers apart from the poor ones. In addition, for this knowledge to productive, it has to be managed responsibly and given freedom to operate within its area of specialization within the organization. Discipline is paramount in the application of knowledge since it enhances the achievement of maximized productivity and empowers a worker to predict risks and avoid them. Developed countries have realized this and in return spend at least five percent of their GDP on research/production and dissemination of discipline guided knowledge.
At the individual level, knowledge has become a powerful tool that informs decisions as seen in the control of product consumption among consumers and the source of decision on investment. Three pivots balance the overall productivity of knowledge: steady process of knowledge improvement, invention of need accessed products/services and sober approach to inventiveness. Drucker outlines these three pivots of knowledge as key in to its application and surety for endless productivity. As evidentin the 12th chapter, Drucker believes it’s the pivot of steady process of knowledge coupled with the need to know that will make an individual interested to know. In addition, once one becomes a knowledge person he/she will be able to internalize and understand the trends in the modern world whether relating to issues, problems or opportunities. As Drucker points out in the 11th chapter, the manager will have to interdependent with the knowledge worker since while the manager will be busy using his/her organizational tool, the intellectual worker will be using his most coveted too: knowledge. It is this kind of relationship anticipated by Drucker that will result in quality productivity, self-gratification in place of work and economic stability.
4.0 Opinionated Discussion
There are three areas that I personally agree with Drucker. First, it is true that the society has changed in both its social-political and the means of production and that is the way things are going. In addition, consumerism patterns have also changed as demands from the society shift from basic goods to more complex services. According to Willard and Halder (17), the rate at which the need for information in the society is growing has compelled many development practitioners to change their policies in information society with regard to collective values and the accountability of those who make decisions. As Willard and Halder (17) further state, the process of decision making has changed from being a tool only closed to managers to become a value litmus test against which the knowledge of a manager can be measured. As such, there is need for organization to make policy changes that allow for inclusion of employees in the decision making. What Drucker states in chapter 12 are true that modern-day manager has to interdependent with the knowledge employee.
Secondly it is true that management as a concept and practice has changed. In the post-capitalistic society, management has changed from being dictatorial and overtly supervisory to become a tool through which organization of knowledge is achieved. According to Mele & Guillen (03) organizations have changed their structures from the traditional manager and subordinates to a structure where all workers are treated equal and have equal voices in the decision making process. In addition, many organizations have departmentalized their operations since the knowledge worker has chosen to specialize with a view to gaining expertise. Specialization has made it difficult for organizations to manage all workers under one individual worker and thus departmentalization of operations. Furthermore, the post-capitalist manager has become more of a leader than a ruler. The manager has evolved and takes part in the execution of procedures and implementation of policies unlike in the past where he/she used to issue commands and stand aloof as workers executed commands.
Thirdly, there is no doubt that manual worker has been send home. The industrial revolution, as Drucker states, has ended and the demand for casual laborers in mass production has been met by machines. Industries have adopted technologically motivated machines that are sophisticated, efficient and reliable in the place of the manual workers. As such, organization and industries has been met with a new sort of demand: the demand for the service worker. To provide service work like legal counsel, information technology, computer mediated communication and others, the worker has to be trained and thus knowing how this applications work. The demand for the knowledge worker, as Drucker puts it, has become insatiable. In the insatiability of the knowledge worker is evident in the modern-day trend of outsourcing and hiring of consultants in many organizations of the world.
There are three ideas presented by Drucker in this book that I personally disagree with. First, the assumption that the manual workers have taken their getting expunged from the labor market with a lot of comfort is not the way things are going in the actual world. In many parts of the world, the 1990s saw the rise in resistance against the adoption of machinery in mass production. According to a report by the Ministry of Labour & Employment (14) in India, this led to many cases of machinery vandalism, especially in Asia and Africa which compelled many industries to go slow on adopting machinery in mass production. Drucker further asserts that the only way the casual workers will regain their position and demand in the labor market is through acquiring knowledge. This again is not possible. Many manual laborers, especially in the developing countries are illiterate and have retrogressed in terms of their knowledge faculties. Many of them have become uneducable as is evident from various unsuccessful programs aimed at educating the adult.
Secondly, Drucker’s assertions that knowledge and education will become cheap in the post-capitalistic society are not true. In my view, as many governments of the world continue to adopt measures in making education and knowledge accessible to everybody, so does the universal education sector gets divided into social-economic classes. In fact, as education and knowledge gets cheaper as Drucker prophesied do does their quality and validity get compromised. Quality education has remained costly and will continue to be so: it is quality knowledge that will influence the competitive edge of individuals and nations in the post-capitalistic society.
Thirdly, I find Drucker’s overemphasis that decentralization of functions of organizations are cheaper and beneficial to be unrealistic. The reason is, many organizations have felt the brunt of decentralization and are always hit hard in terms of costs as a majority of their managerial positions become redundant. Decentralization is in itself a great puzzle that can easily bring down an organization. In addition, he fails to fully explain whether decentralization of organizations will include devolution of resources, independence in decision making and employability or whether it will be on selected functions. In many cases as Bonache et al (05) observe, multinational corporations will decentralize some functions and take along expatriates from the investor-capitalist nations to the various nations of operations. This has done more harm than good to the locals and communities in the recipient countries.
To conclude, the book by Drucker titled The Post-Capitalist Society is inspiring and an eye opener to any individual and organization intending to make impact in the days ahead. Drucker provokes the readers to analyze the present society with regards to the transformations that have taken place and be able to predict the future. His main argument is that society no longer regards capital, labor and natural resource as the most important resources but has embraced knowledge as the most coveted of all resources. I personally recommend this book to everybody and welcome any contrary review of this gratifying publication.
Aggrey Nzomo is an accomplished book reviewer. A renewable energy business development expertArticle source: https://articlebiz.com
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