A Functioning Society and Management as a Liberal Art — Peter Drucker’s Beliefs and Values

Minglo Shao

PUBLISHED:

June 20, 2020

“To make our institutions perform responsibly, autonomously, and on a high level of achievement is thus the only safeguard of freedom and dignity in the pluralist society of institutions. Performing, responsible management is the alternative to tyranny and our only protection against it”. - Peter F. Drucker


World-renowned as “the father of modern management”, Peter Drucker believed that although he was famous for establishing management as a discipline, he was actually a “social ecologist”, and his real concern was the individual’s existence in the social environment. In Drucker’s view, management was a newly emerging tool for improving society and life. He was the author of 39 books, only 15 of which dealt with management. The others were related to community, society, and polity. Only two books —Management for Results and Innovation and Entrepreneurship —were devoted to business management.


Drucker knew that human nature is imperfect, so nothing humans create, including the societies they design, can be perfect. He didn’t hold high expectations or ideals for society; he only hoped that it could be less painful and more tolerant. However, a society still has to have basic functions; it has to provide the people living in it with the conditions for normal life and work, and it has to give individuals identity and status. These functions or conditions are necessary for a society in the same way that normal functions are necessary for a living body.


It is worth noting that society is not the same as nation-state, because “nation-state(government)” and “family” cannot provide the necessary functions of a society. This is evidenced by the fact that some powerful countries have only fragile and fragmented societies. In Drucker’s view, in the industrial age, a normal functioning society must consist of at least three types of institutions: government, business, and non-profit, each of which plays a different and unique role. Individual organizations within each of those categories must have distinctive performances, which requires them to have power centers and decision-making mechanisms. The power centers and decision-making mechanisms should give each individual a place within the organization, allowing them to use their strengths, to play a part and contribute, therefore obtaining livelihood, identity, and status. In the past, nation-state did not have such power centers or decision-making mechanisms; in other words, “management” is the new “polity”. (Drucker collectively refers to all three power centers as “polity”: management systems of business, management systems of nonprofit institutions, and governmental systems of nation-state, because these three sectors all hold power but each has different objectives. Business and non-profit organizations have the power to allocate society’s resources in order to provide specific products and services; the government has the power to arbitrate and intervene to maintain fairness and justice throughout society).


Near Claremont University in the United States, there is a small Drucker memorial — the Drucker House Museum — in what was once Peter Drucker’s California home. On entering the museum, one sees a famous quote in a prominent place facing the entrance of the living room:


“To make our institutions perform responsibly, autonomously, and on a high level of achievement is thus the only safeguard of freedom and dignity in the pluralist society of institutions. Performing, responsible management is the alternative to tyranny and our only protection against it”.


When the museum opened, the Drucker Institute’s colleagues asked themselves, if they were to choose a quote from Drucker’s publications that sums up the significance of his work to the world, what would it be? They eventually chose the above passage.


If you are familiar with Drucker’s life and how his beliefs and values were formed, you’ll surely agree with their choice. From The End of Economic Man, his first book, to A Functioning Society, the last volume that he completed independently, a common thread runs through all his work: resistance to totalitarianism and defense of the individual’s freedom and dignity.


There is a great difference between totalitarianism and authoritarianism. It was not until the 20th century, with the rapid advancement of human knowledge and capabilities, that conditions arose for the centuries-old tradition of authoritarianism to mutate into totalitarianism. Totalitarianism seeks to thoroughly manipulate and control every human being, flesh and spirit, to expunge their compassion and conscience, transforming them into humanoid machines that fulfill the dreams of individual totalitarian rulers. Under totalitarian rule, loyalty to leaders is everything; personal thoughts, feelings, desires, and goals are superfluous and must be eliminated. The 20th century brought wars, revolutions, and movements that caused unprecedented disasters and human suffering. Whether Nazism (National Socialism), Fascism, or Communism, all are “masterpieces” of totalitarianism. The rise of Hitler and Nazism, which the young Drucker lived through, is among them. To best understand how Drucker’s experiences influenced his beliefs and values, read his Adventures of a Bystander. To see what totalitarianism is and why the masses support it, read his The End of Economic Man, with the subtitle “The Origins of Totalitarianism”.


Fortunately, history’s evolution has not always been so dispiriting. Since the Industrial Revolution, especially from the 1800s onward, in the last 200 years, productivity has increased dramatically, not only creating vast material wealth but also bringing profound changes in the social structure. Eighty years ago, Drucker perceived and pointed out the formation of a new pluralistic, organizational society: Emerging enterprises and nonprofit institutions fill the gaps and empty spaces between “nation-state” (government) and “family” in the social structure of the past.


Based on that foundation, universal education and the rise of the knowledge worker are creating a knowledge economy and a knowledge society, and information technology has accelerated all these changes. It should be noted that “knowledge society” and “knowledge worker” are terms Drucker coined. “Knowledge workers” broadly refers to those who possess and apply specialized knowledge and work to create useful products and services for society. This includes entrepreneurs and executives, professionals, and technicians in any organization, as well as independent professionals, such as accountants, lawyers, consultants, trainers, and so on. Today, in the 21st century, owing to the development of knowledge and the ever-widening area to which it is applied, individuals and individual institutions are no longer alone and helpless. Having mastered certain types of knowledge, they have freedom of choice to decide where and how to work and the power to influence others. Knowledge workers and the knowledge-based organizations they formed no longer resemble traditional intellectuals. Knowledge workers’ unique characteristics are their independence and autonomy. They can integrate resources, build their own organizations or start new businesses, create value, and foster economic, social, cultural, and political changes. Traditional intellectuals depended on and were subject to government authorities, and could only act on platforms provided by those authorities.


This is an epoch-making, far-reaching change that has taken place not only in Western developed countries, Japan, and other democracies but also in many developing countries still under authoritarian or even totalitarian rule, such as in today’s China. In totalitarian countries, rulers instinctively and inevitably treat independent and autonomous organizations and knowledge workers as potential threats, suppressing or even banning them. But this can have only one consequence: the hollowing out of society and the economy, which in turn will undermine the basis on which any regime depends, ultimately leading to totalitarianism's collapse. To put it in popular terms, the wave of freedom and democracy now sweeping the world is irresistible; totalitarian rulers, no matter how ostensibly powerful and arrogant, will inevitably be drowned by it.


A healthy modern society is made up of pluralistic organizations. Of the three organizational categories — government, business, and nonprofit; businesses and nonprofits are comparatively more constrained by the market, the public, and the government. Therefore, their managements are less likely than the government to take the road to totalitarian rule (except for businesses and nonprofits that are de facto government proxies). That’s why, in Drucker’s view, businesses and nonprofits are more important and worthy of hope than governments. Nonetheless, they may still fail to achieve the “performing, responsible” operation that Drucker expects, either due to lack of management or mismanagement, providing space and opportunity for totalitarian governments to monopolize social resources and strip individuals’ rights. The rise of knowledge workers in all organizations, including the Internet-era’s virtual work community, has provided the foundation and conditions for a new era of management, posing a challenge to the traditional “carrot-and-stick” approach to management. In response to this reality, Drucker researched, established, and constantly strove to improve the discipline of modern management.


On January 18, 1999, when he was almost 90 years old, Drucker answered the question, “What is my most important contribution?” This is what he wrote:


“That I focus this discipline (management) on People and Power; on Values, Structure and Constitution; AND ABOVE ALL ON RESPONSIBILITIES - that is focused the Discipline of Management on Management as a truly LIBERAL ART”.


Dubbing management discipline a “liberal art” was Drucker’s brainchild, reflecting his unique perspective on management. This is obviously important, but in his many works, there is little further explanation of it. The most complete exposition is found in the fifteenth chapter of his book The New Realities, entitled "Management as Social Function and Liberal Art”:


“Thirty years ago, the English scientist and novelist C.P. Snow talked of the ‘two cultures’ of contemporary society. Management, however, fits neither Snow’s ‘humanist’ or his ‘scientist.’ It deals with action and application; and its test is results. This makes it a technology. But management also deals with people, their values, their growth and development—and this makes it a humanity. So does it concern with, and impact on, social structure and the community. Indeed as been learnt by everyone who, like this author, has been working with managers of all kinds of institutions for long years, management is deeply involved in spiritual concerns—the nature of man, good and evil.


Management is thus what tradition used to call a liberal art: ‘liberal’ because it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership; ‘art’ because it is practice and application. Managers draw on all the knowledge and insights of the humanities and the social sciences—on psychology and philosophy, on economics and on history, on the physical sciences and on ethics. But they have to focus this knowledge on effectiveness and results—on healing a sick patient, teaching a student, building a bridge, designing and selling a ‘user-friendly’ software program”.


As one who has many years of practical management experience and has read nearly all of Drucker’s works, I have often pondered why Drucker called management a “liberal art”? I finally realized that this was not just a beautiful and unconventional act but was a characterization of management; it revealed management’s essence and pointed out the proper direction for managerial efforts. At a minimum, this includes the following implications:


First, the most fundamental management issue, or the key to management, is how managers and individual knowledge workers regard and handle the relationship between people and power. Drucker was a Christian. His faith and his life experiences were mutually confirming and had a profound impact on his research and writing. In his view, man should not have power. Only humankind’s creator, God, master of all things, has power. The Creator is always superior to humans. After all, human nature is weak and cannot resist the temptation to acquire power or withstand its trials. Therefore, a person can only possess authority. He is authorized by the Creator because of his character, knowledge, and ability, which are effective only at a certain stage and in certain actions. This is true not only for individuals but for the entire human race. In democratic countries, “the people are sovereign”; their power is also a kind of authorization granted by the Creator. Under this authorization, human beings are only “tools”—they have free will but must also accept responsibility. Human beings are the Creator’s tools and they cannot become masters; They cannot manipulate and control fellow humans according to their own intentions, nor should they become tools for the manipulation and control of others. Only by recognizing this will people gain both humility and a sense of responsibility; only then will fairness and justice—which the Creator alone commands and which can only summon and be revealed to humans—guide their actions. Moreover, people must constantly examine themselves and willingly conform to society's norms and constraints. 


Second, although human nature is imperfect, every person comes from the Creator and bears his image and good intentions. In this sense, they are all equal to each other, all have their value, their creative abilities, and their functions, and should be respected, and encouraged to create. As stated in the American Declaration of Independence, all men are created equal, and every person has innate, self-evident and inalienable rights. The fundamental reason why “Drucker’s” management discipline can make a difference stems from just this conviction. Does one believe that every person has goodwill and potential? And does one thus really treat people equally? These core values and convictions ultimately determine whether one can respond to Drucker’s management knowledge and whether one can understand and implement it.


Third, in knowledge societies and knowledge organizations, every worker, to some extent, is both a knowledge worker and an executive. In that, they can use their expertise to authoritatively influence other people and organizations — knowledge is power. But power must be governed by responsibility. And performance and results indicate how effective an executive has been in exercising responsibility. Power that accounts to performance and results is legitimate, that is, it is represents authorized authority; otherwise, it becomes “might”, which Drucker is firmly opposed to. The importance of performance and results lies not only in economic and material aspects but also in the psychological aspects that people tend to overlook. If managers and leaders continually fail to solve real issues, a despairing public will irrationally choose to rely on and obey powers that promise a “perfect society”, and willingly surrender their freedom and dignity. This is why Drucker repeatedly warned that if a management fails, totalitarianism will take its place.


Fourth, does management have other responsibilities besides getting organizations to achieve performance and results? Or to put it another way, are performance and results limited to quantifiable economic gains and wealth? In addition to providing customers with inexpensive, high-quality products and services, and earning reasonable profits for shareholders, can an industrial or commercial enterprise become a good, responsible “social citizen”? Can it help its employees enhance their character and competence, turning the organization into a “moral community”? This might seem too demanding, but it is reasonable. More than ten years ago, I worked with a multinational logistics corporation that asked itself and found it was possible to put it into practice. This means that we must learn to design moral and ethical demands and economic goals into the same workflow, the same set of weighing systems, and into every method, tool, and model of operation. Today, it is gratifying that more and more organizations are beginning to take this issue seriously and responding positively to it in their respective fields.


Fifth, “博雅技藝的管理” (management as a liberal art) or “博雅管理” (liberal-art management) are lovely Chinese translations, but they’re a bit problematic. Judged from the three requirements of translation — 信 xin (fidelity), 達 da (clarity and flow), and 雅 ya (elegance), the rendering is elegant but is not faithful enough to the original. Translated directly into Chinese, “liberal art” would be “free art” (自由的技藝); that is, freedom from restraints, a liberal art that lets people throw off restraints and attain spiritual and physical freedom. To put it another way, to become a free person, one must master an art. In ancient Greece and Rome, only “freemen” were permitted to learn such knowledge and skills; slaves neither needed nor were permitted to study them, because only “freemen” bore the exalted responsibilities of a citizen. However, in the earliest traditional Chinese-character editions of Drucker’s works, “liberal art” was translated as 博雅藝術 boya yishu, probably to take advantage of the positive connotations that terminology has in the Chinese language. I feel that “自由的技藝” (free art) is closer to the original English meaning. “Liberal” is freed. “Art” can be translated as 藝術 yishu, but management must be applied, it must perform and produce results, so it is first and foremost a “skill (技能)”. On the other hand, the management’s object is people’s working. When dealing with people, managers must face the good and evil inherent in human nature, as well as people's ideas — emotional and rational — which can change on a moment’s notice. They also must face the same issues within themselves. When viewed from this angle, management is an “art” involving subjective judgment. Therefore, “art” is more suitably interpreted as技藝. “Liberal” (自由) and “art” (技藝) combined is “liberal art” (自由的技藝).


Finally, I’d like to say, the reason I've taken such pains in translating “liberal art” is not just to produce a “correct” Chinese equivalent. More importantly, it’s to stress that management is not what people commonly mistake it for: a study of how to succeed, either personally or organizationally. Its aim is not to help an enterprise make money or achieve the highest efficiency in production; nor is its aim to help a non-profit organization win a good public reputation. Management aims to allow every person to live in a healthier, less harmful and painful human society and community. It is to allow every worker to freely choose the responsibility one is willing to bear in that society or community, according to one's innate goodwill and potential, to freely use one's talents to create value that is useful to others, thus fulfilling one’s responsibility. Moreover, in the process of that creative work, to live out human dignity and grow into a better and more capable person: They have pragmatic knowledge and skills, but are not arrogant or vain; they pursue psychological and spiritual sublimation, but are not jaded or cynical; they revere the sanctity of natural creation, but are not callous or cold-hearted. As a “social ecologist”, this is what Drucker defined and anticipated —"Management as a Liberal Art” or “liberal-art management”, the terms’ true meaning.


Minglo Shao

Licensee of the “Peter F. Drucker/Peter Drucker” brand in Taiwan and China

From a Functional to a Free Society-- The End of Economic Man: Drucker's Diagnosis of Totalitarianism

By Bo Yang Ph.D. • December 10, 2025
Peter Drucker suggested that readers view his first three books as a unified body of work: The End of Economic Man(1939), The Future of Industrial Man (1942), and Concept of the Corporation (1946). These works share a common theme: politics. Drucker did not think about politics like scholars who strictly follow modern social science norms. Instead, he viewed politics as part of social ecology and understood political events through the dynamic changes in social ecology. Despite having "corporation" in its title and using General Motors as a case study, Concept of the Corporation is indeed a book about politics. In this work, Drucker attempts to address the main issues that industrial society must resolve: the legitimacy of managerial authority, the status and function of managers and workers, and the power structure of society and organizations. In Drucker's own words, this is a book exploring the specific principles of industrial society. Corresponding to these specific social principles, Drucker had earlier attempted to develop a general social theory, which was the aim of The End of Economic Man and The Future of Industrial Man. The subtitle of The End of Economic Man is "The Origins of Totalitarianism." The book focuses on how society disintegrates in industrial societies and how totalitarianism rises. For Drucker, the real challenge of this topic isn't explaining how Hitler and Mussolini came to power, nor the actions of Germany and Italy in government, military, and economic spheres. Rather, it's understanding why some Europeans accepted clearly absurd totalitarian ideologies, and why others seemed potentially receptive to them. Drucker's writing style is argumentative. He clearly knew that to effectively advance his arguments, he needed to engage with popular theories of his time. Back then, there were two main explanatory approaches to Nazism and Fascism, which Drucker termed "illusions." Some viewed totalitarianism as ordinary political turmoil similar to previous historical revolutions. In their view, totalitarianism was characterized merely by cruelty, disruption of order, propaganda, and manipulation. Others considered totalitarianism a phenomenon unique to Germany and Italy, related to their specific national characters. Drucker thoroughly refuted explanations based on "national character." He believed that any historical approach appealing to "national character" was pseudo-history. Such theories always emphasize that certain events were inevitable in certain places. But all claims of "inevitability" negate human free will and thus deny politics: without human choice, there is no politics. If the rise of totalitarianism were inevitable, there would be no need or possibility to oppose it. Viewing totalitarianism as an ordinary revolution is equally dangerous. This thinking merely emphasizes how bad Nazis and Fascists were. But the real issue is that Europeans were not merely submitting out of fear—they were actually attracted to totalitarianism. And those attracted weren't just the ignorant masses but also well-educated intellectual elites, especially the younger generation. The world cannot defeat totalitarianism through contempt alone, especially if that contempt stems from ignorance. Understanding the enemy is a prerequisite to defeating it. Drucker identified three main characteristics of Nazism and Fascism (totalitarianism is a social type, with Nazism and Fascism being its representatives in industrialized Europe): 1. The complete rejection of freedom and equality, which are the core beliefs of European civilization, without offering any positive alternative beliefs. 2. The complete rejection of the promise of legitimate power. Power must have legitimacy—this is a long-standing tradition in European politics. For power to have legitimacy means that it makes a commitment to the fundamental beliefs of civilization. Totalitarianism denied all European beliefs, thereby liberating power from the burden of responsibility. 3. The discovery and exploitation of mass psychology: in times of absolute despair, the more absurd something is, the more people are willing to believe it. The End of Economic Man develops a diagnosis of totalitarianism around these three characteristics. Drucker offers a deeper insight: totalitarianism is actually a solution to many chronic problems in industrial society. At a time when European industrial society was on the verge of collapse, totalitarians at least identified the problems and offered some solutions. This is why they possessed such magical appeal. Why did totalitarianism completely reject the basic beliefs of European civilization? Drucker's answer: neither traditional capitalism nor Marxist socialism could fulfill their promises of freedom and equality. "Economic Man" in Drucker's book has a different meaning than in Adam Smith's work. "Economic Man" refers to people living in capitalist or socialist societies who believe that through economic progress, a free and equal world would "automatically" emerge. The reality was that capitalism's economic freedom exacerbated social inequality, while socialism not only failed to eliminate inequality but created an even more rigid privileged class. Since neither capitalism nor socialism could "automatically" realize freedom and equality, Europeans lost faith in both systems. Simultaneously, they lost faith in freedom and equality themselves. Throughout European history, people sought freedom and equality in different social domains. In the 19th century, people projected their pursuit of freedom and equality onto the economic sphere. The industrial realities of the 20th century, along with the Great Depression and war, shattered these hopes. People didn't know where else to look for freedom and equality. The emerging totalitarianism offered a subversive answer: freedom and equality aren't worth pursuing; race and the leader are the true beliefs. Why did totalitarianism reject the promise of power legitimacy? One reason was that political power abandoned its responsibility to European core beliefs. Another reason came from the new realities of industrial society. Drucker held a lifelong view: the key distinction between industrial society and 19th-century commercial society was the separation of ownership and management. The role of capitalists was no longer important. Those who truly dominated the social industrial sphere were corporate managers and executives. These people effectively held decisive power but had not gained political and social status matching their power. When a class's power and political status don't match, it doesn't know how to properly use its power. Drucker believed this was a problem all industrial societies must solve. Totalitarianism keenly perceived this issue. The Nazis maintained property rights for business owners but brought the management of factories and companies under government control. This way, social power and political power became unified. This unified power was no longer restricted or regulated—it became the rule itself. Why could totalitarianism make the masses believe absurd things? Because Europeans had nothing left to believe in. Each individual can only understand society and their own life when they have status and function. Those thrown out of normal life by the Great Depression and war lost their status and function. For them, society was a desperate dark jungle. Even those who temporarily kept their jobs didn't know the meaning of their current life. The Nazi system could provide a sense of meaning in this vacuum of meaning—though false, it was timely. Using the wartime economic system, the Nazis created stable employment in a short time. In the Nazi industrial system, both business owners and workers were exploited. But outside the industrial production system, Nazis created various revolutionary organizations and movements. In those organizations and movements, poor workers became leaders, while business owners and professors became servants. In the hysterical revolutionary fervor, people regained status and function. Economic interests were no longer important, freedom and equality were no longer important; being involved in the revolution (status) and dying for it (function) became life's meaning. The Nazis replaced the calm and shrewd "Economic Man" with the hysterical "Heroic Man." Though absurd, this new concept of humanity had appeal. What people needed was not rationality but a sense of meaning that could temporarily fill the void. Those theorists who despised totalitarianism only emphasized its evil. Drucker, however, emphasized its appeal. He viewed totalitarianism as one solution to the crisis of industrial society. From 19th-century commercial society to 20th-century industrial society, the reality of society changed dramatically. 19th-century ideas, institutions, and habits could not solve 20th-century problems. Capitalism could not fulfill its promises about freedom and equality, and neither could Marxism. It was at this point that totalitarianism emerged. Nazism and Fascism attempted to build a new society in a way completely different from European civilization. Drucker said the real danger was not that they couldn't succeed, but that they almost did. They addressed the relationship between political power and social power, proposed alternative beliefs to freedom and equality (though only negative ones), and on this basis provided social members with new status and function. The war against totalitarianism cannot be waged merely through contempt. Defeating totalitarianism is not just a battlefield matter. Those who hate totalitarianism and love freedom must find better solutions than totalitarianism to build a normally functioning and free industrial society. Totalitarianism gave wrong and evil answers. But they at least asked the right questions. Industrial society must address several issues: the legitimacy of power (government power and social power), individual status and function, and society's basic beliefs. These issues became the fundamental threads in Drucker's exploration of industrial society reconstruction in The Future of Industrial Man. The Future of Industrial Man: From Totalitarian Diagnosis to General Social Theory Both The End of Economic Man and The Future of Industrial Man feature the prose style of 19th-century historians. Even today, readers can appreciate the author's profound historical knowledge and wise historical commentary. For today's readers, the real challenge of these two books lies in Drucker's theoretical interests. He doesn't simply narrate history but organizes and explains historical facts using his unique beliefs and methods. In The End of Economic Man, Drucker developed his diagnosis of totalitarianism around three issues: power legitimacy, individual status-function, and society's basic beliefs. In The Future of Industrial Man, he also constructs a general social theory around these three issues. In "What Is A Functioning Society," Drucker explains three sets of tensions that exist in social ecology: 

Drucker in the Lab: Leading Through Trust, Not Control

By Linda Megerdichian • November 15, 2025
Last semester, two students approached me to advise their AI-based graduate projects at a time when no one else in the department was available or willing to take them on. Our department lacked sufficient faculty with software or AI specialization at the time to support the growing number of requests in this area. I decided to take on the projects and serve as their advisor. I was honest with them from the beginning and told them that I had no prior experience in training machine learning models. Still, I said that if they were willing to put in the effort, I would learn alongside them and support them every step of the way. Both students wanted to build careers in AI, and I knew that their graduate projects could set the tone for the opportunities ahead. I have always believed it is my responsibility to open doors for my students, even when the path ahead is uncertain. Although I understood how the overall system architecture should be designed, I was learning the rest in real time just like them. Others advised me not to take the risk, but I believed in their determination and their right to pursue ideas they were genuinely passionate about rather than what was convenient for faculty. Today, both students successfully demonstrated their projects, and I could not be prouder of what they had accomplished. When I think about this experience, I am reminded of Peter Drucker’s view that leadership is not rank or privilege; it is responsibility. He often wrote that a leader’s first duty is to help others perform to the best of their abilities. That means creating conditions where people can discover what they are capable of, not directing them from above, but believing in them enough to let them try. In this small lab moment, I saw that principle come alive. I did not have the answers, and they knew it. But leadership, as Drucker would say, is not about knowing everything. It is about doing the right thing, even when it means stepping into uncertainty. Trust replaced control. Curiosity replaced expertise. And in that space, both students grew, and so did I. Drucker believed the most effective organizations are those built on mutual trust, where authority is replaced by responsibility, and learning is shared across all levels. That day in the lab, I realized that education itself is one of the purest forms of management, not managing systems or people, but managing potential. Sometimes, the best leadership lesson does not come from a management book. It comes from saying yes when it would have been easier to say no, and discovering that faith in others is the most powerful management tool of all.

Marc Benioff: Reimagining Capitalism through Management as a Liberal Art

By Robert Kirkland Ph.D. • November 4, 2025
When Marc Benioff founded Salesforce in 1999, Silicon Valley had a pretty straightforward playbook which was technological disruption at any cost. Profit, scale, and market capture dominated corporate ambition. Benioff, who worked under Steve Jobs at Apple and explored Buddhist philosophy, was not satisfied with that approach. He envisioned a company that would not only revolutionize enterprise software through the cloud but also redefine the social purpose of business itself. His leadership at Salesforce reflects Peter Drucker's concept of Management as a Liberal Art (MLA). This idea holds that management is not just about efficiency or growth, but about making work human, creating meaning, and building institutions that serve society (Drucker, 1989). Philanthropy as Structure From Salesforce’s inception, Benioff took an unusual approach. He instituted the “1-1-1 model”, pledging one percent of company equity, product, and employee time to philanthropy. This simple yet radical idea embedded social responsibility into the company’s DNA, ensuring that business success translated into community benefit (Salesforce, 2021). Peter Drucker made a similar point in The Concept of the Corporation (1946). He argued that companies cannot operate as "islands of profit" detached from their communities. Benioff's model, now replicated worldwide through the Pledge 1% movement, demonstrates that corporate citizenship can be institutionalized, not just idealized. By formalizing philanthropy as part of corporate structure rather than discretionary charity, Salesforce gave proof to Drucker’s claim that companies can serve as stabilizing social institutions. Human-Centered Leadership Drucker emphasized that management is a humanistic discipline requiring both knowledge and self-awareness. Benioff has consistently modeled this through self-reflection and moral grounding. As a long-time advocate of mindfulness and meditation, he integrates spiritual awareness with corporate purpose. In Trailblazer (2019), Benioff reflects on how introspection informs strategic clarity and ethical leadership. Compassion is a core managerial value for Benioff. This aligns with Drucker’s insistence that good leaders must "engage the whole human being," acknowledging both rational capability and emotional complexity. In cultivating mindfulness as an organizational practice, Benioff turns what Drucker called “self-knowledge” into a shared institutional expectation, not a private exercise. Stakeholder Capitalism in Practice Perhaps Benioff’s most significant Druckerian contribution is his public challenge to shareholder primacy. As a high-profile advocate of stakeholder capitalism, he has urged fellow executives to view not just investors, but also customers, employees, communities, and the planet as legitimate stakeholders in corporate decision-making. Drucker anticipated this shift in 1999 when he argued that institutions must balance individual rights with broader social responsibilities, and that leadership must be anchored in moral purpose rather than short-term gain. Benioff operationalized this at Salesforce by making equality, climate action, and community impact strategic priorities alongside financial metrics. Salesforce has built environmental and social-impact objectives into its leadership accountability and public reporting, positioning those outcomes as core measures of performance rather than PR exercises. In Drucker's terms, this marks a shift from a purely economic mandate to an explicitly ethical one. Building a Meaningful Culture At Salesforce, Benioff’s internal culture emphasizes equality, diversity, and trust. His mantra of “Ohana” a Hawaiian term for family defines the company’s social ethos. Through listening sessions, employee councils, and direct engagement with staff, Benioff attempts to cultivate what Drucker would call a functioning institution: a place where individuals are offered both status and function, and where they derive meaning through active contribution. One concrete expression of this philosophy is Salesforce’s repeated company-wide pay equity audits. The company has publicly acknowledged compensation gaps across gender and race and then allocated millions of dollars to close them. This reflects Drucker’s view that organizations must respect human dignity and align personal fulfillment with collective mission. Benioff’s conviction that fairness can be measured and corrected turns theory into everyday management practice. Balancing Technology and Humanity In Post-Capitalist Society (1993), Drucker identified the rise of the knowledge worker as a defining feature of modern institutions. Salesforce, as a platform for digital collaboration across sales, service, marketing, analytics, and commerce, is organized around those workers. But Benioff’s management philosophy resists the idea that productivity can be reduced to code and dashboards. He argues that innovation begins in empathy and trust, not automation, which echoes Drucker’s warning that management cannot dissolve into technique. At the same time, Salesforce has embraced artificial intelligence through Einstein GPT and autonomous AI agents to automate routine tasks. While this automation has replaced certain roles, Benioff has publicly insisted that human connection remains irreplaceable in high-value work such as enterprise sales, and Salesforce is simultaneously hiring thousands of additional salespeople. By automating repetitive tasks while elevating distinctly human work, Benioff is enacting Drucker’s belief that technology must remain subordinate to judgment, responsibility, and moral purpose (Drucker, 1990). His leadership has also demonstrated Drucker’s axiom that effective management requires balancing continuity with change. Continuity and Change Over two decades, Salesforce has evolved from a single product - customer relationship management delivered via the cloud - to a global platform ecosystem spanning analytics, integration, AI, collaboration, and industry-specific solutions. Yet it’s core values; trust, customer success, innovation, and equality have remained remarkably consistent. The COVID-19 pandemic highlighted this balance. Salesforce mobilized its logistics network and relationships to support public health responses, sourced and donated medical equipment, and repurposed internal systems to help governments and hospitals. Simultaneously, it accelerated digital transformation for its customers, positioning the company as both economic actor and civic partner. This is management serving society not just stakeholders. Moral Stewardship and Systems Thinking A key aspect of Drucker’s MLA is its interdisciplinary nature. He describes management as a liberal art because it must draw on ethics, psychology, economics, history, and even theology to exercise wise judgment (Drucker, 1989). Benioff exemplifies this approach. He openly blends spiritual language, social justice arguments, civic activism, and technology strategy. He links corporate tax policy to homelessness and public health, climate action to fiduciary duty, and workforce equity to innovation capacity. This is not accidental rhetoric. It is an attempt to widen the frame of what “business leadership” is allowed to talk about. And in doing so, Benioff turns the CEO role into something closer to what Drucker called moral stewardship: the active use of organizational power to strengthen society’s fabric. A Model for the 21st Century Drucker argued that a functioning society depends on institutions that foster responsible citizenship, provide meaningful work, and accept obligations beyond profit. Salesforce’s global initiatives illustrate this principle. Its Climate Action Plan, net-zero commitments, LGBTQ+ advocacy, and Pledge 1% expansion reinforce that corporations can be both market leaders and social institutions. Benioff sees business as a primary vehicle for delivering resources, talent, and problem-solving at scale to communities. Marc Benioff’s work at Salesforce is one of the clearest contemporary examples of Management as a Liberal Art. Through empathy, ethical reflection, institutional responsibility, and systemic awareness, Benioff has redefined 21st century management. Like Drucker, he views organizations as moral communities’ arenas for both performance and purpose. In an era of automation, widening inequality, and environmental crisis, Benioff believes that capitalism can be rehabilitated, but only if leaders understand management not as control, but as stewardship. The liberal art of management is not an outdated ideal; it is a living practice and essential for the legitimacy of business itself.  References Benioff, M. (2019). Trailblazer: The power of business as the greatest platform for change. Currency. Drucker, P. F. (1946). The concept of the corporation. New York: The John Day Company. Drucker, P. F. (1989). The new realities: In government and politics, in economics and business, in society and world view. New York: Harper & Row. Drucker, P. F. (1990). Managing the non-profit organization. New York: HarperBusiness. Drucker, P. F. (1993). Post-capitalist society. New York: HarperBusiness. Drucker, P. F. (1999). Management challenges for the 21st century. New York: HarperBusiness. Salesforce. (2021). Philanthropy and the 1-1-1 model. https://www.salesforce.com/company/philanthropy/
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