Vision, Mission, & Objectives

Peter Drucker’s idea of MLA is based on his concept of a Functioning Society of Institutions. Like many who witnessed the rise of totalitarianism in the 1930s, Drucker sought an explanation for why this form of governance was so appealing to people. What conditions made the rise of the Nazis possible, and how could such an event be prevented from ever happening again? Drucker published his book, The End of Economic Man in 1939. In this book, he developed his own explanation for totalitarianism and its appeal. Drucker’s main thesis in The End of Economic Man is that the traditional institutions of European society had broken down, and so had people’s belief in the systems that held society together.

Out of this analysis, Drucker developed his concept of a Functioning Society of Institutions. How can the institutions of a society persist, so that there isn’t such a complete breakdown again? Where can people find status and function in society? What institutions or organizations can provide meaning to existence? When Drucker came to the United States, he looked around and saw, with the rapid growth of industrial capitalism, the increasing prominence of the corporation, particularly in the manufacturing sector. Consequently, his subsequent works on industrial capitalism (The Future of Industrial Man and his analysis of General Motors, The Concept of the Corporation) analyzed the nature of industrial organizations and how they could provide status and meaning for those employed there. As a result, Drucker’s early work on management focused on how to make corporate organizations functioning institutions that were not just economic entities but also social ones. Capitalism could provide a Functioning Society of Institutions – provided that those institutions were well-managed and understood that they were the primary organs of society. As industrial capitalism shifted to a knowledge-based economy, Drucker also looked at non-industrial organizations, as well as non-profit institutions (what Drucker referred to as the social sector). In essence, a functioning society requires well-managed organizations of all kinds: businesses, schools, hospitals, charitable organizations, and other institutions – all very focused on their own missions and strengths, but with a clear understanding of their role as part of a larger society.

Drucker’s theory of this Functioning Society is grounded in all kinds of philosophy, political theory, sociology, and other disciplines of thought. But as he developed his concept of Management as a Liberal Art, he sought to take this theoretical background, and his own reckoning with history, and apply it to making organizations and institutions well-managed and healthy so that they could survive. A Functioning Society of Organizations depends on well-managed organizations that will have a role in society that will hold up over time.