The invention of management: Peter Drucker on tracking the emergence of 'industrial man.'.

• Position: ENDNOTE - Interview

Ed. Note: Peter Drucker, the renowned management thinker of the last century, died on Nov. 11, 2005, at the age of 95. The following is an excerpt from a DIRECTORS & BOARDS interview with Drucker in which he traced the rise of the modern-day form of corporate organization ("The Invention of Management," Winter 1982). The interviewer was Prof. Warren Bennis, founding chairman of the Leadership Institute at the University of Southern California and the author/co-author of 27 books on leadership.

I HAVE COME to the conclusion that when modern organizations first arose, they didn't even arise first in business. In 1860 or 1870 you had fundamental changes in the management of non-business institutions.

The first modern universities founded in this country began in 1869 with the Harvard reform and then 30 years of university entrepreneurship. I think those are the heroic years of American higher education, ending with Nicholas Murray Butler's unfriendly takeover of Columbia University by Teachers College. (If there ever was a hostile takeover, it was that one!)

Then you had the beginning of great local government reform in Britain. These were also the years of basic army reform--the Prussian, Moltke, started it. Then the French army started reform after the Franco-Prussian war in 1870 and finally the British and Americans followed suit. So those were really the years of institution building.

In this country the first business that couldn't run by conventional means was the railroad. The bankruptcy of traditional ways of running the railroad became woefully obvious in the Civil War, which the Union would have won in 12 months if it had been able to run the railroads. Sherman knew it, Grant knew it, Lincoln knew it: The Union had an incredible superiority in manpower, but they could not bring it to bear on the Confederacy. Eventually it was done. But they never could strengthen the railroads. Supplies for the Union army never got to where the troops were...