The First Three Responsibilities of Management

© 2023, Barry L. Linetsky. All Rights Reserved.

Peter Drucker’s 1954 book The Practice of Management is generally recognized as the first to look at management as a distinct professional class and the first to outline the important responsibilities that adhere to those occupying managerial positions. 

Early in the book Drucker sets the table for the seriousness that adheres to managerial responsibilities by identifying three “jobs” that are inherent in every management role, and thus are incumbent upon every manager to recognize and seriously embrace. Drucker’s viewpoint was heavily influenced by his multi-year study of General Motors, which resulted in an internal report to GM leadership as well as his 1946 book The Concept of the Corporation. 

The first job of management (i.e., of managers), according to Drucker, is managing a business. Management must manage, and it must possess the authority to manage actively. This means “taking action to make the desired results come to pass” (p. 11). 

The second job of management is to “make a productive enterprise out of human and material resources” by means of managing managers. It is by means of managers as the directors of people and processes that the whole can be assembled and directed to be much more than the passive sum of the parts. It is only people that can enlarge the capabilities of other material resources: non-human resources “stand under the laws of mechanics. They can be better utilized or worse utilized, but they can never have an output greater than the sum of the inputs. … the problem in putting non-human resources together is always to keep to a minimum the inevitable output-shrinkage through friction, etc. Man, alone of all the resources available to man, can grow and develop” (p. 12). 

The investment in managers and those knowledge workers who get the work directed by managers done, “outweighs the investment in every other resource in practically all businesses.’ Drucker’s admonition, almost 70 years ago, is that:

To manage managers is therefore to make resources productive by making an enterprise out of them. And management is so complex and multi-faceted a thing, even in a very small business, that managing managers is inevitably not only a vital but a complex job.” (p. 14)

The first two responsibilities of managers are to: 1) manage the business for economic results, and 2) manage managers to optimize and systematize the utilization of production resources. 

There is also a third job—a third responsibility inherent in managing—which is to manage workers and work. Getting work done requires workers with different and distinct knowledge, capabilities, and skills. This work has to be organized “ so as to make it most suitable for human beings, and organization of people to make them work most productively and effectively.” Human resources are unlike the other resources managers have at hand. They have “personality, citizenship, control over whether they work, how much and how well, and thus requiring motivation, participation, satisfaction, incentives and rewards, leadership, status and function.” It is the job of management, “and management alone,” says Druicker, to recognize and satisfy these requirements as “the activating organ of the enterprise” (p.14).

Drucker also notes an additional “function” of management that is embedded in every decision and action, and that is the consideration of time. In making decisions, managers must not fail in balancing present and future: “In every case where present and future are not both satisfied, where their requirements are not harmonized or at least balanced, capital, that is wealth-producing resources, is endangered, damaged or destroyed.” 

Management is for the present and the future. All action takes place in the present but to be effective it must be future-oriented and purposefully directed. Drucker writes:

…management must keep the enterprise successful and profitable in the present—or else there will be no enterprise left to enjoy the future. It must simultaneously make the enterprise capable of growing and prospering, or at least surviving in the future—otherwise it has fallen down on its responsibility of keeping resources productive and unimpaired, has destroyed capital. (p. 15)

Drucker has separated out these three managerial responsibilities—calling them “the three jobs of management”— for the sake of drawing attention to them and analyzing them. But he is quick to assure us that in the daily work of the manager, these responsibilities cannot be divided. “Any management decision always affects all three jobs and must take all three into account.” Nor can the manager deal with decisions about the present as separate from decisions about the future. 

Drucker summarizes his observations about the work of managers at the conclusion of Chapter 2 of The Practice of Management:

We must…never allow ourselves to forget that in actual practice managers always discharge these three jobs in every… action. We must not allow ourselves to forget that it is actually the specific situation of the manager to have not one but three jobs at the same time, discharged by and through the same people, exercised in and through the same decision. Indeed, we can only answer our question: “What is management and what does it do?” by saying that it is a multi-purpose organ that manages a business and manages managers and manages workers and work. If one of these were omitted, we would not have management any more—and we also would not have a business enterprise or an industrial society. (p. 17)

These issues are written about and remain at the forefront of almost every business discussion and remain top of mind as indicated by the number of “leadership” posts that appear daily on LinkedIn. This shows how right Drucker was to identify these challenges of management as being the most fundamental to achieving a productive workforce and contributing to the creation of value and enhanced well-being for consumers. I’ve quoted so extensively to show that these issues of management and leadership have been known and talked about and worked on for decades.

Unfortunately, what we hear from so many of those engaged in the current discussions about leadership has a lot to do with identifying and struggling with the imagined virtues and vices of intrinsic traits and attributes of management and leadership without the context that is required and in which Drucker places the role and work of management. For example, one online “career guide” identifies the top ten leadership traits. We are told that these “leadership traits are essential qualities that make effective leaders in the workplace.” They are accountability, adaptability, confidence, creativity, empathy, focus, positivity, risk-taking, stability, and team-building. Apparently, possessing these traits makes one an effective leader. And that’s why, given that everybody possesses these traits, we learn that “everybody is a leader.”

Yes, these are good traits to have, but they completely miss the mark, and have little to do with the larger context of managerial leadership and the jobs and responsibilities of management to manage businesses for economic results, to manage managers to optimize the utilization of productive resources, and to utilize the knowledge, skills, and capabilities of people so that they work productively and effectively. Managerial leadership is about shaping work and getting it done through the cooperation of others, going along a path together, to achieve intended results.

For Drucker, being a manager is a profession undertaken to achieve economic results by producing or contributing to the production of goods that consumers deem valuable to improving their wellbeing and happiness. Managers need to take pride in their work by taking the “job” inherent in every management role seriously and dedicating themselves to the purpose of the work.

It is these kinds of dedicated and professional managers at all levels of organized work systems that we should recognize as making the largest contributions to society so that together we can continue to enjoy and benefit from the bounties of innovation, cooperation, progress and flourishing that come as the reward for building and sustaining viable and trust-inducing work systems. 

© 2023, Barry L. Linetsky. All Rights Reserved. 

Barry Linetsky is a senior-level strategic advisor and enabler, writer, researcher, and photographer. His thought-leadership and research has been published by Rotman Magazine and Ivey Business Journal [https://iveybusinessjournal.com/?s=linetsky]. He is the author of the acclaimed and best-selling book The Business of Walt Disney and the Nine Principles of His Success, and Understanding and Creating Vision and Mission Statements. He blogs on strategic business issues at www.barrylinetsky.com.