Drucker's theory of the business and organisations: challenging business assumptions

This paper considers Drucker's “theory of the business” as a management concept applicable to the challenging of firm performance. The paper seeks to do this by using the theoretical framework developed by Drucker as a tool to apply to organisation planning. In addition the paper aims to demonstrate the often “silent” but influential role assumptions have on organisations. Thus, the paper seeks to invite a reassessment of the role assumptions play in organisations and to present a new and topical perspective on Drucker's original “theory of the business” argument.

A close review of Drucker's “theory of the business” article is outlined and a range of recently published (1994‐2008) works on related subject matter is reviewed. It is argued that the “assumptive design framework” at the heart of the theory of the business has potential to act as a powerful planning and strategy tool for enterprises. In addition the review demonstrates the “silent” positive and negative influences business assumptions have on organisation and management practice.

As a general review the paper provides new knowledge about the practical potential of one of Peter Drucker's seminal published articles in an area largely untouched by business or management research. It illustrates how research employing Drucker's “theory of the business” concept in the context of assumptions in business can have major benefit for organisations, especially growth‐oriented businesses.

This is the first paper to address the empirical potential of Drucker's conceptualisation of the “theory of the business” and exposes a unique Drucker‐inspired business and planning proposition that has significant potential for business management, especially in turbulent times