By Guest commentary Friday, December 12th, 2025

By Gerhard Apfelthaler

Twenty years ago last month, Peter Drucker, still one of the most respected authorities on the practice of management, passed away. He would have also celebrated his 116th birthday. While it was too soon for him to witness the rise of artificial intelligence, he did anticipate the age of artificial intelligence long before “AI” became a staple of boardroom agendas. 

To be clear, Drucker never wrote about large language models, autonomous agents, or algorithmic organizations, but his lifelong themes — knowledge work, productivity, decentralization, innovation, and the primacy of human purpose — offer a remarkably clear guide to what he would likely argue today. 

If Drucker were advising CEOs in 2025, his message would be both optimistic and deeply cautionary: AI will not replace managers, but managers who fail to harness AI will be replaced by those who do.

Drucker famously argued that the 20th century’s greatest management challenge was making knowledge workers more productive. In The Age of Discontinuity and Post-Capitalist Society, he insisted that economic progress would depend less on capital or labor and more on applying knowledge systematically and continuously. AI precisely pulls on this lever.

Drucker would likely view AI as the long-awaited breakthrough that allows organizations to “systematize knowledge” at scale, turning tacit insights, processes, and best practices into accessible, analyzable, and improvable assets. 

He would argue that AI represents to the knowledge worker what the assembly line represented to manual labor: a force multiplier that redefines productivity, workflows, and roles.

At the same time, I am fairly certain that he would also warn that technology alone accomplishes nothing. Productivity gains arise only when leaders rethink processes, decision rights, organizational structures, and measures of performance. 

There is “nothing quite so useless,” Drucker reminded us already in the 1960s, “as doing with great efficiency what should not be done at all.” 

Applied to AI, that would mean that automating wasted work simply would institutionalize waste.

Drucker was also a great champion of decentralization. 

Organizations should push decisions as close as possible to the action, not because participation feels good, but because effectiveness requires autonomy and information symmetry. AI accelerates this logic. 

With intelligent decision support from artificial intelligence, frontline teams can now operate with a level of insight and foresight once reserved for top executives. 

Drucker would most likely enthusiastically support this trend but also stress that decentralization requires responsibility, not just empowerment. AI-supported autonomy must come with explicit strategic clarity, guardrails, and accountability. 

Otherwise, organizations risk replacing bureaucratic rigidity with algorithmic chaos. He would also likely assert that the winning organizations of the AI era will be those that combine intelligent tools with human judgment and clear objectives into cohesive “responsibility centers.”

And where does this all leave management and managers? Drucker always believed that managers do not merely supervise — they enable others to perform. 

In an AI-rich environment, he might argue that the manager’s job becomes less about directing tasks and more about defining purpose and outcomes, designing systems where humans and machines complement each other, developing people who can learn continuously, and ensuring that ethical and social responsibilities guide decisions. 

In The Effective Executive, Drucker wrote that one of the executive’s most important tasks is to make strengths productive. AI extends human strengths but also exposes human weaknesses. Thus, Drucker would urge leaders to invest heavily in training, reframing roles, and reskilling — not as a cost, but as a core responsibility. 

“The enterprise is a human community and a social entity,” he wrote, and AI does not replace the need to cultivate that community; it amplifies it. Well ahead of his time, Drucker argued that “management is a moral practice.” He believed the corporation exists to create both economic and social value, and that legitimacy depends on responsible behavior. 

In the age of AI, where algorithms influence critical decisions, such as hiring and firing, promotion and compensation, but also credit, customer service, healthcare decisions, and more, Drucker probably would insist that leaders treat ethics not as compliance but as strategy. He would likely caution that AI must never undermine dignity and that algorithms must serve human values, not supplant them.

In Innovation and Entrepreneurship, Drucker argued that every organization must become entrepreneurial – constantly searching for change, responding to it, and exploiting it. 

AI, by lowering the cost and reducing the time of experimentation, prototyping, and learning, democratizes innovation across the enterprise. Drucker would view this as the greatest opportunity of all: AI enables every unit, not just a few select ones, to be an entrepreneurially driven “knowledge engine.”

Above all, Drucker would remind today’s leaders that AI is not destiny. Organizations fail not because they adopt the wrong technologies but because they bury themselves in activity that lacks purpose. 

He would likely conclude that the task of management in the age of AI is to ensure that technology serves human needs and organizational purpose and never the other way around. 

In that, Drucker would frame AI not as a technological question but as a governance one for corporations: To what end are we using AI? Who is responsible for what the algorithm does? Who defines the acceptable limits? Who ensures that AI strengthens, rather than weakens, our institutions? 

Humanity, in Drucker’s view, would be the only true foundation of effective management, regardless of how intelligent our machines become.

Gerhard Apfelthaler is a professor of international business and the dean of the School of Management at California Lutheran University in Thousand Oaks.