The next book Peter Drucker would have written: federalism and management as a liberal art

Purpose – The political philosophy of American federalism was a critical influence on the work of Peter Drucker. Drucker drew on federalist ideas to devise ways to distribute and check power within organizations, curbing the darker side of human nature. In this article, the authors aim to discuss the history of federalism, and to demonstrate how Drucker used that philosophy to shape his own management theories. The article also seeks to provide suggestions for applying federalist principles to today's organizations. Design/methodology/approach – Drucker's own writings, as well as historical primary sources, are analyzed to illustrate the influence of federalism. The authors use specific examples from Drucker's own work, including his study of General Motors and his concept of management by objectives, to illustrate how federalism informed Drucker's vision for a functioning society of institutions. Findings – Although Drucker has been criticized as a utopian, he, like the federalists and their philosophical forefathers, grappled with the role and nature of virtue in society, the balance between individual liberty and the greater good, and the need for checks and balances on power. As evidenced by Drucker's work, federalism offers a potential solution to today's organizations for managing complex networks and alliances, as well as creating an effective top‐management team. Research limitations/implications – Future research into the applicability of federalism to contemporary organizations is suggested. Originality/value – This paper provides an in‐depth analysis of the impact of federalist principles on Drucker's work, and offers specific suggestions for applying federalism to managing organizations today. It provides an important connection between the discipline of management and the liberal arts.