Drucker Institute/Wall Street Journal Rankings Measure Most Stakeholder Capitalism Factors

This annual ranking of effective companies addresses many of the key elements of Stakeholder Capitalism when it comes to people management.

 

Microsoft, Amazon, Apple, International Business Machines, and Intel top the 2021 list of 250 Best Managed companies, created by the Drucker Institute for the Wall Street Journal. The rankings are based on an independent analysis of the five dimensions of corporate performance originally developed by the management consultant legend Peter Drucker: Customer Satisfaction, Employee Engagement and Development, Innovation, Social Responsibility and Financial Strength.

 

The Management Top 250 ranking, as published in The Wall Street Journal, is based on a holistic measure of corporate “effectiveness” that was developed by the Drucker Institute, a part of Claremont Graduate University in Claremont, Calif. “Effectiveness” is defined as “doing the right things well.”

 

The ranking includes US companies whose shares are traded on the New York Stock Exchange or Nasdaq Stock Market, and that meet criteria, described below, related to their value and prominence.

 

The measure seeks to assess how well a company follows a core set of principles advanced by the late Peter Drucker, a professor, consultant, author, and longtime Wall Street Journal columnist. Drucker died in 2005.

 

In explaining the rankings, the Drucker Institute says, “Much like human health, intelligence or athleticism, corporate effectiveness is a latent variable, meaning that it cannot be directly observed. But it can be inferred from other variables that can be observed (known as indicators).

 

As a result, “a slightly different weight was computed for each dimension based on the degree to which it was found statistically to contribute to overall corporate effectiveness. Those weights were as follows: Customer Satisfaction = 19%; Employee Engagement and Development = 19%; Innovation = 23%; Social Responsibility = 25%; and Financial Strength = 14%.” 

 

The organization says the “model rests on the belief that all five dimensions are interrelated and influence each other over time—what social scientists call reciprocal causation. While it might be possible to untangle those influences with longitudinal data—and the Drucker Institute has conducted research to better understand how different parts of the model relate to one another—that is not the immediate goal of this ranking. Rather, the main purpose is to provide a snapshot of overall corporate effectiveness at a point’s model, there are 34 indicators that fall under the five dimensions of corporate performance.” 


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