UNIT ONEUNIT ONETheoretical FoundationsTheoretical Foundations

CHAPTER THREECHAPTER THREE

Humanistic Theories of OrganizationsHumanistic Theories of Organizations

PREVIEWPREVIEW Review Classical Theories of OrganizationsReview Classical Theories of Organizations

• Taylor’s Theory of Scientific ManagementTaylor’s Theory of Scientific Management• Fayol’s Administrative TheoryFayol’s Administrative Theory• Weber’s Theory of BureaucracyWeber’s Theory of Bureaucracy

Humanistic Theories of OrganizationsHumanistic Theories of Organizations Human Relations TheoryHuman Relations Theory

• The Hawthorne Studies• Chester Barnard• McGregor’s Theory X and Theory Y

Human Resources TheoryHuman Resources Theory• Likert’s Systems Theory (Four Systems of Management)• Blake and Mouton’s (Blake and McCanse) Managerial Grid

Classical Theories ReviewedClassical Theories Reviewed Classical Theories of Organizations (p. 36)Classical Theories of Organizations (p. 36)

Taylor’s Theory of Scientific Management (tasks)Taylor’s Theory of Scientific Management (tasks) Fayol’s Administrative Theory (mgmt)Fayol’s Administrative Theory (mgmt) Weber’s Theory of Bureaucracy (org structure)Weber’s Theory of Bureaucracy (org structure)

All 3 theories attempt to enhance management’s ability All 3 theories attempt to enhance management’s ability to predict and control the behavior of their workersto predict and control the behavior of their workers

Considered only the Considered only the task functiontask function of communication of communication (ignored relational and maintenance functions of (ignored relational and maintenance functions of communication)communication)

Designed to predict and control behavior in Designed to predict and control behavior in organizationsorganizations

Classical vs. HumanisticClassical vs. Humanistic Classical theories emphasized coercion, control, and Classical theories emphasized coercion, control, and

punishment (FOCUS ON TASKS /PRODUCTION).punishment (FOCUS ON TASKS /PRODUCTION). Maintain predictability and controlMaintain predictability and control Decision-making power at top of hierarchyDecision-making power at top of hierarchy Minimize input from lower-level employeesMinimize input from lower-level employees Rely on science and rules to guide behaviorRely on science and rules to guide behavior Regulate communication to increase predictability and decrease Regulate communication to increase predictability and decrease

misunderstandingsmisunderstandings Result: Result:

• Workers feel they have no control over their work situationWorkers feel they have no control over their work situation• Management does not care about their ideasManagement does not care about their ideas• Feelings and ideas of workers are unimportantFeelings and ideas of workers are unimportant

Humanistic theories were developed to promote the Humanistic theories were developed to promote the CONCERNS of the individual worker in an atmosphere that was CONCERNS of the individual worker in an atmosphere that was too focused on production (FOCUS ON RELATIONAL & too focused on production (FOCUS ON RELATIONAL & MAINTENANCE FUNCTIONS)MAINTENANCE FUNCTIONS)

Principles of Human Relations TheoryPrinciples of Human Relations Theory

Human relations theory is characterized by a shift in emphasis Human relations theory is characterized by a shift in emphasis from TASK to WORKERfrom TASK to WORKER

Go beyond physical contributions to include creative, cognitive, Go beyond physical contributions to include creative, cognitive, and emotional aspects of workersand emotional aspects of workers

Based on a more dyadic (two-way) conceptualization of Based on a more dyadic (two-way) conceptualization of communication.communication.

SOCIAL RELATIONSHIPS are at the heart of organizational SOCIAL RELATIONSHIPS are at the heart of organizational behavior--effectiveness is contingent on the social well-being of behavior--effectiveness is contingent on the social well-being of workersworkers

Workers communicate opinions, complaints, suggestions, and Workers communicate opinions, complaints, suggestions, and feelings to increase satisfaction and productionfeelings to increase satisfaction and production

Origins (Hawthorne Studies & work of Chester Barnard)Origins (Hawthorne Studies & work of Chester Barnard) Human Relations School of Management - Elton Mayo (HarvardHuman Relations School of Management - Elton Mayo (Harvard

Origins of Human Relations TheoryOrigins of Human Relations Theory

““The Hawthorne StudiesThe Hawthorne Studies Hawthorne Works of Western Electric CompanyHawthorne Works of Western Electric Company 1924 - Chicago1924 - Chicago Research focus: Relation of quality and quantity of illumination Research focus: Relation of quality and quantity of illumination

to efficiency in industryto efficiency in industry Four Important StudiesFour Important Studies

““The Hawthorne Studies”The Hawthorne Studies”

Illumination StudyIllumination Study (November 1924) (November 1924) Designed to test the effect of lighting intensity on worker productivityDesigned to test the effect of lighting intensity on worker productivity Heuristic value: influence of human relations on work behaviorHeuristic value: influence of human relations on work behavior

Relay Assembly Test Room StudyRelay Assembly Test Room Study (1927-1932) (1927-1932) Assembly of telephone relays (35 parts - 4 machine screws) Assembly of telephone relays (35 parts - 4 machine screws) Production and satisfaction increased regardless of IV manipulationProduction and satisfaction increased regardless of IV manipulation Workers’ increased production and satisfaction related to supervisory practicesWorkers’ increased production and satisfaction related to supervisory practices Human interrelationships are important contributing factors to worker productivityHuman interrelationships are important contributing factors to worker productivity Bottom Line: Supervisory practices increase employee morale AND productivityBottom Line: Supervisory practices increase employee morale AND productivity

Interviewing ProgramInterviewing Program (1928-1930) (1928-1930) Investigate connection between supervisory practices and employee moraleInvestigate connection between supervisory practices and employee morale Employees expressed their ideas and feelings (e.g., likes and dislikes)Employees expressed their ideas and feelings (e.g., likes and dislikes) Process more important than actual resultsProcess more important than actual results

Bank Wiring Room Observation StudyBank Wiring Room Observation Study (November 1931 - May 1932) (November 1931 - May 1932) Social groups can influence production and individual work behaviorSocial groups can influence production and individual work behavior RQ: How is social control manifested on the shop floor?RQ: How is social control manifested on the shop floor? Informal organization constrains employee behavior within formal organizational Informal organization constrains employee behavior within formal organizational

structurestructure

Hawthorne Studies - ImplicationsHawthorne Studies - Implications

Illumination StudyIllumination Study (November 1924) (November 1924) The mere practice of observing people’s behavior tends to alter their behavior The mere practice of observing people’s behavior tends to alter their behavior

(Hawthorne Effect)(Hawthorne Effect) Relay Assembly Test Room StudyRelay Assembly Test Room Study (1927-1932) (1927-1932)

Relationships between workers and their supervisors are powerfulRelationships between workers and their supervisors are powerful Human interrelationships increase the amount and quality of worker participation Human interrelationships increase the amount and quality of worker participation

in decision makingin decision making Interviewing ProgramInterviewing Program (1928-1930) (1928-1930)

Demonstrated powerful influence of upward communicationDemonstrated powerful influence of upward communication Workers were asked for opinions, told they mattered, and positive attitudes Workers were asked for opinions, told they mattered, and positive attitudes

toward company increasedtoward company increased Bank Wiring Room Observation StudyBank Wiring Room Observation Study (November 1931 - May 1932) (November 1931 - May 1932)

Led future theorists to account for the existence of informal communicationLed future theorists to account for the existence of informal communication

Taken together, these studies helped to document the powerful nature Taken together, these studies helped to document the powerful nature of social relations in the workplace and moved managers more toward of social relations in the workplace and moved managers more toward the interpersonal aspects of organizing.the interpersonal aspects of organizing.

Hawthorne Studies - CriticismsHawthorne Studies - Criticisms

Not conducted with the appropriate scientific rigor necessaryNot conducted with the appropriate scientific rigor necessary Too few subjects (N=5)Too few subjects (N=5) No control groupsNo control groups Subjects replaced with more “cooperative” participantsSubjects replaced with more “cooperative” participants

WORTHLESSWORTHLESS GROSS ERRORSGROSS ERRORS INCOMPETENCEINCOMPETENCE

The Emergence of CommunicationThe Emergence of Communication

Chester BarnardChester Barnard Considered a bridge between classical and human relations theoriesConsidered a bridge between classical and human relations theories The Functions of the Executive (The Functions of the Executive (1938)1938) Argues for . . . Argues for . . .

• strict lines of communication - classical theorystrict lines of communication - classical theory• a “human-based system of organization”a “human-based system of organization”• The potential of every worker and the centrality of communication The potential of every worker and the centrality of communication

to the organizing processto the organizing process Six Issues Relevant to Organizational CommunicationSix Issues Relevant to Organizational Communication

• Formal vs. Informal OrganizationFormal vs. Informal Organization• CooperationCooperation• CommunicationCommunication• IncentivesIncentives• AuthorityAuthority• Zone of IndifferenceZone of Indifference

Six Issues Relevant to Organizational CommunicationSix Issues Relevant to Organizational Communication

Formal vs. Informal OrganizationFormal vs. Informal Organization Formal Organization - a system of consciously coordinated activities or forces of two or more Formal Organization - a system of consciously coordinated activities or forces of two or more

persons. (definite, structured, common purpose)persons. (definite, structured, common purpose)• Persons are able to communicate with one anotherPersons are able to communicate with one another• Willing to contribute actionWilling to contribute action• To accomplish a common purposeTo accomplish a common purpose

Informal Organization - based on myriad interactions that take place thourghout an Informal Organization - based on myriad interactions that take place thourghout an organization’s history.organization’s history.

• IndefiniteIndefinite• StructurelessStructureless• No definite subdivisions of personnelNo definite subdivisions of personnel• Results: customs, mores, folklore, institutions, social norms, ideals -- may lead to formal organizationResults: customs, mores, folklore, institutions, social norms, ideals -- may lead to formal organization

CooperationCooperation Necessary component of formal organizationNecessary component of formal organization The expression of the net satisfactions or dissatisfactions experienced or anticipated by each The expression of the net satisfactions or dissatisfactions experienced or anticipated by each

individual in comparison with those experienced or anticipated through alternative opportunitiesindividual in comparison with those experienced or anticipated through alternative opportunities CommunicationCommunication

Critical to cooperationCritical to cooperation The most universal form of human cooperation, and perhaps the most complex, is speechThe most universal form of human cooperation, and perhaps the most complex, is speech The most likely reason for the success of cooperation and the reason for its failureThe most likely reason for the success of cooperation and the reason for its failure System of communication: known, formal channels which are as direct (short) as possible, System of communication: known, formal channels which are as direct (short) as possible,

where the complete line of communication is used, the supervisory heads must be competent, where the complete line of communication is used, the supervisory heads must be competent, the line of communication should not be interrupted, and every communication should be the line of communication should not be interrupted, and every communication should be authenticated.authenticated.

Barnard’s system lacks relationship formation and maintenance mechanismsBarnard’s system lacks relationship formation and maintenance mechanisms

Six Issues Relevant to Organizational CommunicationSix Issues Relevant to Organizational Communication

IncentivesIncentives Should be availableShould be available Not discussed in detailNot discussed in detail

AuthorityAuthority Associated with securing cooperation for organizational membersAssociated with securing cooperation for organizational members The interrelationship among the originator of the communication, the The interrelationship among the originator of the communication, the

communication itself, and the receivercommunication itself, and the receiver Authority of position OVER Authority of Leadership (knowledge & ability).Authority of position OVER Authority of Leadership (knowledge & ability).

Zone of Indifference - orders followedZone of Indifference - orders followed Marks the boundaries of what employees will consider doing without question, Marks the boundaries of what employees will consider doing without question,

based on expectations developed on entering the organization.based on expectations developed on entering the organization.

Barnard drew attention away from formal organizational structures toward Barnard drew attention away from formal organizational structures toward communication, cooperation, and the informal organization. communication, cooperation, and the informal organization. His work was integrated by other theorists in the human relations movement.

Theory X and Theory Y: Douglas McGregorTheory X and Theory Y: Douglas McGregor

Douglas McGregor (1906-1964)Douglas McGregor (1906-1964) Articulated basic principles of human relations theory The Human Side of Enterprise (1960, 1985) To understand human behavior, one must discover the theoretical

assumptions upon which behavior is based Especially interested in the behavior of managers toward workers “Every managerial act rests on assumptions, generalizations, and

hypotheses--that is to say, on theory . . . Theory and practice are inseparable.”

Two Objectives:• Predict and control behavior• Tap Unrealized potential

Theory X - Classical Theory Theory Y - Human Relations Theory FOCUS: Manager’s assumptions about HUMAN NATURE

Theory X and Theory Y: Douglas McGregorTheory X and Theory Y: Douglas McGregor

Theory X - Classical TheoryTheory X - Classical Theory Three Assumptions

• The average human being has an inherent dislike of work and will avoid it.• Most people must be coerced, controlled, directed, and threatened with punishment• The average human being prefers to be directed, wishes to avoid responsibility, has

relatively little ambition, wants security. Neither explains nor describes human nature

Theory Y - Human Relations TheoryTheory Y - Human Relations Theory AssumptionsAssumptions

• Physical and mental effort in work is similar to play / rest.Physical and mental effort in work is similar to play / rest.• External control and the threat of punishment are not the only strategiesExternal control and the threat of punishment are not the only strategies• Commitment to objectives is a function of the rewards associated with their achievementCommitment to objectives is a function of the rewards associated with their achievement• The average human being learns, under proper conditions, not only to accept but to seek The average human being learns, under proper conditions, not only to accept but to seek

responsibilityresponsibility• The capacity to exercise a high degree of imagination, ingenuity, and creativity in the The capacity to exercise a high degree of imagination, ingenuity, and creativity in the

solution of organizational problems is widely distributed in the populationsolution of organizational problems is widely distributed in the population• Intellectual potentialities of the average human being are underutilizedIntellectual potentialities of the average human being are underutilized

A more positive perspective of human natureA more positive perspective of human nature The KEY to control and quality production is The KEY to control and quality production is commitment to organizational commitment to organizational

objectivesobjectives

Theory Y Prototype: The Scanlon PlanTheory Y Prototype: The Scanlon Plan

Participative ManagementParticipative Management Two Central FeaturesTwo Central Features

Cost-reduction sharing for organizational members - Cost-reduction sharing for organizational members - sharing the economic sharing the economic gains from improvements in organizational performancegains from improvements in organizational performance

Effective participation Effective participation - a formal means of providing opportunities to every - a formal means of providing opportunities to every member of the organization to contribute ideas for improving organizational member of the organization to contribute ideas for improving organizational effectiveness.effectiveness.

Must be implemented appropriatelyMust be implemented appropriately Wastes time and undermines managerial power?Wastes time and undermines managerial power? Magic formula for every organizational problem?Magic formula for every organizational problem? CONCERN for RELATIONSHIPS in the organization.CONCERN for RELATIONSHIPS in the organization. As the need to increase commitment grows, so does the need to develop strong, As the need to increase commitment grows, so does the need to develop strong,

communication-based relationships among organizational members, particularly communication-based relationships among organizational members, particularly between supervisor and subordinate.between supervisor and subordinate.

Miles’ Human Resources TheoryMiles’ Human Resources Theory

Difficult to adopt principles of human relations theory -- misapplications and Difficult to adopt principles of human relations theory -- misapplications and misunderstandings of both classical theory and human relations theory led to misunderstandings of both classical theory and human relations theory led to Human Resources TheoryHuman Resources Theory

The key element to Human Relations Theory, participation, was used only to The key element to Human Relations Theory, participation, was used only to make workers make workers feelfeel as if they were part of the organizational decision-making as if they were part of the organizational decision-making processesprocesses

Key to classical and human relations theory is compliance with managerial Key to classical and human relations theory is compliance with managerial authorityauthority

Workers are told that they are important but were not treated as suchWorkers are told that they are important but were not treated as such

Major Distinctions between Human Resources and Human Relations TheoryMajor Distinctions between Human Resources and Human Relations Theory All people (not just managers) are reservoirs of untapped resources - manager responsibility to tap All people (not just managers) are reservoirs of untapped resources - manager responsibility to tap

physical and creative resourcesphysical and creative resources Many decisions can be made more effectively and efficiently by workers most directly involved with Many decisions can be made more effectively and efficiently by workers most directly involved with

their consequencestheir consequences Relationship between employee satisfaction and performance - improved satisfaction and morale Relationship between employee satisfaction and performance - improved satisfaction and morale

contribute back to improved decision making and controlcontribute back to improved decision making and control

Miles’ Human Resources TheoryMiles’ Human Resources Theory

Increased satisfaction is related to the improved decision making and self-control Increased satisfaction is related to the improved decision making and self-control that occurs due to participation that is genuinely solicited and heardthat occurs due to participation that is genuinely solicited and heard

Two prevalent Human Resources TheoriesTwo prevalent Human Resources Theories Rensis LikerRensis Liker Blake & Mouton (Blake & McCanse)Blake & Mouton (Blake & McCanse)

Four Systems of Management: Rensis Likert (Figure 3.2, p. 56)Four Systems of Management: Rensis Likert (Figure 3.2, p. 56) Management is crticial to all organizational activities and outcomesManagement is crticial to all organizational activities and outcomes Continuum that ranges from more classically oriented system to one based on human Continuum that ranges from more classically oriented system to one based on human

resources theoryresources theory Of all the tasks of management, managing the human component is the central and Of all the tasks of management, managing the human component is the central and

most important taskmost important task High producing departments and organizations tend toward System IV; low producing High producing departments and organizations tend toward System IV; low producing

units favor System Iunits favor System I• System I - Exploitative AuthoritativeSystem I - Exploitative Authoritative• System II - Benevolent AuthoritativeSystem II - Benevolent Authoritative• System III - ConsultativeSystem III - Consultative• System IV - ParticipativeSystem IV - Participative

Blake and Mouton’s Managerial GridBlake and Mouton’s Managerial Grid

Stresses interrelationship between production (task) and peopleStresses interrelationship between production (task) and people Management’s main purpose is to promote a culture in the organization that Management’s main purpose is to promote a culture in the organization that

allows for high production at the same time that employees are fostered in their allows for high production at the same time that employees are fostered in their professional and personal developmentprofessional and personal development

Managerial Grid - now Leadership Grid (Blake & McCanse) (Figure 3.3, p. 59)Managerial Grid - now Leadership Grid (Blake & McCanse) (Figure 3.3, p. 59) FOCUS: Manger’s Assumptions about CONCERN for PEOPLE and CONCERN FOCUS: Manger’s Assumptions about CONCERN for PEOPLE and CONCERN

for PRODUCTIONfor PRODUCTION Concern for PEOPLEConcern for PEOPLE

Degree of personal commitment to one’s jobDegree of personal commitment to one’s job Trust-based accountability (vs. obedience-based accountability)Trust-based accountability (vs. obedience-based accountability) Self-esteem for the individualSelf-esteem for the individual Interpersonal relationships with co-workersInterpersonal relationships with co-workers

Concern for PRODUCTIONConcern for PRODUCTION Use of people and technology to accomplish organizational tasksUse of people and technology to accomplish organizational tasks Concern for is not about quantity or qualityConcern for is not about quantity or quality

Assessment instrument does not represent personality traits of the manager -- Assessment instrument does not represent personality traits of the manager -- instead, indicate a specific orientation to production and peopleinstead, indicate a specific orientation to production and people

Blake and Mouton’s Managerial GridBlake and Mouton’s Managerial Grid

•Authority Compliance (9,1)

•Classical theory

•Country Club (1,9)

•Informal grapevine

•Impoverished (1,1)

•Laissez-faire

•Middle-of-the-Road (5,5)

•Compromise (carrot & stick)

•Team (9,9)

•Human Resources Approach

•Promote the conditions that integrate creativity, high productivity, and high morale through concerted team action

SUMMARYSUMMARY Humanistic Theories of OrganizationsHumanistic Theories of Organizations

Human Relations TheoryHuman Relations Theory• The Hawthorne Studies• Chester Barnard• McGregor’s Theory X and Theory Y

Human Resources TheoryHuman Resources Theory• Likert’s Systems Theory (Four Systems of Management)• Blake and Mouton’s (Blake and McCanse) Managerial Grid

The principles of human resources theory attempt to integrate the concern for production from classical theory with the concern for the worker from human relations theory -- more effective and satisfying!