UNIT ONE

Theoretical Foundations

CHAPTER THREE
Humanistic Theories of
Organizations
PREVIEW
 Review Classical Theories of Organizations
• Taylor’s Theory of Scientific Management
• Fayol’s Administrative Theory
• Weber’s Theory of Bureaucracy
 Humanistic Theories of Organizations
 Human Relations Theory
• The Hawthorne Studies
• Chester Barnard
• McGregor’s Theory X and Theory Y
 Human Resources Theory
• Likert’s Systems Theory (Four Systems of
Management)
• Blake and Mouton’s (Blake and McCanse) Managerial
Grid
Classical Theories
Reviewed
 Classical Theories of Organizations (p. 36)
 Taylor’s Theory of Scientific Management (tasks)
 Fayol’s Administrative Theory (mgmt)
 Weber’s Theory of Bureaucracy (org structure)
 All 3 theories attempt to enhance management’s
ability to predict and control the behavior of their
workers
 Considered only the task function of
communication (ignored relational and
maintenance functions of communication)
 Designed to predict and control behavior in
organizations
Classical vs. Humanistic
 Classical theories emphasized coercion, control, and
punishment (FOCUS ON TASKS /PRODUCTION).
 Maintain predictability and control
 Decision-making power at top of hierarchy
 Minimize input from lower-level employees
 Rely on science and rules to guide behavior
 Regulate communication to increase predictability and
decrease misunderstandings
 Result:
• Workers feel they have no control over their work situation
• Management does not care about their ideas
• Feelings and ideas of workers are unimportant
 Humanistic theories were developed to promote the
CONCERNS of the individual worker in an atmosphere
that was too focused on production (FOCUS ON
RELATIONAL & MAINTENANCE FUNCTIONS)
Principles of Human Relations
Theory

 Human relations theory is characterized by a shift in

emphasis from TASK to WORKER
 Go beyond physical contributions to include creative,
cognitive, and emotional aspects of workers
 Based on a more dyadic (two-way) conceptualization of
communication.
 SOCIAL RELATIONSHIPS are at the heart of
organizational behavior--effectiveness is contingent on
the social well-being of workers
 Workers communicate opinions, complaints, suggestions,
and feelings to increase satisfaction and production
 Origins (Hawthorne Studies & work of Chester Barnard)
 Human Relations School of Management - Elton Mayo
(Harvard
Origins of Human Relations
Theory

 “The Hawthorne Studies

 Hawthorne Works of Western Electric Company
 1924 - Chicago
 Research focus: Relation of quality and quantity of
illumination to efficiency in industry
 Four Important Studies
“The Hawthorne Studies”

 Illumination Study (November 1924)

 Designed to test the effect of lighting intensity on worker productivity
 Heuristic value: influence of human relations on work behavior
 Relay Assembly Test Room Study (1927-1932)
 Assembly of telephone relays (35 parts - 4 machine screws)
 Production and satisfaction increased regardless of IV manipulation
 Workers’ increased production and satisfaction related to supervisory
practices
 Human interrelationships are important contributing factors to worker
productivity
 Bottom Line: Supervisory practices increase employee morale AND
productivity
 Interviewing Program (1928-1930)
 Investigate connection between supervisory practices and employee morale
 Employees expressed their ideas and feelings (e.g., likes and dislikes)
 Process more important than actual results
 Bank Wiring Room Observation Study (November 1931 - May 1932)
 Social groups can influence production and individual work behavior
 RQ: How is social control manifested on the shop floor?
 Informal organization constrains employee behavior within formal
organizational structure
Hawthorne Studies -
Implications

 Illumination Study (November 1924)

 The mere practice of observing people’s behavior tends to alter
their behavior (Hawthorne Effect)
 Relay Assembly Test Room Study (1927-1932)
 Relationships between workers and their supervisors are powerful
 Human interrelationships increase the amount and quality of
worker participation in decision making
 Interviewing Program (1928-1930)
 Demonstrated powerful influence of upward communication
 Workers were asked for opinions, told they mattered, and positive
attitudes toward company increased
 Bank Wiring Room Observation Study (November 1931 - May
1932)
 Led future theorists to account for the existence of informal
communication

 Taken together, these studies helped to document the powerful

nature of social relations in the workplace and moved
managers more toward the interpersonal aspects of organizing.
Hawthorne Studies - Criticisms

 Not conducted with the appropriate scientific rigor necessary

 Too few subjects (N=5)
 No control groups
 Subjects replaced with more “cooperative” participants

 WORTHLESS
 GROSS ERRORS
 INCOMPETENCE
The Emergence of
Communication

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

• strict lines of communication - classical theory

• a “human-based system of organization”
• The potential of every worker and the centrality of
communication to the organizing process
 Six Issues Relevant to Organizational Communication

• Formal vs. Informal Organization

• Cooperation
• Communication
• Incentives
• Authority
• Zone of Indifference
Six Issues Relevant to Organizational
Communication

 Formal vs. Informal Organization

 Formal Organization - a system of consciously coordinated activities or forces of two
or more persons. (definite, structured, common purpose)
• Persons are able to communicate with one another
• Willing to contribute action
• To accomplish a common purpose
 Informal Organization - based on myriad interactions that take place thourghout an
organization’s history.
• Indefinite
• Structureless
• No definite subdivisions of personnel
• Results: customs, mores, folklore, institutions, social norms, ideals -- may lead to formal
organization
 Cooperation
 Necessary component of formal organization
 The expression of the net satisfactions or dissatisfactions experienced or anticipated
by each individual in comparison with those experienced or anticipated through
alternative opportunities
 Communication
 Critical to cooperation
 The 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 failure
 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, the line of communication should not be interrupted, and every
communication should be authenticated.
 Barnard’s system lacks relationship formation and maintenance mechanisms
Six Issues Relevant to Organizational
Communication

 Incentives
 Should be available
 Not discussed in detail
 Authority
 Associated with securing cooperation for organizational members
 The interrelationship among the originator of the communication,
the communication itself, and the receiver
 Authority of position OVER Authority of Leadership (knowledge &
ability).
 Zone of Indifference - orders followed
 Marks the boundaries of what employees will consider doing
without question, based on expectations developed on entering
the organization.

Barnard drew attention away from formal organizational

structures toward communication, cooperation, and the
informal organization. His work was integrated by other
theorists in the human relations movement.
Theory X and Theory Y: Douglas
McGregor

 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
McGregor

 Theory 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 Theory
 Assumptions
• Physical and mental effort in work is similar to play / rest.
• External control and the threat of punishment are not the only strategies
• Commitment 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 responsibility
• The capacity to exercise a high degree of imagination, ingenuity, and creativity
in the solution of organizational problems is widely distributed in the population
• Intellectual potentialities of the average human being are underutilized
 A more positive perspective of human nature
 The KEY to control and quality production is commitment to
organizational objectives
Theory Y Prototype: The Scanlon
Plan

 Participative Management
 Two Central Features
 Cost-reduction sharing for organizational members - sharing the
economic gains from improvements in organizational
performance
 Effective participation - a formal means of providing opportunities
to every member of the organization to contribute ideas for
improving organizational effectiveness.
 Must be implemented appropriately
 Wastes time and undermines managerial power?
 Magic formula for every organizational problem?
 CONCERN for RELATIONSHIPS in the organization.
 As the need to increase commitment grows, so does the need to
develop strong, communication-based relationships among
organizational members, particularly between supervisor and
subordinate.
Miles’ Human Resources Theory

 Difficult to adopt principles of human relations theory --

misapplications and misunderstandings of both classical theory and
human relations theory led to Human Resources Theory

 The key element to Human Relations Theory, participation, was

used only to make workers feel as if they were part of the
organizational decision-making processes

 Key to classical and human relations theory is compliance with

managerial authority

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

 Major Distinctions between Human Resources and Human Relations

Theory
 All people (not just managers) are reservoirs of untapped resources - manager
responsibility to tap physical and creative resources
 Many decisions can be made more effectively and efficiently by workers most
directly involved with their consequences
 Relationship between employee satisfaction and performance - improved satisfaction
and morale contribute back to improved decision making and control
Miles’ Human Resources Theory

 Increased satisfaction is related to the improved decision making

and self-control that occurs due to participation that is genuinely
solicited and heard

 Two prevalent Human Resources Theories

 Rensis Liker
 Blake & Mouton (Blake & McCanse)

 Four Systems of Management: Rensis Likert (Figure 3.2, p. 56)

 Management is crticial to all organizational activities and outcomes
 Continuum that ranges from more classically oriented system to one
based on human resources theory
 Of all the tasks of management, managing the human component is
the central and most important task
 High producing departments and organizations tend toward System IV;
low producing units favor System I
• System I - Exploitative Authoritative
• System II - Benevolent Authoritative
• System III - Consultative
• System IV - Participative
Blake and Mouton’s Managerial Grid

 Stresses interrelationship between production (task) and people

 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 professional and personal
development
 Managerial Grid - now Leadership Grid (Blake & McCanse) (Figure
3.3, p. 59)
 FOCUS: Manger’s Assumptions about CONCERN for PEOPLE and
CONCERN for PRODUCTION
 Concern for PEOPLE
 Degree of personal commitment to one’s job
 Trust-based accountability (vs. obedience-based accountability)
 Self-esteem for the individual
 Interpersonal relationships with co-workers
 Concern for PRODUCTION
 Use of people and technology to accomplish organizational tasks
 Concern for is not about quantity or quality
 Assessment instrument does not represent personality traits of
the manager -- instead, indicate a specific orientation to
production and people
Blake and Mouton’s Managerial Grid

•Authority Compliance (9,1)
•Classical theory
•Country Club (1,9)
•Informal grapevine
•Impoverished (1,1)
•Laissez­faire
•Middle­of­the­Road (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
SUMMARY
 Humanistic Theories of Organizations
 Human Relations Theory
• The Hawthorne Studies
• Chester Barnard
• McGregor’s Theory X and Theory Y
 Human 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!