University of Cambridge

Behavioral Management Theory

During the 1920s and 1930s, the United States was experiencing another force of upheaval not unlike that caused by the Industrial Revolution. Though more limited in scope, it had similar ramifications on the way people work and on the way managers manage those who work.

Culturally and socially the United States was undergoing change. People were moving to the cities in greater numbers. Rapid economic growth was giving people the opportunity to spend money on leisure and household items their parents could only dream about. Women were given the right to vote, unions were now organized and were playing an integral role in politics and the economy, and the first minimum-wage legislation had been passed. Prior to the stock market collapse of 1929, a genuine sense of optimism had swept the country, and values and attitudes toward government, people, families, and work were being transformed. As a result, many of the techniques applied by the classical theorists to the workplace no longer seemed to work effectively.

Several prominent theorists began to direct their attention to the human element in the workplace. Elton Mayo, Mary Parker Follett, Douglas McGregor, Chris Argyris, and Abraham Maslow were writers who addressed this issue by contending that increased worker satisfaction would lead to better performance. It was their belief that a greater concern by management for the work conditions of the employee would generate higher levels of satisfaction; thus evolved behavioral management theory.

Elton Mayo

One prominent pioneer of the behavioral school was Elton Mayo (1880 1949), an Australian psychologist who joined the Harvard Business School faculty in 1926. Convinced that economic incentives only partially explained individual motivation and satisfaction,’ Mayo worked with Fritz Roethlisberger, William Dickson, and others to formulate theories concerning the factors that increased human motivation and satisfaction which were later to become the foundations of the human relations movement in management. Their ideas did not have wide circulation, however, until they were asked to assist in a research project that had apparently failed.

In 1924, a research team launched an experiment at the Hawthorne plant of the Western Electric Company in Cicero, Illinois. Their experiment was designed to identify factors other than fatigue that would diminish worker productivity. Initially, it was believed that physical surroundings (e.g., noise, light, humidity) would have an impact on productivity. Testing was conducted by selecting two groups of women who would perform an assembly operation, with each group in a separate room. One group was to be the control group, working in a room where no change in the physical surroundings would be made. The second group would perform their tasks under changing physical conditions. As various features of the physical surroundings were altered in the second room, the researchers would record the level of output and compare it with the output of the control group.

One such alteration of the physical surroundings was the level of lighting. Illumination was increased in stages, and the researchers recorded an increase in output as well. To further test their hypothesis, the light was dimmed. Much to their surprise, output by the women increased again. Even when the light level was reduced to the point where it resembled moonlight, output increased. What made this finding even more difficult to interpret was that the control group was also increasing its output without any alteration in the physical surroundings. Increased output was also obtained when the researchers expanded the length of the workday and eliminated rest periods. Indeed, many of the women reported that they were more satisfied with their jobs than before the experiments began.

In 1927, Mayo and his team were called in to assist in the interpretation of the results and to conduct further experiments as needed. One such experiment was to alter supervisory authority so that the women could determine on their own when they would take a rest break. Another was to increase the salary of the women in the experimental group while the women in the control group would keep the same pay. Again, productivity went up in both groups. After several years of intensive study, Mayo and his colleagues began to piece together what was happening. First, they concluded that financial incentives did not influence productivity since output went up in both groups though only the experimental group received more pay. Instead, they learned through interviews and observation that an “emotional chain reaction” was causing the increase in productivity?” Having been singled out to be participants in the experiment, the women developed a group pride that motivated them to increase their performance. No longer did they feel that they were isolated individuals in the plant; now they felt they were part of an important group. The support received from their supervisors and the opportunity to make decisions about their job contributed to this motivation.

Mayo and his colleagues realized that an important contribution to the study and practice of management had evolved from a seemingly failed experiment. First, the Hawthorne study suggested that workers were not so much driven by pay and working conditions as by psychological wants and desires which could be satisfied by belonging to a work group. Second, giving workers responsibility for decisions concerning the task, whether as individuals or in a group, was a stimulus to treat the task as more important. And finally, recognition by superiors made workers feel that they were making a unique and important contribution to the organization.

The Hawthorne experiment was a turning point in the study of management, suggesting that a worker is not simply an extension of the machinery. As the results of the study became known among theorists and practitioners alike, an outpouring of research was conducted based on many theories and discoveries made in psychology. Thus, the Hawthorne study opened the study of management to a whole new arena of ideas from the social sciences that had previously been ignored. And, as an unintended contribution to research methodology, the experiments led to a rethinking of field research practices. That is, the researcher can influence the outcome of the experiment by being too closely involved with the subjects who are participating in the experiment. This outcome, referred to as the Hawthorne effect in research methodology, is exemplified by subjects behaving differently because of the active participation of the Hawthorne researchers in the experiment.

Mary Parker Follett

Mary Parker Follett (1868-1933) was born near Boston and was educated at Radcliffe College and Cambridge University, studying politics, economics, philosophy, and law. Her successful work on committees set up to work out solutions to community problems led eventually to a concentration on the study of industrial management, with a particular interest in techniques for resolving conflicts in organizations.

Follett was a pragmatist who believed that conflict was neither good nor bad. She hypothesized that managers could resolve conflict in one of four ways: (1) one side giving in, (2) one side forcing the other to submit, (3) compromise, and (4) integration. Follett believed the first two alternatives were undesirable as they required the threat or actual use of power. Compromise was also unsatisfactory, merely postponing the conflict by not addressing the issues that led to the conflict. With integration, however, the efforts of both sides to identify the solution, according to Follett, would lead to discussion and resolution of the issues that caused the conflict.

Douglas McGregor

A theorist who shared the views of Mayo and his colleagues was Douglas McGregor (1906-1964). McGregor felt that organizations were often designed based on faulty assumptions about human behavior. Those assumptions were that most workers disliked work, that workers preferred to be directed by supervisors rather than assume responsibility for their tasks, and that workers were more interested in monetary gains than in performing their jobs well. Because of these assumptions, McGregor felt that managers were prone to design organizations that were centralized in decision making, established numerous rules and regulations, and required close supervision of subordinates. For fear of technical and financial inefficiency, McGregor felt that organizations overemphasized control mechanisms.

Labeling these assumptions Theory X, McGregor developed an alternative set of assumptions which he labeled Theory Y. His Theory Y assumptions are that workers Can enjoy their work under favorable conditions and can provide valued input to the decision-making process. Rather than develop needless mechanisms of control in the organization, McGregor felt that managers should emphasize coordination of activities by providing assistance to workers when problems are identified.

Chris Argyris

Chris Argyris (1923-) also expanded on the work of the Hawthorne experiment by challenging the basic assumptions of the classical school concerning worker motivation and satisfaction. Argyris argued that an overemphasis on control by managers encouraged workers to become passive and dependent and to shirk responsibility. As a result, workers will become frustrated and dissatisfied with the workplace and will either quit their jobs or engage in behaviors that hamper the achievement of organizational goals. Many of his ideas were developed from the belief that as people mature, they develop new attitudes and behaviors that affect their life-styles. Some of these attitudes and behaviors are a movement toward independence, a broadening of interests, greater diversity in activities, and a desire to assume more control over their lives. Organizations that emphasize control are, in actuality, treating individuals as if they were immature.

Abraham Maslow

Abraham Maslow (1908-1970) is most noted for suggesting a theory that humans are motivated by needs that exist in a hierarchy. At the bottom of the hierarchy are the physiological needs for food and shelter. Once these basic needs are satisfied, humans are then motivated to satisfy higher-level needs for safety, love, esteem, and self-actualization.’ In Maslow’s theory, a person moves up the ladder of needs as each level is satisfied.

Evaluation of the Behavioral School

Contributors to the behavioral school advanced our understanding of management by emphasizing the importance of the individual within the organization-an element essentially ignored by writers of the classical school. That is, social needs of individuals, group processes, and subordinate-superior relationships were all identified as integral components in the practice of management. No longer could managers confine their attention to technical skills. Rather, they had to use people skills as well and develop an understanding of the relationship between the technical and human sides of management.

However, the behavioral school did not completely resolve issues concerning the nature of human motivation. Later studies were to dispute the belief that worker satisfaction was the prime cause of productivity. Under certain conditions, satisfaction was found to play an inconsequential role. In addition, though money may not be the primary motivator, salaries do at times affect worker productivity, particularly in industries where salaries are low, causing high rates of absenteeism and turnover. Much like classical theory, behavioral theory also assumed that the external environment of the organization was static. Thus, the psychological and social dimensions of the individual only partially explain organizational outcomes and constitute only a part of the larger and more complex managerial picture.