This chapter discusses people and organizations. It covers human resource assumptions, human needs, and theories like Maslow's hierarchy of needs and McGregor's Theory X and Theory Y. It also discusses how traditional management can cause conflict between people and organizations. Additionally, it examines the changing employment contract and the dilemma of whether organizations should be "lean and mean" or invest in developing their workforce. In conclusion, the key is aligning what people and organizations need from each other, and there is a dilemma between cutting costs or investing in talent.

1. Chapter 6
People and Organizations

2. People and Organizations
 Human Resource Assumptions
 Human Needs
 What Needs do People Have?
 Theory X and Theory Y
 Personality and Organization
 Human Capacity and the Changing Employment
Contract
 Lean and Mean: More Benefits than Costs?
 Investing in People

3. Human Resource Assumptions
 Organizations exist to serve human needs
 People and organizations need each other
 When the fit between individual and system is
poor, one or both suffer
 A good fit benefits both

4. Human Needs
 The concept of “need” is controversial
 Economists: people’s willingness to trade
dissimilar items disproves usefulness of concept
 Psychologists: need, or motive is a useful way to
talk about enduring preferences for some
experiences compared to others
 Needs are a product of both nature and
nurture
 Genes determine initial trajectory
 Experience and learning profoundly influence
preferences

5. Maslow’s Need Hierarchy
 Needs arrayed in a hierarchy
 Lower needs are “pre-
potent”
 Higher needs become
more important after
lower are satisfied
 Maslow’s hierarchy:
 Self-actualization
 Esteem
 Belongingness, love
 Safety
 Physiological

6. McGregor’s Theory X and Theory Y
 Theory X
 Workers are passive and
lazy
 Prefer to be led
 Resist change
 Theory Y
 Management’s basis task
is to ensure that workers
meet their important
needs while they work
 Either theory can be self-
fulfilling prophesy

7. Argyris: Personality and Organization
 Traditional management principles produce conflict
between people and organizations
 Task specialization produces narrow, boring jobs that
require few skills
 Directive leadership makes workers dependent and
treats them like children
 Workers adapt to frustration:
 Withdraw – absenteeism or quitting
 Become passive, apathetic
 Resist top-down control through deception,
featherbedding, or sabotage
 Climb the hierarchy
 Form groups (such as labor unions)
 Train children to believe work is unrewarding

8. Human Capacity and the Changing
Employment Contract
 Handy – Shamrock form
 Core group of managers
 Basic workforce – part-time or on shifts to increase
organization’s flexibility
 Contractual fringe – temps, independent contractors
 Lean and mean (win by cutting costs): downsize,
outsource, hire temps and contractors
 Invest in people (win with talent): build competent,
well-trained work force
 Shift from production economy to information
economy produces skill gaps

9. Conclusion
 Organizations need people and people
need organizations, but the trick is to align
their needs
 Dilemma: lean and mean vs. invest in
people

10. Conclusion
 Organizations need people and people
need organizations, but the trick is to align
their needs
 Dilemma: lean and mean vs. invest in
people