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American Journal of Economics and Sociology, Inc.

A Quality-of-Life Theory Derived from Maslow's Developmental Perspective: 'Quality' Is


Related to Progressive Satisfaction of a Hierarchy of Needs, Lower Order and Higher
Author(s): M. Joseph Sirgy
Reviewed work(s):
Source: American Journal of Economics and Sociology, Vol. 45, No. 3 (Jul., 1986), pp. 329-342
Published by: American Journal of Economics and Sociology, Inc.
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TheoryDerivedfrom Maslow's
A Quality-of-Life
DevelopmentalPerspective:
'Quality' Is Related to Progressive Satisfaction of a Hierarchy
of Needs,LowerOrderand Higher
By M. JOSEPHSIRGY

Maslow's
ABSTRACT.A quality-of-life (QOL) theory developed fromAbraham
human developmental perspectiveis presented.Developed societies involve
memberswho aremostlypreoccupiedin satisfyinghigher-order needs (social,
needs), it is argued,whereasless-developed so-
esteem, and self-actualization
cieties involve members who are mostly preoccupied in satisfying lower-order
needs (biologicaland safety-relatedneeds). QOLis defined in terms of the
hierarchical need satisfaction level of most of the members of a given society.
The higherthe need satisfactionof the majorityin a given society the greater
the QOLof thatsociety.Institutions are designed to serve human needs in a
society,and thereforea society'sQOL.Societalinstitutionsthatserve human
needs includeproductive, maintenance, managerial/political, and adaptive
institutions. Eachof these types of societal institutionsinvolvea hierarchical
dimension.It is arguedthatprogressiveincreasesin QOLareaccompaniedwith
hierarchicalchangesof these societalinstitutions.

Introduction
QUALITYOF LIFE(QOL) RESEARCHneeds theoretical direction. Accordingto Carley
(1982),a leadingscholarin socialindicatorsandQOLresearch,therehavebeen
manyattemptsat constructingsystemsof social indicatorsand measures,but
little in QOLtheory.Socialindicatorsystemshavebeen developed "pragmat-
ically," i.e., through the use of intuition and political compromise. He argued
thatsocialscientistsshouldconcentratein developingandrefiningQOLtheory
fromwhichsocial indicatorscanbe assessed.Withouttheory,questionscanbe
developedregardingthe constructvalidityof theexistingsocialindicatorsystems.
For example, from an economic perspective, Fox (1974) construed QOL in
termsof "totalincome."He arguedthatan individual'stime is allocatedamong
behaviorsettings in such a way as to maximizehis/her total utility.All such
allocationsand rewardsare treatedin terms of monetaryvalues by way of
Psychologist,is associateprofessor
* M.Joseph Sirgy,Ph.D.,a Social/Marketing/Organizational
of marketing,VirginiaPolytechnicInstituteand StateUniversity,Blacksburg,VA24061.

American journal of Economics and Sociology, Vol. 45, No. 3 (July, 1986).
? 1986 American Journal of Economics and Sociology, Inc.

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330 American Journal of Economics and Sociology

determining opportunity costs of non-participation in the various behavior set-


tings. The total income concept, therefore, is equated with QOL at the aggre-
gate level.
From marketing, this authorand colleagues (Sirgy, Samli, and Meadow, 1982;
Sirgy, Morrisand Samli, 1985), construed QOL in terms of long-term life satis-
faction and argued that the relative "goodness" of a marketing program can be
assessed in terms of its relationship with long-term satisfaction. Thus, QOL
provides "value" for marketing.
From ecology, Bubloz, Eicher, Evers,and Sontag (1980) addressed QOL using
the concepts of the human environed unit, the environment, and the interactions.
A human environed unit is a social unit placed in an environmental context.
The environment is the place that provides energy and matter (resources) for
sustenance of the human environed unit. The interactions involve interrela-
tionships among the components of the human environed unit, among the com-
ponents of the environment, and/or between the units and the environment.
From the perspective of the human environed unit, QOL is viewed as a high
need satisfaction across life domains. From the perspective of the environment,
QOL is viewed as an environment providing sufficient resources to meet those
needs of the human units within it.
From public health, QOL has also been conceptually treated from a need
assessment perspective. The basic task of need assessment is to gather infor-
mation about a particular population and use that information to develop
and/or revise programsfor that population (e.g., Bell, Sundel, Aponte, Murrell,
and Lin, 1983; Nguyen, Atkisson, and Bottino, 1983; Murrell, Brockway, and
Schultz, 1982; Murrell,1973; Kimmel, 1975; Siegel, Atkisson,and Carson, 1978).
More recently, Murrell and Norris (1983) have used ecological concepts in
the context of needs assessment to help address the setting of priorities among
needs. From a traditional community psychology perspective, QOL has been
treated as "goodness of fit" between individuals and the environment of a par-
ticular community. The emphasis by community psychologists has been on the
provision of resources as a means of improving the well-being of communities
(e.g., Hirsch, 1980; Mitchell, Babarim, and Hurley, 1981; Riger and Lavrakas,
1981; Murrell, 1973).
A comprehensive QOL theory has to answer the following questions: (1)
Whatare QOL goals or objectives and do they varyfrom one society to another?
(2) What are those societal institutions that are designed to satisfy QOL goals?
(3) What are the optimal societal structures that best support these societal
institutions?
In the following sections, an attempt is made to answer each of these questions
through a human developmental QOL theory.

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Need Satisfaction 331

II

QOLGoals and Societal Institutions

THE ANALYSISOF HUMANGOALS is fundamental


to the definitionandspecification
of QOLgoals. The QOLliteraturehas treatedthe conceptof QOLgoals quite
variantly(Fitzsimmonsand Lavey,1976;Sirgy,Samli,andMeadow,1982;Sirgy,
Morris,andSamli,1985).Froma humandevelopmentalperspective,QOLgoals
can be definedas satisfactionof humandevelopmentalneeds in a community
or society.Fromthe developmentalpsychologyliterature, we learnthateffective
social-emotionalfunctioningis viewed as movementtowardssatisfactionof
higher-order needs (e.g., self-actualization). accordingto one
Self-actualization,
prominentpersonality-developmental psychologistAbraham Maslow (1954), is
a state when humansachieve their full potentialities.It is a state thatcomes
afterlower-orderneeds (e.g., biologicaland safetyneeds) are satisfied.Most
developmentalpsychologistsarguethatthereis a hierarchyof needs thatpeople
striveto meet, the fulfillmentof one allows releasefor the individualto fulfill
anotherat a higherlevel (cf. Erikson,1963;Leovinger,1976;Kohlberg,1969).
I havearguedelsewhere (Sirgy,1985) thatthe centralargumentcommonto
mosthumandevelopmentaltheoriesreflectsthe notionthatpeoplegrow through
a progressionof satisfactionof needs thatare structuredhierarchically, from
lower-orderneeds (basic,biologicalmaintenanceneeds) to higher-order needs
(self-fulfillment,psychologicalenhancementneeds).
I will use Abraham Maslow'sconceptof need hierarchyto developthe notion
of a progressionof satisfactionof needs in socialdevelopment.Maslowstressed
the pointthatpeople need to developtheirfull potentialities.Theneed forself-
actualization(superordinategoal) becomes more salient given other lower-
orderneeds havebeen madeless salientthroughadequatesatiation(subordinate
goal). In other words,Maslowarguedthatthere is a hierarchyof needs that
people striveto meet, the fulfillmentof one allowsreleaseforthe individualto
fulfillanotherat a higherlevel.
The hierarchyof needs involvesthe following needs orderedfrom lower-
orderto higher-orderneeds. These arebiologicalneeds (e.g. food, water,ox-
ygen,etc.);safetyneeds (e.g., physicalandpsychologicalsecurity);socialneeds
(e.g., need for affiliation,friendship, belongingness, etc.); esteem needs
(e.g., need for achievement,success, recognition,etc.); and self-actualization
needs (e.g., need for creativity,self-expression,integrity,self-fulfillment,etc.).
Lower-order needs havea higherprepotencythanhigher-orderneeds. In other
words,the individualis motivatedto satisfylower-orderneeds before higher-
orderneeds. (See Figure1.)

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332 American Journal of Economics and Sociology

Frustration of a need at a specificlevel of the need hierarchy"fixates"the


individualat thatlevel. The fixationservesto insurethe eventualsatisfactionof
the need. Growth,therefore,is viewed as movementfroma lower-levelneed
of the need hierarchytowarda higher-levelneed.
In termsof QOLgoals,a humandevelopmentalperspectiveentailsthatQOL
goals haveto be definedin termsof developmentalneeds (structuredhierar-
chically)of citizens of a given communityor society. Thatis, assessmentof
humanneeds haveto be undertakento findout the meanlevel of "fixation"of
need satisfactionof the membersof thatcommunity(populationor society).

HIGH

SELF-ACTUALIZATION
NEEDSATISFACTION
OF
POPULATION
INA GIVEN
SOCIETY
(X1K)

ESTEEMNEEDSATISFACTION
OFPOPULATION
IN
A GIVEN
SOCIETY
(X2K)

SOCIAL
NEEDSATISFACTION
OF
POPULATION
INA GIVEN
SOCIETY
(X3K)

SAFETY
NEEDSATISFACTION
OF
POPULATION
INA GIVEN
SOCIETY
(X4K)

BIOLOGICAL
NEEDSATISFACTION
OFPOPULATION
INA GIVEN
(X5K)
SOCIETY
LOW

1: A mANDEVELoPNTAL
FIGURE PERSPECTIVE
OF LALIrfOFLIFE

Basedon the needs assessment,QOLgoalscan,therefore,be set in such a way


as to help the aggregatemassof the populationmovetowardthe satisfactionof
higher-orderneeds.
Proposition 1: Quality-of-life
goals involvea dimensionof hierarchicalgoals
varyingfrom lower-orderbiological and safety-relatedgoals to higher-order
psychologicalgoals, in which the lower-ordergoals are more prepotentthan
higher-orderones.
Therefore,
QOLk = f(2Xlik)

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Need Satisfaction 333

where Xlk = f(2Yljk, ZX2ik)


where X2k = f(2Y2jk, 2X3ik)
where X3k = f(2Y3jk, ZX4ik)
where X4k = f(2Y4jk, 2X5ik)
where X5k = f(2Ysjk)
Xik = satisfactionlevel of self-actualization
needs (1) of individual(i) of pop-
ulation(k)
Yljk = productionlevel of institution(j) servingself-actualizationneeds (1) of
population(k)
X2ik= satisfactionlevel of esteem needs (2) of individual(i) of population(k)
Y2jk = productionlevel of institution(j) servingesteemneeds (2) of population
(k)
X3ik= satisfactionlevel of social needs (3) of individual(i) of population(k)
Y3jk= productionlevel of institution(j) servingsocialneeds (3) of population
(k)
X4ik= satisfactionlevel of safetyneeds (4) of individual(i) of population(k)
Y4jk = productionlevel of institution(j) servingsafetyneeds (4) of population
(k)
X5ik= satisfactionlevel of biologicalneeds (5) of individual(i) of population
(k)
Y5ik = productionlevel of institution(j) servingbiologicalneeds (5) of pop-
ulation(k)
Proposition 2: Societalinstitutionsaredesignedto servehumandevelopmental
needs. There are institutionsthat serve biological needs (e.g., waterworks,
utilities,agriculture);safetyneeds (e.g., healthservices,police, emergencyfa-
cilities,judicialsystem);social needs (e.g., leisure,recreationfacilities,social
productsand services);esteem needs (e.g., employmentservices,intraorgani-
zationalservices),and self-actualization needs (e.g., arts,theory,aesthetics).
Proposition1 definesQOLin termsof need satisfactionof the aggregatein
a society, whereasproposition2 definessocietal institutionsas those serving
specificneeds of the aggregatesociety. Morespecifically,proposition2 puts
fortha taxonomyof societal institutionsbased on the differenthumanneeds
thatare hierarchically orderedfroma developmentalperspective.

III

Societal Structures Related to QOL

KATZAND KAHN (1978) distinguishedproductive/economicorganizationsfrom


maintenance organizations, adaptive organizations, and managerial/political

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334 American Journal of Economics and Sociology

organizations. Thesearedifferenttypesof institutionsor societalstructuresthat


areviewedas subsystemsof a societyplayingvitalroles in the maintenanceand
enhancementof anygiven society.Productive institutionsare concernedwith
the productionof wealth,the manufactureof goodsandthe provisionof services
for specificsegmentsof the generalpublic (e.g., automanufacturers). Mainte-
nance institutionsare involvedin the socializationand trainingof humanre-
sources for organizationalroles in the context of the society as a whole
(e.g, schools,churches).Adaptive societalsubsystemsareinvolvedin the cre-
ationandapplicationof knowledgeto societalproblemsolving(e.g, universities,
researchorganizations).Managerial/political institutionsareviewedas mostly
concernedwith the coordinationof societal componentsand subsystemsin
such a way as to insurestability,maintenance,and growthof the society and
TABLE
1
SOCIETAL
THEINTERRELATIONSHIP
kTHEEN SmtrnEs AND
CmumiTY/SoCiETY
NEDSATISFACTION
INAFFECTING
QALtrYOFLIFE

PRWDUCTIVE MAIMNM POLITICALAW0EIAL ADAPTIVE


INSITIRMNS USTITUTIaN ISTITUIfflos INSTITUTetE
LOWER-ORDER
LOERER HIGHER-ORDER LOWER-ORDER
HIGHER-ORDER HIGHER-ORDER
LOW-ORDERHIGHERORDER
PRODUCTIVE
PRODUCTIVE
MAINTENANCE
MAINTENANCE
POLITICALPOLITICALADAPTIVEADAPTIVE
STRUCTURES
STRUCTURES STRUCTURES
STRUCTURES
STRUCTURES STRUCTURES
STRUCTURES STRUCTURES

E HIGHER- LCW HIGH LOW HIGH LOW HIGH LOW HIGH


NEED
S
ML QOL oL ML Ie ML QOL

ATISFAC-I.
TION_
XOWER- MOERATE LOW__ RODERATE LOW
__
MODERATE LOW _ _ _
MODERATE LOW _

NEED
~
SATISFAC-
TION

segmentsof the society(e.g.,statepoliticalsystem,pressuregroups,laborunions,


professionalassociations,penal institutions).
If we were to use Katzand Kahn'sclassificationof societalinstitutions,then
severalquestionsemerge:
(1) Whatis (are) the optimalstructure(s)involved in productive/economicorganizations
thatwould insure the maximumproduction level of those institutionsservingspecific
needs of the society?
(2) Whatis (are) the optimalstructure(s)involvedin maintenanceorganizationsthatwould
insure the most effective maintenance of human resources that are needed to maintain
and enhance the functioning of societal institutions?
(3) Whatis (are) the optimal structure(s)involved in managerial/politicalorganizations
thatwould insurethe mosteffectivecoordinationamongsocietalsubsystems/institutions?

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Need Satisfaction 335

(4) Whatis (are) the optimal structure(s) involved in adaptiveorganizationsthat would


insure the most effective societal adaptation to changes in human/environmentalre-
sources?

In the following sections, I will attempt to answer each of these questions


within the confines of the human development QOL theory.

IV

Structures Involved in Productive Institutions

PRODUCTIVE INSTITUTIONScan be classified along a hierarchicaldimension varying


from production-orientation, through selling-orientation, through marketing
orientation,to the societal-marketingorientation (Kotler, 1980; Sirgy,1984; Sirgy
and Morris,1986). Productiveinstitutions with structuresreflecting a production
orientation are those organizations that are designed to produce a product ir-
respective of market demand and constraints. Those with structures reflecting
a selling-orientation emphasize the selling/promotion component of the or-
ganization, "to get rid of' existing inventories. Consequently, those organizations
with this type of orientation tend to organize themselves in ways that would
allow them to "hardsell." A marketing-orientation,on the other hand, involves
structuresthat emphasize consumer wants, preferences, satisfaction,and loyalty,
i. e., emphasize customer needs. Those institutions with a marketing-orientation
have structuralcomponents that serve to research the marketand, with strategies
based on market findings, guide the institutions to accommodate target con-
sumers. Finally, institutions with a societal-marketing orientation are those who
have the design of organization that is not only sensitive to the needs of target
consumers but also sensitive to the needs of the general public. That is, those
organizations with a societal-marketing-orientation usually make a concerted
attemptto reduce the social costs associated with the products they manufacture.
The classification of productive institutions using the production-, selling-,
marketing-, and societal marketing-orientations is viewed as a hierarchical di-
mension because these orientations have evolved in this order in western so-
cieties (Kotler, 1980). It is argued that there is a hierarchical progression from
"production-related" structures, all the way to "societal marketing-related"
structures. And this progression is accompanied with societal development.
That is, developing countries (LDCs) seem to have their productive institutions
structuredin ways reflectinga "production-orientation."As LDCsdevelop further,
the structureof their productive institutions change in the direction of "selling,"
through "marketing,"to "societal marketing."
Proposition 3: Productive societal structures that reflect a production and/or

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336 American Journal of Economics and Sociology

selling-orientation(andto a lesserextentmarketing-orientation) producemod-


erateQOLfor communities/societiesin whichmostof its membersarepreoc-
cupiedin satisfyinglower-orderneeds.Conversely, productivesocietalstructures
producehighQOLforcommunities/
thatreflecta societalmarketing-orientation
societies in which most of its membersare preoccupiedin satisfyinghigher-
orderneeds.
As shownin Table1, for QOLto increasein a given society,thereshouldbe
a match betweenthe hierarchicalstructurallevel of the productiveinstitutions
and the hierarchicalneed satisfactionlevel of the aggregatein thatsociety.A
mismatchbetween these two factorsis arguedto resultin low QOLfor that
society.To improveQOLfora LDC,productiveinstitutionshaveto be structured
in sucha wayas to mobilizetheproductionmachineryto establishthefoundation
of an industrializedsociety.The emphasisof the productiveinstitutionsshould
be in the directionof high level productionand sales. LDCscannot affordto
adopt the philosophyof the marketingconcept and societal marketingand
structuretheir productioninstitutionsaccordingly.This can be done aftera
productionfoundationis establishedin these societies, to meet the lower-order
(and more important)needs of the aggregate of thatsociety.
Therefore,matchingthe lower-order societieswithstructural
need satisfaction
lower-orderproductiveinstitutionsis seen as providingmoderateQOLforthat
society. Giventhatthe lower-orderneeds of thatsociety are mostlymet, then
the societycan affordto changeits productivestructuresto adopta marketing
orientation(andin due time,to adopta societal-marketingorientation).Adopting
a higher-order productivestructureis consideredappropriate to helpingsatisfy
higher-orderneeds of the aggregate.

StructuresInvolved in MaintenanceInstitutions

AsSHOWN in Table1, maintenanceinstitutions(e.g., schools) can be classified


alonga dimensionvaryingfromemphasison "basics"to "creativity." In other
words,educationalsystemsin a given society can be structuredto emphasize
basic education(i.e., reading,writing,and otherfundamentalaspectsof edu-
cation)and/orto emphasizecreativity(i. e., focuson channelingstudents'ener-
gies to the constructiveand inventiveaspectsof education) (Goodlad,1983;
Huser,1983).
Froma humandevelopmentalperspective,it can be arguedthat-the type of
maintenanceinstitutionalstructurethatwould producethe highestdegree of
QOLis highlydependenton the level of need satisfactionof the community

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Need Satisfaction 337

or society underconsideration.For those communitiesor societies in which


most of the individualsinvolved do not have their lower-orderneeds met
(i. e., aremostlyconcernedwithsurvivalissues), then it wouldseem imperative
thatemphasisshouldlie in basiceducationand training.This is becausebasic
educationandtrainingareviewed to involveadaptivebehaviorthatis directed
to satisfylower-orderneeds such as gettinga jobthatallowsthe personto earn
a living (i.e., sheer survivaland sustenanceof biologicaland safetyneeds).
On the otherhand,communities(or societies) in whichmostof its members
are preoccupiedwith satisfyingtheir higher-orderneeds (i.e., social, esteem,
andself-actualization needs), maystresscreativityin education/training,
simply
becausesuch communities/societiescan affordto. Creativity maybe viewedas
adaptivebehaviordesignedto satisfyhigher-orderneeds, moreso thanlower-
orderneeds (cf Hawkins,1983).
Foranecdotalevidence,the readeris encouragedto observethe educational
systemof LDCs.MostLDCshaveeducationalsystemsthatstress"basicliteracy
skills,"whereasmostof the moredevelopedcountriesemphasizecreativityand
innovativebehaviorin educationand manpowertraining(Huser,1983;Margu,
1983;Schultz,1981).
Proposition4:Maintenance thatemphasizebasic education/
societalstructures
trainingproducemoderateQOLfor communities/societiesin which most of
its membersarepreoccupiedin satisfyingtheirlower-orderneeds. Conversely,
maintenancesocietal structuresthatemphasizeboth basic plus creative edu-
cation/trainingproducehigh QOLforcommunities/societiesin whichmostof
its membersarepreoccupiedwith satisfyingtheir higber-order needs.
It shouldbe noted thatit is presumedthatcommunities/societieswhich are
preoccupiedin satisfyinghigher-orderneeds alreadysucceeded in satisfying
mostlytheirlower-orderneeds. Maintenanceinstitutionalstructuresof higher-
orderneeds societies reflectboth a "basiceducation/training" emphasisand
allow for "creative"endeavors.Thatis, a creativeinstitutionalstructuredoes
not (or shouldnot) precludestrongbasic education;it goes beyondbasiced-
ucation;it buildson basiceducation.

VI

StructuresInvolved in Managerial/PoliticalInstitutions

INSTITUTIONSvary in theirdegree of structural


MANAGERIAL/POLITICAL emphasis
regardingauthorityandpower.Politicalinstitutionsmayselect a powerstructure
thatis highlycentralizedand authoritarian(one polarextreme)or highlyde-
centralizedand democratic(the other polarextreme). In our moderntimes,

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338 American Journal of Economics and Sociology

societies with highlycentralizedor decentralizedpoliticalstructuresare non-


existent.Whatwe havearesocieties thatare morecentralizedor decentralized
thanothers.
Itcanbe arguedthatsocietiesthatarepreoccupiedwithsatisfyingtheirlower-
orderneeds (i.e., strugglingto survive-the primaryemphasisis directedto
feeding and clothingthe masses)are betteroff with relativelycentralized po-
Witha morecentralizedpoliticalstructure,
liticalstructures. government,through
a formof a "strong"progressivetaxationsystem,can use resourcesfrom the
societal elites and re-distributethese resourcesto the poor masses,with the
goal of satisfyingtheir lower-orderneeds. Once the lower-orderneeds of the
massesarereasonablymet, thenthe politicalstructureshouldgraduallychange
to become less centralizedand move in the directionof decentralization.De-
centralizedpolitical structuresare viewed to be more efficientin increasing
QOLforsocietiesthatbecomepreoccupiedwithhigher-order need satisfaction.
Decentralizedstructuresallow freedomof movement,thought,speech, cre-
ativity,and innovation.Withoutthis freedom to express one's individuality,
talents,thoughts,and feelings, higher-orderneeds of the individualsinvolved
maynotbe realized.Relativelydecentralizedpoliticalstructuresprovideample
opportunitiesfor individualsto excel in workand creativity.
Does thismeanthathigher-order need satisfaction
countries(moredeveloped
countries)should adopt "capitalism"? Althoughdecentralizedstructuresmay
connote "capitalism" as a politicaldoctrine,what is meanthere is not "capi-
talism"buta systemequivalentto "socialdemocracy,"i.e., a politicalstructure
thatis mixed in termsof centralizationand decentralization.
Countriesthathave"socialdemocratic"structures(e.g., manyof the western
countries)have politicalstructuresinvolvingprivateand public institutions.
Public institutionsare designed to serve the society's lower-orderneeds
(e.g, health,water,roads,safety,lawenforcementandcrimeprevention,military
defense,amongothers).Thesepublicinstitutionsaremostlycentralizedstruc-
tures,and rightlyso. Since these public institutionsserve lower-orderneeds,
and since lower-orderneeds are consideredmoreprepotent(important)than
higher-orderneeds, then it becomes necessaryto havepoliticalstructuresthat
aremostresponsiveto these needs. Decentralizedpoliticalstructuresinvolving
public institutionscannotperforma moreefficientjob in servingthe society's
lower-orderneeds thancentralizedpublicinstitutions.Imaginea decentralized
military,police force, governmentagencies,amongothers.Since lower-order
needsareimportant, immediate,andurgent,societycannotaffordto decentralize
these institutions.However,a certaindegree of decentralizationis necessary
periodically(and in timeswhen the sense of urgencyis not there) to improve

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Need Satisfaction 339

organizational performance.Thereis a lot of evidencethatsuggeststhatdecen-


tralizationcan improvethe qualityof organizationalbehavior,and rightlyso
(e.g., Khandwalla, 1977;Katzand Kahn,1978).
Privateinstitutions,on the other hand, seem to serve mostly higher-order
needs of the societyin "socialdemocratic"countries.Sincehigher-orderneeds
are less urgentand importantthan lower-orderneeds, it can be arguedthat
privateinstitutionscanaffordto decentralizemorethantheirpubliccounterparts.
Private(business) firmscan performmore efficientlyin more decentralized
external (political) and internal(managerial)environments(e.g., Katzand
Kahn,1978).
Proposition 5: Politicalsocietalstructuresin whichpoweris concentratedin
publicinstitutions(i.e., "socialistic")producemoderateQOLforcommunities/
societiesin whichmostof its membersarepreoccupiedin satisfyingtheirlower-
orderneeds. Conversely,politicalsocietalstructuresin whichpoweris equally
distributedbetween public and privateinstitutions(i.e., "socialdemocratic")
producehigh QOLfor communities/societiesin which most of its members
arepreoccupiedin satisfyingtheir higher-orderneeds.
Thereadershouldnote thatthisissueinvolvingpolitical/managerial structures
is an "inflammatory" issue in which there is much disagreementamong lay
people as well as socialscientists.Manypoliticiansandscientistshaveadvocated
one positionatthe expenseof the other.It is an issue in whichmanyhavetaken
dogmaticstands.It is an issue in which manycountrieswent to warto defend
theirdogmaticpositions.The positionof this authoris a simpleone, andhope-
fully will not be perceivedas a dogmaticone. The question that should be
posed is, underwhatconditionsis one type of political/managerial structure
more optimalto QOLenhancementthan the other?We, as social scientists,
should concentrateon findingout those mediating variables that make one
typeof political/managerial structuremoreoptimalin producinggreaterQOL
thananother.The mediatingvariablethatI am proposingis the level of need
satisfactionof a givencommunity/society. Thisis a theoreticalpropositionwhich
can be subjectedto testing. Othermediatingvariablescan also be proposed
and empiricallytested.

VII
StructuresInvolved in Adaptive Institutions

As PREVIOUSLYEXPLICATED,adaptivesocietal institutionsare systemsthatallow


the societyto changeto accommodatechangesin the social-economic-political-
technologicalenvironment.Theseareinstitutionsthataremostlyinvolvedwith

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340 American Journal of Economics and Sociology

knowledgeproduction,diffusion,and utilization.Institutionsthatare mostly


involved with knowledge creation or productionare researchuniversities.
Teachinguniversitiesand colleges are mostlyconcernedwith knowledgedif-
fusion.KnowledgeutilizationtypeinstitutionsaremostlyR&D facilitieslocated
mostlyin privatefirms(or throughthe associationwith privatefirms).(A new
journalpublishedby Sage Publications since 1979 is entitledKnowledge Cre-
ation, Diffusion, and Utilization; it is directedto studyingthese three compo-
nents andtheirinterrelationships in the contextof society.)
Communities/societiescouldbe classifiedalongthreedimensions:(1) quan-
tity and qualityof knowledge-creationadaptiveinstitutions,(2) quantityand
qualityof knowledge-diffusion adaptiveinstitutions,and (3) quantityandquality
of knowledge-ulitizationadaptiveinstitutions.Societiesthataremoredeveloped
tend to havemore adaptiveinstitutionsof these threetypes,in qualityas well
as quantity,comparedto less developedcountries.However,thereis a priority
rankingamongthese threetypeinstitutions,i.e., theyarenot equallyprevalent.
In moredevelopedcountries,this priorityrankinginvolvesa hierarchyvarying
frominstitutionsof knowledgeutilization(e.g., R & D institutions),through
institutionsof knowledgediffusion(e.g., teachinguniversitiesand colleges),
to institutionsof knowledgecreation(e.g., researchuniversities).Institutions
of knowledgeutilizationaremostimportantin societaldevelopment,followed
by institutionsof knowledgediffusion,and knowledgecreation,respectively.
In otherwords,for a society to develop (to progressivelysatisfylower-order
needsandthenaddresshigher-order needs),it hasto concentrateon establishing
and/or strengtheningthose institutionsthatare directedto the utilizationof
existing knowledge, and gradually and progressivelyestablish and/or
strengthenknowledge-diffusion institutions,whicharethen followedby estab-
lishingand/or strengtheningknowledge-creation institutions.
Proposition 6: Adaptivesocietal structuresinvolvingknowledge utilization
(andto a lesser extentknowledgediffusion) producemoderateQOLfor com-
munities/societiesin whichmostof its membersarepreoccupiedin satisfying
their lower-orderneeds. Conversely,adaptivesocietal structuresinvolving
knowledgediffusion(andto a lesserextentknowledgecreation)producehigh
QOLforcommunities/societiesin whichmostof its membersarepreoccupied
in satisfyingtheir higher-order needs.

VIII

Conclusion

A QOL THEORY iS proposedin thisarticle.Theperspective


takenis thatof human
development,the theoryelaboratedbyAbraham Maslow.QOLis definedas the

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Need Satisfaction 341

hierarchicallevel of need satisfactionof the aggregatemembersof a society.


Thegreaterthe need satisfaction(fromlower-orderto higher-orderneeds), the
greaterthe QOLof thatsociety.
Certaintheoreticalpropositionswere put forthaddressingthe optimalityof
Thesepropositionscanbe subjectedto empiricaltesting
structures.
institutional
with the availablehistoricaldata.Testingthe proposedtheory,of course,is an
eventualnecessity.This authorencouragesreadersof this articleto not only
test the proposedtheorybutalso to venturemodifyingit to accommodateprin-
ciples and notionsthathavenot been addressedin its context.

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A Modelfor Valuing Vacant Land Under Uncertainty

SHERIDANTITMANof the GraduateSchool of Management,Universityof California,


Los Angeles, presented a model for valuing vacant land under uncertainty in
"Urban Land Prices under Uncertainty," (American Economic Review, 75:3,
June 1985, pp. 505-14). The model provides insights into the process of real
estate speculation, he reports.

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