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Behavioral Management Theory

As management research continued in the 20th century, questions began to come up regarding
the interactions and motivations of the individual within organizations. Management principles
developed during the classical period were simply not useful in dealing with many management
situations and could not explain the behavior of individual employees. In short, classical theory
ignored employee motivation and behavior. As a result, the behavioral school was a natural
outgrowth of this revolutionary management experiment.

The behavioral management theory is often called the human relations movement because it
addresses the human dimension of work. Behavioral theorists believed that a better
understanding of human behavior at work, such as motivation, conflict, expectations, and group
dynamics, improved productivity.

The theorists who contributed to this school viewed employees as individuals, resources, and
assets to be developed and worked with — not as machines, as in the past. Several individuals
and experiments contributed to this theory.

Elton Mayo's contributions came as part of the Hawthorne studies, a series of experiments that
rigorously applied classical management theory only to reveal its shortcomings. The Hawthorne
experiments consisted of two studies conducted at the Hawthorne Works of the Western Electric
Company in Chicago from 1924 to 1932. The first study was conducted by a group of engineers
seeking to determine the relationship of lighting levels to worker productivity. Surprisingly
enough, they discovered that worker productivity increased as the lighting levels decreased —
that is, until the employees were unable to see what they were doing, after which performance
naturally declined.

A few years later, a second group of experiments began. Harvard researchers Mayo and F. J.
Roethlisberger supervised a group of five women in a bank wiring room. They gave the women
special privileges, such as the right to leave their workstations without permission, take rest
periods, enjoy free lunches, and have variations in pay levels and workdays. This experiment
also resulted in significantly increased rates of productivity.

In this case, Mayo and Roethlisberger concluded that the increase in productivity resulted from
the supervisory arrangement rather than the changes in lighting or other associated worker
benefits. Because the experimenters became the primary supervisors of the employees, the
intense interest they displayed for the workers was the basis for the increased motivation and
resulting productivity. Essentially, the experimenters became a part of the study and influenced
its outcome. This is the origin of the term Hawthorne effect, which describes the special attention
researchers give to a study's subjects and the impact that attention has on the study's findings.
The general conclusion from the Hawthorne studies was that human relations and the social
needs of workers are crucial aspects of business management. This principle of human
motivation helped revolutionize theories and practices of management.

Abraham Maslow, a practicing psychologist, developed one of the most widely recognized
need theories, a theory of motivation based upon a consideration of human needs . His theory of
human needs had three assumptions:

• Human needs are never completely satisfied.

• Human behavior is purposeful and is motivated by the need for satisfaction.
• Needs can be classified according to a hierarchical structure of importance, from the
lowest to highest.

Maslow broke down the needs hierarchy into five specific areas:

• Physiological needs. Maslow grouped all physical needs necessary for maintaining basic
human well-being, such as food and drink, into this category. After the need is satisfied,
however, it is no longer is a motivator.
• Safety needs. These needs include the need for basic security, stability, protection, and
freedom from fear. A normal state exists for an individual to have all these needs
generally satisfied. Otherwise, they become primary motivators.
• Belonging and love needs. After the physical and safety needs are satisfied and are no
longer motivators, the need for belonging and love emerges as a primary motivator. The
individual strives to establish meaningful relationships with significant others.
• Esteem needs. An individual must develop self-confidence and wants to achieve status,
reputation, fame, and glory.
• Self-actualization needs. Assuming that all the previous needs in the hierarchy are
satisfied, an individual feels a need to find himself.

Maslow's hierarchy of needs theory helped managers visualize employee motivation.

Douglas McGregor was heavily influenced by both the Hawthorne studies and Maslow. He
believed that two basic kinds of managers exist. One type, the Theory X manager, has a negative
view of employees and assumes that they are lazy, untrustworthy, and incapable of assuming
responsibility. On the other hand, the Theory Y manager assumes that employees are not only
trustworthy and capable of assuming responsibility, but also have high levels of motivation.

An important aspect of McGregor's idea was his belief that managers who hold either set of
assumptions can create self-fulfilling prophecies — that through their behavior, these managers
create situations where subordinates act in ways that confirm the manager's original expectations.

As a group, these theorists discovered that people worked for inner satisfaction and not
materialistic rewards, shifting the focus to the role of individuals in an organization's

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

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

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.
Labelingjthese 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

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

Behavioral Management Theory

Behavioral management theory emerged when employee behavior and motivation was ignored at
the time of classical theory. In any organization, relationship is termed as an important set of
areas that should be handled with care in order to make every single organization an effective
one. Expectations, conflicts, motivations, level of productivity and group behavior are important
areas that should be handled carefully.

Behavior is an important area that surely affects the working of an organization.

After the Hawthorne studies, Harvard researchers, F.J Roethlisbergers & Mayo
evaluate the behavior of five women in a bank who were allowed to leave the
workplace without any permission, who can enjoy free lunches and can enjoy many
other benefits too. Because of this experiment, Roethlisberger & Mayo concluded
that by all this, the rate of productivity increases. When employees working in any
organization do enjoys free lunches or any other activities while rest of the
employees do not, then conflicts do arises and thus change in the behavior emerges
out. This is not healthy for any organization because if behavior of employees
changes, then it will surely affect the working of an organization.

Behavioral management theories do revolve around Abraham Maslow theory. The hierarchy
depicts five major areas:

1. Physiological Needs
2. Safety Needs
3. Belonging & Love Needs
4. Esteem Needs
5. Self Actualization Needs

This theory actually helps the managers to increase their motivation level too. With the help of
this theory, managers do emphasis more on the working of an organization and make sure that
these all elements are present among their employees. For any organization, behavior, inner
satisfaction and the level of motivation really matters. If the level of inner satisfaction of every
single employee is positive then better outcomes can be expected. Motivation should be kept on
increasing because it is the only way with the help of which you can make your organization the
place where you can work and can generate effective & potential outcomes.

In short, we can say that behavioral management theory completely revolves around the behavior
of the managers & employees. Thus, it should be kept in mind and every employee as well as
managers should be given equal chance to express their views and ideas and should be motivated
at every single step.