Module MT020

Behavioral Theory


Module author

Francesca Gino

Harvard Business School
Harvard University

Learning objectives

After you studied this module, you will be able to

  • Explain what behavioral theory is about, what it tries to explain, and how it changed economic theory.
  • Explain why it is relevant to know about this concept in today's economic environment and management practice.
Study point 1


Why Open School of Management believes that knowing behavioral theory is helpful

As researchers continued to study behavioral therapy in management throughout the 20th century, key questions began to eventually evolve concerning the motivations and interactions of people within business organizations. Management practices that were formed in the classical period weren't very practical regarding several management situations and couldn't explain certain behaviors of employees. Simply put, traditional theory ignored staff behavior and motivation.

Behavioral management theory is frequently referred to as the human relations movement since it deals with the human aspect of work. Behavioral theorists thought that a deeper understanding into human behavior in the workplace, such as group dynamics, expectations, conflict, and motivation would improve overall productivity. Here's a look into the different theories and the ideas behind them.

A Change in Theories

Long before behavioral theorists began documenting worker satisfaction along with good working conditions, managers originally thought that the concept of traditional leadership, with its primary interest in high-level efficiency and production, was the most important element for the success of an organization. Later on, it was the concern over employee satisfaction and good working conditions that later formed the basis for behavioral theory in management.

Behavioral management theory greatly relies on the idea that management will understand the human side a little better regarding their employees and therefore treat them accordingly as valuable assets in order to achieve goals. When managers take a keen interest in their workers, it makes them feel special and unique.

After some time, the overall thinking shifted and management began looking at worker satisfaction and good working conditions as a great way to increase general productivity. Some theorists, such as Elton Mayo along with others, intensely studied the productivity aspect of employees under a variety of conditions in order to determine the connection.

Elton Mayo's Hawthorne experiment is a great example of this. During the experiment, a key group of telephone line employees were separated and then closely observed while working. Throughout their day, the members were provided special privileges; including a raise in pay, a company-sponsored lunch, and the choice to leave their work area whenever they wished. What the theorists soon discovered was that the control group was more productive than any other employees. Also, this further motivated the group and increased overall production due to the fact that they felt acknowledged and that management was truly interested in their general well-being and happiness.

For management, this launched the human relations movement. If the only thing management had to do was put forth an effort and express a bit of interest in the well-being of their workers and then reward them for great job performance, workers would feel inspired to work harder and be even more productive. In fact, their attitude towards work would actually be optimistic.

All good managers want their workers to reach their highest potential. However, determining how to go about persuading a certain worker to improve their productivity can baffle even the most clever supervisor. Therefore, identifying unique work-behavior theories and then applying those insights to daily management can be a successful strategy for worker development.

Ethical Theories

When it comes to ethics, most people typically adhere to one of many strategies. Some researchers differentiate the primary ethical theories based on consequences, deontology, and virtue. Most individuals don't really understand their main ethical point of view, and some will even change their approach based on the topic. Nonetheless, fully understanding someone's primary moral perspective can prove to be invaluable with regards to coaching their behavior. These facts can empower someone in authority to directly speak to a worker's value system and therefore greatly enhance the chance of compliance overall.

Hierarchy of Needs

Abraham Maslow, a well-recognized sociologist, recognized a certain hierarchy of needs that guides the behavior of humans. Maslow pointed out that the fundamental needs of humans from a physiological aspect are water, food, and air; then security including shelter and a job; then interactive relationships; then self-worth, self-respect, and the respect of family members, friends, and colleagues. However, at the very top rests self-actualization, which consists of the belief that someone is living a satisfying and fully-acknowledged existence.

Maslow also suggested that individuals tend to basically focus on the very lowest level where they recognize a need. For instance, someone who lacks food will primarily focus on food and not care as much about their general self-worth, while someone who doesn't have the respect of their fellow peers will mainly focus on self-esteem issues prior to reaching self-actualization.

Communication Strategies

Along with clearly recognizing needs, a good manager should also figure out the most successful way to communicate modifications and feedback to a worker to get them to perform better. Keen insights into a worker's ethical approach are quite helpful for this. For example, a staff member who maintains work-based principles will react more readily to a work-based argument than a person who is more consequential in nature.

Identification Strategies

Managers need to discover where each worker's psychological and ethical needs are in order to address their performance level. For instance, if workers tend to complain about their lunch breaks, then obviously they're focusing on their primary physiological needs, and so the manager could perhaps reorganize breaks or try to improve the atmosphere of the lunch room in order to boost their spirits and motivation. Managers should be somewhat sensitive to specific complaints in order to determine where each problem falls according to the hierarchy. Workers who are more sensitive concerning the quality of their work could benefit from being recognized publicly, while workers who worry about their paycheck may be inspired by a certain performance plan that may include both a promotion and pay raise if certain goals are indeed met.

What to Consider

Because people in general hate being labeled, effectively communicating the goals of a worker's performance necessitates a high degree of intelligent and personal sophistication. Furthermore, there are numerous varieties of ethical theories that people may choose to follow; and Maslow's hierarchy, albeit perceptive, is prone to criticism on many levels not only by managers, but by people in general.


Return to Management Theories (MT modules).