Humanistic Management - Need of the Hour

Humans are the most complex organisms on the planet, so the study of the complex act of leading or managing humans is of paramount interest.

The humanistic management approach evolved around social factors in the 21st century, in contrast to the then-existing scientific management theories, whose primary focus was business profit. Humanistic management aims to consider human needs and values first, creating a more balanced relationship between exchangeable market commodities (with a price tag) and non-exchangeable human dignity and well-being (beyond price).

The focal point of humanistic management is human dignity. Legendary modern philosopher Immanuel Kant is seen to have played a significant role in formulating such a concept. Reflecting this fact is his famous quote, “Everything has either a price or dignity. Whatever has a price can be replaced by something else which is equivalent; whatever, on the other hand, is above all price, and therefore admits of no equivalent, has a dignity.”

Formulation of the Humanistic Management (HM) Movement

The HM movement arose in the first decade of the 21st century, with some earlier occurrences in the last third of the 20th century. This has gained momentum since 2010 and has attracted the interest of many scholars and business executives.

In the first decades of management thought, many thinkers stood up for the human side of management, even without using the term “humanistic management.” For example, people like Abraham Maslow, Douglas McGregor, and Frederick Herzberg stressed the importance of human needs and motivations, whereas thinkers Chester Barnard, Peter Drucker, and Mary Parker Follet had a vision that coincided with the technical and human aspects or stressed the centrality of people.

In his book, “Management: A Humanist Art,” David E. Lilienthal coined the terms “humanistic” and “management” for the first time in 1967. As the name suggests, the book puts forward the idea that management is not science, but an art in contrast to the popular scientific and mechanistic approaches. Though the author did not challenge the importance of management techniques and skills, he stressed that managers should understand the individuals and their motivations and act as facilitators to achieve their goals.

In 1973, Carroll Swart labeled a set of innovative proposals, made at the time to overcome the monotonous repetition of tasks, as humanistic management. He suggested that HM involves giving employees more responsibilities and variety in their jobs to motivate them, and to increase their satisfaction and productivity, compared to the existing scientific management, which had given no thought to worker motivation.

Following that, several authors insisted on the centrality of the people within the organization. For instance, Jeanne M. Plas in his book, “Person-centered Leadership: An American Approach to Participatory Management,” proposed a person-centered leadership in which participation is coercive. Sumantra Ghoshal and Christopher Bartlett focused on people-centered policies, corporate purpose, and culture instead of the conventional “industrial machine,” in their book “The Individualized Corporation: A Fundamentally New Approach to Management.” In 1998, Jeffrey Pfeffer suggested putting people first for organizational success in his famous book, “The Human Equation: Building Profits by Putting People First."

Three-Step Approach to Humanistic Management

The Humanistic Management (HM) Center, a thought center for HM practices, envisions HM in three interrelated dimensions.

1. Dignity of human beings: Human beings deserve unconditional protection against exploitation, and it is the responsibility of any society to ensure that. People should never be viewed as a mere means of production within economic processes; rather, every human being should be treated with respect in all their depth and complexity.
2. Business ethics: Integrating ethical considerations into managerial decision making is critical to ensure the implementation of dignity. One-dimensional managerial objectives such as profit maximization can threaten human dignity by leaving no room for balancing stakeholder interests. Therefore, to ensure unconditional respect for the dignity of all people, the consequences of all business decisions that might impact others must be reviewed in advance.
3. Normative legitimacy: Seeking normative legitimacy becomes essential to get rid of what is known as “honest mistakes,” which can be viewed as the failure of a decision maker to see the concerns of others even after sincere ethical reflections during decision making. This can be overcome by dialogue with stakeholders about the ethics of a managerial decision or an action, thereby sharing the responsibility with the stakeholders.

In combination, these three dimensions can promote human well-being through life-conducive economic activities and add value to society at large.

— Partner Event — International Humanistic Management Conference — University of Michigan

Outlines for HM Practice

The research and observations of Henri Fayol and Henry Mintzberg, two pioneers in management theories, were reformulated into the following seven key practices, each embedded with humanistic principles.

1. Creation of institutional statements: Institutional statements (i.e., corporate values, mission, and vision) are solid and permanent elements of the business firm and a crucial guideline for management. The formation of institutional statements can combine humanistic values with technical and strategic elements.

2. Formulation of strategies, objectives, and action plans: The formulation and establishment of strategic planning are critical to achieving business goals frequently during turbulent times and for forecasting the future. Management makes use of both accurate diagnosis of a situation and defined institutional guidelines to make the best decision in a scenario. HM adaptation needs to consider human, social, and environmental aspects of achieving goals along with economic, political, and technical viewpoints and how to respect human dignity in ways that can be achieved. Along with these, management’s goals can include empowering people’s strengths rather than pointing out their weaknesses.

3. Organization and structure: Organization of people and structured allocation of material resources are required to achieve set goals. An organizational structure defines a certain organizational chart or specific roles or responsibilities for people, policies, proceeds, coordination, supervision, and allocation of raw materials, technology, information, and financial funds. Though it’s hard to define an ideal humanistic organizational structure, utmost respect for people and full consideration of their dignity are required. The minimum requirement in HM is to avoid treating people as mere order receptors, without any opportunity to show initiative, or give suggestions. and participate in organizational activities.

4. Coordination and control: One of managers’ primary duties is integrating people, so they should understand that simply giving orders is insufficient to produce the desired coordination. Humans are conscious and free beings. HM advises motivating those who have to be coordinated. Control is another managerial task, which means checking progress against plans. Managers influence other organization members to implement the organization’s strategies via control. However, goal congruence (the intersection of personal and organizational goals) must be accomplished during this influence. In case of a conflict between particular interests and the common good, the latter should prevail.

5. Communication: There can be both formal and informal communication channels. A humanistic requirement here would be avoiding lies and manipulative information, and ensuring transparency in communication.

6. Decision making: Decision making is quintessential to management, and it starts with perception of a need to define the nature of a problem that should be addressed (or solved) and the goal to be achieved with the decision. During this process, HM advocates considering ethical and human evaluation and technical, economic, or possible social reactions. Economic value creation is relevant, but it should be balanced with other criteria giving weight to humanistic values in case of conflict with economic value. Such dissension may disappear in the long run with the trust, confidence, and reputation that HM might generate.

7. Leadership: Leadership refers to influencing or motivating others for a common goal. Apart from the old-fashioned boss-subordinate model and paternalistic leadership forms, humanistic leadership necessitates an interactive relationship and dialogue between leaders and their followers and the association of the leader with the personal growth of subordinates and awareness of societal needs.

Practical Examples/Worldwide Practices — Humanistic Management Center

The Humanistic Management Center in Switzerland is focused on knowledge creation as a thought leader on humanistic management and an agenda setter for the shift toward a humanistic business paradigm. Further, the center develops higher education offers for university teaching and executive education and provides service offers to management practitioners and policymakers.

Conclusion

A brief overview of humanistic management, as well as its evolution and practice outlines, has been presented. In conclusion, HM proposes the human being as both rational and emotional; as having individual talents and creativity with the potential to introduce innovation; and as someone who can be motivated to cooperate and work with low or high morale and, consequently, can develop feelings of resentment for the organization or pride at belonging to it. HM practices are of special importance in today’s tumultuous world, as they fulfill people’s motivations and provide a more complete view of human beings.