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7/30/2019 Lecture - 3 Human Relations Management Theory
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Human Relations Management
Theory
1
Chandrasen Kumar,
Faculty, Institute of Food Security
Food Corporation of India
11/11/2012
Lecture 3 : 06.10.2012
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OVERVIEW
11/11/2012
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Review of discussions from Lecture2 : 09.09.2012
Overview of todays lecture:
Discussion on remaining part of the lecture
Experience sharing
If time permit we shall discuss Human relations
Management Theory which is an important
aspecvt of Management theory
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WHATIS MANAGEMENT?
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Management is the process of designing and
maintaining an environment in which individuals,
working together in groups, accomplish efficiently
selected aims.
Everybody (all managers) carries out managerial functions of
planning, organizing, staffing, staffing and leading
Applies to all kind of organizations
Applies to managers at all levels
All managers aim is to create surplus
It is concerned with productivity that implies effectiveness and
efficiency
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FUNCTIONSOF MANAGEMENT
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Staffing
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THE DEVELOPMENTOF
MANAGEMENT THEORY
Up to the 20th century (pre-modern era)
Adam smiths contribution to the field of management
Industrial revolutions influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach 11/11/2012
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ADAM SMITHS CONTRIBUTION
TOTHE FIELDOF MANAGEMENT
The general popularity today ofjob
specialization is undoubtedly due to Smiths
view about division of labor.
Division of labor is the breakdown of jobs
into narrow, repetitive tasks.
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INDUSTRIAL REVOLUTIONS
INFLUENCEON MANAGEMENT
PRACTICES Industrial Revolution has originated in late-18th-
century Great Britain, and crossed the Atlantic to
America by the end of the Civil War.
Because of the Industrial Revolution, machine
power was rapidly substituted for human power,
which made it economical to manufacture goods in
factories.
With the development of big organizations, a formal
theory to guide managers running these
organizations efficiently and effectively was
needed.
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THE DEVELOPMENTOF
MANAGEMENT THEORY
Up to the 20th century
Adam smiths contribution to the field of management
Industrial revolutions influence on management practices
In the early 20th century Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach 11/11/2012
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SCIENTIFIC MANAGEMENT
Frederick Taylor
Frederick Taylor was called as the father of Scientific
management. His bookThe Principles of Scientific
management was published in 1911. Immediately,its contents became widely accepted by managers
throughout the world.
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BACKGROUNDOF THAT
TIME
There were no clear concepts ofresponsibilities to workers and managers.
No effective workstandards existed.
Management decisions were based on hunch andintuition.
Workers were placed on jobs with little or no concern
for matching their abilities and aptitudeswith the tasks required.
Managers and workers considered themselves to be incontinual conflictany gain by one would be at theexpense of the other.
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TAYLORS FOUR PRINCIPLESOF
MANAGEMENT
Develop a scientific way for each element of an
individuals work, which replaces the old rule-of-
thumb method.
Scientifically select and then train, teach, and develop
the worker.
Heartily cooperate with the workers so as to ensure
that all work is done in accordance with the scientificway that has been developed.
Divide work and responsibility almost equally
between managers and workers. Managers take over
all work for which it is better fitted than the workers.11/11/2012
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THE DEVELOPMENTOF
MANAGEMENT THEORY
Up to the 20th century
Adam smiths contribution to the field of management
Industrial revolutions influence on management practices
In the early 20th century Scientific management
General administrative theory
The human resources approach
The quantitative approach From the later 20th century to the present
The process approach
The systems approach
The contingency approach 11/11/2012
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GENERAL ADMINISTRATIVETHEORY
Herial Fayols contributions
He argued that management was an activity common to all
human undertakings in business, in government, and even in the
home. He stated 14 principles of managementfundamentalor universal truths.
Max Webers contributions
Weber developed a theory of authority structures and described
organizational activity on the basis of authority relations. He
described an ideal type of organization that he called a
bureaucracy, characterized by division of labor, a clearly
defined hierarchy, detailed rules and regulations, and
impersonal relationships.
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FAYOLS 14 PRINCIPLESOF
MANAGEMENT
1. Division of Work
2. Authority
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of
Individual Interests to the
General Interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure of
Personnel
13. Initiative
14. Esprit de corps
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WEBERS IDEAL BUREAUCRACY
Division of labor
Authority hierarchy
Formal selection
Formal rules and regulations
Impersonality
Career orientation
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THE DEVELOPMENTOF
MANAGEMENT THEORY
Up to the 20th century (pre-modern era)
Adam smiths contribution to the field of management
Industrial revolutions influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach 11/11/2012
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THE HUMAN RESOURCES
APPROACH
Hawthorne Studies
Human Relations Movement
Dale Carnegie
Abraham Maslow
Douglas McGregor
Behavior Science
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HAWTHORNE STUDIES
Time: 1924the early 1930s
Place: Hawthorne plant in the Western Electric Company
Designer: Western Electric industrial engineers
Elton Mayo and his associates
Mayos Finding:
Behavior and sentiments are closely related.
Group influences significantly affect individual behavior.
Group standards establish individual worker output.
Money is less a factor in determining output than are
group standards, group sentiments, and security.
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THE DEVELOPMENTOF
MANAGEMENT THEORY
Up to the 20th century (pre-modern era)
Adam smiths contribution to the field of management
Industrial revolutions influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach 11/11/2012
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THE QUANTITATIVE APPROACH
What are quantitative approaches?
The quantitative approach to management,
sometimes referred to as operations research
(OR) or management science. It includes
applications ofstatistics, optimization models,
information models, and computer
simulations, linear programming, and so on,
which can be used to solve management
problems.11/11/2012
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THE QUANTITATIVE APPROACH
How have they contributed to current
management practice?
In general, the quantitative approaches
have contributed directly to management
decision making, particularly to planning
and control decisions.
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THINKING PROBLEMS
What stimulated the classical approach
(scientific management and general
administrative theory)?
What stimulated the human resource
approach?
What stimulated the quantitative approach?
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THE DEVELOPMENTOF
MANAGEMENT THEORY
Up to the 20th century (pre-modern era)
Adam smiths contribution to the field of management
Industrial revolutions influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach 11/11/2012
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THE SYSTEMS APPROACH
Whats the system approach?
Two basic types of the system: closed and open
Closed systems are not influenced by and do not interactwith their environment. In contrast, an open systemdynamically interacts with its environment.
An organization is an open system
The operating model in organizational systems
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WHATSTHE SYSTEM
APPROACH?
The system approach defines a system as a
set of interrelated and interdependent parts
arranged in a manner that produces a unifiedwhole. Societies are systems and so, too, are
computers, automobiles, organizations, and
animal and human bodies.
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AN ORGANIZATION ISAN
OPEN SYSTEM
An organization is a system that interacts
with and depends upon its environment.
Organizations stakeholders:any group that isaffected by organizational decisions and
policies. The managers job is to coordinate all
stakeholders to achieve the organizations goals.
Organizational survival often depends onsuccessful interactions with the external
environment.
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THE OPERATING MODELIN
ORGANIZATIONAL SYSTEM
Input Transformation Output
Feedback
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THESYSTEMSAPPROACH
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THE DEVELOPMENTOF
MANAGEMENT THEORY
Up to the 20th century (pre-modern era)
Adam smiths contribution to the field of management
Industrial revolutions influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach 11/11/2012
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FOUR POPULARCONTINGENCY
VARIABLES:
Organization size
Routineness of task technology
Environmental uncertainty
Individual differences
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PRACTICES
Whats the Taylors four principles of management?
Whats the 14-principles of management?
Whats the Mayos Finding? What are stakeholders?
Which critical contingency variables organizations have?
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PREVIEW
Review Classical Theories of Organizations Taylors Theory of Scientific Management
Fayols Administrative Theory
Webers Theory of Bureaucracy
Humanistic Theories of Organizations
Human Relations Theory
The Hawthorne Studies
Chester Barnard
McGregors Theory X and Theory Y
Human Resources Theory
Likerts Systems Theory (Four Systems ofManagement)
Blake and Moutons (Blake and McCanse) ManagerialGrid
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CLASSICAL THEORIES REVIEWED
Classical Theories of Organizations (p. 36)
Taylors Theory of Scientific Management (tasks)
Fayols Administrative Theory (mgmt)
Webers Theory of Bureaucracy (org structure)
All 3 theories attempt to enhance managements
ability to predict and control the behavior of their
workers
Considered only the task function of communication
(ignored relational and maintenance functions of
communication)
Designed to predict and control behavior in
organizations
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CLASSICALVS. HUMANISTIC
Classical theories emphasized coercion, control, and punishment(FOCUS ON TASKS /PRODUCTION).
Maintain predictability and control
Decision-making power at top of hierarchy
Minimize input from lower-level employees
Rely on science and rules to guide behavior
Regulate communication to increase predictability and decreasemisunderstandings
Result:
Workers feel they have no control over their work situation
Management does not care about their ideas
Feelings and ideas of workers are unimportant
Humanistic theories were developed to promote the CONCERNSof the individual worker in an atmosphere that was too focusedon production (FOCUS ON RELATIONAL & MAINTENANCE
FUNCTIONS)
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PRINCIPLESOF HUMAN RELATIONS
THEORY
Human relations theory is characterized by a shift in emphasis
from TASK to WORKER
Go beyond physical contributions to include creative, cognitive,
and emotional aspects of workers
Based on a more dyadic (two-way) conceptualization ofcommunication.
SOCIAL RELATIONSHIPS are at the heart of organizational
behavior--effectiveness is contingent on the social well-being of
workers
Workers communicate opinions, complaints, suggestions, andfeelings to increase satisfaction and production
Origins (Hawthorne Studies & work of Chester Barnard)
Human Relations School of Management - Elton Mayo (Harvard
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ORIGINSOF HUMAN RELATIONS THEORY
The Hawthorne Studies
Hawthorne Works of Western Electric Company
1924 - Chicago
Research focus: Relation of quality and quantity of illumination
to efficiency in industry
Four Important Studies
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THE HAWTHORNE STUDIES
Illumination Study (November 1924)
Designed to test the effect of lighting intensity on worker productivity
Heuristic value: influence of human relations on work behavior
Relay Assembly Test Room Study (1927-1932)
Assembly of telephone relays (35 parts - 4 machine screws)
Production and satisfaction increased regardless of IV manipulation Workers increased production and satisfaction related to supervisory practices
Human interrelationships are important contributing factors to worker productivity
Bottom Line: Supervisory practices increase employee morale AND productivity
Interviewing Program (1928-1930)
Investigate connection between supervisory practices and employee morale
Employees expressed their ideas and feelings (e.g., likes and dislikes) Process more important than actual results
Bank Wiring Room Observation Study (November 1931 - May 1932)
Social groups can influence production and individual work behavior
RQ: How is social control manifested on the shop floor?
Informal organization constrains employee behavior within formal organizational structure
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HAWTHORNE STUDIES - IMPLICATIONS
Illumination Study (November 1924)
The mere practice of observing peoples behavior tends to alter their behavior(Hawthorne Effect)
Relay Assembly Test Room Study (1927-1932)
Relationships between workers and their supervisors are powerful
Human interrelationships increase the amount and quality of worker participationin decision making
Interviewing Program (1928-1930)
Demonstrated powerful influence of upward communication
Workers were asked for opinions, told they mattered, and positive attitudes towardcompany increased
Bank Wiring Room Observation Study (November 1931 - May 1932)
Led future theorists to account for the existence of informal communication
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HAWTHORNE STUDIES - CRITICISMS
Not conducted with the appropriate scientific rigor necessary
Too few subjects (N=5)
No control groups
Subjects replaced with more cooperative participants
WORTHLESS
GROSS ERRORS
INCOMPETENCE
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THE EMERGENCEOF COMMUNICATION
Chester Barnard
Considered a bridge between classical and human relations theories
The Functions of the Executive (1938)
Argues for . . .
strict lines of communication - classical theory a human-based system of organization
The potential of every worker and the centrality of communicationto the organizing process
Six Issues Relevant to Organizational Communication
Formal vs. Informal Organization
Cooperation
Communication
Incentives
Authority
Zone of Indifference
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S IX ISSUES RELEVANTTO ORGANIZATIONAL
COMMUNICATION
Formal vs. Informal Organization
Formal Organization - a system of consciously coordinated activities or forces of two or more persons.(definite, structured, common purpose)
Persons are able to communicate with one another
Willing to contribute action
To accomplish a common purpose
Informal Organization - based on myriad interactions that take place throughout an organizations
history. Indefinite
Structure less
No definite subdivisions of personnel
Results: customs, mores, folklore, institutions, social norms, ideals -- may lead to formal organization
Cooperation
Necessary component of formal organization
The expression of the net satisfactions or dissatisfactions experienced or anticipated by each individualin comparison with those experienced or anticipated through alternative opportunities
Communication
Critical to cooperation
The most universal form of human cooperation, and perhaps the most complex, is speech
The most likely reason for the success of cooperation and the reason for its failure
System of communication: known, formal channels which are as direct (short) as possible, where the
complete line of communication is used, the supervisory heads must be competent, the line ofcommunication should not be interrupted, and every communication should be authenticated.
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S IX ISSUES RELEVANTTO ORGANIZATIONAL
COMMUNICATION
Incentives
Should be available
Not discussed in detail
Authority
Associated with securing cooperation for organizational members
The interrelationship among the originator of the communication, thecommunication itself, and the receiver
Authority of position OVER Authority of Leadership (knowledge & ability).
Zone of Indifference - orders followed
Marks the boundaries of what employees will consider doing without question,based on expectations developed on entering the organization.
Barnard drew attention away from formal organizational structures towardcommunication, cooperation, and the informal organization. His work wasintegrated by other theorists in the human relations movement.
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THEORY X AND THEORY Y: DOUGLAS
MCGREGOR
Douglas McGregor (1906-1964)
Articulated basic principles of human relations theory
The Human Side of Enterprise (1960, 1985)
To understand human behavior, one must discover the theoreticalassumptions upon which behavior is based
Especially interested in the behavior of managers toward workers
Every managerial act rests on assumptions, generalizations, andhypotheses--that is to say, on theory . . . Theory and practice areinseparable.
Two Objectives:
Predict and control behavior
Tap Unrealized potential
Theory X - Classical Theory
Theory Y - Human Relations Theory
FOCUS: Managers assumptions about HUMAN NATURE
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THEORY X AND THEORY Y: DOUGLAS
MCGREGOR
Theory X - Classical Theory
Three Assumptions
The average human being has an inherent dislike of work and will avoid it.
Most people must be coerced, controlled, directed, and threatened with punishment
The average human being prefers to be directed, wishes to avoid responsibility, has relativelylittle ambition, wants security.
Neither explains nor describes human nature
Theory Y - Human Relations Theory
Assumptions
Physical and mental effort in work is similar to play / rest.
External control and the threat of punishment are not the only strategies
Commitment to objectives is a function of the rewards associated with their achievement
The average human being learns, under proper conditions, not only to accept but to seekresponsibility
The capacity to exercise a high degree of imagination, ingenuity, and creativity in thesolution of organizational problems is widely distributed in the population
Intellectual potentialities of the average human being are underutilized
A more positive perspective of human nature
The KEY to control and quality production is commitment to organizational
objectives
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THEORY Y PROTOTYPE: THE SCANLON
PLAN
Participative Management
Two Central Features
Cost-reduction sharing for organizational members - sharing the economic gains fromimprovements in organizational performance
Effective participation - a formal means of providing opportunities to every member ofthe organization to contribute ideas for improving organizational effectiveness.
Must be implemented appropriately
Wastes time and undermines managerial power?
Magic formula for every organizational problem?
CONCERN for RELATIONSHIPS in the organization.
As the need to increase commitment grows, so does the need to develop strong,communication-based relationships among organizational members, particularly betweensupervisor and subordinate.
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MILES HUMAN RESOURCES THEORY
Difficult to adopt principles of human relations theory -- misapplications andmisunderstandings of both classical theory and human relations theory led toHuman Resources Theory
The key element to Human Relations Theory, participation, was used only tomake workersfeel as if they were part of the organizational decision-making
processes
Key to classical and human relations theory is compliance with managerialauthority
Workers are told that they are important but were not treated as such
Major Distinctions between Human Resources and Human Relations Theory
All people (not just managers) are reservoirs of untapped resources - manager responsibility to tapphysical and creative resources
Many decisions can be made more effectively and efficiently by workers most directly involved withtheir consequences
Relationship between employee satisfaction and performance - improved satisfaction and morale
contribute back to improved decision making and control
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MILES HUMAN RESOURCES THEORY
Increased satisfaction is related to the improved decision making and self-controlthat occurs due to participation that is genuinely solicited and heard
Two prevalent Human Resources Theories
Rensis Liker
Blake & Mouton (Blake & McCanse)
Four Systems of Management: Rensis Likert (Figure 3.2, p. 56)
Management is crticial to all organizational activities and outcomes
Continuum that ranges from more classically oriented system to one based on humanresources theory
Of all the tasks of management, managing the human component is the central and
most important task
High producing departments and organizations tend toward System IV; low producingunits favor System I
System I - Exploitative Authoritative
System II - Benevolent Authoritative
System III - Consultative
System IV - Participative
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BLAKEAND MOUTONS MANAGERIAL GRID
Stresses interrelationship between production (task) and people
Managements main purpose is to promote a culture in the organization thatallows for high production at the same time that employees are fostered intheir professional and personal development
Managerial Grid - now Leadership Grid (Blake & McCanse) (Figure 3.3, p. 59)
FOCUS: Mangers Assumptions about CONCERN for PEOPLE and CONCERN forPRODUCTION
Concern for PEOPLE
Degree of personal commitment to ones job
Trust-based accountability (vs. obedience-based accountability)
Self-esteem for the individual
Interpersonal relationships with co-workers
Concern for PRODUCTION
Use of people and technology to accomplish organizational tasks
Concern for is not about quantity or quality
Assessment instrument does not represent personality traits of the manager --instead, indicate a specific orientation to production and people
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BLAKEAND MOUTONS MANAGERIAL GRID
Authority Compliance (9,1)
Classical theory
Country Club (1,9)
Informal grapevine
Impoverished (1,1)
Laissez-faire
Middle-of-the-Road (5,5)
Compromise (carrot & stick)
Team (9,9)Human Resources Approach
Promote the conditions that
integrate creativity, high
productivity, and high morale
through concerted team action
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SUMMARY
Humanistic Theories of Organizations
Human Relations Theory
The Hawthorne Studies
Chester Barnard
McGregors Theory X and Theory Y
Human Resources Theory
Likerts Systems Theory (Four Systems of Management)
Blake and Moutons (Blake and McCanse) Managerial Grid
The principles of human resources theory attemptto integrate the concern for production fromclassical theory with the concern for the workerfrom human relations theory -- more effective andsatisfying!
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