Hard Work and Common Sense;
Maslow on Mangement, by Abraham Maslow
Concept of the Corporation and The End of Economic
Man: The Origins of Totalitarianism, by Peter Drucker

    Thirty-five years ago, at the beginning of the counterculture revolution of the 1960s, Abraham Maslow, a renowned humanist psychologist, stumbled across a novel experiment in democratic management. Maslow, who taught at Brandeis University, was on sabbatical at Non-Linear Systems, a technology company in Del Mar, Calif. Inspired by his theories about motivation, the company had dispensed with the assembly line and, anticipating General Motors' Saturn Project by about 25 years, had organized its workers into self-governing teams that built entire products from scratch.

     Maslow kept a detailed journal of his thoughts and observations about this experiment, which he published in a book called "Eupsychian Management" (pronounced "U-psychian"), his only book on management. Despite its turgid title, Maslow's book is a readable, impressionistic masterpiece that extolled the virtues of collaborative, synergistic management decades ahead of its time. Yet after a brief print run in the mid-1960s that sold a mere 3,000 copies, "Eupsychian Management" quickly faded from view. The short-lived eupsychian ideals of teamwork, synergy and self-actualization went the way of bell-bottoms and platform shoes. They were supplanted by a financial creed devoted to the pursuit of short-term profits. But, like the pendulums of fashion, seemingly obsolete management ideas have a way of resurfacing. About 10 years ago, "Eupsychian Management" materialized on the Internet. Interest in this cyberspace edition, in turn, helped trigger the republication of the book, which will appear this spring under the title "Maslow on Management," and orders for the book are already pouring in to the publisher.

     "Maslow on Management" represents more than just the revival of a management classic. Coming, as it does, at the end of this decade of re-engineering and globalization, it highlights the continuing tension that has defined the leading trends in American management since the beginning of the century. The tension is grounded, on the one hand, in our romantic beliefs in individuals and their unfettered potential and, on the other hand, in the realities of life in a corporate hierarchy. It is part of America's rationalist heritage from Adam Smith and our love-hate relationship with science: While we embrace technology as a key to progress, we are worried that, ultimately, it will enslave us.

     At the root of this conflict are two warring images of the business organization and its purpose in American society. One sees the corporation as a pivotal institution of democracy with complex responsibilities to a host of constituencies including its employees, customers and the community. The other much more utilitarian view recognizes one primary corporate constituent, the shareholder, and a single purpose, profit-making.

     This conflict first crystallized in Frederick Winslow Taylor's vision of the factory-as-machine and his quest for the "one best way" of creating a production system. Taylor's production methods, which helped create the highest standard of living the world had ever seen, were embraced by such leaders of the Progressive Movement as Walter Lippman and Louis Brandeis, who was known as "the people's lawyer" before he became chief justice.

     Taylor's calculus was deceptively simple: In exchange for incremental pay increases, he pressured workers into taking quantum leaps in efficiency. Taylor understood that workers at the turn of the century weren't being paid fairly. But he was wrong in assuming that men would willingly sacrifice their souls for a bigger paycheck. When Taylor worked for Bethlehem Steel at the turn of the century, he was so hated by his workers that, by some accounts, he had to walk home under armed guard for fear of an attempt on his life. To Taylor, the unskilled immigrant laborer was a creature with the "mentality of an ox"; in one legendary case involving the loading of pig iron onto freight cars, Taylor said the work could be done just as well by "an intelligent gorilla." Taylor, a Philadelphia Brahmin, resorted to crude stereotypes at least, in part, to dramatize the need for his authoritarian methods. However, such condescension, combined with what his biographer Robert Kanigel calls the "Faustian bargain" of Taylor's early pay-for-performance methods, probably did more to foment labor unrest than AFL founder Samuel Gompers and Socialist Party founder Eugene V. Debs combined.

     Even in Taylor's day, there were those who realized that his enterprise, and American society in general, could ignore what Elton Mayo called the "human problems" of industrial society only at its own peril. Already in the 1920s, decades before Maslow's California sojourn, Mayo, a pioneer of human relations, was searching for ways of motivating--rather than coercing--workers to improve efficiency. Mayo and his followers saw that industrial life, which uprooted families and whole communities, could be deeply alienating. Unless the corporation could mend the torn fabric of society, capitalism would threaten the basic values of American democracy.

     The most articulate modern exponent of this view is Peter F. Drucker, who describes the corporation as "the representative institution" of modern society. (Drucker and Maslow acknowledge their intellectual debts to one another.) The corporation, Drucker wrote in "Concept of the Corporation," a 1946 book about General Motors that first brought him to the attention of the business world, "must hold out the promise of adequately fulfilling the aspirations and beliefs of the American people." It was up to "future executives" of corporate America, Drucker wrote in a letter to Mayo at the time of the book's publication, to decide "whether we are going to have a free industrial society or not." Making a profit is important because it is the best indication of the success of the enterprise, but profit in and of itself is not its central purpose, according to Drucker: Creating good industrial citizens is.

     Like many of his contemporaries who imputed social responsibilities to the corporation, Drucker was profoundly influenced by European fascism. A native of Vienna, Drucker decided to leave Europe when, working as a journalist in Germany, he was offered a propaganda job. Even as he was packing his bags, Drucker began to write his first major book, "The End of Economic Man," in which he asserted that fascism was caused by the "collapse" of Europe's "spiritual and social order." European capitalism, according to Drucker, had failed to deliver on its "promise . . . to establish equality."

     Newly arrived in the United States, Drucker saw the best hope of a free industrial society in the American corporation. It was the corporation, Drucker believed, that would fulfill the capitalist imperative of giving "status" and "function" to the individual. It is telling that Drucker, the apostle of large organizations, never found a place for himself within a major academic institution. Years of flirting with Ivy League schools, including Harvard and Princeton, never produced a permanent position. (Drucker is Clarke professor of social sciences at the Claremont Graduate School.) Part of the reason may be that Drucker's liberal arts approach to management (which draws on everything from sociology and philosophy to psychology and science) was at home neither with Mayo's human relations school nor with the quantitative methods and bottom-line approach that swept management in the 1950s and 1960s. Then, too, Drucker provoked the disdain of many academics by writing defiantly readable prose that is free of mathematical models and footnotes.

     The social imperative that inspired Drucker and that sparked the human relations movement was soon swamped by the incipient science of management that grew out of World War II. Inspired by the role that quantitative methods played in improving wartime logistics, corporations sought to use the new techniques to meet the surging demands of a postwar economy. The trouble is that adherents of both motivational and quantitative methods often suffer from the same devotion to their own "one best way." Many companies that espouse democratic values, for example, are content to push motivational techniques that do little more than manipulate their employees; they shy away from any changes that might fundamentally alter the system, breeding cynicism and apathy as a consequence.

     Scientific management, devoid of the human dimension, can be equally pernicious. It took Ford Motors years to recover from an obsession with bottom-line efficiency that took hold in the 1950s and, for years, subjugated everything--manufacturing, product and employees--to short-term profits. It is, of course, possible to envision a synthesis of the two strands: the humanist and the technological. In the 1980s, a profoundly eupsychian approach to scientific management, the quality movement, helped revive Ford and General Motors after their battering by the Japanese, who themselves embrace a management culture that combines the quantitative and the humanistic.

     W. Edwards Deming, the apostle of the quality movement, was a physicist and statistician with a keen appreciation of process. Reared on a Wyoming homestead, in an atmosphere of frontier optimism and struggle, Deming also possessed a deeply religious belief in human potential. To come up with a better method of loading pig iron, for example, Deming would have advised Taylor that when pig iron handlers and railway workers put their heads together, they come up with a far better solution than any stop watch-wielding efficiency engineer.

     Coming from two vastly different disciplines, psychology and statistics, Maslow and Deming arrive at the same conclusion: the importance of continuous improvement for both the individual and the corporation. Among the things that drove Maslow crazy, say his supporters, were the groupies who followed him around thinking that self-actualization would rub off on them by association: For Maslow, self-actualization was nothing but hard work.

     Today, many of the companies that endured a crash diet of re-engineering and downsizing (only to find their creative energy sapped) are once again finding themselves drawn to eupsychian ideas. Warren Bennis, a prominent business theorist at USC who was a friend of Maslow's, explains the renewed popularity of his colleague’s work: “Today competitive advantage rests on the capacity of top leadership to generate intellectual capital,” and eupsychian management “is a key to creating the environment in which ideas can flourish.” There may be more to the eupsychian revival than competitive advantage, however. Nancy Koehn, a business historian at Harvard Business School, says that even among number-crunching MBAs, she detects a new “search for meaning.” As the pendulum of management fashion keeps swinging, it is unlikely ever to pinpoint one best way for achieving both corporate and individual growth. It does, however, point to a number of useful destinations that, together, may help illuminate the way.