1. Rational Economic Man: From the organisational perspective, managers had, for a long time, viewed their employees as rational beings who are primarily motivated by money. They took the and ‘ECONOMIC MAN’ approach to understand and predict the human behaviour. This model is ‘RATIONAL MAN’ based on classical organisation theory. The Scientific Management Movement was based on the belief that by rationally explaining the one best way to do things and offering incentives to workers in the form of piece rates and bonuses, organisational output can be increased. Psychologists have also studied this model for predicting human behaviour. For example, of Theory X reflect this McGregor’s assumptions model. The basic assumptions of the concept of Economic are as follows: ‘Rational Man’ (i) People are motivated primarily by economic incentives. They will do things which get them the greatest economic gain. (ii) As the organisation controls the economic incentives, human beings are essentially passive agents, who are manipulated, motivated and controlled by the organisation. (iii) The feelings of the people are essentially irrational and must be controlled to achieve rationality and self-interest. (iv) Organisations can and must be designed in such a way so as to neutralize and control feelings and therefore their unpredictable traits. people’s In this model, people are induced to produce more by providing them with economic incentives. In this case, there is no organisation-employees conflict because both are satisfying their needs simultaneously. Management is getting more production and people are getting more money. Drawbacks: (i) As this model is based on the classical organisation theory, it suffers from the shortcomings inherent in that theory and do not suit the present day organisation. (ii) The economic incentives can work till the man is not reasonably satisfied by the need of money.
1. Rational Economic Man: From the organisational perspective, managers had, for a long time, viewed their employees as rational beings who are primarily motivated by money. They took the ‘ECONOMIC MAN’ and ‘RATIONAL MAN’ approach to understand and predict the human behaviour. This model is based on classical organisation theory. The Scientific Management Movement was based on the belief that by rationally explaining the one best way to do things and offering incentives to workers in the form of piece rates and bonuses, organisational output can be increased. Psychologists have also studied this model for predicting human behaviour. For example, McGregor’s assumptions of Theory X reflect this model. The basic assumptions of the concept of ‘Rational Economic Man’ are as follows: (i) People are motivated primarily by economic incentives. They will do things which get them the greatest economic gain. (ii) As the organisation controls the economic incentives, human beings are essentially passive agents, who are manipulated, motivated and controlled by the organisation. (iii) The feelings of the people are essentially irrational and must be controlled to achieve rationality and self-interest. (iv) Organisations can and must be designed in such a way so as to neutralize and control people’s feelings and therefore their unpredictable traits. In this model, people are induced to produce more by providing them with economic incentives. In this case, there is no organisation-employees conflict because both are satisfying their needs simultaneously. Management is getting more production and people are getting more money. Drawbacks: (i) As this model is based on the classical organisation theory, it suffers from the shortcomings inherent in that theory and do not suit the present day organisation. (ii) The economic incentives can work till the man is not reasonably satisfied by the need of money.