What about People? Early work on industrial psychology and human relations re-
ceived little attention because of the prominence of scientific management. However,
a major breakthrough occurred with a series of experiments at a Chicago electric
company, which came to be known as the Hawthorne studies. Interpretations of these
studies at the time concluded that positive treatment of employees improved their
motivation and productivity. The publication of these findings led to a revolution
in worker treatment and laid the groundwork for subsequent work examining treat-
ment of workers, leadership, motivation, and human resource management. These
human relations and behavioral approaches added new and important contributions
to the study of management and organizations.
However, the hierarchical system and bureaucratic approaches that devel-
oped during the Industrial Revolution remained the primary approach to orga-
nization design and functioning well into the 1980s. In general, this approach
worked well for most organizations until the past few decades. During the
1980s, though, it began to cause problems. Increased competition, especially on
a global scale, changed the playing field.50 North American companies had to
find a better way.