Management Tools: Organizations Have Needs Too

Applying Maslow’s famous hierarchy of needs to businesses can tell you a lot about your organization’s culture.

By Amanda C. Richards Apr 24, 2015
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Corporations may not be people, but they are comprised of them. So it stands to reason that some of the fundamentals of psychology can be applied at the organizational level as well. Maslow’s hierarchy of needs is a good example.

In the 1940s, the American psychologist Abraham Maslow theorized that humans have five basic needs that inform their behavior. They are often represented as a pyramid that includes basic physiological needs such as hunger, thirst, and shelter at the bottom of the pyramid, and more-abstract human desires, such as self-esteem and self-actualization, at the top. The need for safety, belonging and love fall somewhere in between. The needs at the bottom of the pyramid are critical for survival; those at the top typically only become concerns after the basic needs are met.

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Now let’s take that same model and apply it to an organization. The model looks remarkably similar.

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For organizations, survival needs are the resources required for basic survival: Money to do business, manpower to get the work done, and the tools needed to facilitate work (phones, computers, etc.).

Safety refers to the absence of any type of perceived threat, whether it be bankruptcy, a hostile takeover, high turnover, a new competitor, etc.

Infrastructure consists of the internal systems that allow information to be recorded, analyzed, shared, and stored. It includes basic metrics and reporting, budgets, compensation plans, performance review tools, and communication systems. These tools and systems will guide an organization toward its ultimate goal: a business strategy.

For a business, partnership means collaborating with other constituencies to engage in mutually satisfying relationships that work towards common goals.

The highest aspiration for an organization is actualization, the need to fulfill its full economic and social potential. The primary question at this stage is whether the organization is producing in meaningfulways, rather than simply profitable ones. The entity wishes to develop itself and its constituencies and contribute to the greater good, perhaps by investing in community development or scholarship funds.

Where Do You Stand?

Like people, organizations can be out of touch with their own needs. It is difficult to step back and view a situation from an impartial viewpoint, particularly for leaders who are vested in the business. But it is worthwhile to make the effort. Here’s why:

You can predict an organization’s behavior based on its needs. This model has implications not only for what a given organization should do, but also for what it can do and often what it will do based on its stage of development. For example, take an organization that does not, as a rule, deal with performance issues. That seems utterly illogical: Why continue to pay someone who is not performing? The reason is most often an underlying need that has not been met. Until an organization develops infrastructure, for example, it does not have a secure sense of “self” that will allow it to make confident and consistent decisions.

Leaders can get pushed into making decisions that are out of step with the organization’s dominant need. It may be true that a business is in desperate need of a compensation plan. But if it is dealing with a survival or safety issue, that should take precedence over an infrastructure investment (higher-level need).

It’s important to know that needs are relative and dynamic. Although an entity may have reached a higher stage of development in the hierarchy, lower needs can dominate at any time. If survival resources become threatened, an organization will need to reprioritize. Today’s business environment is too fast-paced to think that lower needs can be permanently met.

Some organizations will never reach the higher levels of the hierarchy—and that’s OK. It is tempting to believe that businesses (and people) must change if they are behaving in ways that do not lead to growth. This is simply not the case. Some organizations have low expectations or lack the skills and resources to meet their own higher-level needs. An organization can remain at any level of need indefinitely.

So maybe it’s time to put your organization on the couch and do a deeper assessment of its needs. Knowing where you stand can help you lead your company forward.

Amanda Richards is a senior consultant with Converge HR Solutions in Wayne, Pa. She can be reached at Amanda@convergehrsolutions.com.

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