**2. Humanistic and economic paradigms in management**

The humanistic and economic paradigms coexist in contemporary management theory. They differ, however, with regard to their understanding of a human being, its needs, and motivation to take action [1, 2].

### *Organizational Culture in Enterprises Applying the Humanistic and Economic Paradigm… DOI: http://dx.doi.org/10.5772/intechopen.113155*

The economic paradigm assumes that business activity aims at profit maximization and interpersonal relations are perceived as short-term transactions [3, 4]. With disregard to moral considerations, the mechanism of utility and self-interest prevails [2, 5, 6]. Hence, a man is conceived mainly as a *homo economicus*—he or she is searching for the quickest gratification of undertaken actions, often acting opportunistically for the sake of own gain. Therefore, people are creatures seeking to increase the material usefulness of the broadly understood benefit. It is appropriate to favor individual benefit rather than the social, collective one [3]. Supporters of the economic orientation in management tend to assume that the main goal of an enterprise is profit maximization, and the primary and only duty of managers is to earn money for the shareholders [7].

However, in recent years, a humanistic paradigm has emerged and is now being more and more heard of [7–9]. The basic concept of this approach is the one where a man is conceived as a *zoon politicon* and has the right to unconditional respect for dignity [10]. Unlike the economic paradigm, the humanistic one assumes that human nature is not given once and forever and can be improved through continuous education [11, 12]. Humanistic management flourishes as an almost natural response to management models where the main search for financial returns damages the wellbeing of people, both inside and outside the company. It is an alternative proposal to the management of the companies where the well-being of people is prioritized above the achievement of merely financial goals [12].

What mostly distinguishes the two views is the ethical component. It remains a central category in the humanistic approach as it attributes the inalienable right to respect for one's own dignity, independent of ethnicity, nationality, social status, or gender to every human being [8, 13]. Human is identified as a rational being who realizes his/her right to freedom in social interactions based on values.

Humanistic management creates and runs a business using three interrelated principles. All three have ethical connotations and require the use of:


Applied together, these three principles contribute to the development of humanism through economic activities that bring values to all mankind. The need to respect the human dignity as a goal of humanistic management results in economic and social impacts [2]. In this approach, management involves assuming responsibility for ethical issues in business decisions. Shifting from the one-dimensional goal of profit maximization to the multidimensional and value-based understanding of organizational success is a fundamental principle.
