In the study of people, Chester Barnard was met with a few intense questions such as what is an individual? What is the extent of our power of free will? It is very easy to avoid those kinds of questions and most people generally navigate towards avoiding those questions, even though they reoccur. Hence, as leaders and executives, we subconsciously assign answers and act on the assumptions and attitudes regarding them. This is far from a good way to manage people but this is what is common place.
A good portion of the readers of this article are working towards being managers. Bearing that in mind there is a significant need to understand the human nature. We assume that there is a basic understanding of human beings and we make decisions based on those views, sadly, that is not the case. As various issues arise, we come to terms with our ignorance on the matter. We ask ourselves questions like are we really free? On important occasions, are humans expected to act rationally? Do our opinions on subject change? For a career in managing this is not adequate.
Of neoclassical economics, humans should act rationally and maximize their utility. Although the claims of human nature by economists are quite unrealistic, the theories still hold value. The model wraps the minds of students of management as their work is with living people not models, resulting in unethical decisions. One would advise that such models are kept away for learners and workers, especially in the early years of their respective age.
Using the theory and those based on that theory, agency theory comes to play which makes us believe that people are self-serving and their only goal is to gather more power, prestige, influence and other things that can be seen in a similar light. It basically states that in the absence of structure to keeps people working in line with the shareholders and management, the staff would work in a selfish manner which can be to the detriment of the company. Reality is far different from this, we are not inherently self-serving, it is for the most part just due to our environment and situations.
Hence, how we view and understand man, should be common in a realistic sense and this should spread to all aspects of our lives, while keeping in mind business ethics. We should wash away any bias within us that says people are for the most part very untrustworthy. If you happen to meet someone that is untrustworthy, 9 out of 10 times, it is due to the environment they were raised in, the circumstances surrounding them, etc.