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Many companies spend a bang-up amount of time money investigating the causes of employee turnover—for example, through programs of exit interviews. Commonly the intent behind such studies is to find out why people leave—the idea being that if a company can identify the reasons for terminations, information technology can work to concord terminations, and turnover, down.

While a company may obtain very valuable information from termination interviews, this kind of approach has two signal defects:

1. It looks at only one side of the coin—the termination side. If a company wants to keep its employees, then it should also study the reasons for retention and continuation, and work to reinforce these. From the viewpoint of a company's policies on employment and turnover, the reasons why people stay in their jobs are simply as important as the reasons why they go out them. An obvious point in evidence is that one private will stay in a job nether conditions that would cause another to first pounding the pavements.

As an analogy, consider the divorce rate. If i were really interested in doing something about it, he would have to sympathize why some people get divorced and why others stay married—the reasons for the two things are entirely dissimilar. Furthermore, the reasons for getting a divorce are not just "just the opposite" of the reasons for staying in union. He would accept to do some real spadework on both sides of the contend to get a complete movie of the divorce phenomenon. Equally, in the corporate setting, at that place are definite rationales for terminating and definite (although sometimes unconscious) rationales for continuing.

2. This approach also tends to assume a perfect correlation between job dissatisfaction and turnover. Many a visitor works for low turnover because it thinks a low charge per unit implies that its employees are pleased with their jobs—and, a fortiori, productive. This is non necessarily true, past any ways. A low charge per unit may but exist the effect of a tight task marketplace. Or mayhap the company has put golden handcuffs on its employees through a compensation scheme that emphasizes deferred benefits. There are many factors involved.

In itself, the fact that an employee stays on a payroll is meaningless; the company must also know why he stays at that place. We shall show, in fact, that some carelessly conceived methods of maintaining a depression turnover rate tin be detrimental to the financial wellness of a visitor and the mental wellness of its employees.

To get a more integrated view of work-force stability, we mounted a study to investigate the motivations to stay and proper ways to encourage it. (The report is described in the sidebar, "Background of the Study.") This is the picture that has emerged.

Why do employees stay? The cursory respond is "inertia." Employees tend to remain with a visitor until some force causes them to leave. The concept hither is very like the concept of inertia in the physical sciences: a body volition remain as information technology is until acted on by a force.

What factors touch on this inertia? There are two relevant factors inside the company and also ii relevant factors outside the company.

First, within the visitor, in that location is the event of job satisfaction. Second, there is the "company environment" and the degree of condolement an individual employee feels within information technology. An employee's inertia is strengthened or weakened by the degree of compatibility between his ain piece of work ethic and the values for which the company stands. The employee's ethic derives from his own values and the actual weather he encounters on the job. The company'south values derive from societal norms, formal decisions by the board of directors, and the policies and procedures of the managing group. A widening gap between these 2 vantages weakens inertia; a narrowing gap strengthens it.

Outside the company, one must consider an employee'south perceived task opportunities in other institutions. An employee'southward perceptions of his outside job opportunities are influenced by real changes in the job market and by self-imposed restrictions and personal criteria. We institute that some employees refuse to consider piece of work in other locations considering "I similar the schools" or "I like my neighborhood." These reasons non only strengthen inertia to stay with their present system, but too strengthen inertia to stay with any arrangement within the aforementioned school commune or neighborhood. All the same, if schools lose their appeal considering of drug problems or neighborhoods become run down or polluted, the inertia to stay in the expanse is weakened, and, consequently, exterior job opportunities go relatively more attractive.

Also, outside the company, there are nonwork factors that directly affect inertia, such as financial responsibilities, family ties, friendships, and customs relations. Some workers told us, for example, that they would never leave their companies because they were born and reared in their nowadays locale. Others said they stayed because they had children in local schools, could not beget to quit, or had good friends at work. Many of these employees likewise reported low chore satisfaction—and yet they stay.

Does it thing whether an employee stays for job satisfaction or for environmental reasons? Yes, because it makes a pregnant difference to the company whether an employee "wants to" stay or "has to" stay.

How tin retention be improved? A visitor might do this past reinforcing the "right" reasons for staying. Past "right," here, we hateful a combination of chore satisfaction and ecology reasons that jibes with the goals of the company. Past "wrong" reasons, we would hateful any combination of reasons for staying that is benign neither to the company nor to the employees. Thus if a visitor reinforces the right reasons for staying and also abstains from reinforcing the incorrect reasons, its turnover—equally distinct from its turnover rate—might exist more satisfactory.

How does a company reinforce the right reasons? Companies can practise this past providing conditions compatible with employees' values for working and living.

If managements concentrate on understanding why employees stay, and so they tin human action to reinforce the correct reasons and stop reinforcing the incorrect reasons. In other words, they can accept a positive approach to managing retention, which will exist more than constructive over the long run than the ordinary, negative approach of simply reducing turnover.

Satisfaction & Environment

Our study has provided iv profiles of employees that are particularly useful in thinking through the twin problems of employee retention and employee turnover. The 2 important variables hither are the employee'south satisfaction with his chore and the environmental pressures, within and outside his visitor, that affect his conclusion to continue or terminate.

Reasons for task satisfaction include achievement, recognition, responsibility, growth, and other matters associated with the motivation of the individual in his job. Environmental pressures inside the visitor include piece of work rules, facilities, java breaks, benefits, wages, and the similar. Environmental pressures outside the visitor include outside job opportunities, customs relations, financial obligations, family unit ties, and such other factors. Exhibit I shows the relationship between job satisfaction and environmental factors for four types of employees, and also explains why each type stays.

Exhibit I. Job Satisfaction and Surroundings

The turn-overs are dissatisfied with their job, have few ecology pressures to proceed them in the company, and will leave at the beginning opportunity. While employees seldom get-go out in this category, they oftentimes terminate up here, having experienced a gradual erosion of their inertia. Consider, for example, an employee who a few years ago was highly motivated, had iii children in college, and was close to existence vested in the company retirement plan. Today, his children are graduated, he is vested, and he has lost interest in his job. His inertia to stay has been greatly weakened, and he may presently get a turnover statistic.

The plow-offs are prime candidates for spousal relationship activities; they tin hands generate employee-relations and productivity problems, and feasibly industrial espionage or demolition. These employees are highly dissatisfied with their jobs and stay for mainly environmental reasons. For example, they may feel they are too sometime to start over over again, or that they are financially dependent on the company do good programs; or they may believe they tin't get a job on the outside. Employees trapped in this category take ii alternatives: (1) they can look for exterior aid (for instance, from unions or the EEOC); and (two) they can modify their beliefs and either "do exactly what they are told and no more than" or decide to "become fifty-fifty with the visitor."

The turn-ons are highly motivated and remain with the company almost exclusively for reasons associated with the work itself. This is most desirable from the company's viewpoint because these employees really want to stay and are non locked in by the exterior environment. Still, if managerial actions reduce job satisfaction (fifty-fifty temporarily), turnover may rise dramatically. Since the inertia of the plow-ons is not strengthened by environmental factors, it is therefore not strong enough to make them stay without continual job satisfaction.

The plough-ons-plus are the most likely to stay with the company in the long run. These employees stay for task satisfaction plus ecology reasons. Even if job satisfaction temporarily declines, they will probably stay. The word "temporarily" is a key one, for if task satisfaction drops permanently, these employees become turn-offs. This transformation will not raise the turnover statistics, but information technology will increment frustrations and affect work performance.

Movement between classifications

The traditional approach to measuring and agreement terminations has focused on the turnovers. These employees by and large represent a relatively small percentage of the total employee population, and hence emphasizing them exclusively tends to ignore the reasons the majority stay with the visitor. Information technology also ignores the dynamic processes past which an employee moves from one classification into some other.

Consider a immature engineer who originally joins the visitor considering he really wants to piece of work there. He moves into a new city where he has very few ties with the community. As he develops his career, he begins to build some meaningful work relationships—he becomes a turn-on. The longer he remains in the locale, the more likely he is to get a turn-on-plus.

But suppose a time comes when his motivation is low. Volition he get out? If do good programs take created a financial dependency, if he has stock options that are not exercisable for two or three years, if he has children who are in proficient schools, if he has merely purchased his dream house—so he probably will not become a turnover statistic. However, he may become psychologically absent—a turn-off. The consequences may show up in alcoholism, chronic physical or psychological affliction, divorce, depression productivity and motivation, and perhaps unionization.

Suppose, instead, that this same engineer has connected to find job satisfaction. He may still stay for some ecology reasons, and the combination of reasons will probably be right—both he and the visitor find his employment fulfilling.

In neither case has he become a turnover casualty, but at that place is a dramatic deviation between the ii situations in terms of morale and productivity. Ane management observer has phrased it this manner: "Nosotros have too many people in our organisation who are no longer with us."

Ane purpose of our enquiry is to understand meliorate the residual between task satisfaction and environmental reasons equally it affects employee retention and to gain insight into ways to influence that rest.

Who Stays & Why?

One way to approach the question of balance between task satisfaction and environmental reasons for staying is to await at the traditional demographic breakdowns, such every bit male/female, bacon/wage, college/loftier school educational activity, and other demographic contrasts, and also at employees' personal work ethics. Nosotros designed our research to answer questions similar these:

  • Exercise managers stay for reasons different from those of nonmanagers?
  • Is the work ethic of younger employees different from that of older employees?
  • What kind of employees (male, female person, exempt, nonexempt, and so on) stay because they like their work?
  • What is the work ethic of those employees who stay because they like their chore?
  • Why exercise managers over xl, who have not had a promotion in five years and don't like their job, stay with the visitor?

Our respondents gave many reasons for staying. We have broken these down into reasons relating to the surround outside the company—the external surround—and reasons relating to the work environment itself, within the company—the internal surroundings. Further, we have broken down the reasons relating to the internal environment into (a) motivational factors and (b) maintenance factors.

Exhibit II represents these two breakdowns. Each row of symbols in the showroom is divided into three parts:

Exhibit Ii. Number of Motivational, Maintenance, and Environmental Reasons for Staying, Among 12 Employee Classifications

one. Motivational factors in the visitor surroundings.

ii. Maintenance factors in the company environment.

3. Factors in the external environment.

To prepare Exhibit II, we took the ten reasons for staying cited almost frequently by the members of a specific employee group and assigned them to the three categories merely listed. For instance, employees with college degrees most frequently cited six relating to on-the-chore motivation, three relating to job maintenance, and one relating to the environment external to the company.

The showroom shows that low-skill manufacturing employees stay primarily for maintenance or environmental reasons, many relating to the nonwork surroundings. Seven of their top ten reasons relate to the external environment—for instance, "I wouldn't want to rebuild the benefits that I accept at present" and "I have family responsibilities." Their two outstanding reasons for staying that relate to the internal environment are fringe benefits and job security. These employees will not remain on the payroll because of job satisfaction. To them, factors outside the visitor are more important.

The reasons managers and professionals gave for staying were significantly different. Equally Showroom 2 shows, managerial and professional employees stay primarily for reasons related to their work and the work environs; six of the peak ten reasons they cited for staying were related to job satisfaction, three to the company surroundings, and only one to the exterior surroundings. These data suggest that managers and professionals are more likely to be turn-ons, while low-skill manufacturing people are very likely to be turn-offs.

The moderately skilled manufacturing employees and the clerical people who are not direct involved in the production process more closely resemble the managers and professionals in their reasons for staying than they do depression-skill manufacturing people. Notwithstanding, near organizations tend to care for all manufacturing employees akin in terms of benefits, working conditions, supervision, and pay. This study suggests that many skilled hourly employees would exist less dissatisfied and more than productive if they were treated more nearly equally managers are, rather than as depression-skill blue-neckband workers are.

In the interest of assessing equal opportunity, we compared whites with nonwhites amongst hourly employees. Nonwhite minorities cited maintenance and ecology reasons for staying more frequently, without mentioning a single motivation factor among their top 10 reasons. Caucasians also tend to stay because of maintenance and ecology reasons, although, for this group, the motivational item "I bask my chore" ranked 8th as a reason for staying, as compared with seventeenth for non-whites.

People with less than five years of company service were compared with those with five or more. Employees with shorter service stay for internal reasons, their inertia being strengthened by a combination of job satisfaction and the job setting. Nonetheless, after 5 years of service, environmental reasons begin to appear, while internal reasons tend to sideslip in relative significance. In other words, every bit in the example of the immature engineer, these employees join a company because they want to. Nevertheless, equally they build family and economic responsibilities, these may displace internal reasons for staying.

A similar human relationship was plant in educational levels. People with a available'due south (or higher) degree stay because of motivation and maintenance reasons, whereas people without a college degree tend to stay for maintenance and environmental reasons.

Skill & nonmotivational factors

Given the traditional managerial belief that educational level represents a meaningful stardom amidst employees, we examined the influence of maintenance and external environment on people at various skill levels.

Exhibit Iii shows the percent of employees, past skill category, who selected diverse ecology reasons for staying with their companies. These figures highlight the varied degrees of significance people with unlike skill levels place on ecology factors:

Exhibit III. The Effects of Ecology Factors on Employees at Various Skill and Chore Satisfaction Levels

  • Low-skill employees feel spring principally by benefits, family unit responsibilities, the difficulty of finding another chore, personal friendships with coworkers, loyalty to the company, and simple fiscal pressures.
  • Moderate-skill employees feel roughly the same, but they seem somewhat less sensitive to environmental factors. Loyalty to the company, however, was cited more frequently.
  • Managers offer quite a dissimilar profile. They stay mainly for reasons related to their jobs themselves and community ties; the difficulty of finding some other task, family responsibilities, and company loyalty exert relatively less influence on them.

Hence at that place seem to be existent differences in the importance the three groups attach to environmental factors. Additionally, we might note that managers are more willing to expect for new jobs, even though this may exist difficult, whereas the depression-skill workers tend to be unwilling to exercise this. It seems that "perceived outside opportunities" should be interpreted narrowly with respect to the depression-skill classification.

Chore satisfaction

Exhibit Iii also shows the significance of environmental factors for employees with different degrees of job satisfaction. These information point that very dissatisfied employees go along to stay because of financial considerations, family unit responsibilities, lack of exterior opportunities, historic period, and, to some extent, "corporate enculturation" (they wouldn't want to look for a chore or have to learn new policies). Such reasons for staying are self-defeating and hardly could exist considered right. These turn-offs have non yet affected turnover statistics, but still they may be having but every bit severe, or fifty-fifty a more severe, outcome on the company. These employees see themselves as so locked in by the environment that they have fiddling alternative but to stay; and, therefore, the possibility of reduced productivity or behavior antagonistic to the organization is slap-up.

Historically this locked-in, turned-off condition has been considered characteristic of manufacturing or unskilled-labor categories, primarily. However, contempo reports of increased matrimony involvement at the managerial level propose that information technology is occurring at higher levels of the organization as well. 1 study shows that breach is not express to the hourly ranks, merely may occur at any level of an organization.1

Why Dissatisfied People Stay

We gained some insight into why an employee stays with a company when he is dissatisfied with his chore, supervisor, benefits, pay, and so on. We establish that employees who said, "I don't like my job," or, "I don't savor working with my supervisor," stay primarily for maintenance and ecology reasons, generally related to financial and family responsibilities. The only "inside the company" reasons high on the list related to benefit programs and job security. These employees are excellent examples of personnel who have non affected the turnover statistics simply who may accept left the company, psychologically, long ago.

This finding illustrates the fact that the reasons people stay are non necessarily the contrary of the reasons why people go out. Ane often hears negative statements most supervisors and jobs in get out interviews; yet, of the employees we studied, many who made such statements are all the same with the companies virtually which they complain. These are the turn-offs.

Moreover, it suggests that these employees practise non have as much task mobility as many companies assume. The old platitude that "if y'all don't like the job, y'all are complimentary to leave" is nearly equally naive equally telling a monkey in a zoo that if he doesn't similar his bananas, he should go back to the jungle. The reinforcement that environmental factors give to the inertia of these alienated employees must exist quite powerful, and it will probably accept a strong force to break their inertia—in extreme cases, discharge.

It might be concluded at this point that level in the organisation, race, tenure, pedagogy, and degree of job satisfaction determine why people stay. However, we found a factor more stiff than any of these—namely, the work ethic of the people involved in the written report.

An Employee's Work Ethic

Man beings exist at different levels of psychological evolution, and these levels are expressed in the values they concord respecting their work. One useful categorization of levels and work values appears in the sidebar, "Values for Working."

Showroom Iv tabulates the elevation ten reasons employees stay, based on their psychological level. It shows a startling dichotomy. Employees possessing relatively loftier tribalistic or egocentric values stay mainly because of environmental reasons, whereas employees with relatively high manipulative or existential values stay primarily for inside-the-visitor reasons, many of which are motivational. We also plant that the tribalistic or egoistic employees are located primarily in the low-skill manufacturing functions and that manipulative or existential employees are located primarily in management, research, or professional person positions.

Exhibit IV. Number of Reasons Why Employees Stay, for Dissimilar Levels of Work Values

Although not all the implications are clear at this point, it seems credible that corporate managers, in deciding on policies and philosophy, in reality take been talking to themselves most themselves. That is, they tend to adopt policies and theories of human motivation that appeal to their own private value systems, under the assumption that all employees have like values. For example, many a manipulative manager presumes that money and large, status-laden offices motivate other people in the same way they drove him to his present level of success. He may have climbed the corporate ladder, but equally our results clearly show, for many employees the ladder does not even exist.

This is non meant as a criticism of managerial value systems, merely as a description of reality. Ane can expect leaders, whatever their values, to adopt policies which most appeal to their own value system. An private makes a decision based on what he thinks is right. What is right depends on his values.

To put the matter another way: about managers are following the Gold Rule, "Do unto others as you would have them practice unto you." Assuming all people have the aforementioned values, then what is right for the manager is right for the employee. However, since values of people are not the same, what is right to the manager is often wrong for the employee. If nosotros were to write a Platinum Rule, we should say, "Do unto others every bit they would accept y'all exercise unto them." This rule has obvious value for a manager who seeks to reinforce right reasons for staying, at various value levels, and to avoid reinforcing wrong reasons.

We farther explored job retention and values past linking data on values and reasons for staying. This enabled us to make up one's mind the values of those people who stay because they like their jobs and those who said that their jobs were non reasons for staying.

We plant that employees who stay because they like their jobs tend to be relatively manipulative and existential; and those who keep for reasons not directly associated with their jobs tend to be tribalistic and egocentric. We also found that the tribalistic and especially egocentric workers were relatively more dissatisfied with motivation factors than were employees with other value systems. The to the lowest degree dissatisfied employees had existential values, followed by the manipulative and conformist employees. This is not too surprising, because the fact that the free enterprise system tends to reward conformist and manipulative values, and existential people stay only equally long every bit they are happy.

Environment & values

Exhibit V demonstrates once more the subconscious power of environmental factors. It presents the pct responses of employees scoring the highest (ninetieth percentile or greater) in each value system—that is, the employees who fit nearly clearly into each value arrangement.

Exhibit Five. Value Systems and Ecology Factors

The information bear witness a dichotomy between employees with relatively high manipulative or existential values (Levels 5 and 7) and other employees, specially those with relatively loftier tribalistic or egocentric values (Levels 2 and 3). Almost without exception, people of Levels 5 and 7 place less emphasis on external environmental reasons for staying than practise people with other values.

Thus whereas age, length of service, type of work and skill level, race, and instruction describe who stays, and for what reason, the underlying value system explains why. Only tin we, as managers, really use these facts to improve employee retentivity? Is there a positive approach to keeping people that is more effective than focusing on the negative element of turnover? Our position is "Yes, there is."

Toward Managing Retention

Because managers have habitually concerned themselves with turnover, information technology will be difficult to suspension the habit. Nonetheless, managers must terminate the rituals of finding out why people leave and start investing resources in the positive management of retention. If managers reinforce the right reasons for employees staying and avoid reinforcing the wrong reasons, they cannot merely ameliorate traditional turnover statistics but set up goals for retention. However, they must begin to understand and respect employees as individuals with values that differ from their own.

As a prerequisite to the development of a program to manage retention, certain hard questions must be answered:

  • Why practice employees stay?
  • What are their values for working and for living?
  • What are their ages, sexes, marital statuses, and then on?
  • What are the right and wrong reasons for employees staying in their jobs?
  • How dissatisfied is dissatisfied?

We take obtained some quantitative insight into the first three questions, but the final two may not take a quantitative solution. What is "correct" or "incorrect," and how far an employee may be pushed before he is forced to get out, are moral questions. For these we offer our value judgments.

Ideally, it seems that the goal of managing retentivity would be to create conditions uniform to the turn-ons-plus—that is, some residual between chore satisfaction and environmental reasons. This raises some questions. For example, if employees who do not like their jobs stay because of the "locked-in" features of do good programs, should managers not consider changing benefit programs to reduce inertia?

To begin with, managers might make pensions highly portable, a measure that would tend to reduce inertia just enhance costs. To rest this, it would then be necessary to improve the conditions for satisfaction so that people stay because they want to, non considering they must.

Another influence on inertia is the location of a company. For example, a corporation that locates a new manufactory, offices, or laboratories in towns that are not highly attractive or requires the relocation of many employees has weakened inertia; thus employees are more than likely to leave when they become dissatisfied with their piece of work. Some compensatory maneuver may be chosen for. Again, corporations which locate plants in small towns, and describe primarily from the people who were born and reared in those communities, are edifice in inertia that tends to increment retention and decrease turnover—perchance too much so.

For another attribute, consider corporations with headquarters in New York City. They may find their employees take very depression inertia because it is like shooting fish in a barrel for people to simply get off the subway at a different end, or even become off the elevator at a different floor, and find themselves in a different corporation. That is, they can change jobs without changing their exterior environment. In this case, inertia to stay with the present employer may be very weak, but there might be strong inertia to stay in the same general locale. Naturally, in working toward this balance, companies volition accept to devote some careful idea to the question, "How dissatisfied is dissatisfied?" for its employee groups. Suppose i sets up a scale of chore satisfaction from +10 (very satisfied) to –10 (very dissatisfied). Volition an employee leave when the level is –5? Theoretically, perhaps, he will; but realistically, the respond depends on the strength of inertia.

For example, if the "golden handcuffs" are set with diamonds, in the form of stock options which are exercisable at some distant point in the future, and then inertia is strengthened—that is, until the options are exercisable. At the date of exercise, his inertia will drop to a very low signal, other things being equal; and even if his level of task dissatisfaction has remained constant, information technology may now be great enough to interruption the present inertia level. Once inertia to stay has been broken and the person is in movement on his style out of the company, information technology will accept great force to annul his momentum to leave.

One tin can besides find examples where an employee has stayed with a company well beyond a point where he has a sense of accomplishment and meaning in his piece of work and is waiting only for early retirement. He has probably get a problem to the system, to himself, and to his family. Lucrative early-retirement programs (sometimes known as late belch programs) take become increasingly popular as a ways to break inertia, often to the do good of both parties.

The effects of inertia, of course, are not limited to the employee, simply as well extend to his or her spouse. It is not uncommon to find an employee returning to the home town because the spouse is dissatisfied with the present locale.

In seeking balance, and so, it would be useful for a company to review all do good, pay, location, and other environmental factors, likewise every bit job satisfaction, to determine whether people are staying for the correct or wrong combinations of reasons—always keeping in mind that what is right and wrong to management may non take the same degree of rightness and wrongness to the employee.

Ultimately, rightness and wrongness, whatsoever their specific definitions for individuals in a given company, will require the provision of a piece of work environment that is broadly uniform with the employees' personal goals and their values for working and living. Managers demand to recognize that the "average employee" is only a concept, and develop personnel programs, policies, and procedures that are responsive to the disparate values of employees.2 Simply then is it possible to develop strategies and reinforcements for employees to stay for reasons that are right for both the organization and the individual.

Toward Existential Management

A new work ethic is emerging in this social club. If organizations resist recognition of the change in values for working, stick with a unmarried approach to people, retain the concept of the average employee, and keep to snap on gilded handcuffs, and then:

  • The new generation may non even enter those organizations, only create its ain (or take over existing ones).
  • Present employees who are locked in and turned off may seek third-party intervention to guarantee their correct to chore satisfaction, or their real freedom to leave.

Most organizations historically have been and nonetheless are created and perpetuated past manipulative and conformist philosophies. If direction wants employees to stay for reasons that are right for the individual, the corporation, and the lodge, it must develop existentially managed organizations that truly accept and respect people with differing values. The approach we have taken in this article, while admittedly a "first cut" at simply one aspect of the trouble, may be useful to managers who have recognized the demand for broader views of employment policy.

1. Alfred T. DeMaria, Dale Tarnowieski, and Richard Gurman, Manager Unions? (New York, American Management Association, Inc., 1972).

ii. See our article, "Shaping Personnel Policies to Disparate Value Systems," Personnel, March–April 1973, p. 8.

A version of this article appeared in the July 1973 issue of Harvard Business Review.