This Research Report contains two main parts: first human needs and motivations were studied; then revolutionary changes were offered to different economic sciences.

1. Research and Analysis Project
Research report
Needs and their influence on economy
Vitaliy Shmygin, ACCA

2. 2
CONTENTS
Part 1. Project objectives and overall research approach..............................................................5
1.1. Project objectives and achievements.........................................................................................3
1.2. Analysis of the content theories of motivation. Identification of key internal motivational
factors to study...................................................................................................................................5
1.3. Analysis of process theories of motivation. Identification of key external motivational
factors to study...................................................................................................................................6
1.4. Identification of overall research approach, subject of research and suitable
methodologies....................................................................................................................................7
Part 2. Gathering information about the key factors of motivation of employees in an
organisation.............................................................................................Error! Bookmark not defined.
2.1 Information gathering in the chosen organization. ......................................................................8
2.2 Questionnaire research of employees’ internal motivational factors.Error! Bookmark not defined.
2.3 Questionnaire research of employees’ external motivational factors.Error! Bookmark not defined.
2.4 Sources of ideas for analysis and evaluation..............................................................................7
Part 3. Results, analysis, conclusions and recommendations .........Error! Bookmark not defined.
3.1 Analysis of questionnaire results about employees’ internal motivational factors. ....................9
3.2 Combining internal motivational factors with financial and non-financial incentives................14
3.3 Practical application of research results for designing cost-effective motivational policy........17
3.4 Conclusions about research findings and recommendations for further study. .......................19
Part 4. Application of research findings for changes in different sciences (further reading). 20
4.1. The laws of formation and realization of needs for the processes of biological and social
nature of people. ..............................................................................................................................13
4.2. Reconstruction of demand function and other revolutionary changes in sciences.................21

3. 3
1.1. Projectobjectivesand achievements.
The initial purpose of this Research and Analysis Project (RAP) was:
 To critically review key factors in the motivation of employees in an organization.
Author concluded that this goal can be achieved by applying process approach as a method of
scientific research and analysis. But application of process approach unexpectedly resulted in the
creation of simple but effective model of human needs and motivations, and many gross errors in
different sciences became clearly visible. So in addition to initial goal, other great objectives were
stated and achieved, like:
 to construct simple but effective motivational model of human needs that is applicable to all
economic and non-economic sciences;
 [based on a new model of needs] to formulate objective laws and subjective dependencies
related to formation and realization of human needs;
 [based on the new laws] to reconstruct basic functions, like demand function;
 [based on the new functions] to identify inconsistencies in different economic and non-
economic sciences, committed because of incorrect notion about the needs and motivating
factors of people.
This Research Report contains two main parts: first human needs and motivations were
studied; then revolutionary changes were offered to different economic sciences. General structure
of the Research Report and its comparison with the current state of economic sciences is
demonstrated in the figure 1.1.
Taking into account innovative character of the performed researches and obtained results, this
paper could be considered as offering new scientific idea. So let us start our journey into the terra
incognita of employee motivations, human needs and consumer behaviours!

4. 4
Areas to be covered by the presentation
(structure of the RAP)
Subject + methodology
Newmotivationaltheory Contenttheoriesof motivation
Model of needs and
motivations
Laws of needs
Laws of utilities of
products
Change of functions
Changes in theoretical
economic sciences
Changes in practical
economic sciences
Law of diminishing
marginal utility
Functions
Subject
Model of needs
H
U
M
A
N
N
E
E
D
S
C
O
N
S
U
M
E
R
P
R
O
D
U
C
T
S
HUMAN LIFEPROCESSES
Theoretical economic
sciences
Practical economic
sciences
Model of needs Model ofneeds
Methodology
Process of
motivation
Process of
motivation
Process of
motivation
Processtheoriesof motivation

5. 5
Part 1. Application of process approach to the study of needs and
motivations.
1.2. Analysisof the contenttheories of motivation.Identification of key
internal motivational factors to study.
Motivation theories are customary subdivided into content and process groups (Tietze, n.d.).
Content theories, also called needs theories, try to identify what our needs are and relate
motivation to the fulfilment of needs. They focus on the importance of determining 'what' motivates
people. From the viewpoint of the content theories, motivation is a force that works to actuate our
behaviour from within our minds. So we can conclude that content theories are good in developing
internal (intrinsic) motivational factors like human necessities, desires, etc. Table 1.1 (Gordon et
al., 1990, p.428) contains some most popular content theories of motivation with last column
added for our conclusions and choices from practical viewpoint.
Table 1.1
Comparison of human needs in the content theories of motivation
Herzberg
two-
factor
theory
McClelland
achievemen
t motivation
Alderfer’s
ERG theory
Maslow’s needs
pyramid
Needs to address from practical
viewpoint, in accordance with process
approach methodology
Motivators
Power
Achievement
Growth
Self-actualization Learning (knowledge acquisition)
Esteem Working (useful application of knowledge)
Hygiene
Affiliation Relatedness Social relations
Socialising (“social degradation” in many
cases)
Existence
Safety
Biological
Physiological
It is difficult to use content theories in practice, because most of the needs there are more like
final results or emotional states, but not actual work processes to which we should motivate our
employees. We can apply deductive approach methodology (Dudovskiy, n.d.), which supposes
first a critical review of theories and formulation of hypothesis about the possibility of their practical
use, as follows:
1. Maslow’s self-actualization and esteem (Maslow, 1943) are related to Alderfer’s growth
(Alderfer, 1972), to McClelland’s power and achievement needs (McClelland, 1985), and to
Herzberg’s motivators (Herzberg, Mausner and Snyderman, 1959). How can we use such
formulated employees’ needs for our organization’s practical purposes? We want to motivate
employees to learn how to do the task; then to work enthusiastically. So we would try to
organize our motivation system in such a ways, that employees understand: self-actualization,
esteem, career growth and power can be achieved through (equal to) the processes of learning
and working. Taking into account our chosen process approach methodology, we should
research employees’ needs in learning and working processes with the goal to increase them.
2. Social relations, relatedness, affiliation are recognized by theorists as the most popular group
of social nature needs. We will welcome if employees of the chosen organization are on good
terms with each other, but we would not like them to spend too much time on entertainment or
social relations instead of work and trainings. For our practical purposes we would try to
organize our motivation system in such a ways, that employees understand: it is not good to
waste precious working or learning time on useless activities. We want to study this group of
needs in order to control them (not necessary to increase). So we identify third group of needs
to address – socialising (for practical purposes in many cases it could be also called “social
degradation”).

6. 6
3. Perhaps all theorists accept that human has two natures: biological and social. We identify
fourth group of employees’ needs to address – biological.
Motivational theorists really study more emotions than needs in working or learning. Perhaps
this is because the categories of needs and emotions are not yet clearly differentiated in
philosophy. In our researches we will connect human needs with live processes as follows:
Need – a mechanism of self-induction, forcing an organized system to participate in any of
the life processes.
Connecting needs with life processes (and consumer products utilized in life processes) is very
important for application of needs model in different economic and non-economic sciences.
Having identified employees’ needs to address, process approach allows identification of key
internal motivational factors influencing those needs. These factors (or forces) and mechanism of
their impact are shown schematically in fig.1.1, a simple model of human needs, built based on the
analysis of content theories of motivations and process approach logic.
Fig. 1.1. Factors influencing formation of the needs in the processes of biological and
social nature of people. Where Necb, Desb, Nb; Necs, Dess, Ns are necessities, desires and needs
of people in the processes, respectively, of biological and social natures.
Desire – this factor can have positive or negative (disgust) values. Some people are very much
governed by their desires; others have strong willpower. Hence willpower is the second internal
motivational factor, or rather coefficient Cv .є[0;1], characterising reflection of desires in human
needs.
Necessity – like “desire”, this factor can have positive or negative (harm) values. Necessity
influences the need of human if he is aware of it or feels it. Hence awareness of necessity is
another factor, or rather coefficient Ci.є[0;1], characterising reflection of necessity in human needs.
While animals are organisms of biological nature, people have two natures: biological and social.
Factors influencing needs of social nature are mediated by consciousness.
1.3. Analysisof process theories of motivation.Identification of key
external motivationalfactorsto study.
The process theories of motivation are: Skinner’s reinforcement theory (Ferster, Skinner,
1957), Victor Vroom's expectancy theory (Vroom, 1964), Adam’s equity theory (Adams, 1963),
Locke’s goal setting theory (Locke, Latham, 1990), etc. These theories study factors and
Consciousness
Dess
Necs
Ns
Processes ofsocialnature
Ci
Ci
Necb Desb Nb
Processes ofbiologicalnature
Cv
Cv

7. 7
processes which force people to act in a certain way. Human needs and internal motivational
factors (main focus of content theories of motivation) are considered as only one element of
decision making, and we can conclude that process theories are good in developing external
(extrinsic) motivational factors. These factors are far more numerous than internal, as a result
process theories are far more difficult to compare between them. There were many attempts to
combine process theories (Porter, Lawler, 1968), but the results were criticized as too complex and
limited in practice. Perhaps the only thing that all theorists confirm is that external factors of
motivation can be:
1. Financial. Mainly monetary in nature, like wages, salaries, bonuses, perquisites, profit sharing.
But could also be money equivalents, like shares, share options, retirement benefits, paid
vacancies, housing, etc.
2. Non-financial. Some of them are: status, organisational climate, career opportunity, job
enrichment, etc.
We will identify financial and non-financial as two groups of key external factors to study.
1.4. Identification of overallresearch approach,subjectof research and
suitable methodologies.
Based on the analyses of motivation theories, we could say that content theories focus on
WHAT, while process theories focus on HOW human behaviour is motivated. (Krash, Villam, 2013)
Or alternatively, content theories focus on the subject of research, while process theories focus on
methodology. Following this conclusion, author decided:
1. Identify main subject of research: “motivation”, as the influence on human needs and
behaviours by motivational factors. We will try to unite internal and external factors in one
simple model of needs.
2. Identify process approach as an overall research approach.
Process approach methodology considers its subject in continuous movement and
development, and views an organisation as a set of interrelated activities that use inputs to deliver
an intended result. Other methodologies useful to achieve our main goal are (Winch et al., n.d.):
 Deductive or inductive? Deductive approach is preferred, which begins with existing theories,
concepts and formulates hypothesis that are later tested and confirmed.
 Quantitative or qualitative? A qualitative approach is preferred, which means conducting
interviews, questionnaires or observing behaviour.
 Analysis or synthesis? Analysis is preferred, which supposes breaking down intellectual or
substantial whole into parts and then studying components.
1.8 Sources of ideas for analysis and evaluation.
This RAP emerged due to coincidence of two ideas sourced by popular theories of motivation
and three ideas conceived by RAP author.
The idea of identifying motivation as the influence on employee’s needs emerged mainly due to
content theories of motivation, especially Maslow’s needs pyramid (Maslow, 1943), Alderfer’s ERG
theory (Alderfer, 1972). The idea to apply process approach to the study of employee’s needs and
motivations was influenced by process theories of motivation, especially Skinner’s reinforcement
theory (Ferster, Skinner, 1957).
For correct application of process approach to the study of human needs, author of this RAP
conceived idea to identify category of need as it was stated in this RAP; and then created a new
process-based model of human needs and motivations. The idea to classify needs as was

8. 8
proposed in this new model and the idea to explain processes of formation, realization and
manipulation of needs by the influence of internal motivational factors (like Desires, Necessities,
Willpower) emerged due to this RAP author’s own reflections, analyses and observations.
Newly offered process-based needs model caused several other important ideas and
discoveries related to different economic sciences, which were conceived by the author and
presented in the second part of the Research Report.
1.5 Information gatheringin the chosen organization.
Taking into account humanitarian nature of researches on motivation, the main information
gathering technics were questionnaires. Blank copies of questionnaires and summaries of the
main points in responses can be found in RAP Appendices.
All questionnaires were completed by the employees of Medical Home Odrex, the leading
private clinic, which provides diversified medical services of European standards (Medical Home
Odrex, 2017). The main reason for choosing this organization was that its employees represent
great diversity of age, income, ethnicity, educational groups, as it is typical for multiservice medical
establishment. Due to this diversified background and the fact that questionnaire participants
mostly answered similarly, characterizing their choice of answer as “obvious”, the results should
reflect the attitude of the majority of people.
All Odrex employees were informed about the equal opportunity to participate in the voluntary
questionnaires, 33 persons decided to take part in it from the total of about 300 employees. So
sample size of 11% of the population was achieved that is normal rate for voluntary self-selection
sampling technic. Author of the RAP considers that this sample size is representative enough to
make conclusions about the population of Odrex employees and it is appropriate for the objectives
of this RAP.
There are some limitations of self-selection sampling, like:
 decision to participate in the study may reflect some inherent bias in the characteristics of
the participants;
 self-selection could lead to exaggerating some particular finding.
Despite its potential limitations, self-selection sampling is a popular technique when human
characteristics are subjects of research. It delivers correct opinion about the population if
questionnaires are understandable and ethical issues, like confidentiality, are considered.
Sometimes it is the only technique acceptable for employees or management of the subject
organization, like it was the case with this research.
Replies to some questions and statements could be potentially detriment to the relations of
respondents with employers, colleagues or other parties. So questionnaires were confidential and
anonymous to insure frankness of responses and avoid braking moral rules and ethical principles.
The choice was offered to respondents whether to identify themselves in person identification
questions or not.
Two simple questionnaires were carried out to gather information about employees’ internal
motivational factors in MH Odrex:
 Questionnaire 1 “Assessment of influence of desires and necessities on motivation” (Appendix
1), and
 Questionnaire 2 “Assessment of influence of willpower and awareness of necessity on
motivation” (Appendix 2).
These two questionnaires together served to construct the practical model of needs of
averaged Odrex employee and compare it with the needs models in the most popular content
theories of motivation.

9. 9
Two questionnaires were carried out to gather information about external motivational factors:
 Questionnaire 3 “Assessment of influence of financial and non-financial incentives on
motivation” (Appendix 3). Results of this questionnaire allowed adding external factors to
internal and analysing their interaction in one model of needs.
 Questionnaire 4 “Assessment of effectiveness of external motivational factors” (Appendix 4)
served for designing motivational policy in the chosen organisation and demonstration of
practical applicability of the new process-based model. Next 10 factors were investigated:
 Fixed salary.
 Performance bonuses.
 Fringe benefits.
 Additional paid leave.
 Career development.
 Continuing training, education.
 Challenging, atypical work.
 Team spirit.
 Sound human relations.
 Entertaining events.
1.9 Analysisof questionnaire results aboutemployees’ internal
motivationalfactors.
Averaging arithmetically responses to questionnaire 1: “Assessment of influence of desires and
necessities on motivation” (Appendix 1), we obtain:
1. Needs in the processes of social nature of people:
 Processes of knowledge acquisition (learning). Very hateful processes for most of respondents.
Hence, a-priori human desire to participate in these processes takes average value of Dess.l.=–
0.4u (utils). However Necs.l.=0.4u as of all the processes of social nature the learning process is
most useful.
 Processes of useful application of knowledge (working). Less hateful processes. Accordingly,
a-priori desire to participate in them is Dess.w.=–0.2u. Similarly, their usefulness on average is
Ness.w.=0.2u.
 Processes of socialising (or “social degradation”– entertainment, waste of time, etc.). At the
time when person does not acquire knowledge and does not apply them usefully, his social life
is not only empty and meaningless, but frankly harmful – person at this time is losing
knowledge and squandering resources. Social degradation is anti-process that is damaging to
the social nature of human. The necessity for this process is negative and depends on its
intensity. It could even be calculated as: Ness.d.= –(Ness.l.+Ness.w.)/2= –(0.4+0.2)/2= –0.3u The
desire to participate in this process is formed a-priori by laziness and feeling of pleasure
Dess.d.=0.3u.
Economy, like other social sciences, is interested first of all in the processes of social nature of
people. Maybe the proposed list of these processes is incomplete and it is necessary to make
changes there? But looks like these three types of processes fully encompass social life of people.
Person belongs to a social nature at any time when he either acquires knowledge, or uses them for
some useful purposes, or is wasting time on entertainments. By acquiring knowledge the person
creates social nature inside himself. By usefully applying knowledge the man creates this nature
around himself. By participating in the processes of social degradation – the person is destroying
the social nature. All other processes in human life are of biological nature.

10. 10
2. Needs in the processes of biological nature of people. The necessity for these processes
depends on their intensity. In this paper, necessity is assessed on the basis of their "unitary
importance" as 1 or –1:
 The process of satiation of the body with water (the thirst quenching). It is all-important
biological process. When organism necessitates water (Necb.=1u), it intuitively feels thirsty
(Desb.=1u).
 The process of satiation of the body with energy and chemical elements (the food
consumption). It is also a very important process in the life of organism, Necb.=1u. At the same
time human feels hunger, Desb.=1u.
 The process of sleep. With the necessity of this process, human feels sleepiness:
Necb.=Desb.=1u.
 The process of ensuring security of continued existence. The desire in this process is formed
intuitively by the sense of fear, Necb.=Desb.=1u.
 The disease process. It is an anti-process that impacts destructively on the biological nature of
organism, Nesb.=–1u. The desire to participate in this process is formed by the sense of
discomfort, pain, Desb.=–1u.
The presented list of biological processes is incomplete. These data, however, are enough to
make a number of conclusions1
:
1) biological needs are characterized by instinctive nature of their origin, flow and satisfaction;
2) biological nature of people is perfect in the sense of coincidence of the necessity and the
desire to participate in the biological life process;
3) social nature of people is not perfect (maybe even opposite), since a-priori desire to participate
in the process of social nature is opposite to its necessity.
Arranging in tabular form in lines – the life processes, and in columns – the factors, which
determine employees’ needs for these processes, and filling in the values that characterize the
contribution of these factors to the formation of the needs in these processes, we get Table 3.1 for
a theoretically modelled averaged Odrex employee. We disregard for some time the influence of
willpower and information on the formation of needs of the social nature of this “balanced person”
(i.e. Ci.=Cv .=α), the biological needs (instincts) are not satisfied.
Table 3.1
Influence of internal motivational factors of desires and necessities on the averaged MH
Odrex employee
Nature of
processes
Processes Nec Des Needs (with calculation)
Processes
of social
nature
Knowledge acquisition (learning) 0.4 –0.4
Ns.l.= Ci.×Ness.l+ Cv .×Dess.l.=
0.4α–0.4α=0
Useful application of knowledge (working) 0.2 –0.2
Ns.w.= Ci.×Ness.w+ Cv .×Dess.w.=
0.2α–0.2α=0
Socialising (social degradation) –0.3 0.3
Ns.d.= Ci.×Ness.d+ Cv .×Dess.d.=
–0.3α+0.3α=0
Processes
of
biological
nature
Thirst quenching 1 1 Nb=Nesb×Ci.×Cv .=1
Food consumption 1 1 Nb=Nesb×Ci.×Cv .=1
Sleep 1 1 Nb=Nesb×Ci.×Cv .=1
Ensuring security 1 1 Nb=Nesb×Ci.×Cv .=1
Disease –1 –1 Nb=Nesb×Ci.×Cv .=–1
If we add to Table 3.1 the results of questionnaire 2 “Assessment of influence of willpower and
awareness of necessity on motivation” (Appendix 2), where Ci.=0.5 (awareness about the
necessity is in the middle level for people) and Cv .=0.7 (the needs to a large extent are formed by
desires, – a man of weak willpower), we obtain Table 3.2 with:
 The need for a process of knowledge acquisition: Ns.l.=0.5×0.4+0.7×(–0.4) =–0.08;
1
These conclusions lead to identification oflaws related to formation and realization of needs,to reconstruction ofbasic
functions (like demand function), and many other importantdiscoveries formulated later in this Research Report.

11. 11
 The need for a process of useful application of knowledge: Ns.w.=0.5×0.2+0.7×(–0.2)=–0,04;
 The need for a process of social degradation: Ns.d.=0.5×(–0.3)+0.7×0.3=0.06.
Table 3.2
Influence of internal motivational factors on MH Odrex employees
Processes Nec Des Ci. Cv. N
Learning (knowledge acquisition) 0.4 -0.4 0.5 0.7 -0.08
Working (useful application of knowledge) 0.2 -0.2 0.5 0.7 -0.04
Socialising (social degradation) -0.3 0.3 0.5 0.7 0.06
Processes of biological nature 1 1 1 1 1
Comparison of the model of averaged Odrex employee with content theories of motivation is
depicted in Fig. 3.1 (Gordon et al., 1990, p.428). In Table 3.3 we critically review mentioned in Fig.
3.1 and Table 1.1 motivational theories of Herzberg (1976), McClelland (1985), Alderfer (1972),
Maslow (1943) and newly constructed process-based needs model in relation to the research
results of key internal motivational factors influencing Odrex employees.
Herzberg
two-factor
theory
McClelland
achievement
motivation
Alderfer’s ERG
theory
Maslow’s
needs pyramid
Process-based model of
needs
Motivators
Power
Achievement
Growth
Self-actualization -0.08 Learning
Esteem -0.04 Working
Hygiene
Affiliation Relatedness Social relations 0.06 Socialising
Existence
Safety
1 Biological
Physiological
Fig. 3.1. Comparison of the needs of the averaged MH Odrex employee with content
theories of motivation
Table 3.3
Critical review of popular content theories of motivation based on the results of research
among MH Odrex employees
Criteria
reviewed
Two-factor
theory
(Herzberg, 1976)
Achievement
motivation
(McClelland,
1985)
ERG theory
(Alderfer, 1972)
Needs
pyramid
(Maslow,
1943)
Process-
based
model
Model contains
needs or
factors
influencing
needs
Factors Needs Needs Needs Both
Notion of
needs (or
factors)
Hygiene factors
recognize basic
necessities;
motivators
identify desires,
emotional desires
More like
emotional states
More like
processes
More like
emotional
states
Processes
Research
findings
confirm or
contradict
theory
Existence of
factors is
confirmed
generally, but
Herzberg studied
Differences
between
individuals are
confirmed.
Change of
Differences
between
individuals are
confirmed. But
difference in
Confirm for
averaged
Odrex
employee.
Contradict
Confirm

12. 12
their influence on
satisfaction/
dissatisfaction
(not on needs).
Model describes
averaged
employee, but
factors act very
differently on
Odrex individuals
needs over time
or change of
employee’s
personality are
not sufficiently
reflected in the
model (lack of
factors
influencing
needs)
intensity of needs
depending on
their “level” is
confirmed only for
averaged Odrex
employee. Model
lacks flexibility of
needs over time
(no factors)
for many
individuals,
who first
prioritize
higher level
needs
(learning,
working)
Conclusion and
recommendatio
ns about
practical
application
Complicated and
limited
applicability. Lack
of the needs
complicates
specific
motivations for
different
individuals and
utilization in other
sciences
Complicated
applicability.
Convince
employees that
learning and
working will
result in
“Affiliation”,
“Power” or
“Achievement”
Complicated
applicability.
Convince
employees that
learning and
working will result
in “Growth” and
“Relatedness”
Limited.
Easily
applicable
for
averaged
employee;
controversi
al for
motivating
individuals.
Easily
applicable.
Recommend
ed.
Thus, critical review of key internal motivational factors in MH Odrex and comparison of results
with popular content theories of motivation in Table 3.3 and Fig.3.1 confirms relevance of content
theories, especially for averaged Odrex employee. These theories have many similarities between
themselves and with results of our process-based researches. They correctly emphasize great
influence of human emotions, biological (physiological) and higher level needs on motivation to
work and training processes. But researches of American psychologists lacked something
methodological:
 Lack of clearly defined category of need (subject) resulted in unclear notion of need. It
complicates practical applicability.
 Lack of clearly defined overall approach (methodology) resulted in incompleteness of
models: no factors influencing needs or no mechanism of needs formation (no needs) if
factors are present. It limits practical applicability.
Application of process approach to the study of needs, as it was done in this RAP, allows
identification of influencing factors and resolves perhaps all the criticisms of content theories. For
example, these theories are criticized for failing to reflect differences between individuals. But
Table 3.4 presents a model of man, whose needs are dictated solely by his a-priori desires (Ci.=0,
Cv .=1, biological instincts are completely satisfied).
Table 3.4
Model of needs of a person with Ci.=0, Cv.=1, whose biological instincts are satisfied
Nature of
processes
Processes Nec Des Needs
Processes of
social nature
Knowledge acquisition 0.4 –0.4 Ns.l.=0.4×0+(–0.4)×1=–0.4
Useful application of knowledge 0.2 –0.2 Ns.w.=0.2×0+(–0.2)×1=–0.2
Social degradation –0.3 0.3 Ns.d.=–0.3×0+0.3×1=0.3
Processes of
biological nature
Processes of biological nature
(instincts)
0 0 Nb=Nes=Des=0
Conclusion can be drawn from Table 3.4 about the hedonistic2
character of the needs of social
nature for this person. He does not want to recognize his social role and is looking for the
maximum satisfaction of his a-priori desires (Petri, Govern, 2013, p.206).
2
Hedonism – is a school ofthought, according to which the meaning oflife is to maximize net pleasure (Bruton,2016).

13. 13
On the other hand, Table 3.5 presents a person, whose needs of social nature are dictated
solely by the necessities (Ci.=1, Cv.=0, instincts are satisfied). This man completely controls his a-
priori desires (has exceptional willpower) and is fully aware of the necessity of various processes
of social nature.
Table 3.5
Model of needs of a person with Ci.=1, Cv.=0, whose biological instincts are satisfied
Nature of
processes
Processes Nec Des Needs
Processes of
social nature
Knowledge acquisition 0.4 –0.4 Ns.l.=0.4×1+(–0.4)×0=0.4
Useful application of knowledge 0.2 –0.2 Ns.w.=0.2×1+(–0.2)×0=0.2
Social degradation –0.3 0.3 Ns.d.=–0.3×1+0.3×0=–0.3
Processes of
biological nature
Processes of biological nature
(instincts)
0 0 Nb.=Nes=Des=0
We can draw conclusion from Table 3.5 about the high level of social development of this
person. He demonstrates the need to acquire and to usefully apply knowledge.
Main criticisms of content theories, resolved due to application of process approach to the study
of needs, are reflected in Table 3.6 (Sydney TAFE, n.d.).
Table 3.6
Major criticisms of the content theories of motivation.
Criticism of content theories Resolution due to process approach
Rigidity, failing to recognise that individual
needs change constantly.
Factors “Necessity” and “Desire”, which change
over time, add flexibility.
Describing majority, but not individual
persons’ differences.
Factors “willpower” and “awareness of necessity”
(Cv ., Ci.), which do not change so often,
characterise individuality of person.
Theories were many times tested, but
results were inconclusive, because too
many biases and difficulties emerged.
Process approach offers practicable model and
identifies factors. It is easier to test.
Ignoring the process that connects human
needs with behaviour is criticized as “far too
simplistic”.
Connection between factors and human
behaviour is straightforward with process
approach.
Focus on work-related needs: ignoring other
aspects of human lives, little influence on
other disciplines.
Life processes connect needs with products.
Process-based needs model will greatly influence
many economic and non-economic sciences.
4.1. The laws of formation and realizationof needs for the processesof
biologicaland social natureof people.
Based on the conclusions from the analysis of questionnaire results about employees’ internal
motivational factors, presented in Part 3.1 and in Tables 3.1, let us formulate a string of laws:
 For the processes of biological nature of people:
1) The law of coincidence of the necessity and desire of people to participate in the processes of
biological nature (the law of formation of the biological nature needs):

14. 14
For a balanced organism3
the desire to participate in the process of biological nature is
equal in magnitude and direction (sign) with the necessity of this process for this organism.
2) The law of instincts satisfaction (the law of realization of biological nature needs):
The need of organism for instinctive process decreases with the participation of the
organism in this process.
The functioning of the laws of formation and realization of the needs of organism in the
process of biological nature are explained by the physiology of instinctive processes.
 For the processes of social nature of people:
3) The law of opposites of necessities and desires of people to participate in the process of social
nature (the law of formation of the needs of social nature):
For a balanced organism a-priori desire to participate in a process of social nature is
equal in magnitude and opposite in direction (sign) with the objective necessity of this
process for this organism.
4) From the demonstrated in Tables 3.1 model of formation of social needs of people and from the
presented above reasoning within the process approach to the study of the needs, the
functioning of the law of satisfaction of human needs in the processes of social nature is
not found!
1.10 Combininginternalmotivationalfactors with financialand non-
financialincentives.
One of our RAP sub-objectives was to research interactions between internal and external
motivational factors. To achieve this sub-objective, we will add to Fig.1.1 (our simple model of
human needs) two groups of key external factors identified in Part 1: (1) financial and then (2) non-
financial incentives. Results of questionnaire 3: “Assessment of influence of financial and non-
financial incentives on motivation” (Appendix 3) will be used as raw data of this analysis.
(1) Financial incentives are based on the influence of the needs for processes of biological
nature (PBN) on the needs for processes of social nature (PSN):
Needs for the processes of biological nature of human have a subjective, mediated by
consciousness, indirect impact on the needs for processes of social nature.
Schematically, this dependence is shown in Fig. 3.2.
3 Balanced organism means that for it Ci.=Cv.
Ns
Processes ofbiologicalnature (PBN) Processes ofsocialnature (PSN)
Consciousness
Dess
Necs
Cv
Ci
Cv
NbNecb Desb
Ci

15. 15
Fig. 3.2. The influence of the needs of human biological nature on the formation of needs
for the processes of social nature. Where Necb., Desb., Nb., Necs., Dess., Ns.– the necessities,
desires and the needs of people for, respectively, PBN and PSN; dotted lines denote indirect
(through the consciousness) impact of the needs for PBN on the needs for PSN.
Financial incentives have the greater effect when biological needs of person are less satisfied.
Maximum satisfaction of the needs for PBN of people in the long term supposes the use of the
maximum amount of knowledge, i.e. Nb affects both the need for application of knowledge and the
need for their acquisition. However, from the results of questionnaire 3: “Assessment of influence
of financial and non-financial incentives on motivation” (Appendix 3), we can make conclusion that
because of high urgency of instincts satisfaction, biological needs of human more often influence
the need for urgent work (application of already accumulated volume of knowledge), that is:
Ns.w.motiv ated =Ns.w.+Nb (3.1)
where Ns.w.motiv ated – the need for useful application of knowledge influenced by the needs of
biological nature (Nb);
Ns.w.– the need for the application of knowledge without urgent influence of Nb.
(2) Non-financial incentives are based on the influence of emotions (Dese.) on the needs for
processes of social nature (PSN):
Emotions have a mediated by consciousness motivational impact on the need for the processes
of social nature of human.
Schematically, this dependence is shown in Fig. 3.3.
Fig. 3.3. Subjective influence of the needs in the processes of biological nature (basis of
financial incentives) and emotional desires (basis of non-financial incentives) through the
consciousness of person onto the needs for the processes of social nature. Where Necb.,
Processes ofbiologicalnature Processes ofsocialnature
Necb
Ci
Desb Nb
Financial
incentives
Cv
Consciousness ConsciousnessConsciousness
Dese
Non-financial
incentives
Consciousness Ns
Necs
Ci
Dess
Cv

16. 16
Desb., Nb., Necs., Dess., Ns.– the necessities, desires and needs for, respectively, PBN and PSN of
human; dotted lines denote indirect (through consciousness) influence of the needs for PBN and
emotional desires (Dese) on the needs for PSN.
The impact of person’s emotional and spiritual realms, his moral and cultural values on PSN is
indisputable. Except for the person himself, it is influenced by other people (Lee, 2015). From the
results of the questionnaire 3 also follows that while the needs for processes of biological nature
(Nb) mainly influence human need for urgent useful application of knowledge (Ns.w.) and only in
positive direction, emotions can have an active influence on the needs for any of the processes of
social nature and in any direction.
The influence of emotions and the needs for PBN onto the needs for PSN can be combined in
the formulas:
Ns.motiv ated =Ns.+Nb.+Dese. (3.2)
External Motivation=∆Ns.motiv ated =Nb.+Dese. (3.3)
where Ns.motiv ated – total need for PSN;
Nb., Ns.– needs for the processes of biological and social natures;
Dese.– human emotional desire to participate in PSN;
∆Ns.motiv ated.– change of the need in PSN under the influence of financial and non-financial
incentives.
Influence of motivation on the averaged Odrex employee (Ci.=0.5; Cv.=0.7) is displayed in
Table 3.7.
Table 3.7
Influence of motivation on the averaged MH Odrex employee (Ci.=0.5; Cv.=0.7)4
Processes Nec Des Ci. Cv. N
External Motivation
NtotalNb
(financial)
Dese
(non-financial)
∆Ns.m.
Learning (knowledge
acquisition)
0.4 -0.4 0.5 0.7 -0.08 0.30 0.30 0.60 0.52
Working (useful
application of
knowledge)
0.2 -0.2 0.5 0.7 -0.04 0.65 0.30 0.95 0.91
Socialising (social
degradation)
-0.3 0.3 0.5 0.7 0.06 0.05 0.20 0.25 0.31
Processes of
biological nature
1 1 1 1 1 – – – 1
Conclusion can be drawn about the high level of motivational influence on the correction of
needs and behaviour of Odrex employees. Especially strong effect is achieved by combination of
financial incentives and internal factors, influencing the needs in working processes
(Ns.w.total=0.91u). This analysis of Table 3.7 data can be used for designing cost-effective
motivational policy. If we want to increase employees’ needs in the processes of acquisition and
useful application of knowledge, and we have found that financial incentives mostly influence the
needs of Odrex employees in the process of work, then motivational strategy should be:
 Connect financial incentives (like fixed salary, performance bonuses, etc.) with work activities
and work results.
 Non-financial external motivational factors (like career development, team spirit, etc.) influence
working and learning processes equally. But we will connect non-financial incentives more with
employees’ learning activities, as work processes will be well influenced by financial tools.
4
Calculations for Table 3.7 are in spreadsheetAppendix10.

17. 17
1.11 Practical applicationof researchresults for designingcost-
effective motivationalpolicy.
Averaging arithmetically responses to questionnaire 4: “Assessment of effectiveness of
external motivational factors” (Appendix 4), we obtain Table 3.8, which reflects current influence of
available to Odrex management financial and non-financial incentives on different types of
employees.
Table 3.8
Influence of external motivational factors on MH Odrex employees5
.
External motivational factors
Average
influence
on all
employees
Average for
employees with
dominant
learning needs
(creative
people)
Average for
employees with
dominant
working needs
(workaholics)
Average for
employees with
dominant
socialising
needs
(hedonists)
Financial incentives:
Fixed salary 0.92 0.88 0.95 0.93
Performance bonuses 0.61 0.81 0.90 0.30
Fringe benefits (insurance
coverage, transportation to work,
etc.)
0.82 0.75 0.85 0.83
Additional paid leave 0.79 0.81 0.50 0.97
Non-financial incentives:
Career development 0.82 0.88 0.85 0.77
Continuing training, education 0.52 0.88 0.65 0.23
Challenging, atypical work 0.42 0.81 0.35 0.27
Team spirit 0.65 0.56 0.45 0.83
Sound human relations 0.67 0.63 0.40 0.87
Entertaining events 0.36 0.25 0.20 0.53
Analysing Table 3.8 data, we can make next recommendations for designing cost-effective
motivational policy in MH Odrex.
Financial incentives are very strong motivational factors for all types of Odrex employees. We
have decided earlier to connect them with work activities.
 Fixed salary is the strongest external motivational factor. There is no ground for conclusion that
employees of any group want to be paid more or less than others. When setting salary scales it
is recommended to emphasize such work-related criteria as:
 quantity of work (working hours) and shift schedule;
 difficulty and stressfulness of work;
 scope of work responsibilities;
 qualification, education and skills requirement.
Fixed salary dominates considerably over such motivational factors in MH Odrex as team spirit
and sound human relations. Therefore equalisation of wages is not recommended, rather the
opposite. But fair and clear fixed salary scales and policies should be established to avoid
disappointment of employees in this factor.
5
Calculations for Table 3.8 are in spreadsheetAppendix9.

18. 18
 Performance bonuses have special impact on employees with dominant needs in working and
learning processes, though hedonists are not much motivated by this tool. It is better to attach
bonuses not only to working, but also to learning activities. This will additionally motivate
people with learning needs; encourage more creativity; and offers choice for hedonists to
develop themselves either in knowledge acquisition, or in work processes. Working and
learning criteria in bonuses system can be:
 quantity of work activities performed at satisfactory, good, and excellent levels;
 clients' satisfaction by the medical services provided;
 offering of innovative practices to colleagues and management, reflected in the quantity
and especially quality of job instructions and procedure manuals prepared about:
 new effective methods of patients treatment;
 efficient ways of performing tasks;
 economic ways to use scarce resources (Brewer, 2010)
Health professionals’ motivation to work has a significant influence on the quality of services
and image of medical establishment. Odrex competitive strategy is based on the high quality
and innovative methods of medical treatments (Medical Home Odrex, 2017). Considerable
bonuses and active promotion of bonus program should be beneficial for company, even if it is
an expensive motivational tool.
 Fringe benefits (insurance coverage, transportation to work, etc.) is a very strong factor. Its
impact is similar to fixed salary. Maybe additional researches would give interesting results if
employees are grouped based on age, social status, marital status, and other personal
characteristics. But such research is outside the scope of this RAP, because it would require
different approach to sampling, very different analysis and modelling technics, questionnaires
would not be strictly anonymous with many questions related to personality of respondent and
hence special analysis of biases can be required, etc. Based on the results of our limited
research of this motivational factor, it is recommended to allocate fringe benefits to Odrex
employees according to the same work-related criteria, as for fixed salary. Difference between
these two factors is that fringe benefits are more flexible and less expensive than fixed salary,
but some employees can become demotivated when payments are terminated. Besides, strict
controls are required over fringe benefits to avoid fraud and unfair allocation.
 Additional paid leave is a strong but expensive motivational tool. It impacts employees
differently. Organization can gain from giving additional leave to creative people, especially if
they need to prepare themselves for challenging, atypical work. Contrariwise, hedonists are
unlikely to spend additional time on continuing education or preparation for challenging tasks. It
is recommended to offer additional leave based on anticipated challenging tasks (not on past
work results).
Non-financial incentives are quite strong motivational factors for all types of Odrex
employees. We have decided earlier to use non-financial incentives mainly for motivation to
knowledge acquisition processes.
 Career development is the strongest non-financial motivational factor, equally important for all
groups of employees. This tool should have considerable influence on willpower (Cv.),
comprehension of necessity (Ci.), and need for knowledge acquisition if career development in
MH Odrex is based on such criteria as:
 professionalism;
 advanced education;
 good track record of resolving atypical tasks;
 knowledge of related work activities;
 knowledge of other disciplines useful for career, like management, information
technologies, foreign languages.

19. 19
 Continuing training, education strongly influence creative people and workaholics, but does not
motivate hedonists. It is recommended to offer different types of trainings and education
possibilities to different groups:
 Offer access to databases, professional newspapers and magazines for people with
dominant learning processes. Self-education is the best way of education for such
employees.
 Offer on-the-work trainings, work mentoring programs and experience sharing for
employees with dominant working processes. Such people want to understand work
activities, like to perform well-defined tasks, and confused if work instructions are
controversial.
 Organize additional controls and supervision over hedonists. It is difficult to motivate such
people to learning activities. But if patients’ lives depend on adequate trainings and
education of these employees, then it will be more effective to instruct exactly: what should
be learned, when training results will be checked, and what actions can follow if results are
satisfactory/ non-satisfactory.
 Challenging, atypical work is a weak factor, influencing only employees with dominant learning
processes. Next procedures could be used for motivation and successful completion of atypical
tasks:
 Professional managers should first analyse adequate resources and correct scope of
authority and responsibility allocated to new work, effective performance management
systems should be in place. Then try to find duly motivated creative people to perform
atypical task.
 When challenge is successfully resolved, organize sharing of experience with other
employees; prepare written instructions.
 Reward creative people who resolved the task.
 Team spirit influences strongly hedonists. It is recommended to reassess the principles of
performance measurement and reward allocation in order to increase the interest of creative
people and workaholics in team work. Organization can also benefit if teams are formed from
people of the same type. This can add harmony and increase teams’ effectiveness.
 Sound human relations influence considerably creative people and hedonists, but have little
impact on workaholics. It is advised to avoid disturbing workaholics from work activities, but
encourage sound relations, sharing of knowledge and experiences among employees of other
groups.
 Entertaining events is the weakest motivational factor. If not required by traditions, avoid events
or allow employees a choice of visiting them.
1.12 Conclusions and achievements of Part1 abouthumanneedsand
motivations.
The initial purpose of the RAP, “to critically review key factors in the motivation of employees in
an organization”, has led to the analysis of both internal and external motivational factors and to
practical recommendations about designing cost-effective motivational policy in the chosen
organisation. Several important research findings were made during preparation of the RAP:
 Popular content theories of motivation were analysed and changes offered to needs models in
order to make them more practicable.

20. 20
Special attention was devoted to critical review of the content theories of motivation.
Conclusion was made that the major problems with these theories are the lack of clearly defined
category of need (subject) or the lack of clearly defined overall research approach (methodology).
Process approach was offered in this RAP to the construction of needs models that resulted in
making content theories more practicable.
 Internal and external motivational factors were united in one simple model of human need,
which allowed analysis of their interactions and combined effect.
This fact is very interesting and recommended for further study. Previously content theories
analyzed internal motivational factors, process theories – external, and attempts to unite all the
factors resulted in complicated models with limited practicability.
 The possibility of designing cost-effective motivational policy based on the combined effect of
internal and external motivational factors was demonstrated.
Cost-effective recommendations by each motivational tool available to management of the
subject organisation were offered in this RAP due to uniting internal and external motivational
factors in one simple model. Such approach to designing motivational policy is recommended
for practical implementation in other companies, because it considers all the factors, allowing
calculation of the strength of these factors and their combinations.
Important achievement of this RAP is a simple and easily applicable process-based model of
needs, which is effectively a synthesis of content and process motivational theories. Clear
connection between needs and life processes (and products, consumed in life processes) opens
door for application of this new model in many sciences. For example, human needs and
motivations are basic elements in economics (there would have been no economy as such if
people had no needs and motivations). However analysis of demand for consumer products (which
directly influences demand for raw materials, crises of overproductions, etc.) currently starts with
products’ utility, instead of consumer needs. But utility of consumer products is simply a derivative
of needs satisfaction! Until now there was just no suitable model of needs that could be accepted
in economics. Process-based model of needs and motivations is long waited to boost development
of economic sciences.
Part 2. Application of research findings for changes in different
sciences.
This part is devoted to great influences of our RAP findings on the progress of different
economic and non-economic sciences. It is very useful for humanity and for your personal
development, but it was separated from the main part of the Research Report because of some
diversion from pure motivational topic.
Models of motivation constructed till now lacked development in other than “Motivation”
sections of science. To create the model of needs, applicable for all people (or at least for the
overwhelming majority), proceeding from which it is possible not only to analyse, foresee and
correct (motivate) people’s behaviour, but suitable for all the sciences! And to make this model
easy and convenient in use – till now it seemed to be an irresolvable task in science.
But author of this paper point out that created by him model of needs results in formulation of
objective laws, those laws can be used to reconstruct basic functions (like demand function, labour
supply, etc.); then it is easy to identify and correct number of mistakes in different economic and
non-economic sciences, committed because of incorrect notion about the needs and motivating
factors of people. Unfortunately, volume limits does not allow demonstrating full importance of the
performed research. We will confine ourselves to only formulation of laws related to formation and

21. 21
realization of human needs, then quick construction of new demand function, and finally we will
glance at the potential of this research to make revolutionary changes in different sciences!
4.2. Reconstructionof demandfunction and other revolutionary
changes in sciences.
For the construction of demand functions we will apply widely accepted marginalism algorithm
(Hyman, David, 1994).
Fig. 4.1(A) reflects the relationship between the quantity of consumed product and volume of
realised needs in the processes of biological nature. The derivative of this function is a function of
demand, shown in Fig. 4.1(B). The demand curve for products that realise human need for
processes of biological nature (products PBN) is primarily determined by the law of instincts
satisfaction, according to which each additional unit of goods satisfies less need for processes of
biological nature.
Quantity of
consumed
product
Total utility
(total realised
need)
Marginal utility
(marginal
realised need)
0 0.00 -
1 2.00 2.00
2 3.75 1.75
3 5.25 1.50
4 6.50 1.25
5 7.50 1.00
6 8.25 0.75
7 8.75 0.50
8 9.00 0.25 A
9 9.10 0.10
10 9.15 0.05
B
0.00
0.50
1.00
1.50
2.00
2.50
1 2 3 4 5 6 7 8 9 10
Marginalutility
Quantity of product
Marginal utility (marginal realised need)
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
1 2 3 4 5 6 7 8 9 10
Totalutility
Quantity of product
Total utility (total realised need)
Fig. 4.1. Construction of the demand function for products PBN. Where A) total utility function
of a hypothetical product PBN; B) marginal utility function of the product PBN.

22. 22
For the processes of social nature the law of needs satisfaction does not work. The utility of
each additional unit of product-service that realises human need for PSN (product PSN) does not
depend on the consumed quantity of products of this group. It depends on people's consciousness.
The relationship between the quantity of consumed product PSN and the volume of realised need
is shown in Fig. 4.2(A). The derivative of this function is the demand curve for product PSN, whose
graph is shown in Fig. 4.2(B).
Quantity of
consumed
product
Total utility
(total realised
need)
Marginal utility
(marginal
realised need)
0 0.00 -
1 2.00 2.00
2 4.00 2.00
3 6.00 2.00
4 8.00 2.00
5 10.00 2.00
6 12.00 2.00
7 14.00 2.00
8 14.00 0.00
9 14.00 0.00
10 14.00 0.00 A
B
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
1 2 3 4 5 6 7 8 9 10
Totalutility
Quantity of product
Total utility (total realised need)
0.00
0.50
1.00
1.50
2.00
2.50
1 2 3 4 5 6 7 8 9 10
Marginalutility
Quantity of product
Marginal utility (marginal realised
need)
Fig. 4.2. Construction of the demand function for products PSN. Where A) total utility function
of a hypothetical product PSN; B) marginal utility function of the product PSN.
As for the averaged statically person the need for the processes PSN does not change with the
volume of their realisation (the law of needs satisfaction does not work for products PSN), then
marginal utility of the product PSN does not diminish with additional quantity consumed and its
price does not change. However, the increase in sales of products at the same price is only
possible to a certain natural limit, called a point of market saturation (Qs). At this volume of
production the effect of the temporary satiation starts to appear, when for some period of time
there are just no more available consumers on the market, who are taking part in this particular
PSN.
In reality, because consumer behaviour and motivations are influenced by both rationality and
irrationality (emotionality, Dese), the demand curve for products PSN would look like shown in Fig.
4.3.

23. 23
Fig. 4.3. The graph of demand function for product PSN. Where Pg.=MU – “market growth”
price, equal to marginal utility of product PSN for averaged person; Qs.– "saturation point" of the
market.
The graph shows that an inverse relationship exists between the demand volume and the price
of products PSN – the law of demand works. Let's briefly discuss each of the intervals of the curve
ABCDE.
AB phase – the stage of "know-how". Rare, often new product evokes an emotional effect (Dese)
in some consumers and is sold at inflated prices. The need that this product realises is
considerably influenced by human emotions (Ns.total=Ns.+Dese.).
BC phase – market growth. Demand at this stage is extremely elastic. Until market of product
PSN is not saturated, there is little competition within the product group (group of substitute
products that realise the same need). Consumers, who are not satisfied with the existing parity of
prices for this group of products, refuse to realise the need for this process of social nature in
favour of other PSN. Thus, the competition for people's preferences occurs between different
product groups. For manufacturer, whose product is at the stage of market growth, it is
recommended to actively expand production and inform the consumers about their unfulfilled need
in the PSN (advertising higher quality of particular product is more appropriate for CD phase).
To determine the price of the market growth stage and the market saturation point it is enough
to find the derivative of total utility function TU' and perform basic calculations (Fig. 4.4):
Qs Q
B
C
D E
A
P
Pg.=MU
0

24. 24
Fig. 4.4. Determining the market growth price (Рg) and market saturation point (Qs) of the
product PSN
Pg.=TU'=tgα=MU; (4.1)
Qs.=TU/tgα=TU/MU=Ns.av g×n/MU, (4.2)
where Pg.– market grows price;
TU – total utility (total need realised by the product);
MU – marginal utility of product;
Ns.av g– need of the average person in the life process (where the product is involved in by providing
services);
n – number of consumers in the market.
CD phase – stage of saturation of market PSN. It is characterized by the fierce competition
within the product group. Demand at this stage is extremely inelastic. The "collapse" of the market
is possible if a product with fundamentally new technology of production emerges, that is capable
to realise much more need for this PSN. If, in addition, old product took up a large share of the
population’s budget, had a variety of complementary products, mobilised many branches of
economy for its production and service, the "collapse" of this product’s market could lead to an
economic crisis!
DE phase – the stage of non-standard use of product. Since the price of the product is
extremely low, additional quantity will be purchased because of its possible additional properties or
for emotional reasons.
People involved in marketing, who are closer to the market realities than economic theorists,
have long noticed all four described above phases of demand function for products PSN. Thus,
Qs Q0
D
P
Pg.=MU
P
TU
Qs Q0
α

25. 25
similar market analyses and recommendations were offered by the Boston Consulting Group in
their well-known market growth-share matrix with four stages of product development (Carl W.
Stern, Michael S. Deimler (eds.), 2006). It should also be noted that overwhelming majority of
contemporary products and services are created for realization of people needs mainly in
processes of social nature (products PSN), for realization of needs in PSN and emotional desires
(products PSN+Dese) or for realisation of both PSN and PBN (products PSN+PBN), and they have
demand function with market grows and market saturation point, as displayed in Table 4.1. Only
tiny part of products that are used for satisfaction of people needs exclusively in PBN are
categorized by smoothly declining form of demand curve (without market grows and saturation)
widely applied in contemporary economic theory to all markets and products.
Table 4.1
Classification of products-services depending on the needs realised due to them
Classification group
Examples of products-
services
Typical form of demand curve
Products PBN
Most simple food and shelter
(Giffen goods)
Products PBN+PSN
Fast-foods, clothing, water,
bedding
Products PSN
Kitchenware, tools, dry-
cleaning
Products PSN+Dese
Luxury goods, flowers,
jewellery, art
The ability of markets to be satiated is very important and it is necessary to study not only with
the purpose to develop marketing, but also for the analysis of the mechanisms of anti-crises
regulation of the economy. During studying all these schools of anti-crises regulation, the opinion is
formed that goods become overproduced over money (banknotes, papers, figures), but not over
needs of people. Moreover, mechanisms of managing overproduction crises are proposed, which
in majority of cases lead to such negative consequences as inflation, public debt, etc. In the
author’s opinion, in-depth study of human needs, emotions and motivations will lead to
reconsidering many sections of economics and to change of paradigm.
To summarize, human needs and motivations are something very basic in economic sciences
(perhaps there would have been no economy as such if people had no needs and motivations).
Study of human behaviour has revolutionary potential, for example:
 In management – new look on the theory of motivation is offered, combining process and
content theories, etc.
 In marketing – new classification of consumer goods and services, depending on their demand
functions, is proposes, etc.
P
0
QD
P
0
D Q
P
0
D Q
0
P
D Q

26. 26
 In microeconomics – the law of diminishing marginal utility for most goods and services is
questioned, "income effect" should be questioned, instead new “marketing effects” (market
saturation, rationality, irrationality) should be studied in microeconomics6
. Functions of supply
and demand for various goods and services could be rebuilt or interpreted anew, etc.
 In macroeconomics – based on the new knowledge about human behaviour and particularities
of demand, crises of overproduction should be reanalysed as lack of population needs for
overproduced goods (not lack of money, banknotes, figures), etc.
Motivational model of needs offered in this paper is not limited to economic sciences. It is not
even limited to humanitarian sciences. Needs are something very basic to life. As of today, there is
still no generally accepted philosophical category of “life” in science but let us formulate it as follow:
Life – is organized in some way system, which possesses such set of needs that ensures its
prolonged independent existence.
So life processes are directed by needs. Organism is dead when nothing directs it from "within"!
By pressing some key, a man directs not life but a robot! System that has no needs can only be a
machine. If man wants to create new forms of life, he should know as much as possible about the
laws of needs – the thing that "inspires" life. The study of needs should be separated into
independent field of knowledge. It should also be noted that scenarios and laws, according to
which the human needs are formed, realized, influenced (motivated) or developed are not uniform
and unchangeable. It is quite possible that the needs of machine organisms or maybe artificial
intelligence would be formed and realised according to some other laws.
Needs and motivations must be actively studied for the accelerated development of science and
technology!
Hope that reading this Research Report added great value to your personal and professional
development. I allow and encourage giving this RAP in any form to any person.
Good luck!
Vitaliy Shmygin.
6 Author only offers here a glance at the profound differences between microeconomics and marketing. But
he could propose another work with more detailed analysis of needs and their influence on economy.