This chapter discusses people and organizations. It covers human resource assumptions, human needs, and theories like Maslow's hierarchy of needs and McGregor's Theory X and Theory Y. It also discusses how traditional management can cause conflict between people and organizations. Additionally, it examines the changing employment contract and the dilemma of whether organizations should be "lean and mean" or invest in developing their workforce. In conclusion, the key is aligning what people and organizations need from each other, and there is a dilemma between cutting costs or investing in talent.