Management Theory: Classical, Human Relations, and Volkswagen

This report provides an in-depth analysis of management theory, focusing on classical and human relations approaches. It begins with an introduction to management theory and its importance in assessing employee effectiveness and achieving business objectives. The report then delves into the core concepts of classical and human relations theories, exploring their key factors and principles, including scientific management, bureaucratic theory, and the significance of employee behavior and motivation. A substantial portion of the report is dedicated to a case study of Volkswagen, illustrating how the company has implemented both classical and human relations theories during organizational changes, such as the introduction of new product lines and technologies. The analysis examines the impact of these theories on Volkswagen's organizational structure, employee roles, communication, and overall productivity. The report also highlights the benefits of each theory, such as improved efficiency, better communication, and enhanced employee morale. Overall, the report offers a comprehensive understanding of management theory and its practical application within a major automotive company.

History of Management
Theory

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Management theory helps to assess the effectiveness of the employee in the company for
the achievement of the business objectives and implementation to achieve the objectives of the
company efficiently. The report studies about Volkswagen company which deals in automotive
industry the company was founded in 1937. the company is largest auto maker and has
worldwide sales of its product. The company has biggest markets share in china which delivers
40 percent of sales. Its head quarters are situated in Wolfburg, Germany. The report discuss
about the classical and human relation theories and the key factors of the theories. Next the study
will be discuss the recent examples that influences the classical and human relation approaches.
Furthers the report will identify the relevant practices, policies and approaches in the company
with the help of providing an example.
MAIN BODY
Theme 1: “Significance of Classical and Human relationship theory”
As per the view of Shafritz, Ott and Jang, (2015), classical management theory looks at
creating the situation in the organization where employee used to work at a multiple level with
the sole motive of increasing the productivity in the organization. In which employee at the
lowest level find their work supervise by the senior employee in the organization. At every level
in the organization all the employee are having the specific task that they have to follow with a
specific procedure design to maximise productivity in the organization. Classical management
theory does not allow the friendliness and personal interaction to become involved in the
organization as they generally used to follow rules exactly and the hiring and firing of employee
must relate to the skill they possess. On the contrasting endBratton and Gold, (2017) explains
that Human relationship theory used to look at the behaviour of the employee in the organization
and focuses more on the individual at a workplace as compare to the rules and procedure at
organization. Human relation theory used to fix a set of the communication in between employee
and manager in the organization, allowing them to interact with one another to make the decision
in the organization. Generally worker in the organization used to are exposed to the different
motivational and the emotional theory to build a bond which helps them in increasing the
productivity of the organization. The focus of this style is creating fulfilled, productive workers
and helping workers invest in a company.
Theme 2: “Different type of classical and human relation theory and its principle”

As per the view of Koskela, (2017), there are many different type of classical
management theory and the Human relationship theory which is performed in the organization.
Some of the common management theory are Scientific theory which looks at analysing and
synthesizing the workflow in the organization. This theory looks at labour productivity as the
aspect of the production in the organization. As per the thought of Fischer and Miller, (2017),
Their are 14 principle of the scientific management theory that start with Division of work in
which organization used to divide the work in such a way that the specialized worker get a
specialised work according to the skill set. Authority is the second principle in which employee
are given the power to show their skill which helps them in getting motivated. Discipline is
another principle which looks at bring the obedience in the employee toward the project of the
organization. Unity of command is the next principle which looks at giving the clarity to the
employee about the command as organization make sure that employee get a command from just
one manager. Unity of direction is next principle which explains that all the work of the
employee which is performed in the organization should be linked with the organization
objective. Next principle explains that the individual interest should be subordinate of the
organizational interest. Remuneration is the next principle which explains that remuneration to
the employee should be good so that they feel motivated to work for the organization.
Centralization is the next principle which explains that the decision making in the organization
should be properly balanced. Scalar chain is the next principle which states that there should be a
clear line in the area of the authority. Order is the next principle which explains every employee
should have a resource to function properly in the organization. Equity is the another principle
which explains that all employee should be treated equally. Next principle explains that the job
security should be offered to every employee in an organization. Initiative is next principle
which explains that all the employee should be motivated to take initiative by their own. Esprit
de corps is the last principle which explains that manager should take the step to develop the
morale in the workplace.
In the view of Ferdous, (2016) , Bureaucratic theory is another classical management
theory which believes that the organizational structure which includes the rule, standardised
process, procedure and requirements are the best way to set up the organization and its
administration. This theory treated every employee equally in the organization and all the
employee has the clear idea of the division. As per Nhema, (2015) there are 7 principle of

Bureaucratic theory that starts with An unfocused or in focused mission which explains that
organization should clearly define the type of the mission. Second principle is equality which
explains that their should be equality for all employee who are getting judged on the basis of
rules and regulation and right. Third principle defines that there is a need of the proper rules and
regulation in the organization which will help in maintaining the discipline in organization.
Formal Hierarchy structure is the another principle which explains that their should be
centralization of the power in terms of the planning and decision making in the organization.
Specialization is the next principle which explains that the organization can divided into different
department on the basis of the function. Sixth principle explains that the recruitment in the
organization should be done on the basis of the skill and the technical ability to perform
organization function. Last principle explains that their should be the hard copy of every
operation of the organization.
As per Mingst, McKibben and Arreguin-Toft, (2018) there are no further sub types of the
Human relation theory but there are 8 principle of Human relationship theory. The first principle
state that Human in the employee are not their for only financial interest they also require
recognition and appreciation. Second principle state that the feeling of the Human being also
need to understand by the manager as worker are not machine. Next principle explains that the
informal relation also play a crucial role in organization success. Next principle state that the
organization should serve a high degree of job security to the employee of the organization. Next
principle explains that their should be the good communication in between the employee and the
manager in the organization. 6 principle state that the manage should rake the corrective action to
stop the conflict and misunderstanding in the organization. Next principle state that the manager
should provide the room for the employee to showcase their talent and the last principle state that
the employee should be given the role in the decision making.
Theme 3: “Importance of classical and Human relationship theory”
As per the view point of Koskela, (2017), Classical management theory used to bring the
variety of the benefit for the organization as classical management helps the organization in
bringing the clarity in the organization operation as this theory clearly defines the function and
operation in the structure of the organization. It also simplify the function of the organization as
the division of the labour make it easier and more efficient for the organization to accomplish the
organization objective. Classical management theory also help the business in improving the

communication in the organization as all the employee are clearly having the idea of roles and
task to be performed.
As per the view point of Koskela, (2017), as Human relation looks at the employee
behaviour in the organization it brings the variety of the benefit for the organization. Human
relationship theory helps the business in improving the working culture in the organization as all
the employee used to interact with each other which reduce the chance on uncertainty in the
organization. It has also helped the organization in improving the morale of the employee in the
organization as all the employee are having the feeling that the organization used to look behind
them. It has also helped the organization in getting the employee retention in the organization
and also the creativity in the organization as the point of view of employee are also given valued
in the organization.
Case Study
Volkswagen, is a German auto maker headquartered in Wolfsburg. Volkswagen has gain the
good name in the market due to the quality of the product which is offered by the organization in
the recent past. Volkswagen has recently added new trim level to the Golf range which has seen
the variety of the changes in the process of the organization as they have brought the new
technology and the new skilled employee was also employed by the organization for the purpose
of making the change in the organization. During the process of implementing the change
following influence of the classical and Human relation theory has been find.
Classical Theory
At the starting stage itself in the project of implementing the change in the Golf range of
the Volkswagen the organization has implemented the classical management theory in the
organization as they has decided to form a proper structure in the organization which includes
the new plan, policy and strategy which describes the proper way through which the change will
be implemented in the organization. After that the Organization has divided the organization in
different structure and all the department used to work with relation to each other in such a way
that the work used to follow from down to the up, which means that the basic function used to
complete by the low level employee and the further big function used to be completed by the
senior employee in the organization which has helped the company in improving the productivity
of the organization (Fischer and Miller, 2017). Organization has also created the situation in
which the employee used to work at a multiple level as the employee who used to work at a

lower level are continuously supervised by the senior employee which has created the séance of
supervising in the employee which has helped the business in getting the best out of the
employee of the organization. After division of the work Volkswagen has also specified the roles
and the responsibility which need to be performed by the employee in the organization which
will help the organization in bringing the clarity of the mind in the organization among the
employee as they were clear about the function they have to perform in the organization.
Organization has also brought the centralization in the organization in which after hearing the
suggestion of employee authority used to make the decision in the organization (Fischer and
Miller, 2017).
Human Relation Theory
Volkswagen has also shown the implication of Human relation theory in the organization as at
the time of implementing the change in the organization management has provided the proper
briefing about the change which organization will be bringing and the benefit which organization
will be getting after bringing the change which has helped the organization in building good
working culture in the organization as all the employee was linked with the objective of the
business, it has helped the business in improving the efficiency in the organization. Organization
has also provided the proper training to all the new and old employee of the organization about
the way through which the change in the product can be adopt it has helped the business in
passing on the message to the employee that the organization used to think about the employee
of the organization which has helped the Volkswagen in improving the morale of the employee
in the organization (Shafritz, Ott and Jang, 2015) . Organization has also tried to fix a good set
of the communication in the organization as all the leader in Volkswagen has adopted the
supportive leadership style in the organization so that the employee does not feel uncomfortable
to work in the organization and feel free to discuss the concern if any is seen by the employee in
the organization. Organization also has organized different meeting in the organization in which
all the employee were called and ask to give their suggestion if they feel any change which need
to be implemented in the organization and all the good performer are rewarded by the
organization which has helped the organization in motivating the employee and also giving the
appreciation to them. This all activity has also helped the business in giving the job security to
the employee of the organization as employee are the one who are more uncertain at the time of
the change in the organization (Bratton and Gold, 2017).

Classical approach of management profess the body of management which is based on
the belief that the employee of organisation will have economical and physical needs which are
needed to be fulfilled by the company. Human relation encourages the organisation to understand
the individuals perspective for the increasing the job satisfaction of the employees.
Reward and incentives:Volkswagen practices to motivates the employee of the
company by providing them rewards which will encourages the workers to work more
effectively and efficiently for the organisation. As when rewards are given to the employees of
the company it creates the sense of competition in between the employees to get the rewards.
The giving valuable reward to the employee motivates them engage in the work for longer time.
When the employee perform similar job for longer time it improve the skills of the employee
through which the employee can give training to the new employee on the basis on his
experience in the company and job position (Galli, 2019). Offering of high rewards and
incentives attracts large number of candidates to work in the company. The company policies
gets affected positively as the employee work to earn reward which enables them to work
effectively and efficiently for the firm and in-return the employee is motivated to earn more
incentives
Training and development: Training is most effective part of the company to improve
its management capabilities and increases the competitive capabilities from the rivals in the
markets. The employee of the Volkswagen company are highly skilled and talented which enable
the company to produce better good and services from the rivals in the market. By getting
competitive advantages the company is able to build positive images in the markets due to which
the employee of the company are motivated to work with more hard work as for employee
working in highly reputable company will increase their standard of living. When the employee
is trained it teaches them the importances of their job position in the company which enables the
employee to work more carefully and produce best result for their work. The company policies
gets affected positively by providing recruitment and training program as it generates skilled and
talented employee in the company which helps the company to get competitive human capital
from rivals in the market.
Working procedure in organisation:Volkswagen company organises its works in such
a way that it makes the employee to work flexibility as company provides friendly working
environment which helps the employee to give their leader suggestion and convey the problems

which employee is facing to while dealing with the working procedure of the organisation. When
the managers listen to the problems of the employee it creates the sense of belongingness in the
employee which motivates them to work more efficiently in the company. When the working
procedure is well defined and the business operations are bifurcated properly then it makes easier
for the employee to perform the job with more understandability and manage the operation.
Volkswagen employee knows their work and they understands the job with more meaning. The
policies of company gets affected positively as the organisation working procedure improves and
the employees get improved organisational culture (Ferdous, 2016) . When the work load on
each employee is less it maintains the retention ratio of the company.
Task management: Volkswagens manages its task in systematic manner and defines the
roles and responsibilities managers and leaders to lead the organisation for achievement of their
common goals. Company examine the clear relationship between the top management and lower
authority which increase improves the accountability in the company. When the managers
delegates the work to its subordinate. Then it enables the employee to show their creativity and
improves their accountability for the work assigned to them. The company gets affected
positively as these helps Volkswagen to manage their work effectively and reduce the waste with
optimum utilisation of the resources.
CONCLUSION
From the above report it can be concluded that maintaining human relation in the
Volkswagen plays an important role in the development of the organisation. Classical and human
relation approach helped the organisation to achieve the goal of organisation with more effective
and efficient manner. As the theory aims to increase the productivity with the help of scientific
methods. The report discusses about the relevant practices, policies and approaches of
Volkswagen in which mainly it performs reward management, task management, working
procedures and training and development. With the help of these practices the company is able to
manage its managerial and operational activities.

REFERENCES
Books and journals
Berg, D. A., and et.al., 2017. Using Classical Test Theory in Higher Education. In Handbook on
Measurement, Assessment, and Evaluation in Higher Education (pp. 178-190).
Routledge.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Ferdous, J., 2016. Organization theories: from classical perspective. International Journal of
Business, Economics and Law. 9(2). pp.1-6.
Fischer, F. and Miller, G. J. eds., 2017. Handbook of public policy analysis: theory, politics, and
methods. Routledge.
Galli, B. J., 2019. Theory of Constraints and Human Resource Management Applications.
International Journal of Strategic Engineering (IjoSE). 2(1). pp.61-77.
Geisler, E. and Wickramasinghe, N., 2015. Principles of Knowledge Management: Theory,
Practice, and Cases: Theory, Practice, and Cases. Routledge.
Koskela, L., 2017. Why is management research irrelevant?. Construction management and
economics. 35(1-2). pp.4-23.
Mingst, K. A., McKibben, H. E. and Arreguin-Toft, I. M., 2018. Essentials of international
relations. WW Norton & Company.
Mladenova, T., 2019, May. A project managment system for time planning and resources
allocation. In 2019 42nd International Convention on Information and Communication
Technology, Electronics and Microelectronics (MIPRO) (pp. 1299-1303). IEEE.
Nhema, A. G., 2015. Relevance of classical management theories to modern public
administration: A review. Journal of Public Administration and Governance. 5(3).
pp.165-179.
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