Organisational Behaviour: Evaluating Management Theories' Influence

This essay critically evaluates the influence of classical and human relations approaches in contemporary management, drawing upon relevant literature and case studies. It begins by introducing the context of evolving management practices in response to globalization and technological advancements, highlighting the limitations of past approaches in managing modern business complexities. The essay then reviews key classical theories, including Fayol's Administrative theory, Taylor's scientific management, and Weber's theory of bureaucracy, emphasizing their focus on efficiency, structure, and control. Following this, it examines human relations theories, such as the Hawthorne Studies and Maslow's Hierarchy of Needs, which emphasize the importance of human factors, motivation, and employee well-being. The essay includes a case example of McDonald's, illustrating the application of classical theories in a modern fast-food chain. The essay analyzes the strengths and weaknesses of both approaches, concluding with an assessment of their relevance and impact on management practices today, providing valuable insights into the evolution of organizational behaviour.

Running head: ORGANISATIONAL BEHAVIOUR
Organisational Behaviour
Name of the student
Name of the university
Author note

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Introduction
Management practices in the modern era are quite similar to the management
practices in the past decades. However, the change in the macro and micro
environment along with the advent of globalisation and technological advancement
has led to the change in organisational structure. These phenomenon has forced the
management of different organisations to change their approaches of management
and use a broader approaches of management. The approaches dominating the
past decades are not sufficient to manage the complexities in the modern business
environment (Vittikh, 2015). These factors have inspired evaluation of the different
classical and human relation theories to management. The analysis of the past
literature shows that the past approaches and the modern and post-modern theories
have similarities in mainly three faces. These factors are control, development of
business and leadership. Efthymiou and Yacoub, (2016) states that these facets are
focused on improving the performance of the organisation which every manager
aims to achieve in modern organisational setting. Ihuah, (2014) evaluated the value
chain theory created by Michael Porter to state that the purpose of every
organisation is generate a higher value than the actual cost of generating that value.
Nhema, (2015) stated that the classical approaches to management mainly
focused on the activities and structure of an official organisation. This implies that the
efficiency of the processes were the main concerns of the organisations. On the
contrary, in case of the human relation theories, the approaches were focused on the
human factor at work. Individual motivation and satisfaction was the focus of these
theories where efficient resource usage leads to effective operations.
Classical theories
The summary of the early ages in management theories highlights the need
for effective and efficient utilisation of traditional product factor which was moving
from being independent activities to coordinated ones. These theories were labelled
into scientific management theories and classical theories. The classical
approaches to management were promoted by the theories and they are Taylor’s
theory of scientific management, Fayol’s Administrative theory and Weber’s theory of
bureaucracy.

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Fayol’s Administrative theory
Henri Fayol, a French engineer became the CEO of a mining company during
its time of reaching bankruptcy (Khorasani & Almasifard, 2017). Fayol focused on the
principles of effective management of resources and activities within a company. The
major themes explaining the classical themes are management functions,
management activities and general principles of management. As per the theory,
business and organisational life was the combination of diverse six activities. These
activities can be classified as commercial, security, managerial, accounting, financial
and technical. The management activities were divided into five functions. These
functions included activities such as organising, coordination, control, command,
planning and forecasting. Fourteen principles were advocated by Fayol which guided
the managerial functional performance. Khorasani and Almasifard, (2017) also
clearly listed and defined these principles and they are Discipline, Authority, Unity of
direction , Remuneration , Division of work, Subservience of individual benefits to
general interest, Unity of command, Centralization, Stability of tenure of personnel,
Initiative , Equity, Scalar chain , Order, Esprit de corps.
Ferdous, (2016) performed an analysis on all these principles mentioned by
Fayol to highlight that Fayol was the first to differentiate between managerial and
technical skills. The author claimed that particular labour is required to help other
reach their fullest potential. There was a clear differentiation between responsibility
and authority. The author described authority as the facility to give instructions while
on the other hand, authority is the result of the previous action. Bishop, (2015)
states that initiative principle tries to guide organisations on rewarding and
encouraging employees that had the ability to generate new innovative idea and
initiate the process of implementation. The organisation was viewed as top down in
this theory.
Bishop, (2015) states that modern concerns regarding fairness and conflict
of interest can be related to the theory by highlighting the concept of general interest
versus individual interest. Esprit de corps and initiative indicates the sensitivity of
Fayol towards the needs of people as groups and individuals. It also highlights the
present need of avoiding the mechanistic approach towards the modern workforce.
The principles were seen from the perspective of a rational model instead of trying to
adapt different structures and changing the behaviour of the people. This helped in

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identifying the best fit for establishing an effective relationship between the
consumers and organisation. Khorasani and Almasifard, (2017) criticised the
approach made by Fayol as it lacked the ability and effectiveness to cope up with
various modern conditions such as flatter structures, increased involvement of the
employees in the process of decision-making and rapid changes in the environment.
Taylor’s theory of scientific management
Frederick Winslow Taylor was also a theorist and manager and rule-of-thumb
was used by the management to leave the method of working to the employee
initiatives (Hu, 2013). As per the suggestion from Taylor, management needed to
take this role away from the employees for promoting efficient performance. The
theory was developed based on the work experience of Taylor as a manager of a
steel company and shop-floor worker (Taylor, 2014). The author was able to identify
the key reasons for inefficient practices at work and these factors were related to the
concept of “rule-of-thumb” and “soldiering”. This problems were solved scientifically
by calculating the most effective way of performing each based on the skill level of
the employees. (Taylor, 2014) states that these approach led to the division of
activities into smaller tasks. Taylor studied and analysed the operating time and skills
of highly skilled workers to eliminate all unnecessary movements and identify the
best possible way to do a job. These skills were put as standards for performing
these jobs.
As stated by Hu, (2013), Taylor proposed that average employees prefer
tasks that are well defined along with standards. The scientific approach would
facilitate in improving prosperity of both employer and employee. The optimisation of
task standards would improve the efficiency of the work done by the employees.
However, this theory was heavily criticised for taking the relationship between
employees and employer as granted (Khorasani & Almasifard, 2017). This negatively
affected the financial incentive scheme due to the lack of trust between the
employees and the workers (Efthymiou & Yacoub, 2016). His theory turned the
lower level of workers into automatons where there were no scope of innovation
resulting in frustrating and dissatisfaction among these employees.

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Weber’s theory of Bureaucracy
Max Weber supported the theory and principles proposed by Henry Fayol.
The author opined that management within an organisation needs to rational and
impersonal. This theory was based on the ways business had been operating in
Europe in the past 18th century (Mills, Weatherbee & Durepos, 2014). The business
operated at the family or personal level and employees were loyal to a single person.
This means that the employers personal reasons and sentiments affected their
decision making process. Weber proposed that developing an organisations based
on rational authority would be far more productive and flexible to changes in case of
dynamic environment. A bureaucratic organisation is formed on regulations and rules
that bind the workforce and the hierarchy level (Khorasani & Almasifard, 2017).
Technical qualification and competence will be the criteria for developing and
acquiring new employees. Managers would be entrusted with legal powers for
providing orders. There are various bottle necks attached to bureaucracy consists of
numerous levels of authority and rules which has been one of the most standardised
ways of dealing with workforce.
Drawbacks of classical theories of Management
Classical theory of management mainly focused on increasing the productivity
and work efficacy of the workforce and the overall organisational processes
(Khorasani & Almasifard, 2017). However, it failed to take into account the below
mentioned factors.
Non-financial reward was not considered into this theory of management.
Rewarding employees with increase in salaries may not be the best way to
motivate the workforce. There are other factors such as recognition at work
place and free medical care are the factors affecting the ways employees are
rewarded.
Well-being of the employees were not considered by the classical principles.
This process is irrational as employers only thinking at improvement in
productivity and not the welfare of their respective employees.
There were no principles of social interaction among the workforce as
communal communication is one of the most effective ways of developing
team bonding and healthy relationship at work.

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Human relation theories
The drawbacks of the classical theory of management has led to the
development of the new theories to understand the reasons due to which the
classical theories of management have failed to deliver its promises. This resulted in
exploitation of all other facets of management to highlight key factors necessary for
motivating employees.
Hawthorne Studies
The pioneer of the human management approaches and theories is Elton
Mayo. Mayo examined the theory in Hawthorne plant in USA (Jung & Lee, 2015).
The author suggested that employers care towards their workforce would have a
significant impact on the motivation level of the employees (Jung & Lee, 2015). This
factor would also have positive influence on the productivity of the employees. The
author also proved that employees’ feel empowered and valued when the employers
care for their workforce (Jung & Lee, 2015). This helps in developing a sense of
belonging among the workforce. Various small organisations lacked in this approach
and the multinational enterprises have implemented policies for the welfare and
empowerment of the employees.
Maslow Hierarchy of Needs
Maslow’s hierarchy of needs have identified satisfaction level of employees at
five levels. The lowest and the basic need is the physiological need which includes
basic human needs such as air, water, food, shelter and clothing (Lee & Hanna,
2015). This need has to be fulfilled as it helps to live a normal life. The next level is
the safety of the employees. Security in life is crucial and employees look for security
to protect their family and lack of security demotivates them. The third level is sense
of belonging and once the other two levels are fulfilled, employees move to this level
(Lee & Hanna, 2015). The employees look for a sense of belonging from their peer
group or associations. It provides them with the opportunity to share their own
feelings and solve issues. Self-esteem needs is the next level which helps the
employees in gaining confidence (Lee & Hanna, 2015). The employees feel
motivated when they have high self-esteem. Low self-esteem among the employees
results in the imbalance at the psyhological level and depression. The final level of
need is where very few employees where they have achieved everything and will be
able to achieve whatever they want.

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Other Theories
Process and content theories were developed by other theorists working of
human behaviour approaches. The expectancy theory developed by Victor Vroom
focused on the subjective reality and not the objective reality. Rewards was
categorised into intrinsic and extrinsic rewards which introduced the difference
between valance and value (Parijat & Bagga, 2014). In respect to this theory, Equity
theory focused on the perception of the people where the employees are not only
interested in rewards but also the comparative nature of it (Burrai, Font & Cochrane,
2015). However, this is only applicable to extrinsic rewards. The theory suggests
that sense of the equity of the employees are applied to the subjective view and
reward attractiveness is comparable to the one available to peer group. On the
contrary, other theories opposing this thoughts such as Goal setting theory and
reinforcement theory were also introduced.
Case example
The classical theories have significant impacted the business has been
conducted in the modern world. One of the best examples of classical theory
implementation is McDonalds which is one of the fast food chains having presence in
multiple countries. The evaluation of the business code of conduct of McDonald’s
various examples of classical principles have been highlighted. McDonald’s policy of
Additional responsibility of Supervisory employees, Personal accountability and
Management Commitment, the principles of Fayol such as Unity of Command,
Division of Work and Unity of Direction can be identified (Efthymiou & Yacoub,
2016). The employees in McDonald’s are provided with specific job and the
supervisors have the authority to give orders. These supervisors are responsible for
the adequate functioning of the restaurants. Restaurant staffs are one supervisor
and centralisation in the decision making process is followed. Employee Experience
code of McDonald’s show that rewards are available for the employees achieving
standard practices which depicts the Schein’s model which facilitates the employees
in addressing Maslow’s’ hierarchy of needs (Efthymiou & Yacoub, 2016). The
organisation uses a top down structure. The corporate governance manual of
McDonalds clearly shows the way Equity principle of Fayol has been implemented
under Respect and Dignity, Human rights, Diversity and Inclusion.

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Relevant practices and policies of different organisations
In the modern business environment, the use of classical approaches to
management is prevalent in many companies. Nucor steel is one of the largest steel
manufacturing companies in US have adopted the classical approaches by providing
bonuses and rewards for all the hard working employees (Khorasani & Almasifard,
2017). Modern management can simplified linking performance and incentives, and
Wal-Mart is a suitable example for explaining this concept (Efthymiou & Yacoub,
2016). Wal-Mart developed bonus packages for employees working for the hourly
basis. The workers in Nucor was entitled to incentives in respect to the executive
employees that are not. The use of Bureaucratic approach is applicable in majority
of the organisations in China and other developing countries (Taylor, 2014). Another
example suggest that the employees hired by the electricity Supply Commission of
Malawi are trained before assigning them to various job positions which reflects the
use of classical management theory of Taylor (Hu, 2013). It has been seen that in
some of the developing countries, graduate employees are hired and equip them
with right skills to fulfil their duties. The Weber’s classical approach of bureaucracy
was founded its way in rules and regulations of majority of the companies. These
rules and regulations have been developed for guiding the workforce in fulfilling their
duties (Hu, 2013). General Motors is a company that have used the bureaucratic
approach where the organisation used the decentralisation approach for their
production facilities and centralisation approach for controlling the organisational
policies. Classical management approaches has been seen implemented by majority
of the organisations in the modern business environment varying from large
corporations to small business entities (Hu, 2013).
The human relation theories and approaches have also influenced the policies
and regulations of modern management. The importance of developing an effective
work environment and employee engagement has been emphasised on majority of
the companies (Bishop, 2015). Studies have shown that various organisations have
implemented approaches for motivating their respective by a means of extrinsic and
intrinsic reward system. Companies like Google and Apple have been seen to
develop a unique work environment and autonomy for the employees which not only
helps them to grow personally but also at the organisational level. This helps in
keeping up the motivation and productivity of the employees working in their field

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(Vittikh 2015). Corporate social responsibility is another aspect of implementing
human relation theories where firms aim to evaluate their contribution towards their
respective societies and environment. Corporate social responsibility and triple
bottom line is one of the main factors changing the way organisations operate in the
modern environment.
The corporate social reporting concept has become a key component of
company operation where organisations are focused on improving their social
awareness and protecting their natural environment. Microsoft and Google are the
companies known for their CSR initiatives and philanthropic approaches to
contributing to the positive changes in the modern environment (Voegtlin &
Greenwood, 2016). It has also been seen that business entities have use both the
approaches and developed a balance between them in order to attain sustainability
in the modern environment. The use of both the approaches is necessary to
overcome the limitation of each of the approaches. However, still differences are
identified among different organisations due to the core values and beliefs, some
organisations have implemented methods to improve the standards at work and
provide rewards for them (Burrai, Font & Cochrane, 2015). On the contrary, there
have been organisations considering employees as the most valuable asset for
gaining sustainable development and competitive advantage. The evaluation of the
modern business environment shows that all the companies are trying to provide the
best possible product and services, and develop satisfaction throughout the journey
map (Jung & Lee, 2015). However, it is not possible to attain using only one of these
approaches to management, where the human relation theories are required and
classical approaches both contribute to improving the performance of the employees
and the overall organisation.
Conclusion
The analysis of both the classical theories and human relation theories have
presented the contribution of each of the theories to the modern organisational
processes and operations. Managing business in the modern environment have
changed but the contribution and implementation of these theories into the
organisational processes have shaped up the way, business entities operate. The
use of Taylor and Fayol’s approaches have found its way in majority of the

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organisations corporate government manuals which shows that guidelines for
employees in the modern workforce have been developed based on their theories
presented by these theorists. Similarly, employee motivation and welfare has also
become one of the major approaches for providing growth and encouragement to the
workforce. The human relation theories have found their place in majority of the
organisation’s employee growth and retention policy for managing performance.
The examples of renowned companies like McDonald and Google have
shown the way bureaucracy had been implemented in these organisations and even
though, the structures are becoming flatter but that hierarchical structural still
prevails. This means that even though the organisations have seen reduction in
bureaucracy and redundancy but it stills exists at some levels. However, the in Asian
countries, the use of classical theories and human relations theories are still
prevalent. On the contrary, a critical factor that needs to be considered is the fast
changing nature of business environment and workforce which is expected to make
considerable changes to the way organisations operate. However, the core values
presented in each of the theories will still be used in the modern organisations as the
maintain standards and employee welfare will remain a concern for the business
entities for many more years to come.

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