The influence of classical and human relations approaches in management today

A critical evaluation the influence of classical and human relations approaches in management today

Fabrice Tshiyoyi Banyingelat

Sudent ID number: R2308D16950940

Module Name: Theories of Management

Module code: UU-MBA-712-ZM

Date: 25 February 2023

Introduction

Early management dates to 5000 BC, when the agricultural revolution was in its infancy, and then continues through the birth of the industrial revolution in the 1800s (Santayana, 2007). In the mid-1800s, the United States was impacted by the development and growth of advanced industrialization, resulting in the inception of the Second Industrial Revolution in 1860 which forced people to migrate from farms to cities for jobs in factories. One of the impacts of the Second Industrial Revolution in 1860 was urbanization. The growth of industries brought rapid urbanization, resulting in overcrowded living conditions and increased demand for infrastructure and services in cities. This led factory managers to begin to have difficulties managing large workforces to achieve optimum production. Therefore, managers began conducting studies in the factories to uncover new ways of maximizing efficiency.

Management is essential for an organization's success and focuses on achieving enterprise goals, ensuring satisfaction, and maintaining sustainability. According to one of the definitions by Mahajan (2009), “Management can be referred to as processes, procedures, and techniques designed to achieve specific organizational goals and outcomes by efficiently utilizing resources.” Other authors (Woods, 2017) quite simply define it as a “science that requires well-defined concepts, principles, and techniques. It's viewed as art, as managers acquire skills and experience, combining science and practice to create a comprehensive management theory.”

Management theories have evolved, with classical and human relations approaches being two fundamental paradigms that have significantly influenced the field of management. The classical approach, combining scientific management, administrative, and bureaucratic management, emerged in the early 20th century to enhance efficiency and productivity in industrial settings. The human relations approach, which gained popularity in the mid-20th century, emphasizes understanding and catering to employees' social and psychological needs for enhanced performance and job satisfaction.

Management scientists have been influenced by the early work of late 19th century and early 20th century classical theorists; some of whom are used in this evaluation like Fredrick W. Taylor (1856 – 1915), an American mechanical engineer, also termed as the father of scientific management introduced methods to increase productivity through scientifically analyzing work processes and tasks. Henri Fayol (1841-1925) was a French mining engineer with experience in administration and management who focused on the roles of a manager and their functions. Finally, Max Weber (1864 – 1920) a German sociologist contends the efficiency of bureaucracy in organizations. As further stated by Cole, Gerald & Kelly (2015), “These classical theorists were practicing managers who reflected upon and theorized about their personal experiences of management to produce a set of rational principles of management which could be applied universally to achieve organizational efficiency”. This approach is more relevant in today's basic, psychological, and self-actualization needs of Maslow's pyramid, as it is now seen as a major contribution to an individual’s performance that will in turn impact the organization.

Although classical management was initially viewed as a solution to the industrial revolution, faced criticism for lacking human social support, leading to the development of human-relation theories. Therefore, this paper critically evaluates the evolution and influence of classical and human relations approaches in management today, examining their impact on contemporary practices, and relevancy in the modern business environment.

Classical Approach: Principles and Influence

Classical theory mainly concentrates on organizational structure and emphasizes planning, technical requirements, management principles, and the assumption of rational and logical behavior, as per Kumar's 2017 research. The classical management approach is influenced by the works of influential theorists like Frederick Taylor, Henri Fayol, and Max Weber, as illustrated in the diagram.

Scientific Management

Frederick Taylor, a practical manager-theorist, institutionalized scientific management in 1910, believing that by analyzing work processes and tasks, managers could identify the most efficient ways to perform them, leading to increased productivity, reduced waste, and improved organizational performance. During the Industrial Revolution, he observed factory workers' lack of enthusiasm and performing minimal work just enough to keep their jobs. Taylor observed that “when a naturally energetic man works besides a lazy one, the logic of the situation is unanswerable: Why should I work hard when that lazy fellow gets the same pay that I do and does only half as much work?" (Subba Rao & Kumar, 2010). The origin of his principle, Differential Payment, is evident from this perspective, which pays individuals based on their productivity level.

Taylor's scientific management principles included conducting time and motion studies to optimize work processes, standardizing work methods based on scientific analysis, emphasizing training and development to ensure well-trained employees contribute to organizational success, and introducing incentive systems to reward workers for meeting or exceeding performance standards. Taylor's scientific management principles, as outlined by Subba Rao & Kumar (2010) and Mahajan (2009), are further elaborated upon:

1. Science, not the Rule of Thumb – enhancing an organization's efficiency through scientific work analysis, rather than relying on the 'Rule of Thumb' method.

2. Harmony, Not Discord – the importance of maintaining positive interpersonal relationships between workers and management for group harmony.

3. Mental Revolution – a positive shift in management and worker’s attitudes promotes cooperation in organizational activities.

4. Division of responsibility – a clear structure in the work process, with managers responsible for planning and employees executing the work.

5. Development of employers & employees – the importance of employee development to enhance their efficiency and effectiveness within the organization.

Henry Ford (1863 – 1947), a renowned automotive designer, utilized Taylorism in the creation of the Model T, aiming to create an affordable and durable vehicle. In 1913, he introduced the assembly line and division of labor, revolutionizing automobile production by reducing the time it took to produce an automobile. The management approach streamlined the production process by training workers in specific skills, resulting in an affordable automobile from $850 in 1908 to $290 in 1927.

Administrative Management

Another type of classic management theory is the administrative management advocated by a Frenchman and engineer called Henri Fayol whose managerial ideas were shaped by his experience as a mining engineer and later director at the French Coal and Iron Company. His method focuses on productivity through training and worker behavioral qualities, earning him the title “The Father of Administrative Management.”

Administrative management began with the classification of activities that support the organization. In his Journal of Management History, Michael J. Fells wrote, "Fayol argued that all industrial undertakings precipitate activities that can be categorized into six groups: technical, commercial, financial, security, accounting, and managerial.” Next, Fayol's administrative principles stretched management activities into five functions of coordination which detail the core duties expected of every successful manager as follows:

1. Planning: create plans and priorities to define the necessary phases and technologies.

2. Organization: mobilize the required services like human capital, equipment, and money.

3. Command: ability to assign responsibilities and make decisions.

4. Coordination: support the progress of the business through meetings.

5. Controlling: measure staff’s actual performance to ensure work is completed in line with the organization’s policy.

Additionally, Fayol presents a set of 14 adaptable principles of management theory. Below are the principles according to Mahajan (2009):

1. Division of work involves dividing tasks among individuals into sub-activities that can enhance efficiency and productivity.

2. Authority: gives managers the right to make decisions.

3. Discipline: employees are expected to adhere to the policies and procedures.

4. Unity of command: to prevent confusion, employees should report to one superior.

5. Unity of direction: the plan should involve collaboration with one head and a single plan for group activities to achieve organizational objectives.

6. Subordination of individual interests to general interest: employees should put the interest of the organization above theirs.

7. Fair Remuneration: employees should be remunerated fairly and reasonably.

8. Centralization and Decentralization: Top management should be responsible for making crucial organizational decisions and decentralize authority to lower-level managers, enabling them to make decisions.

9. Scalar chain: there should be respect for the line of superiors from the highest authority to the lowest rank.

10. Order: The proper arrangement of social order and material things is crucial for ensuring smooth operations.

11. Equity: The organization must demonstrate fair and equitable treatment for all employees.

12. Stability of tenure of personnel: provide employees with the opportunity to settle down in their roles and prove their worth.

13. Initiative: encourages employees to develop and utilize their skills and abilities to innovate in delivering the organization's objectives.

14. Esprit de corps: Encouraging harmony and unity among team members.

Volkswagen is a prime example of effective administrative management. The company applies the division of work (labor) to manufacture quality products through various methods which include: (1) assembly line production focusing on specific tasks. (2) quality control involves assigning roles to specific employees such as inspectors. (3) Continuous improvement encourages employees to innovate. (4) The supply chain involves good cooperation with suppliers. (5) training & development to provide specialized skills and knowledge.

Bureaucratic Organization

The origins of bureaucratic organizational structures can be traced back to ancient civilizations. Still, the modern concept was further developed during the 19th century by German sociologist Max Weber in his work “Economy and Society,” which was published posthumously in 1922. Weber believes that bureaucracy characterized by hierarchical structures, clear authority levels, standardized procedures, and division of labor is the most efficient model for organizational operations. And to cement Weber’s legacy, Peter Drucker, a management consultant believes that “Organizations that adhere to a rigid set of rules are more likely to be successful.”

Weber's theory of bureaucracy suggests that organizations can achieve efficiency and cost-effectiveness when organized with a top-down power structure. Weber's techniques emphasize task specialization, division of labor, timely work, and clear roles. He identifies bureaucracy as an organization characterized by rules-based decision-making, professionalism, a chain of command, and restricted authority. In South Africa, this is evident in organizations like SARS (South African Revenue Service), Denel, and SANDF (South African National Defense Force).

Weber emphasized the importance of a professional and impersonal work environment, introducing three types of authority: rational-legal, traditional, and charismatic, each with unique characteristics. His management theory, as outlined by Peek (2020), outlines six characteristics similar to those of Fayol & Taylor.

1. Task specialization: ensures timely completion of work at the highest skill level, categorizing tasks based on team members' competencies and areas of expertise.

2. Hierarchical management structure: management division into layers, each responsible for its team's performance.

3. Formal selection rules: The selection of employees should be done based on their technical skills and competencies, acquired through education, experience, or training only.

4. Efficient and uniform requirements: employees should be provided with clearly defined and strictly enforced rules to understand their expectations.

5. Impersonal environment: professional and impersonal employee relationships foster rational decision-making based on facts and rational thinking.

6. Achievement-based advancement: promotions should be based on achievement, experience, and technical qualifications.

Bureaucratic management has been criticized for its contribution to delaying decision-making and reducing employee morale due to strict adherence to regulations. However, it is effective in organizations dealing with large amounts of standard information, as demonstrated by the South African Revenue Service led at the top of the organization by a commissioner. The commissioner is assisted by various executive committees and senior management teams that oversee various departments. Recruitment and advancement are based on employee abilities and competency, and rules and guidelines are established by the minister of defense.

Conclusion on classical approaches

Traditional management theories emphasize formal organization and specialization for effective production and profitability. In this approach, scientific management evaluates operational functions, administrative management centralizes and decentralizes decision-making authority, and bureaucracy traditionally uses physical work activities for enforcing organizational rules and standards. These classical approaches continue to influence modern management practices, with organizations adopting scientific management principles to streamline processes, increase efficiency, and reduce waste. Taylor's lean manufacturing techniques and Weber's bureaucratic structures are prevalent in large corporations and government agencies. These systems remain relevant in contexts where stability, predictability, and adherence to regulations are crucial.

However, their weaknesses rely on the fact that Taylor's scientific approach prioritizes productivity over social considerations, leading to exploitation thinking among workers due to high specialization and standardization in complex tasks. Fayol identified managerial functions independently, but his theory has been criticized by executive-level management for focusing solely on top-level perspectives, ignoring mid-level and line managers. Weber's bureaucratic theory undermines employees' innovative contributions to an organization's goals, leading to a decrease in productivity and discouragement.

Human Relations Approach: Focus on People

To address the shortcomings of the classical approach, a whole new approach to human relations is taking place in the workplace, that prioritizes employee wellbeing and employs management methods that view employees as motivated, committed contributors to the company. The human relations approach focuses on motivating teamwork, fulfilling needs, and achieving organizational goals, as a reaction to classical theorists' focus on formal organization structures and ignoring human factors like worker well-being. It also acknowledges that employees are not mere machines, but individuals with emotions, needs, and desires that influence their workplace behavior.

Mayo's study shifted focus from individual and physical factors to the importance of groups in the workplace, requiring sociological and psychological considerations. In his study at the Hawthorne Plant of the Western Electric Company in Chicago, he discovered that money isn't the only incentive for workers, and social pressures influence attitudes and productivity, indicating that human motivation is primarily social. “With the view of taking into account the social needs of employees, organizations should provide opportunities for meaningful work and creating conditions that enable fair wages, a conducive work environment and protection of human rights” (Rao & Kumar, 2010).

The key Principles of the Human Relations Approach are:

1. Social Needs: acknowledges that employees' social needs extend beyond financial compensation, focusing on recognition, belonging, and a sense of community within the workplace.

2. Informal Groups: acknowledges the existence of informal groups within organizations, recognizing their impact on employee behavior, offering support, camaraderie, and a sense of identity.

3. Two-Way Communication: emphasizes the importance of effective communication between management and employees to foster trust, collaboration, and feedback.

4. Participation: involving employees in decision-making processes, which can boost motivation, job satisfaction, and commitment among organizations.

5. Leadership Style: encourages a more democratic and participative leadership style, promoting support, empathy, and understanding among team members, in contrast to traditional authoritarian methods.

6. Conflict Resolution: acknowledges conflict as a natural aspect of organizational life, promoting open and constructive resolutions to find mutually beneficial solutions.

7. Employee Development: emphasizes the importance of investing in employee training and development to foster a more engaged and motivated workforce.

By implementing a Human relations approach, organizations must understand individual factors influencing motivation and provide benefits to employees to improve productivity. Despite the growth of remote technology and group work, organizations must foster positive group dynamics for teamwork and positive employee attitudes. Effective leadership is crucial, as managers spend 75% of their time in verbal interaction with subordinates. Leaders are encouraged to adopt participative decision-making processes that empower employees and foster a sense of ownership in achieving organizational goals. Creating positive working conditions can promote increased individual and group attitudes. These initiatives lead to a more fulfilled workforce, better performance, improved morale, increased retention, and loyalty to the company. Human relations theory is advantageous in the evolving corporate environment, promoting team building, a motivated workforce, and enhanced production. Rore Burke believes that “team development is a dynamic process where the relationships between the team members pass through a number of phases as they get to know each other. It is important for the project manager, as team leader, to be aware of these development phases so that the team members can be guided through the stages. This will increase the team members’ effectiveness and protect them from interpersonal conflict, which could implode the team.”

Integration of Classical and Human Relations Approaches

While the classical and human relations approaches are often portrayed as contrasting paradigms in management theory, many scholars argue for their integration to achieve holistic organizational effectiveness. These two theories consist of increasing corporate or business profits and performance through a systemic implementation of rational management strategies which represents the main aim of those management scientists. The practitioners of management agree that there is no one-size-fits-all approach to management; instead, managers should adapt their practices based on situational factors such as task complexity, environmental uncertainty, and workforce characteristics. By combining elements of both approaches, managers can leverage the efficiency-driven principles of scientific management while also attending to the socio-emotional needs of employees emphasized by human relations theory. For instance, a manufacturing firm may implement lean production techniques to optimize operational processes while concurrently fostering a culture of teamwork and collaboration among workers.

Challenges in Applying Both Approaches Today

To effectively assess and comprehend these different approaches, it is crucial to base evaluations on a set of shared characteristics. Scientific management, while a foundation for modern management, faces challenges in today's fast-paced business environment. Balancing efficiency, innovation, employee empowerment, fostering a collaborative culture, and promoting diversity are essential. Adapting administrative management strategies to modern business challenges requires a proactive approach that embraces change, technology, diversity, and data beyond traditional office-based dynamics. Furthermore, globalization has brought about cultural diversity, security, and sustainability. While successful in the past, bureaucratic organizations face challenges in today's business environment such as innovation demands due to their rigid hierarchies and formal procedures.

On the other hand, human relations approaches focused on interpersonal relationships may encounter difficulties in virtual or remote work settings where face-to-face interactions are limited. Building trust among team members dispersed across different locations requires innovative communication strategies that go through challenges that require managers to navigate cross-cultural differences sensitively while promoting inclusivity within multinational teams. The human relations approach’s emphasis on understanding individual motivations becomes more complex when dealing with employees from diverse backgrounds with varying values and expectations.

A Case Study Example in the modern-day – Vodacom Telecoms

Vodacom, a leading African telecommunications company based in South Africa, employs a blend of classical and human relations management approaches. The company's strategic decision-making process and improved communication have been significantly enhanced by its clear chain of command and well-defined organizational structure. Additionally, Vodacom has made significant investments in technology and automation to enhance efficiency and productivity, adhering to the principles of the classical approach. Vodacom uses human relations principles in management, implementing employee engagement initiatives like recognition programs, training, and work-life balance policies to foster satisfaction, motivation, and loyalty. Furthermore, Vodacom emphasizes the significance of effective communication in fostering strong employee relationships through various channels like town hall meetings, employee surveys, and suggestion boxes.

Vodacom's management style balances efficiency, productivity, and profitability with employee engagement, communication, and motivation, ensuring business objectives are achieved while prioritizing employee well-being, and aligning with scientific management and human relations principles.

Conclusion

Understanding management theories is crucial for a manager to be effective in their roles. The classical management theory emphasizes efficiency, specialization, standardization, hierarchy, and profit maximization. The theory offers advantages such as increased productivity, cost reduction, and a clear hierarchy. However, it may lack employee involvement, resistance to change, and a limited focus on employee development. The human relations management Theory, developed in the mid-20th century, focuses on employee motivation, job satisfaction, and workplace relationships, offering benefits like increased motivation and adaptability to market changes. However, it may also lead to reduced efficiency and implementation difficulties.

Both classical and human relations approaches have left a lasting impact on contemporary management practices by shaping how organizations structure their operations and engage with their workforce. While classical principles continue to inform efficiency-driven strategies aimed at optimizing performance metrics, human relations insights underscore the importance of fostering positive workplace relationships for long-term success. Managers today face the challenge of integrating elements from both approaches to create adaptive organizations capable of responding to changing market conditions while nurturing a supportive work culture that values employee well-being. By recognizing the complementary nature of classical efficiency principles with human relations focus on people-centered leadership, organizations can achieve a balanced approach that maximizes productivity while enhancing employee satisfaction.

In conclusion, based on my case study of the Vodacom organization, both classical and human-relation theories have a significant influence on today's business environment. So, the choice between Classical or Human Relations Management Theory depends on an organization's specific needs and context.

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