1.What is Organisation and Organisational Behaviour?

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1 1.What is Organisation and Organisational Behaviour? Organisation is a cooperative interaction dynamic in social system with the purpose of satisfying individual needs (Barnard, 1938). This is not a sole definition about organisation, there are many other terms about organisation such as, Mintzberg (1983) Organisation is "Every organized human activity -- from the making of pots to the placing of a man on the moon -- gives rise to two fundamental and opposing requirements: The division of labor into various tasks to be performed, and the coordination of these tasks to accomplish the activity". Organisational behaviour focuses on the study of the people behaviour within the organisation (Luthans, 1995). The Organisational Behaviour commonly known as the study and understanding of individual and group behaviour, and the path of structure towards improvement of organizational performance and effectiveness (Robbins, 1998). Another term of Organisational behaviour is a major discipline towards description, understanding, and prediction of human behaviour within formal organisation. Organisational behaviour as discipline is the clear recognition that organisations make internal settings that influence the behaviour of people within it and to some point the internal condition of an organisation is influenced by the large components such as economic, politic, social, and technology which support the organisation (Owen, 1987). Based on these definitions we can see that organisation consists of many elements which built it. From the people, the system, and the goals, these 3 elements have to be integrated towards the organisation improvement and better performance. This paper will discuss about the two theories about management. The comparison, the nature, and the origin of these theories will be presented in this paper. 2.The Theories of Organisation Studies -The Classical Approach- The origin of Classical Approach carried out initially in the early part of the century, by such scientist as Frederick W. Taylor, Henri Fayol, Urwick, etc. Most of them were laying the fundamental for a comprehensive theory of management (Mullins, 2005). Frederick W. Taylor came up with the so-called Scientific Management through his book The Principle of Scientific Management on His theory emphasizes in obtaining increased productivity from each worker through structuring the technical work organization and providing monetary incentives as the motivator for higher results. He believed there is a most efficient working method by which employee should do their jobs. He argued that all jobs processes can be determined into discrete tasks, so that tasks, by scientific method, was able to find the best way to undertake each task, these terms recognized as division of labour. Taylor found out the major cause of inefficient work is lack of employee initiatives on his job. This issue obtain another negative impacts for company such as waste of human effort, waste of material things, waste of time, etc(freedman, 1992). In other words, Taylor thought the basic cause of these waste was because company focused too much on the output of job rather than focusing on every single process by which the work was finished. This condition was normally happened in that time

2 because most of company used predetermined results, usually throughout the number of finished product, to measure appropriate salary or incentives for the workers. Having said that, Taylor saw initiatives and incentives system are major problem for company in order to improve their performance. Therefore, he argued that the only way to increase performance is by giving special incentive so the company can hope to get a lot of initiatives from his employee (Owens, 1987). The other contributor of Classical Theory is Henri Fayol. Henri Fayol has different perspective than Taylor, he was focusing on the manager rather than the employee and he emphasized in administrative aspects in the organization. Fayol established five administrative functions: (1) Planning; (2)organizing; (3)commanding; (4)coordinating; (5) controlling. By these terms, it is obvious that Fayol concerned in commanding and controlling the organization towards high performance. Moreover, another contributor for this approach is Max Webber, a German sociologist, who came up with the idea of bureaucracy. Weber believed the bureaucratic concept was an approach to minimize the frustrations and illogicality of huge organization where the relationship between executive level and workers are based on class privilege (Owens, 1987). The nature of Classical Approach, basically, associated with two major theorists. The first one is Scientific Management which established by Frederick W. Taylor and Henri Fayol, and the other one is Bureaucracy which invented by Max Webber. Based on their theorists, classical approach mainly focused on the hierarchy concept which usually recognized as line and staff (Owens, 1987). The Classical Approach were focused on the design of a coherent structure of organization, they believed by designing good organization structure will improve efficiency. The other principle of Classical Approach is the unity of command within organization, it is a vain if company has good organization structure but lack of unity of command within it (Mullins, 2005). Another principle in Classical Approach is the span of control in the organization. The core concept of this principle is to determine the number of subordinates below the supervisor, the ratio of subordinates compare with the supervisor has to be optimized, and otherwise the problem will occur in the organization. Mooney and Reiley set out three common principles in Classical Approach which are: The principle of coordination : the must have for employee to work together with unity of command, the exercise of authority, and the require for discipline; The scalar principle : the hierarchy of organization, the duties need to be graded, and the delegation of works; The functional principle: a well defined specialization of works and the clear distinction between different kinds of duties. The Classical Approach was suitable for the early 1900 s when the main issues in companies or organisations were mostly related to the rising number of employee, increasing demand, full of mechanisation, and the tasks rationalisation in every jobs (Terry, 1975). Despite, there are many arguments that said Classical Approach is suitable and works longer than they predicted. If we take a look Henri Fayol s theory about 5 principles of management, planning; organising; commanding; controlling; and co-ordinating, such terms still being used by many companies today, such as Japanese on their Just-in-Time framework, quality circles, kanban system, and many other Japanese managerial framework (Fells, 2000).

3 In conclusion, the nature of Classical Approach tends to describe and define some set of predetermined principles which would generate the basis of management. The common understanding for these dealt with organization structure which possessing a hierarchical structure and operates in extremely logical, systematic, and rational. By using these concepts, they belief there will be optimum solution of system management for every condition, if the optimum solution achieved the effectiveness will result (Terry, 1975). -The Human Relations Approach- In 1920s, Western Electric Company associated with National Research Council did some experiment designed to calculate the optimum intensity level of the light for maximise the production efficiency in a shop. They did this famous experiment in Hawthorne plant that is why this experiment popularly known as Hawthorne experiment. Elton Mayo was the member of the research team, and perhaps he is the well known educator at the time. They found out that the human variability has to be taken into account in determining the productivity (Owen, 1987) and it shown that there was another variable which can influence employee productivity besides the incentives. Hawthorne study indicated the economical reason was not the only influence to the employee behaviour (Johnson, 1993). This research was the beginning of the human relations movement. During 1927 until 1932, this research group tried to analyse the outcome from different kinds of variable in productivity, the changed such factors as incentive amount, number of working hours, intensity of lighting, method of payment, co-workers and manager substitution, etc, they actually made an industrial situation where the manipulated external aspects of organisation leads to different productivity or outcome (Pyoria, 2005). The Hawthorne Experiment established new concepts of organisation management to be used in practical situation. The concepts consist of many variables such as employee morale, dynamics of group worker, the supervision method, relationship between workers, the behavioural principles of motivation (Owen, 1987). This argument is actually strengthened by Marie Parker Follet theory, which established before the Hawthorne Experiment. Follet put an idea of the group power, followership, and involvement in the organisation. In addition, many theories have been found related to the human relations in organisation before The Hawthorne s experiment take place, such as in 1863 William Hearn from Australia put forth the idea of the hierarchy of human needs and Hugo Munsterberg came up with the industrial psychology in 1890s at Harvard. But still, Mayo s, with the Hawthorne, manuscripts and books are known as the foundation of Human Relations approach (Lemak, 2004). The other author who contributed the Human Relations Approach was Edward Mcgregor who has the famous theories, Theory X and Theory Y. Theory X basically is explaining that humans dislike and avoid to work, therefore they need control, guide, and force toward organisation s objectives. Conversely, Theory Y said that people like to work and they are able to learn and seek responsibility under the right conditions (Zilbert, 2000). Mcgregor s theories, obviously, support the human relations approach in terms of managerial context of managing the people in the organisation and it strengthened the key idea of Human Relations Approach about the nature and the role of manager which concerning in emotional factor in employee and social justice as the objective for this approach.

4 The perspective of Human Relations Approach concerns that the organisation becomes further than just a profit oriented enterprise, they become more than just a place to work but also a medium for administering social interaction (Lemak, 2004). Regarding to Mayo (1933, p.73) the consequence of the social interaction in organisation was the each personnel and the group as a whole themselves need to adjust into the industrial situation where their self determination and social welfare prioritised first and the work itself is supplementary. One of the main characteristic of the human relations approach is the group of employee taken as the main unit of analysis instead of individual employee. The other hallmark of this approach is the viewing of employee motivation in terms of social needs rather than economic needs (Lemak, 2004). The Human Relations approach has been proved that this approach is relevant nowadays, even though it has been written almost 7 decades ago. This theory generates ideas emphasizing the significance of team work and leadership, good communication, motivation, and work design (Mullins, 2005). The idea of organizing teamwork is one of the notion that has long lasting value until now. As we known, the efficient team work requires a collective goals, strong relationship among the members, feeling of togetherness, and strengthening social cohesion between employee can lead to good atmosphere in the organisation (Pyoria, 2005). The positive atmosphere in the organisation tends to be established because it can enhance the employee performance and by the end the organisation performance will enhance as well. The efficient teamwork is still being used in many big companies nowadays such as General Electric, Unilever, and many big consulting companies. They tend to implement team working because they believe this idea can bring positive impact for the company. In conclusion, the Human Relations Approach introduced the significance of the informal organisation that always involves within the formal structure of organisation (Mullins, 2005). This informal organisation was the main influence of the employee s behaviour. Therefore, manager or to management in the organisation have to concern and aware about this informal organisation. If they can create and embed sentiments which support their goals by fulfilling employee s social and emotional needs, the effect would be the higher performance and the social harmony within the organisation (Johnson, 1993). 3.Classical Approach versus Human Relations Approach These two schools of management thought had their own principles, view, ideas, and approach. The explanation above provides evidence of how different they were. Many important points of differences will be discussed below; The Classical approach, mainly, focusing on the jobs and the structure within the organisation. They believed the organisation needs to be built according to specific goals and plan within an inflexible specification (structure), that is why this theory, merely, seeing workers as a machine. These characteristics are very contrast to Human Relations Approach which argued that the people have to be the basis of the organisation. Organisation needs to be looked as the social function where the relationship, people needs, and emotional needs are the driver of workers performance which can lead to enhancement of organisation performance (Lemak, 2004 and Hersey, 2001).

5 The role of the manager under the Classical approach is to create the job specification, rules, procedure etc. and enforce the workers to do all of it appropriately. Manager was to be seen as the trainer & planner who has the higher authority in the organisation. Due to this higher education and superior authority, manager was to design the most efficient way to do all the jobs and ensure the employees can do maximum output from their job (Lemak, 2004 and Mullins, 2005). On the contrary, Human Relations Approach argued the function of the manager is to embed cooperation and coordination inside the organisation. The managers need to be aware with what motivates the workers and why workers need that. The role of the manager shifts into facilitator and builder of the team, by doing theses Human Relations believed it will enhance the worker s performance. As a consequence, the productivity and the performance will sharply increase also (Hersey, 2001). The Classical Approach argued that workers can do a good job if their economical needs have been attained beforehand. This thought is basically based on the Adam Smith s economic theory which said that human nature is fundamentally rational. Thus, the only motivator for employee to work in better performance is monetary incentive that is why the people who work under Scientific Management called as economic man (Wagner et.al, 2008). Conversely, the Human Relations Approach said that the social and personal needs are the major influence for employee performance. The satisfaction of socialising, good job atmosphere and sense of belonging throughout the organisation are the main driving force of performance enhancement. Therefore, the people who work under Human Relations Approach called as social man (Donnelly, 2000). Both of these approaches have their own strength point. Classical theory can establish an industrial harmony in the organisation by using their principles (planning, organising, commanding, etc) and the bureaucracy approach. That is why many big companies are using this approach, they believed this approach will gain more efficiency and quick decision making in the organisation. As a note, such companies which are using this approach, basically, have a very large number of employees. Army is one of the examples of the company who use this approach. It is obvious such companies apply this Classical Approach, because they need standardisation and specialisation to manage their large company. On the other hand, Human Relations has the strength as well. This approach really emphasize in importance of personnel management, which its movement has led to ideas on obtaining more output by humanising the work (Mullins, 2005). Having said that, this approach is really developing nowadays, with regard to the humanisation, many companies using their principles to obtain the better performance and social harmony in the organisation. Team works, leadership, communication, and motivation are very popular words in management at the moment which we know it is all the human relations principles. Classical approach has a lot of criticisms. Many studies shown doubt about the effectiveness of this approach, especially in management nowadays. The most significance failure of this approach is lack of human factors. Because of that, classical approach has point of weaknesses such as (Blauner 1964, cited in Johnson, 1993): Inability of employee to use control over work processes Lack of employee understanding about what is the purpose on their job Employees failed to become involved in the jobs Lack of sense of belonging with the organisation

6 Human Relations cannot avoid the criticisms as well. Many criticisms point out that this approach is lack of scientific approach and it has only few perspectives. It avoids the role of organisation itself in how the social system operates. Since the central point of this approach is the human motives, it couldn t provide explicit statement of the basis of organisation planning, managing, and organising. To some extent, Human Relations only concerning to the attitude and behaviour of the employee rather than concerning in principles of organisation (Barnes, et.al., 1970). 4.Conclusion Organisation can be defined as the division of work among people who work together and coordinated to reach the specific goals. The study of organisation can be approached with two studies. The Classical approach views organisation as a closed system and possessing rigid hierarchical organisation structure and operating in rational, systematic, and logic path. This theory tends to put the system in the organisation as the main focus rather than the people within it. The Human Relations approach perceives organisation as a open system where the needs and the values of the people have to be managed in order to reach organisation s goals. This theory put human as the unit of analysis and the core instrument in the organisation. Both of these theories have their own strength and weaknesses. I believe each theory will perform very well to some particular type of organisation and it will be much more better if we combine these theories because the coordination within the organisation can t work unless employee within it are willing to cooperate with the management. Therefore, I argue that the needs and values of the people as a human must be considered and integrated with the needs and values as described by the vision and mission statement of the organisation. The system of the organisation has to take into account the element of the human (employee), otherwise organisation cannot move smoothly to reach their specific goals.

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