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Neoclassical Theories of Management

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Jenny Jose

on 11 October 2013

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Transcript of Neoclassical Theories of Management

Weaknesses in classical theories
Urgency of a new theory
Introduction to Neoclassical theory of Management
Elements of the theory
Theorists and their main works
Neoclassical Theories of Management
Amaya,Kayanush, Nitesh,Parth,
Jenny,Vaishnavi, Chanpreet &Paritosh

closed-system, rational theory is too narrowly focused on production
reduces the human component to mere fleshy machines
deteriorated individual craftsmenship by helping invention of Industrial Revolution
promotes capital intensive economies
largely derived intellectually than empirically; thus criticised
anatomy/structured concerned, instead of individual needs and their potential
neglected the large scale changes in environment
Weaknesses of Classical Theory
classical economists were not well known for being a happy and optimistic bunch
some believed that population growth would be too rapid for the resources available
some believed that the government should not intervene to try to correct as this would only make things worse
(the 'laissez-Faire' approach)
this approach essentially placed total reliance on markets, it had to be done away with as it prevented markets from clearing properly
...and problems created from classical theories needed a solution
The neoclassical theory was an attempt at incorporating the
behavioral sciences into management thought
in order to solve the problems caused by classical theory practices.
Introduction to neoclassical theories
Rather than focus on production, structures, or technology, the neoclassical theory was
concerned with the employee

Neoclassical theorists concentrated on answering questions related to the best way to
motivate, structure, and support employees
within the organization.
As there is a close connection between moral and production, neoclassical writers emphasized that management must take greater interest in employee development & workers satisfaction
recognizing the individual differences which the classical theory ignored
every individual has emotions, aspirations, attitudes, hopes, feelings and expectations
the new classical theory advocated a package deal of motivation including financial and non financial incentives to make the workers feel at ease at work and increase their productivity
individual in a group develops social wants
as he is a social being he develops a desire to belong and be accepted by his work group
ParTiCiPaTiVE Mgmt
neoclassical theory suggested that workers participation in management improves their productivity
classical theory was job oriented; neoclassical theory is employee oriented
there is a shift in managerial style from product oriented approach to employee and group oriented approach
neoclassical writers emphasized satisfaction of workers whereas the classical theory emphasized the productivity
classical theory was concerned with the basic needs of the organization and society whereas the neoclassical theory approach tried to satisfy the personal security and needs of workers
neoclassical writers considered business organizations as social system
employees needed to be motivated by social and psychological wants and not solely by economic incentives
Democratic style of leadership was essential
found holes in classical organizational theory, attempted to revised it, and spurred almost all other school of thought that followed
led to further research and study related to humanness of organizational members, co-ordination needs among administrative units, operation of external-internal relations and the process used in decision making
De-emphasized simplistic mechanistic organizational theories
helped the future incorporation of professions into organization theory, such as sociology
neo-classicists did not develop a body of theory that could adequately replace the classical school
attempted to blend assumptions of classical theory with concepts that were subsequently used by later organization theorists from all perspectives.
it was an anti-school; could not stand on its own
Full transcript