Archive for Neoclassical viewpoint


The classical bureaucratic model of organization though pervasive, has been considered inappropriate to the changing requirements of modern times. A bureaucratic organization was considered to be too inflexible and hierarchical to adapt to the changes occurring in organizations and technology.


Parkinson’s laws and Peter Principle highlight the negative aspects of bureaucratic organizations. Whatever be the criticism against bureaucracies, it is realized that to some extent they have become essential. Therefore, writers and organizations began to explore ways to modify the bureaucratic organization structures. In essence these new structures reflect modifications to the classical principles of delegation of authority and standard of control.


Delegation extends the scope of the principle to the point of an abiding organization-wide philosophy of management. A tall organization structure means a series of narrow spans of control, and a flat one incorporates wide spans and limited layers of control at horizontal levels. Both the structures have their advantages and disadvantages. They should be viewed on relevant concepts and not as ideal absolutes.


A tall structure calls for control and close supervision over the subordinates. But close supervision may not necessarily produce better control. Similarly in a flat organization with wide spans, it may not be possible to keep close control over subordinates but it provides for decentralization, individual initiative and self-control. Tall structures are less favorably viewed it is held that self-control is better than imposed control. The choice in this regard however rests ultimately on management assumptions about individuals and groups in organizations.


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The neoclassical theory, also referred to as the human relations school of thought reflects a modification to and improvement over the classical theories. While classical theories focused more on structure and physical aspects of work (notwithstanding Taylor’s concern for mental revolution), the neoclassical theory recognizes the primacy of psychological and social aspects of the worker as an individual and his relations within and among groups and the organisation. Though neoclassical philosophy could be traced to ancient times, it gained currency only after the World War I, particularly in the wake of the “Hawthrone experiments” at Western Electric Company by Elton Mayo during 1924 to 1932.


The initial experiments carried out cover a period of three years sought to determine the effects of different levels of illumination on workers’ productivity in the test groups, productivity raised irrespective of variations in illumination at indifferent experiments. In the second set of experiments which began in 1927 a smaller group of six female telephone operators was put under close observation and controls. Frequent changes were made in working conditions such as hours of work, lunches, rest periods, etc. Still, over a period of time as the experiments continued with such changes, productivity continued to rise. It was concluded that the social or human relationships among the operators, researchers, and supervisors influenced productivity more decisively than changes in working conditions.



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