Neo classical Theory of organization in hindi & English ||Diff b|w Classical & Neo Classical Theory

The NeoClassical theory posits that an organization is the combination of both the formal and informal forms of organization, which is ignored by the classical organizational theory. ... The NeoClassical theory asserts that an individual is diversely motivated and wants to fulfill certain needs.
Three Organisation Theories: Classical, Neo-Classical and Modern Organisation Theory!

1. Classical Organisation Theory:

The classical writers viewed organisation as a machine and human beings as components of that machine. They were of the view that efficiency of the organisation can be increased by making human beings efficient

2. Neo-Classical Organisation Theory:

The classical theory of organisation focussed main attention on physiological and mechanical variables of organisational functioning. The testing of these variables did not show positive results.

The main propositions of neo-classical theory are given as follows:

1. The organisation in general is a social system composed of numerous interacting parts.

2. Informal organisations exist within the formal organisation. Both are affected by and affect each other.

3. Human being is independent and his behaviour can be predicted in terms of social factors at work.

4. Motivation is a complex process. Many socio- psychological factors operate to motivate human beings at work.

5. A conflict between organisational and individual goals often exists. There is a need to reconcile the goals of the individual with those of the organisation.

6. Team-work is essential for higher productivity.

7. Man’s approach is not always rational. Often, he behaves non- logically in terms of rewards which he seeks from his work.

8. Communication is necessary as it carries information for the functioning of the organisation and the feelings of the people at work.

Improvements over Classical Theory:

Neo-classical theory offers modifications and improvements over classical theory

3. Modern Organisation Theory:

Modern organisation theory is of recent origin, having developed in early 1960’s. This theory has tried to overcome the drawbacks of earlier theories. In the words of W.G. Scott, ‘The distinctive qualities of modern organisation theory are its conceptual analytical base, its reliance on empirical research data and, above all, its integrating nature. These qualities are framed in a philosophy which accepts the premise that the only meaningful way to study organisation is to study it as a system.” This theory may be understood in two approaches: systems approach and contingency approach.
:-some of the silent features of new classical theory of organisation are
#Flat structure
#decentralization #informal organisation
#shortcomings of neo classical theory


The key difference between classical and neo classical theory is that the classical theory assumes that a worker's satisfaction is based only on physical and economic needs, whereas the neoclassical theory considers not only physical and economic needs, but also the job satisfaction, and other social needs..

Difference Between Classical and Neo Classical Theory



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