Question

Explain the thoughts of neo-classical theory.

Answer 1

Thoughts of Neo-Classical Theory:

• By the end of 19th century, formats and size of industries started growing due to industrial revolution. The classical theory proved to be less effective , on these large industries and so there rose a need for changes in these principles.
• So, to remove some limitations of classical theory, some management experts made changes to the existing principles and established new approaches. These new approaches or principles were called thoughts of Neo-Classical Theory.
• In the start of 201h century, Australian Industrial psychologist Elton Mayo gave the concept called the ‘Hawthorne Effect’ based on the study that he did in Hawthorne Works, America.
• This theory gave a new birth to behaviour oriented thought. Hence, Elton Mayo is called promoter of Thoughts of Neo-Classical Theory’:
• Thoughts of neo-classical theory emphasizes on behavioural approach and group behaviour.
• Later, certain additions were made to the thoughts of neo-classical theory.
  Keeping in mind the concepts of classical theory, certain additions were made in the neo-classical theory which included informal organization, human behaviour, human relations, inspiration, etc.
• Elton Mayo, Herzberg, Rensis Likert, Chris Argyris, McGregor and Maslow are main contributors to these thoughts.
• The thoughts of neo-classical theory especially focus on human relations or human behaviour thoughts, thoughts of social mechanism and social arrangement.