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1. NEO CLASSICAL THEORY

2. Neo-classical theory of management is an extended version of the classical management theory. It arose out of the critique of classical theory. Theorists worked on a new approach by using classical theory as the bedrock by focusing more on human relations and behavioral science. 

3. The essential features of the neoclassical approach of management are: The Business Organization Is A Social System The Human Factor Is The Most Critical Element In This Social System Social And Psychological Factors Play A Crucial Role In Determining Productivity And Employee Satisfaction The Management Should Also Develop Social And Leadership Skills Apart From Technical Skills. They Should Think More About The Welfare Of Workers Productivity In An Organization Is Directly Related To Employee Morale.

4. Elton Mayo, Chester Barnard and Herbert Simon are some of the famous neoclassical theorists. They are responsible for introducing and experimenting with the neoclassical approach.

5. Two Movements In The Neoclassical Theory Of Management The neoclassical organizational theory talks about ways and ideas that focus on the emotional beings of the organization. There are two primary sources of the neoclassical theory of organization: the human relations movement and the behavioral science approach.  The human relations movement regarded organization as a social system. Social physiologists and sociologists put focus on group dynamics and promoted people-management skills in addition to technical skills. The behavioral science approach considers human behavior in organizations and promotes the development of human beings and its benefits at the individual and organizational levels. Let’s take a look at how the work of these various sociologists and psychologists promoted neoclassical organizational theory.

6. Human Relations Movement This resulted from Elton Mayo and Fritz J. Roethlisberger’s Hawthorne studies. According to them, social and psychological factors are important in determining worker productivity and satisfaction. The movement shows that efficient leaders are employee-centric, democratic and follow a participative style.

7. Behavioral Movement This had contributions from various sociologists and psychologists such as A.H. Maslow, Douglas McGregor, Argyris, F. Herzberg, Rensis Likert, J.G. Likert, Kurt Lewin and Keith Davis. It is a more mature version of human relation theory. The theory proposes ideas about how managers should behave to motivate the employees. And the aim is to encourage employees to perform at the highest level and achieve organizational goals.

8. Criticism Of Neoclassical Theory Of Management The following are the main criticisms of this theory: The Theory Is Merely An Extension Of Classical Theory With Human Insights Attached To It The Theory Is Outdated As The Situational And Contingency Theories Address Its Loopholes It Assumes Every Organization Runs By A Single Method Irrespective Of The Environment