The Neoclassical Organizational Theory

The neoclassical organizational theory, which evolved as a reaction to the rigid, authoritarian structure of the classical organizational theory, focuses on the importance of human relations and behavior in the workplace (Docherty et al., 2001). According to the classical organizational theory, there is a single best method to designing an organization. Based on this theory, a manager must have close control over their subordinates, resulting in an organization with tall hierarchies and a narrow span of control (Scott, 1961). In contrast, the neoclassical organizational theory argues that both economic effectiveness and employee satisfaction should be priorities in an organization. Based on this theory, a manager should have loose control over their subordinates, resulting in an organization with flat hierarchies and a wide span of control (Scott, 1961). In turn, the neoclassical organizational theory gave rise to two movements known as the human relations movement and the behavioral movement. The human relations movement is based on how people relate to and interact with one another within a group whereas the behavioral movement is focused on the individual behavior of employees (Docherty et al., 2001).

The human relations movement, which developed from the work of Elton Mayo and Fritz J. Roethlisberger’s Hawthorne studies, focused on social factors, such as the treatment of employees by management and interpersonal relationships among colleagues, rather than economic factors, as the driving forces behind human behavior in the workplace (Sonnenfeld, 1985). The studies took place at the Western Electric plant in Hawthorne, New York where Mayo and Roethlisberger measured employee productivity while manipulating the levels of light ...

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...essential that managers create an environment that is conducive for individual growth and achievements in an effort to increase employee satisfaction and maximize productivity. This can be done by encouraging employee participation in decision-making processes and providing the necessary resources for them to succeed personally and professionally.

Works Cited

Docherty, J., Surles, R., & Donovan, C. (2001). Textbook of administrative psychiatry. (2nd ed.). Washington, DC: American Psychiatric Publishing, Inc.

Hindle, T. (2008). Guide to management ideas and gurus. New York, NY: Economist Intelligence Unit.

Scott, W.G. (1961, April 1). Organization theory: An overview and an appraisal. Journal of the Academy of Management, 4(1), 7-26.

Sonnenfeld, J.A. (1985, April 1). Shedding light on the Hawthorne studies. Journal of Occupational Behavior, 6(2), 111-130.