Organisation Theory from Classical and Neo-Classical Origins and Forces that Shape Organizational Structure

This essay provides a detailed description of classical and neo-classical approaches to management, along with the various forces that shape organizational structure. It also covers contemporary marketing, cultural excellence, Japanese quality control methods, and organizational learning. The essay concludes that proper management is essential for any company to succeed.

ORGANISATION
THEORY

Table of Contents
Organisation theory from its classical and neo-classical origins and forces that willl shape
organizational structure in the future...............................................................................................1
REFERENCES................................................................................................................................6

Organisation theory from its classical and neo-classical origins and forces that willl shape
organizational structure in the future
To enhance performance of employees and to increase their productivity along with operational
efficiency it ids very important for companies to execute effective management policies as well
as procedures as they assist in supporting business. In the late 19th century and over 20th century
the classical theory is emerging which is defined as an approach to management in business. On
the other hand neo-classical theory of management is defined as extension, modified and
improved form of classical theory that mainly focus on human resources of the company. This
theory is also described as behavioural theory of organisation or human resources (Olsen, 2019).
There are various forces that helps in shaping structure of organisation such as industrial,
technological, automation, complexity, business strategies, resource distribution, culture,
industrial, innovation and many others. The following essay will provide description about
classical and neo-classical approaches of management in detail along with various forces that
helps in shaping structure of organisation for an organisation.
Classical organisation theory defines companies as machine and employees are described
as factors of that machine. This mainly focus on labour specialization, centralized authority and
incentives that assist in optimizing productivity as well as in enhancing profits. There are various
personalities who put their initial contribution of classical management which include Henri
Fayol, Max Weber and F.W. Taylor. There are three main factors on which classical
management theory is based on that involves hierarchical structure, incentives and specialization.
This theory of management assist in implementing clear structure by which the company could
be able to perform each functions and operations effectively that will help the organisation in
accomplishing their organisational objectives. Therefore, these theories are very useful in
streamlining operations along with enhancing productivity of workers and overall organisation.
F.W. Taylor purposed the scientific theory of management that mainly focus on productivity and
efficiency of people. The main purpose of this theory is to increase production of an organisation
that will support in enhancing efficiency of an individual (Hatch, 2018). The scientific theory of
management states that the motivation among employees could help companies in enhancing
their efficiency along with achieving competitive advantage in the market. This theory also assist
in improving management approaches by which employees productivity could be increased and
this will enhance their abilities to accomplish organisational objectives effectively. This theory
also assist in standardizing the procedures, cost and time across overall procedures along with
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offering financial incentives which work as motivational factor for employees that helps in
boosting their productivity. The scientific management theory also assist in evaluating and
synthesizing the workflow in an organisation. This theory also assist in improving economic
efficiency of the a company. Principles of management is classified as classical theory that helps
managers of an organisation in managing organisational activities effectively thorough
employees by getting their maximum efforts. Henry Fayol has given 14 principles of
management that are determined as top-down methods. The 14 principles of management
includes unity in direction, authority, division of work, discipline, centralization, remuneration,
scalar chain, collective interest over individual interest, order, equity, initiative, stability, unity of
command, stability of tenure and esprit de corps. There is another classical theory which was
purposed by Max Weber that explains bureaucracy which was begin in 20th century. The theory
of bureaucracy is mainly based on six principles that includes well-trained workers,
specialization, managerial dedication, formalized rules and impartiality of management
(Budzinski and Kuchinke, 2018). According to this theory, it is very essential for companies to
implement hierarchical structure by which they could accomplish their organisational objectives
along with enhancing productivity of employees. According to classical theory of Max Weber, it
is important for organisations to have well trained employees who could perform assigned tasks
and responsibilities effectively. Furthermore, bureaucracy requires managerial dedication and
there should be impartiality of management. This theory explains that clear set of rules and
regulations along with effective line of authority assist organisation in managing business
functions smoothly.
The neoclassical methods defines that companies are a combination of both informal and
formal forms of business. The informal structure of companies are structures through social
interaction among employees that will impact the formal structure of business. There are various
organizations which implements new classical organizational theory that is defined as working
principle. According to new classical theory people who are motivated and want to accomplish
their certain demands by which they could effectively perform various functions of business.
Hence, this extended version of classical management theory mainly pedes focus on behavioural
science and human (Denhardt and Baker, 2018). This theory of management is certainly based
on emotional factors of an organization. There are three main factors included in new classical
theory which are work groups, individual and participative management. The behavioural
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science method values behaviour of human and business along with promoting the development
of human capital that will assist in offering various advantages at organizational and individual
level. The human relation theory of organization is defined as school of organizational ideas that
majorly paid attention on satisfaction of workers, motivation factor that enhance productivity of
employees and informal workplace environment. This story mainly focus and importance of
workers as individual that also supports in maximising the performance along with productivity
in order to perform better in an organization. This story also assist in understanding
organizational and industrial psychology. According to this theory workers of a company
respond highly when they get proper supervision and attention from seniors. The proper
guidance provided by the senior authorities helps them in enhancing their productivity and
performance. According to one of the psychologist Abraham Maslow, needs work as a driving
factor of motivation that encourages workers to perform effectively and willingly within an
organization. This theory states that needs of workers are based on diverse levels that starts from
basic demands of humans and accomplishing a need that could encourage employees to seek for
another stage that can motivate them. This theory of motivation states that there are five needs of
humans which define their behaviour (Rojas, 2019). These needs are classified under various
groups that are psychological needs, basic needs and additional needs. According to hierarchical
theory of needs employees of an organization look forward to achieve their demands from every
level that help management in keeping their workers encouraged. Theory X and theory Y
methods of encouragement mainly focus on methodologies that help companies in motivating
their employees. Theory X of motivation focus on importance of leadership or supervision
whereas theory Y Pay its attention on recognition and rewards. According to this theory
companies that implement theory X execute authoritarian style. On the other hand companies
that incorporated theory Y states that workers of an organization take responsibilities of their
own actions and work productivity in order to meet organizational objectives.
Contemporary marketing is defined as a modern marketing strategy that focus on customer
orientation by presenting them various range of commodities in order to create large customer
base. This assistant making conscious and effective decisions show that companies could gain
sustainable competitive advantage in the market (Peltonen, 2018). Therefore contemporary
marketing strategies is defined as a marketing funnel that helps companies to monitor their
progress. Contemporary marketing strategies offers items or services based on demands of target
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market. This is strategy assist in supporting customers of companies and through which they
could benefit from their strategies. This marketing theory mainly includes shared values and Co
creation. This theory of contemporary marketing also help in developing a bridge between
customers and companies through gamification that assist in future growth of organizations.
Companies could use various social media channels in order to post information about products
or services that will help in attracting large customer base along with enhancing brand awareness
among people. Another factor of contemporary marketing theory include shared value that
considers the market that organizations want to target by which they could get several
opportunities and benefits for their development as well as growth (Beyes and Holt, 2020). For
instance, Tesla has invested large amount of money in developing charging stations for electric
cars across North America, Europe and Asia where several cars of diverse brain could also utilise
these charging stations this strategy of Tesla mainly focus on shared value where organization try
to attract a large customer base which helps them in improving marketplace.
Cultural excellence represent purpose for excellence and mainly focus on developing something
by which better outcomes could be accomplished. Cultural excellence will make sure that
workers who are working in companies have significant purpose so that they remain motivated to
accomplish organizational objectives. Through motivating employees the companies could
enhance their performance along with overall productivity of organization in order to accomplish
better outcomes and ensure cultural excellence. Culture excellence also motivate companies do
not settle for small results and aim for higher outcomes by which they could gain competitive
position in the market over others. There are some factors such as toughness, transparency,
connectedness and trust that helps companies in creating cultural excellence which also assist in
encouraging employees so that they could perform effectively as well as work with maximum
effort in accomplishing organizational objectives (Benschop, 2019). According to theories
beliefs and values are considered as best for culture that could motivate workers as an
organization has shared vision and goals that will motivate workers to perform with maximum
efficiency so that desired objectives could be accomplished that will support organisations in
maintaining their competitive position and culture.
The Japanese method Of quality control will also assist in developing superior quality in
manufacturing process by creating team oriented human resource management methods. William
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Ouchi gave Japanese management style that is based on enhancing loyalty of employees towards
an organization by offering them job security. This story is also called as theory Z that mainly
focus on understanding issues through which quality could be increased. According to this theory
of management, managers of companies focus on organising training programs, make maximum
utilization of quality control methods engage in decentralised decision making and carefully
develop working standards at workplace for workers. The methods of Japanese story will assist
Companies to focus on improving their quality standards by performance of workers could be
increased and ensure work life balance that will encourage them to accomplish organizational
objective more effectively and smoothly (Comfort, 2019).
Organizational learning is defined as procedure of transferring knowledge in a company.
Organizational learning is mainly based on for various kinds of categories that include group,
individual, inter organisational and organisational. According to theories organisational learning
is important and develop a pathway for new approaches of learning in order to perform business
activities smoothly and effectively that will ensure success for long terms. Organizational
learning include training and development possibilities that are important for a company as these
programs play essential role in managing effectively. Through organizational learning firms
could develop knowledge that could enhance awareness (Cato, 2020). The theory of
organizational learning mainly focus on developing knowledge and utilise hope that information
within accompany by interacting while finding as well as solving problems. Furthermore,
organisations which are highly engaged in development are helpful in accomplishing
organizational objectives by engaging in continuous development and learning. As per Peter
Singh, learning organization is defined as term that companies adopt encouraging methods in
generate learning that motivate employees to seek for bigger opportunities that will help in
resolving issues along with finding unique solutions. Developing a learning organization mainly
includes five pillars that are mental models, system thinking, team learning, personal mastery
and shared vision.
From the above essay it has been determined that any company without proper management
could face various challenges end threads. The classical management theory consist of several
theories that was proposed by various famous personalities. This theory states that a company is
considered as a machine where every employee is the factor of that machine. It could be
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evaluated that there are several classical management theories that include principle of
management, scientific theory and others. The new classical theories are modern version of
classical management theories. According to these theories demands are considered as
motivational drivers of employees that could help them in encouraging along with enhancing
their performance by which companies could gain competitive advantage in the market.
REFERENCES
Books and Journals
Benschop, Y., 2019. Joan Acker: Champion of feminist organization theory. In Gender,
Embodiment and Fluidity in Organization and Management (pp. 8-24). Routledge.
Beyes, T. and Holt, R., 2020. The topographical imagination: Space and organization
theory. Organization Theory, 1(2), p.2631787720913880.
Budzinski, O. and Kuchinke, B.A., 2018. The modern industrial organization theory of media
markets and competition policy implications. Ilmenau Economics Discussion Papers,
(115).
Cato, P., 2020. Implementing Learning Organization Theory in Higher Education: a Case
Study (Doctoral dissertation, Grand Canyon University).
Comfort, L.N., 2019. Applications and Extensions of Organization Theory: The Context of
Accountable Care Organizations (Doctoral dissertation, UC Berkeley).
Denhardt, R.B. and Baker, D.L., 2018. Five great issues in organization theory. In Handbook of
Public administration (pp. 121-147). Routledge.
Hatch, M.J., 2018. Organization theory: Modern, symbolic, and postmodern perspectives.
Oxford university press.
Olsen, J.P., 2019. Political Science and Organization Theory Parallel Agendas but Mutual
Disregard. In Political choice (pp. 87-119). Routledge.
Peltonen, T., 2018. Revisiting the sociological origins of organization theory: the forgotten
legacy of Pitirim Sorokin. In Origins of Organizing. Edward Elgar Publishing.
Rojas, F., 2019. Race and organization theory: reflections and open questions. In Race,
Organizations, and the Organizing Process. Emerald Publishing Limited.
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