An Evaluation of Classical and Neo-Classical Management Approaches

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ESSAY
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The success of every organisation depends upon the effectiveness and efficiency of the
management. Moreover, the effectiveness of control is depended on the skill and knowledge
managers and their ability to understand employee’s needs and expectations (Wilton, 2016).
Classical management approach is a collaboration of various homogeneous management ideas
for organizations evolved in the late 19th and early 20th century. The inside perspective of this
approach is for coping with the industrial revolution and for efficiency theories.
Some of the critical contributors to classical management theory are Henri Fayol, Frederick
Taylor and Max for developing management theories like Scientific Management,
Administrative Management and Bureaucratic management. To overcome the limitation of the
classical method of control, the theorist came up with new schools of the theory called neo-
classical management theory. Neo stands for new, this approach was human-oriented, and
importance was given mainly on time needs, behaviors and employee’s attitudes (Kitana, 2016).
The neo-classical theory also has three groups, human relations and behavioral mostly in the late
1920s and 1930s after Hawthorne experiments conducted by Elton Mayo together with his
associates.
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The theory of Classical Management Theory is referred to the management body that is
considered to be from an employee’s belief that employees were having only physical and
economical. Such employees may don’t give importance to social needs and job-satisfaction.
Therefore, according to this theory, the emphasis is given mostly to centralised decision making,
labour specialisation, and mostly profit maximisation. This theory of management came into
existence in between the nineteenth century and twentieth century (Jelinek, 2015). This Classical
Management Theory was useful in dominating the control thinking mostly in the 1920s and
1930s where the emphasis was primarily given work process efficiency. Altogether the Classical
Management Theory includes three other schools of thought, i.e. Scientific Management that
mainly identifies and states the most excellent way for performing work. The Bureaucratic
Management, management focuses primarily on various procedures and rules, work distribution
etc. Lastly, the Administrative Management, here in this style stress is mainly upon information
flow within an organization.
The theory of Scientific management is propounded by Frederick Taylor and considered the
father of Scientific Management. According to this approach, the emphasis is given mostly on
increasing the business productivity of an organisation by enhancing the overall process of the
production process through empirical research (Waring, 2016). This method was commonly
applied in the United States at the beginning of the 20th century, because of insufficiency in
skilled labour and for increasing the production effects of workers was raised. According to this
approach of Management, a line of work in an organisation must be planned and designed to
offer priority to the workers with properly controlled and stipulated charge. In this method, each
job is performed with particular standards and procedures. Taylor’s management theory is
developed by considering fundamental belief where the managers are essential assets in the
organisation and have any responsibility and duty to perform for organising the stuff and
activities in a better way.
Scientific Management has four principles, and the first principle states that it is better to develop
the best scientific methodology for performing the various task within the organisation. In the
Second principle, managers are responsible for delegating the best worker for a particular work
considering his skills, experience and by offering training accordingly (Vittikh,2015). The third
principle of Scientific Management states that managers must assure that the selection of the best
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person for a particular job by the application of the most suitable methodology. In the Last
principle, Taylor has given is that workers are not responsible for the use of the work method but
only for work performance.
Administrative management: The scientific managers are known for their emphasis on the job
design approach for management study and managers responsible for embracing a
comprehensive view. The second approach of classical management theory is mainly concerned
with various managerial performance ranges (Thompson, 2017). The Administrative
management primarily focuses on the efficiency of the business organisation, thus it is also
known as the comprehensive analysis of control. Henri Fayol, Henry Dennison , Alvin Brown,
Chester I Barnard, Oliver Sheldon and J Mooney and A C Reily etc. are some of the known
contributors of this management approach.
However, Henri Fayol is considered as the most notable contributor mainly because of his book
“General and Industrial management” the book represents mostly the management philosophy
which is useful even for guiding modern managers (McCann, 2016.). Fayol stated that proper
management needs to follow specific patterns that must be analyses conclusively if identified. In
this approach, the focus is given mainly on effective business operation management. Before
Fayol it was a misconception that manager are born not made, which has been disproved with the
help of fourteen general management principles developed by Fayol.
Bureaucratic Management; It falls under the stream classical management theory. This theory
can be applied in an organisation for effective management offering a formal system that is
formed by hierarchical roles and levels for maintaining effectiveness and efficiency. Max Weber
is the originator of the Modern Sociology (Sturdy, et. al., 2016). Weber has used ‘bureaucracy’
for defining the organisational structure with proper role and responsibility distribution among
the employees. According to him, performance evaluation in the organisation must be made
entirely based on merit and technical competence.
The Bureaucratic Management developed by Max Weber is one of the widely used management
approach in an organisation in public as well as private sector. In this approach, the organisations
can have a proper distribution and level of control and authority. The overall Bureaucratic
management is dependent upon various administration tools and devices. Four principles form
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the base of bureaucratic management approach including Hierarchical positions, a division of
labour, rules of the system, and lastly uncongenial relationship.
The classical management approach has a significant contribution to developing various theories
of management. There are three thrusts in this perception. In the case of scientific management,
the main focus in upon the employees of the organisation and on the implementation of various
methods for improving overall productivity (Kitana, 2016). The Administrative theory focuses
on the whole organisation and the means for making it competent. Moreover, the Bureaucratic
management put spotlights to remove any managerial inconsistencies, i.e. it highlights mostly on
position, not on the person. The Classical approach of management is useful in highlighting
general management principle characteristics with a clear differentiation between managerial and
operative functions. From the analysis of classical management theories, it can be identified that
for implementing any scientific method for solving issues related to management and for
understanding the employees need proper support is required amongst employees and employers
(Jelinek, 2015). Moreover, the Classical approach on several counts has been criticized because
of it being too formal, not suitable for complex and dynamic organizations.
The Neo-classical approach of management began in 1920 with Hawthorne. This theory was the
limitations of classical management theory. In the case of traditional approach, the main focused
was over machines and jobs in an organisation for enhancing the overall productivity (Jelinek,
2015). But it has been found that workers after a certain time interval have become resistance
towards this applied management approach. The main reason was that in classical management
the employees are not offered with any psychological and social satisfaction in the workplace.
Hence, eventually, the managers have shifted their attention towards management style
considering workers intentions. The theorists of this approach concentrated mostly on answering
various questions associated with employee’s motivation, support and structure. The founder of
the neo-classical theory is George Elton Mayo. According to him, the neoclassical theory of
management consists of three essential elements: Hawthorne Experiment, Organizational
Behavior and lastly Human Relation Movement. The Hawthorne experiments are referred to a
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set of conducted research in an organisation of the USA named Western Electric Company in the
year 1927-1932 (Busse and Warner, 2017).
The main purpose of this experiment was to gain knowledge regarding the insights of behaviors
of workers in a group or as an individual working for the organisation. Elton Mayo conducted
the research project along with his associates and General Electric had sponsored the entire
project originally for identifying and understanding the human behaviours within a workplace
even in case of environmental changes due to various factors. The overall Hawthorne has four
primary stages namely Illumination experiments, Relay assembly test room experiments, Mass
interviewing programme, and lastly Bank wiring observation room study. After this experiment
of Hawthorne, Elton Mayo came up with a conclusion that for any organization the human
resources are the most significant assets.
The Human relation movement can be considered as the direct result of Hawthorne experiments
performed by Fritz J. Roethlisberger and Elton Mayo (Khorasani, and Almasifard, 2017). This
management theory was put forwarded mainly for identifying various methods and ways that
will be effective for the organisation for increasing the overall productivity primarily by
assessing the working environment in the organisation like offering intervals, level of lighting,
working hours along with morale.
The Hawthorne Experiments provided a clue to several other theorists for conducting an active
research project for developing the social and interpersonal relations within the organisation.
Studies of Douglas Mc Gregor, Abraham H. Maslow, Keth Davis, Frederick Herzberg and
Rensis Likert effectively describe the human relation movement and its significance.
The theory of Organizational behavior is based on sociologist and psychologists and emphasized
on the importance of group dynamics, and on other hand others emphases on developing and
need of organizational behavior within the workplace (Miner, 2015). Here, the attitude,
performance and behavior of employee as an individual and in groups within the organizational
settings, thus this approach is known as the behavioral approach. This approach can be
considered as an improved and extended version of the former approach i.e. the human relations
movement. The Organizational behavior management approach is a interdisciplinary and
multidimensional knowledge application that was strained from different the behavioral sciences
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including anthropology, sociology, nd Psychology, etc for manage various organizational issues.
Hence, the other name for this approach is behavioral science approach.
The Neoclassical theory has contributed significantly to understanding the behaviour of human
being inside an organisation or workplace. This approach has also played an essential role in
generating awareness regarding the need and powerful part of human resources in any
organisation for increasing their efficiency, productivity and profit. The neoclassical approach
has provided innovative and new methods for understanding the behaviour of human resources.
The main contribution of this management approach can be stated as for provide recognising of
an business organization to be a social system that is subjected to cultural pattern and sentiments
among the employees of that organization along with leadership, group dynamics, participation,
motivation, job environmental, etc (Bratton, and Gold, 2017).
The neoclassical approach has effectively supported in changing the vision of an organisation
and manager regarding the employees after this theory employees are valued as essential
resources rather than mere tools. Moreover, this management approach became the foundation
for other management theory and their development. However, there are few limitations of the
Neo-classical management approach like it is deficient in accuracy with consideration of the
classical theory as the behaviour of human is always unpredictable and unstable. This method
also lacks in providing any scientific validity thus it suffers from clinical unfairness.
The classical and neo-classical approaches to the organisation can impact management practices.
For example, the organisational management has impacts of the traditional management theories
and approaches to achieve the employee satisfaction and services whereas the scientific
management theory has consideration of the employee demands and expectations besides the
excellent quality and performance at the workplace. The benefits and services in the workplace
also define business shape and structuring. Following are some of the factors that can impact the
organisation shape in the context of the classical and neo-classical theories:
The increasing size of the business has to implement the neo-classical management theories and
approaches to achieve satisfaction among the employees as it also can empower the employs
toward the social system at the workplace. Therefore, the size of the business will impact the
businesses to determine the approaches and theories for employee satisfaction, operational
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management and quality assurance. The business-size in term of the geographical expansion, and
the number of the employees' impacts the organisational structure (Jones, 2013). For example, a
small organisation might stick to use the classical theories for management whereas centralised
system can be used for decision making and controlling of the operations whereas in a large
organisation there is need of the hierarchical structure where the resources are aligned to the
allotted role and responsibilities to contribute the business success.
The stage of the development also impacts the business for management practices. An
organisation in the developing stage has use of the classical management theory to achieve the
effective integration of the resources for performance and quality. Also, the goal of development
defines a business structure (Claver-Cortés, et. al., 2012). For example, the organisations can use
autocratic or bureaucratic management to achieve faster decision making for the competitive
advantages whereas the organisation also can integrate the scientific theories for the structure
and outcomes.
The type of the business strategy is another major force on the shape and structure of the
business. The management structure can consider the use of the neo-classical approaches for
performance and quality whereas it also can impact employee contribution and satisfaction.
Therefore, the nature of the business strategies for the growth and competitive benefits define the
integration of the management style and set the possible outcomes (Rothaermel, 2015).
Besides, several changes can impact the organisation for the shape. The shape is mostly achieved
through the changes in the operation and structure to meet the competitive strengths. For
example, the constraint of the resources can enforce the business to adopt the changes and new
structure. The new structure can increase the roles and responsibilities of the individual to
achieve the smooth execution of the tasks. Also, the shape of the business has consideration of
the people requirements so that more satisfaction and quality can be achieved. The lack of
effective administrative services can impact the business to adopt the changes (Jones, 2013). The
lack of proper control and management on the employees can enforce the organisation to align
the practices to the standard approaches. It is required to manage profitability and ensure high
performance. Also, the changes in the technology and demands of the profitability can drive the
business toward the growth and structural changes. The integration of the technology and system
forces can enforce the business to adopt the new structure.
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Organizations presently are influenced mainly by various external environment such as
advancing technology, globalization, competitive market etc. Thus, the managers and higher
authorities in the organization is responsible for implementing proper management approaches
for increasing the productivity and sustainable business growth. Both classical as well as
neoclassical approaches play an important for developing advance management practices and
theories. In an organization, the implemented approaches of management are considered to be
very significant determining the enhancement of efficiency and congenial working environment.
Even though the classical theory is now considered as outdated, but understanding this will be
helpful for understanding the concept of management as a part of intellectual analysis and this
provide the manager with the basic ideas of managerial need for increasing efficiency and
productivity. The Neoclassical approach, on other hand stresses on symbolic rewards and human
variables for organizational profit through motivation.
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References
Books and journals
 Bratton, J. and Gold, J., 2017. Human resource management: theory and practice.
Palgrave.
 Busse, R. and Warner, M., 2017. THE LEGACY OF THE HAWTHORNE
EXPERIMENTS: A CRITICAL ANALYSIS OF THE ‘HUMAN RELATIONS
SCHOOL OF THOUGHT’. History of Economic Ideas, 25(2), pp.91-114.
 Claver-Cortés, E., Pertusa-Ortega, E.M. and Molina-Azorín, J.F., 2012. Characteristics of
organizational structure relating to hybrid competitive strategy: Implications for
performance. Journal of Business Research, 65(7), pp.993-1002.
 Jelinek, M., 2015. Management, Classical Theory. Wiley Encyclopedia of Management,
pp.1-2.
 Jones, G.R., 2013. Organizational theory, design, and change. Upper Saddle River, NJ:
Pearson,.
 Khorasani, S.T. and Almasifard, M., 2017. Evolution of management theory within 20
century: A systemic overview of paradigm shifts in management. International Review of
Management and Marketing, 7(3), pp.134-137.
 Kitana, A., 2016. Overview of the managerial thoughts and theories from the history:
Classical management theory to modern management theory. Indian Journal of
Management Science, 6(1), p.16.
 McCann, P., 2016. Location theory. In Theories of Local Economic Development (pp.
149-166). Routledge.
 Miner, J.B., 2015. Organizational behavior 1: Essential theories of motivation and
leadership. Routledge
 Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education,.
 Sturdy, A., Wright, C. and Wylie, N., 2016. Managers as consultants: The hybridity and
tensions of neo-bureaucratic management. Organization, 23(2), pp.184-205.
 Thompson, J.D., 2017. Organizations in action: Social science bases of administrative
theory. Routledge.
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 Vittikh, V.A., 2015. Introduction to the theory of intersubjective management. Group
Decision and Negotiation, 24(1), pp.67-95.
 Waring, S.P., 2016. Taylorism transformed: Scientific management theory since 1945.
UNC Press Books.
 Wilton, N., 2016. An introduction to human resource management. Sage.
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