Organisation Theory: Classical, Neo-Classical & Future Forces Analysis

This essay delves into the multifaceted realm of organization theory, providing a comprehensive analysis of its core concepts and principles. It begins by introducing the subject matter and outlining the essay's structure, which encompasses an exploration of both classical and neo-classical approaches. The classical approach is examined through the lenses of scientific management, principles of organization, and bureaucracy, offering insights into the foundational theories that have shaped modern management practices. The neo-classical approach is then analyzed, focusing on the human relations school, Maslow's hierarchy of needs, McGregor's theory X and Y, and contingency theory. The essay further investigates the forces that will shape organizations and their structures in the future, including the culture-excellence approach, the Japanese approach, organizational learning, and recent developments such as modernist, postmodernist, realistic, and complexity perspectives, along with the importance of technology. Furthermore, the essay examines cultural and power-politics perspectives and their impacts on organizations. The conclusion summarizes the key findings and reinforces the significance of organization theory in understanding and navigating the complexities of modern business environments. The essay is supported by relevant references to substantiate the arguments and perspectives presented.

Running head: MANAGEMENT
Organization Theory
Name of the Student:
Name of the University:
Author Note:

1MANAGEMENT
1. Introduction:
The essay provides an insight into the organization theory. The theory puts across
correlated definitions and concepts that are able to explain behavior of groups or subgroups or
individuals and interacts with one another for performing activities that are intended towards
accomplishment of the common goal (Daft 2015). Some common types of organizational
theories includes classical, neoclassical, systems and contingency organizational structure. The
variations in the organizational theory are drawn from the multiple perspectives that includes the
modern and the postmodern views.
The essay here focuses on the theories of classical approach, neo classical along with a
mention of the forces that shapes the organization.
2. Classical Approach:
The approach comprises of scientific, administrative and the bureaucratic theories of
management.
1. Scientific Management put forward by Frederick Taylor (1856-1915) refers to a
management theory that synthesizes and analyzes the workflows (Grachev and Rakitsky 2013).
The key objective lies in improving the productivity of the labor. The four key principles of this
theory include (Turan 2015):
i. Consideration of Scientific Analysis: This principle focuses on the fact that the
management should not remain stuck in with old techniques in accomplishing their task but they
should constantly look forward for the development of newer techniques that would make the
work easier, simpler and quicker.

2MANAGEMENT
ii. Maintenance of Harmony and not Discord: According to this principle, an organization
must have such atmosphere created that should make labor and management indispensable to
each other.
iii. Co-operation between Managers and Workers: This principle states that activities
carried out by the different people must be based on the essence of cooperation.
iv. Clear Division of Responsibility and Work: This must be ensured between the
management and the workers where managers needed to be more concerned with the supervision
and planning of work and workers remained concerned about carrying them out.
2. Principles of Organization was introduced by Henri Fayol (1841–1925). The 14
principles put across by Fayol has been the earliest theories of management that has also been
quite comprehensive (Godwin et al. 2017). The principles includes (Peaucelle 2015):
i. Division of the Work: Specialized employees helps in increasing output since they
seem to be increasingly efficient and skilled.
ii. Having Authority: Managers should have authority of giving orders. However, they
must remember that authority comes with the responsibility.
iii. Maintaining Discipline: This must be supported in organizations however the methods
of accomplishing it might vary.
iv. Unity of Command: The employees must have a single manager for direct reporting
v. Unity of Direction: Teams having similar objectives must work as per the directions of
single administrator through use of a single plan. This will result in appropriate coordination of
the action.

3MANAGEMENT
vi. Subservience of the Individual to Generalized Interest: Managers must ensure that the
interests portrayed by a single employee should become increasingly important relative to the
group.
vii. Fair Remuneration: The contentment of the employees depends on the fair
remuneration of each of the individual. This mostly include the non-financial and financial
compensation.
viii. Ensure Centralization: The principle refers to the closeness of the employees in the
process of decision-making. It is vital to look towards accurate balance.
ix. Line of Authority: Employees needs awareness regarding their position in
organizational hierarchy or the command chain.
x. Ensure Order: The facilities of the workplace must remain tidy, safe and clean for the
employees and everything must remain in place.
xi. Ensure Equity: Managers must remain fair to the staff at most times and ensure
maintenance of necessary discipline as well as acting with required level of kindness.
xii. Stability in Tenurity of the Personnel: Managers must strive towards minimization of
the employee turnover. Personnel planning must remain a priority.
xiii. Undertake Initiative: The employees must be provided with the required level of
freedom for creating as well as carrying out the plans.
xiv. Guarantee Team Spirit: The organizations must strive towards the promotion of the
team spirit and the unity.

4MANAGEMENT
3. Neo-classical Approach:
The approach is also referred as ‘human relations’ or ‘the behavioral theory of
organization’ approach towards an organization (Firoozabadi and Ashkezari 2016). Some of the
neo classical theories to be discussed in this report will be Mayo’s The Human Relations School,
Maslow and McGregor theory and the Contingency theory.
Introduced by Mayo, the Human Relations School represented an approached that
focused on understanding and prescribed for the workplace behavior based on significance of
the communication, supervisory skills and the norms of the work group (Trahair and Zaleznik
2017). In other words, this theory focused on the managers taking interest in workers thereby
treating them as people having worthwhile opinion along with realizing that they enjoyed
interacting together. According to Mayo, workers are motivated by (Tannenbaum, Weschler
and Massarik 2013):
 Better level of communication between the managers and the workers
 Greater involvement of the manager in the work life of the employees
 Ensure working in the teams or groups
McGregor has put forward a Theory X and Theory Y. The Theory X is an authoritarian
style that overviews the individuals as remaining oriented to the material rewards thereby
remaining prone to the ‘free ride’ on efforts of the others (Mohamed and Nor 2013). To ensure
that the individuals are rewarded fairly, measurements needed to be implemented carefully that
included the sanctioning of the unproductive behaviors over that of the favorable. On the other
hand, the Theory Y puts across participative management style that makes an assumption that
people will implement self-control and self-direction in achieving the organizational objectives

5MANAGEMENT
to a degree that remains committed to the objectives (Hattangadi 2015). The key task of the
management in such cases lies in maximizing the commitment.
Maslow’s hierarchy of needs represents a motivational theory of psychology proposed
by Abraham Maslow (Jerome 2013). The theory focuses on the needs of the humans organized
into hierarchy. The hierarchy has been found to range from the concrete needs like the food and
the water to the increasingly abstract concepts like the self-fulfillment. Maslow states that on
meeting of a lower need brings the next need into focus. Nevertheless, the five categories of need
according to Maslow have been (Lee and Hanna 2015):
 Physiological
 Safety
 Belonging and love
 Self-actualization
 Esteem
The contingency approach towards management has been based on theory that the
effectiveness of the management remains dependent or contingent upon interplay between the
application of management behaviors and particular situations (Wu et al. 2014). In fact, the
theory portrays the way an organization must change based on circumstances.
4. Forces Shaping Organizations and their Structure
Some of the theories includes the culture-excellence approach, the Japanese approach,
organizational learning, modernist, postmodernist, and complex and realist perspectives and
importance of technology.
The Culture Excellence Approach: This is primarily people oriented. It focuses on the
employees along with highlighting importance of the empowerment and the active engagement

6MANAGEMENT
of all the people from the organization for facing challenges prompted by the changes (Al
Shobaki et al. 2017).
Nevertheless, a culture excellence approach can be followed in an organization by
adopting the following steps (Escrig and de Menezes 2015):
 By Maintaining United Front: In spite of the squabbling and the presence of butt heads,
the employees must be made to leave with common purpose.
 By Setting and Managing Expectations: It is vital to set the attitude, collective tone and
the work ethic of the team.
 Building Characters along with Rules: It is vital to build the character of the team. This
is what that kicks in whenever rules are broken. A strong character of the team ensures
lesser management and higher level of productivity.
 Engaging the Employees: Engaged employees has been found to enthusiastically
contribute to the team and the success of the company. Engagement of an employee is
driven by various factors like autonomy and employee confidence, quality and nature of
the job, access to the career development and training, growth opportunities, ongoing
feedback and communication, clear grasp of goals, relationship with coworkers and
supportive managers.
 Leading by an example: Sincere commitment towards following promises, fulfillment
of obligations and behavior towards integrity helps in setting positive standard.
The Japanese Approach:
The Japanese Management Style has been marked by Theory Z proposed by Dr. William
Ouchi. The Japanese approach became popular during the times of economic boom of Asia

7MANAGEMENT
during 1980. The objective of Theory Z lay in increasing the loyalty of the employee against the
company by putting across job for lifetime with stronger focus on the employee wellbeing both
within and outside the job (Sasaki and Hutchins 2014).
Some characteristics of this theory includes (Richter 2013):
 Ensures employment and job security for a longer term
 Introduces the concept of collective responsibility
 Allows implicit control and explicit and formalized measures
 Allows collective nature of the decision making
 Gives rise to a slower process of promotion and evaluation
 Allows specialized careers at moderate level
 Showcases concern for family and the individual.
Organizational Learning:
The organizational learning represents a process of creation, retention and transfer of
knowledge within the organization (Dixon 2017). An organization has been found to improve
with time once it starts gaining knowledge. There are quite a few steps that the managers can
undertake for promoting organizational learning. These includes:
1. Creation of Knowledge: The managers must continuously seek towards uncovering
new knowledge regarding customers, business and the environment. They might do through
conducting surveys, performance of market analysis, networking with the colleagues and
keeping tab on competitors.

8MANAGEMENT
2. Retention of Knowledge: Once created, managers should adopt a system of retaining it
within organization. It must be stored or recorded in a place that is easily accessible by
employees.
3. Transfer of the Knowledge: The knowledge must get transferred to the individual or
the organizational community. Some of the methods of knowledge transfer can be through
writing articles or conducting training.
The modernist perspectives portrays that the forces shaping organizations and their
structure includes setting of objectives, strategic planning, managing of resources, deployment of
financial and human assets required for achieving objectives and measuring of results. On the
other hand, the postmodernist perspectives includes humanizing the employees and
encouraging the management in increasing the productivity of the worker by considering the
employee needs along with the development of the incentive system, training and development
of career path.
However, the realistic perspectives puts across new and powerful developments in
social science and philosophy and thereby creating increasing impact on the management studies
and business. While the complexity perspectives emphasizes on the interactions along with the
feedback loop that leads to constant change in the system. These perspectives finds an
application in the fields of the organizational studies and the strategic management. As far as the
importance of technology is concerned it has been found that companies makes use of
technology for improving the ways in which they manage and design the relationship with the
customers. The cultural perspectives has been found to have an impact on how best the
employees are usually managed based on the priorities and values. The power politics

9MANAGEMENT
perspective can be used effectively in achieving organizational and individual cohesion thereby
ventilating the differences.
Conclusion:
In conclusion, it can be said that the organizational theory puts across various approaches
for the analysis of the organization. The essay provides an insight into scientific management,
principles of organization and bureaucracy. The essay also focuses on theories of neo-classical
approach which includes the Human Relations School, Maslow and contingency theories. There
is also discussion on the forces that will shape the organization and their structure in future with
special focus on the culture-excellence approach, the Japanese approach, organizational learning
and the recent developments including the modernist, postmodernist, realistic and complex
perspective along with importance of the technology. There is also focus on the cultural and the
power and politics perspectives and their impacts on the organizations.

10MANAGEMENT
References:
Al Shobaki, M.J., Abu-Naser, S.S. and Abu Amuna, Y.M., 2017. Learning Organizations and
Their Role in Achieving Organizational Excellence in the Palestinian Universities.
Daft, R.L., 2015. Organization theory and design. Cengage learning.
Dixon, N.M., 2017. The organizational learning cycle: How we can learn collectively.
Routledge.
Escrig, A.B. and de Menezes, L.M., 2015. What characterizes leading companies within business
excellence models? An analysis of “EFQM Recognized for Excellence” recipients in
Spain. International Journal of Production Economics, 169, pp.362-375.
Firoozabadi, J.D. and Ashkezari, M.Z., 2016. Neo-classical realism in international
relations. Asian Social Science, 12(6), pp.95-99.
Godwin, A., Handsome, O.E., Ayomide, W.A., Enobong, A.E. and Johnson, F.O., 2017.
Application of the Henri Fayol principles of management in startup organizations. IOSR Journal
of Business and Management, 19(10), pp.78-85.
Grachev, M. and Rakitsky, B., 2013. Historic horizons of Frederick Taylor's scientific
management. Journal of Management History.
Hattangadi, V., 2015. Theory x & theory y. International Journal of Recent Research
Aspects, 2(4), pp.20-21.

11MANAGEMENT
Jerome, N., 2013. Application of the Maslow’s hierarchy of need theory; impacts and
implications on organizational culture, human resource and employee’s
performance. International Journal of Business and Management Invention, 2(3), pp.39-45.
Lee, J.M. and Hanna, S.D., 2015. Savings goals and saving behavior from a perspective of
Maslow's hierarchy of needs. Journal of Financial Counseling and Planning, 26(2), pp.129-147.
Mohamed, R.K.M.H. and Nor, C.S.M., 2013. The relationship between McGregor's XY theory
management style and fulfillment of psychological contract: A literature review. International
Journal of Academic Research in Business and Social Sciences, 3(5), p.715.
Peaucelle, J.L., 2015. Henri Fayol, the manager. Routledge.
Richter, F.J., 2013. The dynamics of Japanese organizations. Routledge.
Sasaki, N. and Hutchins, D. eds., 2014. The Japanese approach to product quality: Its
applicability to the West. Elsevier.
Tannenbaum, R., Weschler, I. and Massarik, F., 2013. Leadership and organization (RLE:
organizations): A behavioural science approach. Routledge.
Trahair, R.C. and Zaleznik, A., 2017. Elton mayo: The humanist temper. Routledge.
Turan, H., 2015. Taylor's Scientific Management Principles": Contemporary Issues in Personnel
Selection Period. Journal of economics, business and management, 3(11), pp.1102-1105.
Wu, T., Wu, Y.C.J., Chen, Y.J. and Goh, M., 2014. Aligning supply chain strategy with
corporate environmental strategy: A contingency approach. International Journal of Production
Economics, 147, pp.220-229.