Organization Theory Essay: Classical, Neo-Classical, and Future Trends

This essay provides a comprehensive analysis of organization theory, beginning with an introduction to the concept and its significance in modern business environments. It delves into the classical approach, examining Frederick Taylor's Scientific Management and Max Weber's Bureaucracy. The essay then explores the neo-classical approach, including the Human Relations School, Elton Mayo, Maslow, McGregor, and Contingency Theory. The core of the essay focuses on the forces shaping organizations in the future, such as customer-centricity, culture excellence, organizational learning, and recent developments like modernist, postmodernist, realist, and complexity perspectives, including the impact of technology and cultural and power-political perspectives. The essay concludes by summarizing the key points and referencing the sources used.

Running head: ORGANIZATION OF THEORY
Organization of Theory
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction:...............................................................................................................................3
Classical Approach:...................................................................................................................3
Neo Classical Approach:............................................................................................................4
Forces that are expected to shape the organizations and their structure:...................................6
Conclusion:................................................................................................................................9
References:...............................................................................................................................10

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Introduction:
The Organization Theory is a broad concept used by the modern organizations for the
efficient design of their organizations. With a precise look at the organization theory, it is
understandable that it considers the organizations as the open system and that is pretty
significant in reflecting the ability and tendency of the companies in operating in various
business environments (Greenwood et al. 2017). Along with that, the realization of the
companies as open system is efficient in elaborating the necessity that the companies face in
interacting with their stakeholders (Scott 2015). The study analyses the application of two
broad theories for the design of the companies in the form of classical approach and neo
classical approach. In addition to this, the study identifies the factors that have the potential to
contribute to the formation of the organizational structure of the companies.
Classical Approach:
With a detailed focus on the classical approach, it is understandable that the mentioned
concept considers the organizations as mere machine where the human resources is regarded
as an important part of the machine. Considering the classical approach, it is evident that the
authors claimed that the efficiency of the organizations is dependent on the efficiency of the
human resources employed in the companies. As a result, the success of the higher authority
of the companies in structuring the organizations in a professional manner is primarily
dependent on their ability in considering the specialisation of the employees during the co-
ordination of the activities. As per the comments of Luhmann (2018), the classical
organization theory is largely dependent on the factors such as the division of labour, span of
control, structure along with the scalar and functional process. As per the comments of
Jackson, Sørensen and Møller (2019), the classical approach primarily advocates for the
improvement of the organization through increasing the efficiency of the employees of the

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company. Jackson, Sørensen and Møller (2019) further added that the increment in the
efficiency of the companies is primarily dependent on the ability of the companies in
formulating the operational activities of the employees as per the expertise level of the
employees. In such situation, it provides added ease to the companies in achieving the desired
efficiency and quality in the services of the companies.
The scalar and functional process is seen to refer to the unity of command, growth of chain of
command, obligation to report along with delegation of authority and at the same time, the
scalar process us considered to be responsible for development of strong senior superior
relationship. On the other hand, Luhmann (2018), claimed that the structure signifies the
formal relationships between the people in the organizations, different tasks and activities
that the companies are required to execute as collective groups. Other than this, the span of
control is pretty significant in stating the number of subordinate candidates that are managed
by a particular manager. Hence, it is understandable that the strict limitation of the number of
the subordinate employees to be managed a member outlines the dynamics or the structure of
the organization. With a precise look at the Frederick Taylor’s Scientific Management
approach, the strong emphasis on the level of job knowledge and repetitive experiments for
the performance improvement, planning for the appropriate management of the workload and
remuneration, delivery of training as per the needs of the employees is pretty prominent
(Turan 2015). Considering Max Weber’s Bureaucratic theory of organizational management,
the importance of structuring the organizations into hierarchical formation and the
formulation of the roles and responsibilities for governing the organizations and its members
is evident (Ferdous 2016).

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Neo Classical Approach:
Neo Classical approach is primarily focused on mechanical functions and physiological
variables associated with the functioning of a physical organization. With a precise look at
the Neo Classical approach of organizations, it is understandable that the companies have
close consideration towards the social, economic and technical factors that affect their
business actions (Őnday 2016). According to Ripsman, Taliaferro and Lobell (2016), the Neo
Classical approach of organizational structuring focuses on considering organizations as
general social system that is comprised of several interacting parts. According to Őnday
(2016), the Neo classical approach of the organizational management advocates for the
existence of the informal organizations within the perimeter of the formal organizations. In
addition to this, Ripsman, Taliaferro and Lobell (2016) claimed that the human beings are
independent and their behaviour can be anticipated with a precise look at their social factors.
Apart from that, the Neo Classical approach of the organizational management considers
motivation to be a complex process where various socio physiological factors have the
capability to affect the motivation of the human beings inside the organization. Along with
that, Vargo et al. (2017) claimed that the existence of the conflict between the individuals and
organizations is pretty natural, however, the effective alignment of the objectives of the
individuals to the aims of the organizations are crucial for the success of leaders in applying
the mentioned approach in developing the organizations.
Considering the Neo Classical approach, Ripsman, Taliaferro and Lobell (2016) mentioned
that the team work is significantly important for the success of the companies in increasing
their productivity and at the same time, communication is regarded as important element of
the organizational management as it plays a crucial role in transferring information for better
functioning of the organizations. As per the comments of Soni and Soni (2016), Maslow’s
hierarchy of needs is pretty significant in stating the various forms of needs that can affect the

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level of motivation of the individuals at the organizational context through citing
physiological needs, safety needs, belonging needs, esteem needs and elf actualization needs.
With a precise look at the McGregor’s theory of motivation, the classification of individuals
at the organizational context on the basis of the nature of the employees with the application
of assumption testing, becomes evident. As per the comments of Lawter, Kopelman and
Prottas (2015), McGregor’s theory advocates for the application of job enlargement of the
employees, participative management, performance appraisals along with decentralization
and delegation of the job responsibilities as the suitable techniques for the enhancement of
the employee motivation in the organizations. One of the fundamental criticism of the neo
classical theory of management is the excessive dependence of same on the classical theory
of management. Along with that, the mentioned theory is regarded as less effective for the
modern business context and for the modern organizations. The application of the Neo
classical theory is seen to be reluctant in acknowledging the significance of the varying
business environment. Along with that, the mentioned theory considers that there is only one
approach towards the management of the business which is inappropriate considering the
varying dynamics of the modern business environment.
Forces that are expected to shape the organizations and their structure:
With a precise look at the structure of the modern organizations, it is evident that one of main
factors that is influencing the formation of the structure of the organizations is the customer
centricity. Considering the impact of the globalization, it is understandable that the
established companies are finding it difficult to maintain their share of market and at the
same time, it is becoming difficult for them to achieve the desired growth in an intensely
competitive business environment. As per the comments of Pandya (2016), the increasing
flexibility of the companies in penetrating into new business markets as a result of the
globalization or more specifically Foreign Direct Investment, has certainly played a crucial

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role in increasing the intensity of the business competition in the modern world of trade. In
such situation, Kindström and Kowalkowski (2015) claimed that the companies have the
liability introduce bestseller products and services for their customers to ensure that they are
maintaining their financial feasibility through the increasing sales of their products.
Considering the concept of the bestseller products, it is understandable that the design of the
products or services of the companies are required to incorporate the preferences of their
customers and that precisely creates the context of the customer centric approach of business
management. In addition to this, Bhat and Darzi (2016) mentioned that the modern
companies are facing the necessity of establishing an efficient customer relationship
management system which has the capability to source the customer insights or preferences
in a professional manner so that it be easy for the manufacturer and suppliers to design the
bestseller products in a more efficient manner. Hence, the necessity faced by higher authority
of majority of the modern mainstream organizations in ensuring the customer centric
approach of business management is pretty prominent. The citation of Amazon will be crucial
for elaborating the formation of a customer centric design of the organization (Habel et al.
2019).
With a detailed focus on the Culture Excellence approach for the formulation of the
organizational structure, it is visible that the formulation of a productive organizational
culture is dependent on the ability of the companies in ensuring the smooth management of
the communication and the transfer of information across all the levels of the company. With
a precise look at the culture excellence approach, it is visible that the formation of a strong
and productive corporate culture is primarily dependent on the ability of the companies in
ensuring the formation of a free flowing working environment (Guiso, Sapienza and Zingales
2015). In such situation, the structure of the organization faces the necessity to incorporate
such an organizational culture where the communication amongst the senior and subordinate

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employees of the organization is informal in nature. In addition to this, the culture excellence
approach of the organizational structure design is required to contribute to the development
of such an organizational structure that promotes creativity and innovation in the
organizational context as that has the potential to place the organization in perfect position for
the achievement of the desired flexibility and productive working environment. In addition to
this, the creation of such an organizational culture will be substantial for increasing the
flexibility of the companies in managing the developmental needs of their employees within
the workforces with the help of the efficient senior junior employee integration.
On the other hand, the importance of the organizational learning theory is also pretty
prominent in the formation of organizations and in maintaining the sustainability associated
with the companies. As per the comments of Ullah (2015), the success of the companies in
enhancing the quality of their services for the efficient retention of their cutomers is seen to
be dependent on the capability in resolving the developmental requirements with the
initiation of the efficient training and developmental activities. The enhancement of the skills
and expertise of the employees is seen to be crucial for increasing the efficacy of the
companies and in designing the best seller products as per the important insights of the
customers. In addition to this, the organizational learning approach places the companies in
perfect position for the continuous professional development which is much required for the
modern companies in increasing the quality of the team performances for the accurate
management of the excessive demands of the market as per the desired quality rating. Along
with that, the influence of the organizational learning approach in the development of the
organizational structure plays an important role as it creates sense of openness amongst the
employees and executives of the company. As a result, it provides considerable amount of
ease to the companies in incorporating modern technology and innovative solutions in the
design of their services, products and techniques of their employees’ business management.

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The significance of the theory in the structure of the organizations is pretty visible with the
formation of the learning and development department of organizations and the development
of the learning facilities in the companies.
Apart from this, the role of the unions is expected to be substantial in the design of the
structure of the companies in near future. As per the comments of Cascio (2015), the success
of the organizations in creating a stable workforce is largely dependent on their ability in
managing the human resources in a professional manner. The structure of the organizations
are required to have special consideration for the human resource management where the
wage and work time characteristics of the employees, rewarding policy, training requirements
of the employees along with the workplace health and safety are required to be managed in a
professional manner. Considering the incorporation of the Japanese approach in the design of
the organizations, the application of the highly transportable management technology is
pretty prominent (Kono 2016). In addition to this, the Japanese approach advocates on behalf
of the ability of the technique in changing behaviour in cases where the culture is made to be
feel as an obstacle.
Conclusion:
On an ending note, it is visible that the organizational structure and the culture has faced
considerable amount of evolution over the years. The success of the organizations in
managing their business activities is seen to be primarily dependent on the ability companies
in developing a suitable structure. The application of the classical and neo classical theories
in the development of the organizational structure is considered to be important on the basis
of diverse merits of the same. Along with that, the formation of the organizations and the
structure of the same in near future is seen to be dependent on the factors such as customer

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centricity, obstruction less corporate culture along with the ability of the company in
managing the learning of the employees.

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