Organizational Theory: Classical, Neo-Classical, and Future Forces

This report delves into the evolution of organizational theory, commencing with a detailed examination of the classical approach, including the contributions of Taylor, Fayol, and Weber, and their focus on efficiency, managerial principles, and bureaucratic structures. It then transitions to the neo-classical approach, highlighting the importance of human relations and situational leadership, along with the contingency theory. The report further explores contemporary marketing orientations, the culture-excellence approaches, Japanese management philosophies, and organizational learning, emphasizing how these forces will shape organizational structures in the future. The conclusion synthesizes the key findings, underscoring the dynamic nature of organizational theories and their adaptation to evolving market conditions. The report references several books and journals.

Organisation theory
from its classical and
neo-classical origins
and forces that will
shape organisational
structures in the future

Table of Contents
INTRODUCTION ..........................................................................................................................3
CLASSICAL APPROACH.............................................................................................................3
NEO-CLASSICAL APPROACH....................................................................................................4
FORCES THAT WILL SHAPE ORGANISATIONS AND THEIR STRUCTURE IN THE
FUTURE .........................................................................................................................................5
Contemporary marketing orientations.........................................................................................5
The culture - excellence approaches...........................................................................................6
The Japanese approaches............................................................................................................6
Organisational learning ..............................................................................................................7
CONCLUSION ...............................................................................................................................7
REFRENCES...................................................................................................................................8
Books and Journal.......................................................................................................................8

INTRODUCTION
According to Classical Approach it can be said that it focuses on work force's physical
and financial needs only rather than cultural needs or self esteem of theirs(Bidard and Erreygers
2020). Whereas Neo-Classical theory focuses on inculcating measures of behavioural sciences in
organisation which results in solving problems caused by Classical Approach(Abdulwahab,
OMEDE and JACOB 2020). Several forces which will construct organisational structures in
coming future can be technical know how, advancement in analytics, accessing to relevant facts
and figures and dealing all the complex hurdles with an easy method(Van Buren, Syed and Mir
2020). In the report, focus is detailed on the theories and how they can change the structure of
organisation.
CLASSICAL APPROACH
Fredrick Winslow Taylor, Henri Fayol, Max Weber gave different theories and proposed
several principles which explained classical approach with varied perceptions. The one of first
management consultant, Fredrick Winslow Taylor also recognised as the father of scientific
management is known for his outstanding methods that can enhance efficiency of operations. He
also proposed four principles of management which are Science Not Rule of Thumb, Harmony
Not Discord, Cooperation Not Individualism and Development of Each and Every Person to His
Greatest Efficiency and Prosperity. These mainly focused on creating cooperation and mutual
understanding among workers. Also aimed on working towards the betterment of work forces
which will ease the job process and enhance productive efficiency of operations performed. On
the other hand, Henri Fayol an another leader of classical theory also focused on increasing
productivity of work force but with a managerial perception. 14 principles which were proposed
by Fayol can be mentioned as Division of Work, authority and Responsibility, Discipline, Unity
of Command, Unity of Direction, Subordination of Individual Interest, Remuneration,
Centralisation, Scalar Chain, Order, Equity, Stability, Initiative, Esprit de Corps. With above
mentioned principles, emphasis was on improving the managerial efficiency rather than of
individual's efficiency which would solve the challenges that arise in an effective manner. When
whole organisational management is improved it will create an absolute change in whole
organisation which would reduce the efforts of management team thus raising the productivity of
business association and sustaining in market economy. Another leader who proposed his claims

in context of Classical Approach was a known German sociologist, Max Weber. He argued
Bureaucracy which is based on organised structure which is formally managed. It concentrates
on improvising the productivity of organisation in a graded structure which have sheer ploicies
and targets which can govern the whole place. The bureaucracy can work in both public and
private offices especially which are operating on larger scale. As employee count is high and to
reduce informal measures they follow a strict and mandate level in managerial process. In these
business associations, authority and responsibility is accurately delegated in the organisational
structure line. Like Henri Taylor, Max Weber also focuses on improving enterprise's productivity
by focusing on managerial team rather than workforce. But here theories were developed
according to middle line managers rather than top management. The theory proposed by Max
Weber can be known as Bureaucracy which is more professional and impersonal. The main
characteristics of bureaucratic theory can be seen as specialisation in division of work forces, a
conventional framework of policies made for achieving set rules and targets, well characterised
structure of hierarchy in organisation, official follow up of regulations framed for the purpose,
non personal state of affairs. The Bureaucratic Theory can be seen as an official and formal
procedure which works with a strict and systematic pattern, eliminating the personal touch
because of massive size of organisation(Keylock, Singh, Passalacqua and Foufoula‐Georgiou
2020).
NEO-CLASSICAL APPROACH
Neo-Classical approach is different from classical approach as it emphasises on
developing human inter personal relations among work forces rather than just increasing the
productivity of organisation and employees as in classical approach. This is a modern theory
where with productivity, mental health and physical being of an individual is also focused. The
two theories which were propounded by different economists in context of above mentioned
approach are The Human relations school and Contingency Theory. The human relations school
approach was developed in early 1920's. It emphasises on framing policies regarding to a group.
It involves communicating rules in team so that they properly execute it and also administrate the
operations that is undergoing and providing assistance which are occurred while the whole
operation. This approach is vital for every business organisation as it clearly supports the
competencies which are highly important in employee's success. As it is modern day theory
where along with business development and high productivity, equal emphasis is paid on

employee's development and their behaviour. This theory strengthens the team and constructs
them in being creative and enhancing their personal as well as professional career. When team is
developed it will automatically lead to productivity of employees and whole enterprise. This can
be achieved when the team members have a good interpersonal communication skills and
mutual understanding among them. The major skills which are centred in human relation skills
can be effective communication among whole team, conflict resolution between employees,
multitasking ability of a team, negotiation between stakeholders and organisation, organising
skills of leader who leads the group. On the other side, Contingency theory is a situational
approach. It was propounded by Fred Edward Fiedler. This describes that there are several events
which are not irreplaceable but can be managed and solutions can be found out at utmost so that
harmony is maintained in an organisation. For example, conflicts. They are natural that they can
be arisen any time and despite of numerous policies they can not be avoided. But there are
measures, which are adopted at times and they can make their resolution easy. This theory is of
aim that leaders have adapted with the contingencies which are claimed to be a part of business
surroundings in coming future times(Farias,Krysa and Harmon 2020).
FORCES THAT WILL SHAPE ORGANISATIONS AND THEIR
STRUCTURE IN THE FUTURE
There are many forces which can construct the organisational structure in a more better
way which can lead to higher productivity and gains to an institution, in current as well as
coming times. It is necessary for manager to follow approaches which can improvise the
enterprise.
Contemporary marketing orientations
The contemporary marketing orientation is used to enhance the old and less equipped
marketing methods to connect with consumers. Here the managers are keen to adopt several new
processes which are helpful in building a healthy and loyal consumer relation. As marketing
refers to understanding the desires and needs that is required by buyers and enabling to work
towards the same. This can be initiated by promoting products and services through social
media. Managers can connect with large public and popularise themselves through posts, mails
and others so that large consumer market is catered and increase the sales. This market
orientation can be achieved through various types of orientations like sales orientation, market

orientation, product orientation and societal orientation which can ease out the process. This is a
force which can shape organisation in a better way and develop their future structure. This
increases the loyalty towards brand and catering all relevant facts and figures which are required
to be used in hurdle free operation of a business process. There are various companies that has
adopted it and have successfully addressed the concerns of consumers which can boosted the
growth of organisation(Ellison, Pollock and Grimm 2020).
The culture - excellence approaches
The culture of excellence means what perception external individuals have on respective
work place. This approach emphasise on maintaining proper standards of the work culture. This
can be done through developing staff and meeting their expectations in regards to job
satisfaction, pay benefits, work culture, relations with employees and others. When the culture of
organisation is improved it will bring a change in work capacity of employees. This will shape
organisation in a better way and in coming times also the structure will be modified which will
increase business operations and growth. Also cordial relations should be focused among
employees so that goodwill of an enterprise is not harmed. The culture excellence approach can
be achieved by eliminating bias, setting examples which can be followed by subordinates,
increasing the employee engagement in all tasks and activities, setting targets and meeting them
in an proper manner. Also when rules or policies are framed they should not be just formed but a
proper execution should be kept upon so that they are a success and not a failure. These will help
organisation in coming to a better shape and in coming times the procedure can be executed in a
proper way delegating in the structure of organisation(Medne, Lapina and Zeps 2020).
The Japanese approaches
According to Japanese Approach focus is paid on quality products and services rather
than quantity so that consumers are satisfied with the goods and services whatever they receive.
Along with this it is mandatory to make it sure that employees are clear and focused about what
they have to achieve and in what direction they have to execute their work process. The
employees are required to be trained so that there are less chance of defects in operation. This
will create a good brand image in eyes of employees as their work load is reduced. When
consumers are supplied with superior quality products they are loyal towards the brand and thus
brand name is popularised. Also Japanese Approach focuses on eliminating wastes so that
productivity is enhanced. Also the Japanese approach believes that every individual should be

respected irrespective of their job position which motivates the employees and feels connected.
This is a role of Human Resource Department as in how human resource manager works for
upliftment of employees by framing policies and set of rules which can work in this direction.
Several companies have been adopting this approach to become a trend setter in domestic as well
as international market. These will change the structure of organisation in a positive manner in
coming future times(Hino 2020).
Organisational learning
To change the structure of organisation and shape it in a positive outcome, the process of
organisational learning plays an important role. No business can sustain in market without
accepting failure and working in its regard to resolve the same. Every organisation when formed
is a new one and with coming time it faces challenges which makes it to learn. According to this
it can be said that this is a process of making, developing, framing, sustaining and delivering the
facts and figures which are relevant to organisational process and which operations they are
following. The organisation learn and develops with the experience that it caters over the time by
existing in the market. When they learn from their experiences and failures which comes mid
way, knowledge is generated among the management team and because of it can improvise the
work culture. These changes will result in improvised shaping the organisational structure and
resulting in organisational efficiency(Oh and Han 2020).
CONCLUSION
As per the above mentioned report, it can be concluded that organisational theories act as
vital and renowned process which can facilitate the working process of an organisation. Also
through this it can be examined with time organisational theories and practices also changed
seeing to the dynamic culture of economy. To bring a change in market area, there are several
approaches which have been adopted by enterprises according to their operations and size. These
approaches have developed a change in organisational structure which has generated the
enterprise to be a success and lead in respective industry.

REFRENCES
Books and Journal
Abdulwahab, A.B.U.H., OMEDE, J.A. and JACOB, J.N., 2020. POSTULATIONS AND
IMPLICATIONS OF NEO-CLASSICAL THEORY ON NIGERIA’S ECONOMIC
DEVELOPMENT. Socialscientia: Journal of Social Sciences and Humanities, 5(3).
Bidard, C. and Erreygers, G., 2020. Exhaustible resources and classical theory. Œconomia.
History, Methodology, Philosophy, (10-3), pp.419-446.
Ellison, M., Pollock, G. and Grimm, R., 2020. Young people’s orientations towards
contemporary politics: Trust, representation and participation. Zeitschrift für
Erziehungswissenschaft, 23(6), pp.1201-1226.
Farias, G., Krysa, I. and Harmon, J., 2020. Sustainability Mindsets for Strategic Management:
Lifting the Yoke of the Neo-Classical Economic Perspective. Sustainability, 12(17),
p.6977.
Hino, N., 2020. Japanese English as an Expanding Circle variety: viewpoints and
approaches. Asian Englishes, pp.1-12.
Keylock, C.J., Singh, A., Passalacqua, P. and Foufoula‐Georgiou, E., 2020. Hölder‐Conditioned
Hypsometry: A Refinement to a Classical Approach for the Characterization of
Topography. Water Resources Research, 56(5), p.e2019WR025412.
Medne, A., Lapina, I. and Zeps, A., 2020. Sustainability of a university’s quality system:
adaptation of the EFQM excellence model. International Journal of Quality and Service
Sciences.
Oh, S.Y. and Han, H.S., 2020. Facilitating organisational learning activities: Types of
organisational culture and their influence on organisational learning and
performance. Knowledge Management Research & Practice, 18(1), pp.1-15.
Van Buren III, H.J., Syed, J. and Mir, R., 2020. Religion as a macro social force affecting
business: Concepts, questions, and future research. Business & Society, 59(5), pp.799-
822.