neo classical school of management thoughtsneo clasical theory of management

NEO CLASSICAL SCHOOL OF MANAGEMENT THOUGHTS

BY

MANISHA VAGHELA

[email protected] 1BY: manisha vaghela

Flow of presentationIntroductionBeliefs of neo classical theoryElements of neo classical theoriesConclusionBibliography


Introduction:

The term classical refers to work done by a group of economists in the 18th and 19th centuries.

the word neo meaning “new”.


Much of this work was developing theories

about the way markets and market economists and they are generally termed neo-classical economists..

The neoclassical school is the mainstream school of thought in economics, deriving from the work of the marginalists, who defined value in relation to scarcity and regarded the balance of supply and demand as determining equilibrium prices.


The neoclassical approach was set out by Alfred Marshall in his Principles of economics, published in 1890;


Beliefs of NEO CLASSICAL THEORIES:

Classical economists were not well-known for being a happy, optimistic bunch of economists

some believed that population growth would be too rapid for the resources available


Some believed that the government should not intervene to try to correct this as it would only make things worse and so the only way to encourage growth free markets. This approach is known as a “laissez – Faire” approach.

Essentially this approach places total reliance on markets and anything that prevent markets clearing properly should be done away with.


Much of Adam-Smith’s early work was on this theme and he introduced the nation of an invisible hand that guided economic activity and led the optimum equilibrium. Many people see him as the founding father of modern economics.

The Victorian period of rapid expansion worldwide seemed to cheer the classical economists up a little and they became a bit more optimistic..


but still maintained ‘their’ total faith in the role of markets.


It may be noted here that the theories stated by Taylor and Fayol are called by writers as classical theories.

while the theories stated by writers as classical theories the human relations movement and the behavioural science movement are called new-classical theories


Elements of Neo-classical theories

1.Individual 2. Work Group3.Participative management4.Oreintation5. Motivation 6. Leadership 7. Employee Development


1) Individual :Neo-classical theory recognized the

individual differences which were ignored by the classical theory.

Every individual has emotions, feelings, attitudes, hopes, aspirations, and expectations.


The new-classical theory advocated a package deal of motivation, including financial and non financial incentives, to make the workers feel at ease at work and increase their productivity.


2) Work Group :An individual in a group develops Social

wants. As he is a social being, he develops a

desire to belong & to be accepted by his work group.


3) Participative Management :Neo-classical theory suggested workers

participation in management for improving their productivity


4) Orientation Classical theory was job oriented while

neo-classical theory is employee oriented.

There is a shift in managerial style from product oriented approach to employee and group centered approach


classical theory was concerned with the basic needs of organization and society whereas neo-classical approach tried to satisfy the personal security and social needs of workers

Neo-classical writers emphasized satisfaction of workers whereas the classical theory emphasized productivity.


5) Motivation :Neo-classical writers considered business

organization as a social system,

The employees could be motivated by social and psychological wants and not solely by economic incentives.


6) Leadership :Democratic style of leadership is essential

to develop co-operative attitude of employee towards management.


7) Employee Development :As there is a close connection between

moral and production, neo-classical writers emphasized that management that must take greater interest in employee development workers satisfaction.


Conclusion :Hereby I conclude that neo classical theory is

adopted by all the economists of management

As neo classical is based on employees its more acceptable

In this theory all are benefited not the manager the firm and specially the employees.


Reference books

Students guide to management by Dr. Neery dashisth Principles of management by Dr. P.C tripathi.

Theory practice of management.


neo classical school of management thoughtsneo clasical theory of management

Business