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Management Practices and Organisational Behaviour

Notes 8. Both-way communication is necessary because it carries necessary information downward
for the proper functioning of the organisation and transmits the feelings and sentiments
of people who work in the organisation upward.
9. Teamwork is essential for cooperative and sound functioning of the organisation.

2.2.1 Appraisal of Neoclassical Theory Contribution

The neoclassical theory provides various modifications and improvements over the earlier
theory and offers a more humanistic view towards people at work. Neoclassicists have also
introduced behavioural science in the study of organisational functioning which has helped
managers quite a lot. This approach emphasised the micro-analysis of the human behaviour.
The theory has brought into light certain important factors which were altogether ignored by
the classicists such as informal group, group norms, informal leader, non-economic rewards,
etc. Thus, the approach gives evidence of accepting the classical doctrine though superimposing
its modifications, resulting from individual behaviour and the influence of the informal group.
2.2.2 Criticisms

The main criticisms of the neoclassical theory are as hereunder:
1. Certain Assumptions are not True: Certain assumptions on which the neoclassical theory
is based do not seem to be true. For example, the assumption that there is a solution to
every problem which satisfies everyone in an organisation is not true. Often there are
conflict interests among various groups in the organisation that are structural and not
merely psychological.
2. Limited Application: The various formats and structures of organisations given by
neoclassicists are not universal. Their application is limited. There is no particular structure
which may serve the purpose of all the organisations. It also overlooks some of the
environmental constraints which managers cannot ignore and this lapse makes the
practicability of the theory limited.
3. Lack of Unified Approach: The theory lacks the unified approach of the organisation
theory. In fact, it is not a theory at all. All that was done in neoclassical theory is simply
modification of the classical theory rather than organisational transformation. So, this
theory has almost the same limitations as the classical theory.
4. More Emphasis on Human Aspect: The theory gives too much emphasis on human aspects
in the organisation. As the classicists concentrated on structural aspect, neoclassicists
concentrate their attention on the human aspect. It ignores the other aspects such as formal
structure, discipline, etc.

Some thinkers while criticising the theory have called it bankrupt because it suggests nothing
new. Though, the theory has offered valuable contributions to the lore of organisation like the
classical theory, it suffers from incompleteness, a short-sighted perspective and lack of integration
among the many factors of human behaviour studied by it.

2.2.3 Facts Discovered through Hawthorne Experiments

Hawthorne studies at the Western Electrical Company, Chicago were the main source of
inspiration to the neoclassical school. Mayo and his associates carried out several experiments
there, by providing better working and living conditions and financial incentives, and they got
amazing results. Productivity and efficiency went up considerably. The following facts were
uncovered by these experiments:

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