This post is the continuation of some inside information from Organizational Behavior and Governance.
According to Shafrits et al. Neoclassical Organization Theory is not totally new, it is modified Classical Organization Theory. Neoclassical Organization Theory became a foundation for further development of other org-n theories. Generally, Classical Organization Theory view organization as machine, while Neoclassical Organization Theory uses human factor, environment as a part of organization. This chapter includes several authors who developed the idea of Neoclassical Organization Theory. For instance, Chester Barnard in his The Function of the Executive writes about importance of cooperation of individuals, effort of individuals in task achievement. It unites org-n, creates right and wrong moral sense of behavior. Moreover the reasons for cooperation of individuals are wide from material inducement to ideal benefaction and it is not stable (Caster I. Barnard as cited in Shafritz et al., p.93). Robert Merton in 1940 wrote that Weber’s bureaucracy negatively affects people in org-ns, because it is not perfectly efficient. Neoclassical Organizational Theory challenged basic tenets of Classical Organization Theory mostly by Herbert A.Simon. He argues that “general principles of management” are not suited to the most administrative situations faced by managers. It means that if we view the organization in rational manner, it will never work in irrational situations.
To sum up previous ideas, Neoclassical theory is a plot for further development of organizational theories. It addressed many of the problems inherent in classical theory. Neoclassical approach introduced an informal organization structure and emphasized the following principles: individuals are not a part of machines, they are human being, participative management.
After reading those chapters about classical and neoclassical organizational theories I started to think how I will operate as a director of the company. Here I am interesting about your ideas, do you think that machines more important that workers? Profit or human being?