BUSINESS MANAGEMENT - MAY/JUNE-2008
1. What are the contributions of Neo-classical theories to the evolution of Management?
ANS: The neo classicists focused on the human aspect of industry. They modified the classical theory by emphasizing the fact that organization is a social system and the human factor is the most important element within it. They conducted some experiments (known as Hawthorne Experiments) and investigated informal groupings, informal relationships, patterns of communication, patterns of informal leadership, etc. this led to the development of human relations approach. Elton mayo is generally contributors to this school include Roethlisberger, Dickson, Dewey, Lewin, etc.
It revealed the importance of social and psychological factors in determining workers productivity and statisfaction.
The human relationsts argued that achievement of organizational objectives is impossible without the willing cooperation of people and such cooperation cannot be automatically secured or ordered. It has to be consciously achieved. The neo-classical approach advocated people oriented organization structure which will integrate both informal and formal organizations.
The basic tenets of neo-classical theory or human relations approach are as under :
1. the business organization is a social system.
2. the behaviour of an individual is dominated by the informal group of which he is a member. 3. an individual employee cannot be motivated by economic incentives alone. His social and psychological needs must be satisfied to improve the level of motivation. 4. in an organization, it is ultimately cooperative attitude and not the mere command which yields result. 5. management must aim at developing social and leadership skills in addition to technical skills. It must take interest in the welfare of workers. 6. morale and productivity go hand in hand in an organization.
Factors affecting human relations
Organization should be viewed as a social system. Human relations in the organization are determined by the individual, work-group, leader and work environment as shown in fig. 5.2. 1. Individual
1. Individual. The individual is an important element of the organization and each individual is unique. Behaviour of an individual is affected by his feelings, sentiments, values and attitudes. Motivation of employees should give due consideration to their economic, social and psychological needs. Thus, motivation is a complex process.
2. Work-group. The work group is the centre of focus of human relations approach. It has an important role in determining the attitudes and performance of individual workers. The Hawthorne studies showed that the informal groups exert thremendous influence over the behaviour patterns of workers.
3. Work- environment. Human relationists advocated the creation of a positive work environment where organizational goals are achieved through satisfaction of employees. In general, when employees needs are satisfied, the work environment is termed positive and when employee needs are not satisfied, the work environment is termed negative.
4. Leader. The human relationists gave great importance to leadership. The leader must ensure full and effective utilization of all organizational resources to achieve organizational goals. He must be able to adjust to various personalities and situations. He must behave in a way that generates respect. As the Hawthorne studies showed, a supervisor can contribute significantly in increasing productivity by providing a free, happy and pleasant work environment.
Hence the ultimate aim of neo classical approach is to establish ,cultivate and develop an environment where the HUMAN ELEMENT is given due importance and recognition. This environment...