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Neo classical school of management thoughtsneo clasical theory of management


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Neo classical school of management thoughtsneo clasical theory of management

  2. 2. Flow of presentation Introduction Beliefsof neo classical theory Elements of neo classical theories Conclusion Bibliography BY: manisha vaghela 2
  3. 3. Introduction: Theterm classical refers to work done by a group of economists in the 18th and 19th centuries. the word neo meaning “new”. BY: manisha vaghela 3
  4. 4.  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. BY: manisha vaghela 4
  5. 5.  The neoclassical approach was set out by Alfred Marshall in his Principles of economics, published in 1890; BY: manisha vaghela 5
  6. 6. 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 BY: manisha vaghela 6
  7. 7.  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. BY: manisha vaghela 7
  8. 8.  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.. BY: manisha vaghela 8
  9. 9.  but still maintained „their‟ total faith in the role of markets. BY: manisha vaghela 9
  10. 10.  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 BY: manisha vaghela 10
  11. 11. Elements ofNeo-classical theories 1.Individual 2. Work Group 3.Participative management 4.Oreintation 5. Motivation 6. Leadership 7. Employee Development BY: manisha vaghela 11
  12. 12. 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. BY: manisha vaghela 12
  13. 13.  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. BY: manisha vaghela 13
  14. 14. 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. BY: manisha vaghela 14
  15. 15. 3) Participative Management : Neo-classical theory suggested workers participation in management for improving their productivity BY: manisha vaghela 15
  16. 16. 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 BY: manisha vaghela 16
  17. 17.  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. BY: manisha vaghela 17
  18. 18. 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. BY: manisha vaghela 18
  19. 19. 6) Leadership : Democratic style of leadership is essential to develop co-operative attitude of employee towards management. BY: manisha vaghela 19
  20. 20. 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. BY: manisha vaghela 20
  21. 21. 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. BY: manisha vaghela 21
  22. 22. Reference books Students guide to management by Dr. Neery dashisth Principles of management by Dr. P.C tripathi. Theory practice of management. BY: manisha vaghela 22
  23. 23. BY: manisha vaghela 23