2. Neo classical approach was first set out by
Alfred Marshall in his book principles of
economics, published in 1890’s.
George Elton Mayo is considered as founder
of neo classical theory.
3. The word neo means “new”
The word classical refers to work done by
group of economists in the back (18 & 19)
century
5. Proposed by Elton Mayo.
He mainly focused was on
the people working in an
organization.
Human relation
development contributed
to:
Employee-centric,
democratic and
participative style of
leadership is more
efficient.
6. It can also be called as mature version of human
relation theory.
This theory is how the managers should behave to
motivate the employees and encourage them to
perform at high levels and be committed to the
achievement of organizational goals.
7.
8.
9.
10.
11.
12.
13.
14.
15. Points of distinction Classical approach Neoclassical approach
Focus functions and economic
demand of workers
Emotion and human
qualities of workers
Structure Impersonal and mechanistic Social system
Application Autocratic management and
strict rules
Democratic process
Emphasize Discipline and rationality Personal security and social
demand
Work goal of worker Maximum remuneration and
reward
Attainment of organizational
goal
Concept about men Economic being Social being
Content Scientific management,
administrative
management, and
bureaucratic management
Hawthorne experiment ,
human relation movement
and organizational behavior
Relation Formal Informal
Nature Mechanistic Organistic
16. Hereby I conclude that neo classical theory is
adopted by all economists of management.
As neo classical is based on employees its
more acceptable.
In this theory all are benefitted not the
manager the firm, and specially the
employees.
