ABSTRACT
The research profers an appraisal of neo-classical theory of organization.The neoclassical theory was an attempt at incorporating the behavioral sciences into management thought in order to solve the problems caused by classical theory practices. The premise of this inclusion was based on the idea that the role of management is to use employees to get things done in organizations. Rather than focus on production, structures, or technology, the neoclassical theory was concerned with the employee. Neoclassical theorists concentrated on answering questions related to the best way to motivate, structure, and support employees within the organization. Studies during this time, including the popular Hawthorne Studies, revealed that social factors, such as employee relationships, were an important factor for managers to consider. It was believed that any manager who failed to account for the social needs of his or her employees could expect to deal with resistance and lower performance. Employees needed to find some intrinsic value in their jobs, which they certainly were not getting from the job that was highly standardized. Rather than placing employees into job roles, where they completed one specific task all day with little to no interaction with coworkers, employees could be structured in such a way that they would frequently share tasks, information, and knowledge with one another. The belief was that once employees were placed into this alternate structure, their needs for socialization would be fulfilled, and thus they would be more productive. A Case study of UAC is conducted to determine the application of the neo –classica theory.
CHAPTER ONE
INTRODUCTION
In the early 1920s, classical management theorists, such as Frederick Taylor, Henry Gantt, and Frank and Lillian Gilbreth, spent their time researching how a specific job was done, what steps were taken by an employee to complete the work, and the amount of time it took a worker to complete a task using different methods. They then used this information to determine the most effective way of completing a task. While these individuals focused on the science of creating specialized work processes and workforce skills to complete production tasks efficiently, critics began to scrutinize classical management theory for its potentially harmful effects on workers. It was not so much the methodology of finding the most efficient way to complete a task that concerned critics, but the underlying assumption of classical management theorists that managers and workers would meet halfway on their attitudes towards standardization. However, many believed that placing too much emphasis on standardization of jobs and workers had not created this ‘mental revolution’ that Taylor and his associates had hoped for, but rather had inadvertently created an attitude among managers at the time that employees were nothing more than an appendage to a machine. While machines and processes could be standardized, critics argued that it was unrealistic to expect that standardization among emotional beings; the two needed to be looked at individually. So, as Taylor and other classical management theorists continued their work on standardization, others started to conduct research on the worker, and thus, the neoclassical theory of management was born. The neoclassical theory was an attempt at incorporating the behavioral sciences into management thought in order to solve the problems caused by classical theory practices. The premise of this inclusion was based on the idea that the role of management is to use employees to get things done in organizations. Rather than focus on production, structures, or technology, the neoclassical theory was concerned with the employee. Neoclassical theorists concentrated on answering questions related to the best way to motivate, structure, and support employees within the organization. Studies during this time, including the popular Hawthorne Studies, revealed that social factors, such as employee relationships, were an important factor for managers to consider. It was believed that any manager who failed to account for the social needs of his or her employees could expect to deal with resistance and lower performance. Employees needed to find some intrinsic value in their jobs, which they certainly were not getting from the job that was highly standardized. Rather than placing employees into job roles, where they completed one specific task all day with little to no interaction with coworkers, employees could be structured in such a way that they would frequently share tasks, information, and knowledge with one another. The belief was that once employees were placed into this alternate structure, their needs for socialization would be fulfilled, and thus they would be more productive.
1.1 BACKGROUND OF THE STUDY
The Neoclassical perspective began with the Hawthorne studies in the 1920s. This approach gave emphasis to “affective and socio-psychological aspects of human behavior in organizations. The human relations movement was a movement which had the primary concerns of concentrating on topics such as morale, leadership.Hawthorne study A number of sociologists and psychologists made major contributions to the study of the neoclassical perspective, which is also known as the human relations school of thought. Elton Mayo and his colleagues were the most important contributors to this study because of their famous Hawthorne study from the “Hawthorne plant of the Western Electric Company between 1927 and 1932.The Hawthorne study suggested that employees have social and psychological needs along with economic needs in order to be motivated to complete their assigned tasks. This theory of management was a product of the strong opposition against “the Scientific and universal management process theory of Taylor and Fayol. This theory was a response to the way employees were treated in companies and how they were deprived of their needs and ambitions.In November 1924, a team of researcher – professors from the renowned Harvard Business school of USA began investigating into the human aspects of work and working conditions at the Hawthorne plant of Western Electric Company, Chicago. The company was producing bells and other electric equipments for the telephone industry. Prominent Professors included in the research team were Elton Mayo (Psychologist), Roethlisberger and Whilehead (Sociologist), and William Dickson (Company representative). The team conducted four separate experimental and behavioural studies over a seven-year period. These were:’Illumination Experiments (1924–27) to find out the effect of illumination on worker’s productivity.”Relay Assembly Test Room experiment (1927–28) to find out the effect of changes in number of work hour and related working condition on worker productivity.”Experiment in interviewing Working : In 1928, a number of researchers went directly to workers, kept the variables of previous experiment aside, and talked about what was, in their opinion, important to them. Around 20,000 workers were interviewed over a period of two years. The interviews enabled the researchers to discover a rich and intriguing world that previously remained undiscovered and unexamined within the Hawthorne studies undertaken so far. The discovery of the informal organisation and its relationship to the formal organization was the landmark of experiments in interviewing workers. These experiment led to a richer understanding of the social, interpersonal dynamics of people at work.”Bank wiring Room Experiments (1931–32) to find out social system of an organization.’Results of the Hawthorne studies The Hawthorne studies helped conclude that “a human/social element operated in the workplace and that productivity increases were as much an outgrowth of group dynamics as of managerial demands and physical factors. The Hawthorne studies also concluded that although financial motives were important, social factors are just as important in defining the worker-productivity.Hawthorne Effect was the improvement of productivity between the employees, it was characterized by:
The satisfactory interrelationships between the coworkers It classifies personnel as social beings and proposes that sense of belonging in the workplace is important to increase productivity levels in the workforce. An effective management understood the way people interacted and behaved within the group. The management attempts to improve the interpersonal skills through motivations, leading, communication and counseling. This study encourages managers to acquire minimal knowledge of behavioral sciences to be able to understand and improve the interactions between employees
1.2 STATEMENT OF THE PROBLEM
Critics believed that Mayo gave a lot of importance to the social side of the study rather than addressing the needs of an organization. Also, they believed that the study takes advantage of employees because it influences their emotions by making it seem as if they are satisfied and content, however it is merely a tool that is being used to further advance the productivity of the organization Therefore the problem confronting this research is to profer an appraisal of the neo- classical theory with a case study of UAC PLC.
1.3 RESEARCH QUESTION
1 What is the nature of the neo- classical theory
2 What is the significance and limitations of the neo- classical theory
3 What is the nature, significance and limitation of the neo- classical theory in UAC PLC.
1.4 OBJECTIVES OF THE STUDY
1 To determine the nature of the neo- classical theory
2 To determine the significance and limitation of the neo- classical theory
3 To determine the nature, significance, and limitation of the neo-classical theory in UAC PLC
1.5 SIGNIFICANCE OF THE STUDY
The study shall appraise the nature, significance, and limitations of the neo-classical theory And it shall also serve as a source of information of to organizational managers.
1.6 STATEMENT OF THE HYPOTHESIS
1 Ho work and productivity in UAC is low
Hi Work and productivity in UAC is high
2 Ho Human relation and Behaviourial management in UAC is low Hi Human relation and Behaviourial management in UAC is high
3 Ho effect of Human relation and behavioural management in UAC is low Hi effect of Human relation and behavioural management in UAC is high
1.7 SCOPE OF THE STUDY
The study focuses on the appraisal of the neo-classical theory of management With a case study of UAC PLC
1.8 DEFINITION OF TERMS
NEO-CLASSICAL THEORY DEFINED
The neoclassical theory was an attempt at incorporating the behavioral sciences into management thought in order to solve the problems caused by classical theory practices. The premise of this inclusion was based on the idea that the role of management is to use employees to get things done in organizations. Rather than focus on production, structures, or technology, the neoclassical theory was concerned with the employee. Neoclassical theorists concentrated on answering questions related to the best way to motivate, structure, and support employees within the organization. Studies during this time, including the popular Hawthorne Studies, revealed that social factors, such as employee relationships, were an important factor for managers to consider. It was believed that any manager who failed to account for the social needs of his or her employees could expect to deal with resistance and lower performance. Employees needed to find some intrinsic value in their jobs, which they certainly were not getting from the job that was highly standardized.
Human Relations Movement:
Human relations movement deals with the factors which encourage higher performance on the part of workers. The improvement of working conditions, lowering of hours of work, improvement of social relations of workers, besides monetary gains help in increasing productivity.
Impact of Social Factors: The impact of social factors was visible on the productivity of workers. The normally known ‘monetary incentives’ for increasing output were not visible. Elton Mayo described organization as a ‘social system’ and social norms at work play an important role in motivating people. It was the restructuring of social relationships that was the main cause of changes in productivity at Hawthorne studies. It was made clear that man was primarily motivated by his social needs i.e., a sense of security, recognition, morale and belongingness. The output increased in Relay Room due to the effectively functioning of social group with a warm relationship with its supervisors.
Importance of Informal Groups: It was observed that in order to overcome the shortcomings of formal groups, workers create informal groups. Informal work groups have a great influence on productivity and attitudes of the workers towards work performance. Social pattern and pressure of a group, rather than management demands, frequently had the strongest influence on how productive workers would be.
Leadership: Leadership is required to direct group activities. A formal supervisor as appointed by the management may not be able to achieve the desired results. The ‘informal leaders’ acceptable to t he informal groups have more influence on their behaviour pattern because they associate themselves with the groups. A supervisor formally appointed should associate himself with the social problems of the group for getting co-operation and better work from the workers.
Proper Communication: Proper communication system is necessary for better understanding between management and workers. The experiments showed that if workers are explained the logic of taking various decisions and also their participation in decision making brought much better results. Management should understand the attitudes and viewpoints of workers and giving them due recognition will help in overcoming many difficulties.
Balanced Approach: The experiments showed that a balanced approach should be taken to the whole situation. The problems of workers could not be explained by taking one factor or management could not achieve the results by emphasising one aspect. All the things should be discussed and decision be taken for improving the whole situation. A balanced approach to the whole situation can show better result REFERENCES Perrow, Charles (1991). “A Society of Organizations”. Theory and Society: 725–762. Chandler, Alfred (1977). The Visible Hand. Cambridge: Cambridge University Press. Greiner, Larry (June 1998). “Evolution and Revolution as Organizations Grow”. Harvard Business Review. Weber, Max. Economy and Society: An Outline of Interpretive Sociology (2 Volume Set). University of California Press.
