Explain difference between Classical Theory and Neo-Classical Theory of Organisation.

Difference between Classical Theory and Neo-Classical Theory of Organisation:

The classical theory has its origin in the writings of Taylor. Though, the main concepts of the theory have been developed through Mooney, Allan, Urwick and Brech. Neo-clasical theory was inspired through the Hawthorne experiments conducted by Elton Mayo and his associates.

The classical theory notices organization structure as impersonal and mechanical, while Neo-classical theory considers organization like a social system.

The focus of classical theory is on work and economic requires of workers, while Neo-classical theory focuses upon small groups and on emotional and human qualities of workers.

The Emphasis of classical theory is on order and rationality, while, the emphasis of Neo-classical theory is on personal security and social needs of employees.

As per to classical theory, organizational behaviour is a product of regulations and rules, whereas Neo-classical proponents view organizational behaviour like a product of feelings and attitudes and sentiments.

Classical theory propagates authoritarian practices, elaborate regulations and rules to obtain results, while, Neo-classical theories propagate democratic practices and encourage involvement of workers in decision-making. They recognise the significance of human dignity and values.

Classical theory results in work alienations and dissatisfaction among workers, while, Neo-classical theory results in happy and satisfied workers trying to increase production.