Neo-classical Approach of Management
Neo-classical Approach of Management
It is called the human relations theory of management. Whereas classical theory focused attention on job content of management of physical resources, neo-classical theory gave greater attention to man behind the machine and stressed the importance of individual as well as group relationship in the workplace. That is the proponents of this approach held that the real cause of human behavior was something more than mere physiological variables, and focused their attention on the human beings in the organization. They emphasized the role of psychology and sociology in the understanding of individual as well as group behavior in an organization. Hence, this approach is also called as ‘human approach to management. The human relations approach is based on two fundamentals: (a) an organization should be viewed in social terms as well as in economic and technical terms, and (b) the social process of group behaviour can be understood in terms of clinical method analogous to the doctor’s diagnosis of the human organism. The number of sociologists, psychologists, management experts and others who have made significant contributions. to this approach is so large that the space here does not permit even their listing. However, we propose a relatively detailed discussion of the famous experiments at Haw thorne because of their historical importance to the human relations approach to the study of managerial problems.
First Phase of Study:
The Hawthorne experiments were conducted during the period 1924-1932 in three phases. During 1924-27, the National Research Council of U.S.A. made a study in collaboration with Western Electric Company, Chicago, to study the relationship between the intensity of illumination and workers productivity. The experiments were conducted at the Hawthorne plant of the Western Electric Company, on the original hypothesis of scientific management that there was a correlation between the quality of illumination and workers output. These experiments, however, showed amazingly opposite results- productivity, increased when illumination was either increased or decreased for a test group. When the researchers were about to declare the whole experiment a failure, Elton Mayo, of Harvard, saw in it something unusual. Therefore, he along with F. J. Roethlisberger and T. N. Whitehead, sociologists, and company representative William Dickson, continued the research. Later he came to the conclusion that changing illumination up and down caused increased productivity because the test group began to be noticed, to feel important.
The second phase of the Hawthorne studies consists of Relay Assembly Test Room Experiments. Taking a clue from the illumination experiments, the researchers conducted these experiments from 1927 to 1932 to study the relationship between working conditions incentive system, rest periods, physical facilities, etc., and workers productivity. The findings of these experiments were quite surprising which led the researchers to conclude that productivity was not related to such physical variables as incentive wage payments, rest pauses and physical facilities, but to something else- attitudes of workers towards work and their group.
The third phase of the experiments relates to the Bank Wiring Observation Room Study. This study was conducted between November 1931 and May 1932 with the object of analyzing the functioning of a work-group and its impact on individual behaviour. The study proceeded with the hypothesis that in order to earn more, workers would produce more individually and would help others to produce more to take advantage of group bonus. In this case also, the hypothesis proved wrong- the members of the test group set the production norm themselves, anybody attempting to exceed the norm was disfavoured by others and group pressure was applied to restrict his production. The researchers were thus led to conclude that informal relationship was important in the working of groups; there should be proper synchronization between interest of the management and worker and efforts should be made to modify informal group behaviour to realize organization objectives.
From the foregoing discussion, it is clear that the Hawthorne experiments focused attention on the following.
Social factors are important variable les influencing the working of an organization; it is something more than a formal structure of arrangement of functions. As Mayo puts it an organization is “a social system, a system of cliques, informal status system, rituals and a mixture of logical, non-logical and illogical behavior”.
In an organization individuals tend to create groups. They react as members of groups and not as individuals. Besides formal organization there is also an informal organization plays an important role in an organization
The style of leadership is an important factor influencing productivity of organizations. The management should try to understand huma behaviour, especially group behaviour. In some cases, informal leadership would prove more useful than formal one.
An effective system of communication is an aid successful working of an enterprise. A good communication system makes possible to explain to the workmen the objectives as well as the course action directed towards their achievement. Workers’ participation in decision making as well as feedback regarding programmers, policies, and their execution to is facilitated by the system of communication.
The generation of conflicts is a natural consequence of the working of an enterprise. These conflicts are generated between groups an organization because of maladjustment between changes in individuals an the organization. Till perfect reconciliation is reached, conflict will exist.
The quality of supervision plays an important role determining productivity a friendly co-operative and inspiring supervisor can achieve better than an authoritarian one.
The Hawthorne experiments showed, in general, that productivity was not related to physical variables like incentive wage payments, comfortable working conditions, rest pauses and physical facilities. On the contrary, the improvement in productivity was due to such social factors as morale, satisfactory interrelationships between members of a work-group (a sense of belonging), and effective management a kind of managing that would understand human behaviour especially, group behaviour and serve it through such interpersonal skills as motivating, counselling, leading and communicating. Further, these experiments emphasized that humans are social and business organisations separate in a socio-technical system.
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