• Skip to main content
  • Skip to primary sidebar
  • Accounting
  • Banking
  • Business
  • Statistics
  • Economics
  • Finance
  • HR
  • Law
  • Marketing
business-jargons-site-logo

Business Jargons

A Business Encyclopedia

NeoClassical theory

Definition: The NeoClassical Theory is the extended version of the classical theory wherein the behavioral sciences gets included into the management. According to this theory, the organization is the social system, and its performance does get affected by the human actions.

The classical theory laid emphasis on the physiological and mechanical variables and considered these as the prime factors in determining the efficiency of the organization. But, when the efficiency of the organization was actually checked, it was found out that, despite the positive aspect of these variables the positive response in work behavior was not evoked.

Thus, the researchers tried to identify the reasons for human behavior at work. This led to the formation of a NeoClassical theory which primarily focused on the human beings in the organization. This approach is often referred to as “behavioral theory of organization” or “human relations” approach in organizations.

The NeoClassical theory posits that an organization is the combination of both the formal and informal forms of organization, which is ignored by the classical organizational theory. The informal structure of the organization formed due to the social interactions between the workers affects and gets affected by the formal structure of the organization. Usually, the conflicts between the organizational and individual interest exist, thus the need to integrate these arises.

The NeoClassical theory asserts that an individual is diversely motivated and wants to fulfill certain needs. The communication is an important yardstick to measure the efficiency of the information being transmitted from and to different levels of the organization. The teamwork is the prerequisite for the sound functioning of the organization, and this can be achieved only through a behavioral approach, i.e. how individual interact and respond to each other.

Related terms:

  1. Organizational Theory
  2. Administrative Theory
  3. Modern Theory
  4. Classical Theory
  5. Conditioning Theory

Reader Interactions

Comments

  1. Mary Ifeyinwa Johnpedro says

    May 23, 2018 at 5:15 am

    Thank you for this site,
    My search for what Neoclassical school of thought is all about brought me here and I am satisfied.

    Reply
    • Zed says

      March 7, 2022 at 6:09 pm

      Thank you so much

      Reply
    • Jos Muhammed says

      June 29, 2022 at 8:55 pm

      Thank you very much for these sites. I am very excited

      Reply
  2. Otaru Ayo peter says

    August 27, 2018 at 4:42 am

    Please, what is the ‘Hard core’, Pros and Cons and the state of the art of the neoclassical theory.

    thank you

    Reply
  3. Charleston Garpeh says

    December 5, 2019 at 12:46 pm

    Thanks a lot. but I want to know what is the emergence of the the neoclassical theory of management?

    Reply
    • Cindy Quitalig says

      January 23, 2020 at 10:03 am

      yeah i want to know as well.

      Reply
  4. Frenchesca June says

    March 11, 2020 at 10:37 pm

    Your site is so amazing. I love how you arrange your information. How do I reference this article?

    Reply
  5. Yangi Betty chaplain says

    March 13, 2021 at 8:50 pm

    Which means this theory takes about human behaviors
    I have understood

    Thank really

    Reply
  6. Meow says

    May 15, 2021 at 6:38 pm

    Big thank you to this post, it helped me a lot

    Reply
  7. Ilori Maria says

    November 5, 2021 at 6:20 am

    Thank you

    Reply
  8. Best Tyson says

    March 19, 2022 at 6:40 pm

    Well, I am grateful for this.

    Reply
  9. Hamed says

    July 5, 2023 at 12:52 am

    I’m satisfied with the explanation of neoclassical from this site

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Top Searches

  • Communication Process
  • Planning
  • 7 C’s of Communication
  • Management
  • International Marketing
  • Business Strategy
  • Effective Communication
  • Insurance
  • Strategic Management
  • Selection Process

Trending Now

  • Group
  • Business
  • Accounting
  • Budget
  • Entrepreneurship
  • Journal
  • Leadership
  • Motivation
  • Communication
  • Stress

New Business Terms

  • Corporate Governance
  • Logistics Management
  • Dividend
  • Quorum
  • Corporate Veil
  • Trade Union
  • Warehouse
  • Mistake
  • Ratification
  • Void Agreement

Categories

  • Accounting
  • Banking
  • Business
  • Business Law
  • Business Statistics
  • Economics
  • Finance
  • HR
  • Marketing

Copyright © 2025 · Business Jargons · Contact Us · About Us · Privacy