Health Management: Neoclassical Theory/ The Human Relations Approach

Introduction:

It was first set out by Alfred Marshall. George Elton Mayo (1880-1949) is considered as founder of neocassical theory. It is also known as behavioural science approach as it led after Hawthorne experiment. 

• It was an attempt at incorporating the behavioral sciences into management thought in order to solve the problems caused by classical theory practices. 
• In this theory, human relations & behaviors of individuals and groups are given the importance.

• It was based on the idea that the role of management is to use employees to get things done in organizations. 
• Rather than focusing on production, structures, or technology, the neoclassical theory was concerned with the employee. 
• It concentrated on answering questions related to the best way to motivate, structure, and support employees within the organization.

Principles: 

High morale values increase productivity more rather than good working conditions alone. Hence, an informal organizational structure was introduced with the following principles:

• The individual: An individual is identified as a social entity with goals & aspirations in the organization.
• The workgroup: Social interactions within the group are also emphasized & given importance.
• Participative management: It encourages the participation of workers in the process of decision making.

Appraisal:

• This theory has been widely applauded due to highlighting the role of human values & emotions in managing the organization, in comparison to the older classical approach which was focused more on task, methods & rules.
• Behaviourists have enriched management theory through their contributions in the areas of group dynamics, motivation communication and leadership. 
• However, they have failed in developing an integrated theory of management as behavioural guidelines can be helpful and profitable, but care must be taken not to accept them as being completely valid and applicable to all situations.
• First of all, it lacks the precision of classical theory because human behavior is unpredictable. 
• Second, its conclusions lack scientific validity and suffer from a clinical bias, its findings are tentative. 
• Third its application in practice is very difficult because it requires fundamental changes in the thinking and attitude of both management and workers. 

Difference between classical and neoclassical theory:

The classical theory stresses on task and structure while the neoclassical theory emphasizes people aspect. 

References:

1. Kadri, A., 2019. IAPSM's Textbook Of Community Medicine. 1st ed. New Delhi: Jaypee Brothers Medical Publishers (P) Ltd, p.1221.
2. https://study.com/academy/lesson/neo-classical-theory-of-management-the-human-relationsapproach.html#:~:text=The%20neoclassical%20theory%20was%20an,get%20things%20done%20in%20organizations.
3. https://www.businessmanagementideas.com/management/neoclassical-theory/neoclassical-theory-of-management/19763
4. http://www.iosrjournals.org/iosr-jbm/papers/Vol14-issue6/A01460105.pdf?id=7380 photo credit
5. https://www.toppr.com/guides/fundamentals-of-economics-and-management/evolution-of-management-thought/neo-classic-organization-theory/ photo credit
6. https://www.toppr.com/guides/fundamentals-of-economics-and-management/evolution-of-management-thought/neo-classic-organization-theory/ photo credit