Neoclassical Theory (Principles, Characteristics, Influences, Advantages and Disadvantages)

Many authors define management of him as a branch of the social sciences. It is in charge of planning, organizing, directing and controlling the resources and activities carried out in an institution.

Although the beginning of it could be located from the very existence of man in society, when they rationed their meals, planned and distributed tasks, it is generally accepted that he took his first steps during the XIX century.

With some influence from the fundamentals of classical economics from Adam Smith, emerge Frederick Wilson Taylor and his Theory of Scientific Management and Henri Fayol with his Classical Theory of Organization, both considered the fathers of management.

After them, many authors have made important contributions, Weber, Mayo, Maslow and others have allowed the development of administrative theory, one of them is the Neoclassical theory.

This movement arose in the middle of the last century, during the 50s, after the great wars and the economic depression, these events prompted the development of a renewed approach to classical theory.

In addition, his main ideas focus on maximizing the efficiency of the procedures administrative by automating their processes, using the amount of resources, without wasting them, which includes reducing manpower.

Some of the most important exponents of Neoclassical theory are: O'donnell, Dale, Druker and Koontz.

Postulates and Principles of Neoclassical Theory

The principles on which neoclassical theory is based and identified are:

• Division of labour, breaks the process down into smaller, specialized and specific tasks to make it more efficient.
• Specialization of tasks and functions for each work area and position.
• Formal hierarchical order, with levels of authority of greater responsibility as the level of hierarchy within the organization increases.
• Administrative breadth of managers and the number of subordinates you can control and supervise.

Characteristics of Neoclassical Theory

Some of the characteristics that differentiate Neoclassical Theory from other management approaches are:

• Seeks to automate production processes.
• Try minimize the use of labor in production processes.
• Oriented to the achievement of objectives through its results.
• The number of workers is directly proportional to the growth of the organization.
• Supports formal organization.
• Take back and modernize the postulates, principles and statements of Classical Theory, although it also takes ideas that it considers useful from other theories administrative.

Influence of Other Administrative Theories

Neoclassical theory is also influenced by other currents of administrative thought. Likewise, some of the concepts that it rescues from other theories are:

• Of Human Relations: informal organization, leadership, communication, group dynamics, socialization, productive community.
• Structuralist: external environment, organization structure, comparison between organizations, integration of formality and informality of the organization of classical theory and that of human relations.
• Behavior: motivation, administrative styles, organizational behavior, conflicts, contribution-reward balance.
• Math: Operational research, measurement of results
• Of the Systems: Integration and reciprocity of subsystems

Advantages of Neoclassical Theory

Like everything, for neoclassical theory there are both advantages and disadvantages. In this case, the advantages and some positive consequences that the Neoclassical Theory provides are:

• Optimize results for small businesses.
• Simple structure and easy to understand.
• Maximize performance and productivity.
• Clear definition of tasks and responsibilities.
• Simple deployment and containment.

Disadvantages of Neoclassical Theory

Finally, the drawbacks observed in the application of the postulates of the Neoclassical Theory are:

• Staff reduction.
• Single and direct authority.
• Centralization of management in one person.
• Possibility of the director of exceeding his functions.