Approaches to Organisational Behaviour | Classical, Neo-Classical and Modern Approach

Several research in the field of organizational behavior resulted in the development of various approaches to organizational behavior. These researches were based on quantifying the study of human actions and reactions in their work environments.

Approaches to Organisational Behaviour

Most of the approaches to organizational behavior are aimed at motivating the members of an organization in order to optimize their productivity and performance. There are mainly three approaches to organizational behavior, as shown in Figure:

Classical Approach

The classical approach to organizational behavior emphasized the planning of work, technical necessities of an organization, principles, and concepts of management, and the assumption of logical behavior.

The classical approach to organizational behavior was based on the management theories laid down by various scholars, such as Taylor, Fayol, Urwick, Mooney and Reiley, and Brech in the early years of the 20th century.

Philosophy of Classical Approach

The philosophy of the classical approach is based on the following statements:

  • A clear understanding of the purpose of an organization is imperative to understand the working of the organization and assessing ways of improvement.

  • Identification of major objectives helps in the clarification of purposes and responsibilities at all levels of the organization.

  • Attention to an appropriate delegation of power and division of work is necessary for organizational effectiveness. The duties and responsibilities should be clearly defined in order to maintain specialization and coordination.

  • Emphasis is laid on a hierarchy of management and formal organizational structure and relationships.

Principles Apply to All Types of Organizations

Many classical writers gave several principles governing organizational behavior. Of these principles, the following three (Mooney and Reiley) apply to all types of organizations:

Principle of Co-ordination

This principle emphasizes on the need for people to act together with unity of action (Esprit De Corps), and the need for authority and discipline in organizations.

Scalar Chain Principle

This principle emphasizes the hierarchical structure of an organization and represents the line of authority at all levels of management. The scalar chain involves the flow of communication from the top to the bottom level of the organizational hierarchy. The principle states that information in an organization should pass through the scalar chain.

Functional Principle

This principle emphasizes the specialization and the distinction between different kinds of duties. It states that work in an organization should be divided among employees as per their skills and abilities in order to increase the efficiency of employees.

Classical Approach Management Theories

The Classical approach comprises the following management theories:

Scientific Management

This is based on the concept of planning work to achieve efficiency, standardization, specialization, and simplification.

F.W. Taylor suggested four principles of scientific management in 1947, which are:

  • No rule-of-thumb at the workplace
  • Scientific selection of the worker
  • Cooperation of management and labor rather than conflict
  • Scientific training of workers
Bureaucratic Management

This theory considers the organization as a part of the broader society. Bureaucratic management is based on the principles:

  • Structure
  • Specialization
  • Predictability
  • Stability
  • Rationality
  • Democracy
Administrative Management

This theory was proposed by Henry Fayol and is based on several principles of management. Some of them are:

  • Division of work
  • Authority and responsibility
  • Discipline
  • Unity of command
  • Unity of direction
  • Subordination of individual interest
  • Remuneration of personnel
  • Centralization
  • Scalar chain
  • Order
  • Equity
  • Moreover, according to this theory, management was considered a set of planning, organizing, training, commanding, and coordinating functions.

Neo-Classical Approach

The Hawthorne Experiment formed the basis of the neo-classical approach to organizational behavior. Most views of neoclassical thinkers are human-centric as against the authority-centered views of the classical organizational theory.

The neo-classical approach emphasizes the point that an organization is a social system in which individuals work together to achieve major objectives. This approach is people-oriented and can be referred to as the human resource approach.

The basics of the classical approach focusing on unity and scalar chain principles are retained in the neo-classical approach. However, the neo-classical approach is basically a behavioral science approach and lays emphasis on human relations in organizations.

The essence of the neo-classical theory can be summarised with the help of the following:

  • Organizational situations should be viewed in social as well as economic and technical terms.

  • The social process of group behavior should be understood while organizing the structure.

The neo-classical theory states that the fulfillment of employee needs with regard to recognition, role in decision making and overall satisfaction is essential to improve employee efficiency. The main postulates of the neo-classical approach are given as follows:

An organization is a social system with individuals working together to accomplish organizational goals and objectives.

  • The social environment of the job affects employees, who in turn affect the social environment.

  • The informal organization exists within the formal organization and both affect each other.

  • The behavior of human beings is not always logical and rational. It is affected by the social and psychological factors present in the surroundings.

  • Human beings have different motivational patterns, which depend on human needs and desires.

  • Organizational objectives often conflict with individual goals, thereby increasing the need for better coordination between the organization and its employees.

  • Communication is an essential tool to transfer information vital for the smooth functioning of an organization. It serves as a medium to assess the feelings and sentiments of the employees.

  • Teamwork is important for encouraging cooperation among employees.

The neo-classical theory suggests that the organizational structure should be developed in such a way that it helps in achieving the basic propositions of the theory.

Elements of Neo-classical Theory

Let us discuss the significance of elements of neo-classical theory in the following section:

Flat Organisational Structure

The neo-classical theory advocates the formation of flat organizational structures over tall structures. As against the tall organizational structure, a flat structure has relatively less number of layers of middle management.

This implies that the chain of command from top to bottom is short, and the span of control (number of employees under a manager) is wide. Moreover, the flat structure is less expensive and minimizes hierarchical control.

The figure shows the difference between tall and flat structures


Decentralization refers to the conscious effort to delegate the power of decision-making to the lowest levels in the organization. This is contrary to the centralized system of decision-making where power is restricted to the hands of top management only.

It brings about a sense of belongingness and participation among the employees, which motivates them to perform better.

The figure shows the delegation of power in the centralized and decentralized system

Informal Organisation

This element of the neo-classical theory differentiates it from the classical theory. The neo-classical theory suggests that an informal organization exists within the formal organization.

An informal organization is formed to fulfill the social and psychological needs of the employees in an organization. The satisfaction of these needs affects employee behavior significantly.

Modern Approach

The modern approach to organizational behavior seeks to overcome the limitations of the traditional approaches (classical and neo-classical). The modern approach is based on scientific explanations of the complexities of organizational structure.

The modern approach can be further divided into two separate approaches, as depicted in Figure

Let us discuss the main postulates of the two approaches in detail in the following section:

Systems Approach

This approach is also referred to as the system organization theory. This approach was postulated in the 1950s and considered the organization as a system of consciously coordinated activities of various individuals in an organisation.

Organizations are viewed as purposely unified systems consisting of interrelated parts or subsystems, such as the technical system, managerial subsystem, production system, marketing system, and social and political system, which are mutually dependent. Each of these systems affects the other systems and thus, shares a complex relationship with organizational functioning.

For example, an incident that affects the technical subsystem may have a significant impact on the production subsystem of the organization. Therefore, the interdependency of these subsystems is critical to the accomplishment of organisational objectives.

There are three basic interlinks that connect one subsystem to another. These interlinks are:

  • Communication process
  • Decision-making process
  • Balancing process

The figure illustrates how each of these interlinks helps in connecting the various subsystems in an organization:

Contingency Approach

According to the classical approach, the best way of managing things can be applied across all organizations under all circumstances. However, circumstances across organizations vary in structure and complexity as they depend on different variables.

Thus, each situation must be analyzed carefully to determine the significant variables in order to establish the most effective organisational practices. The contingency approach argues that the external environment and the internal environment of an organization form the basis of the organizational structure.

Organizational behavior varies in different situations depending on the individual and groups in the organization, technology, structure, and the environment facing the organization.

For example, if the employees are eager to take more responsibility, managers may give freedom to their employees to encourage innovation at the workplace. Whereas, managers may adopt the directive management styles in case employees are unwilling of taking responsibility.

  • Fox, W. (2006). Managing organizational behavior (1st ed.). Cape Town, South Africa: Juta.

  • French, R. (2011). Organizational behavior (1st ed.). Hoboken, N.J.: Wiley.

  • McKenna, E. (1994). Business psychology and organizational behavior (1st ed.). Hove, UK: Lawrence Erlbaum.

  • Education Portal,. (2014). Contingency Approach of Management: Definition, Example & Quiz | Education Portal. Retrieved 28 February 2023, from

  •,. (2014). SLI offers a range of leadership development, corporate training, as well as individual and team coaching services. Retrieved 28 February 2023, from

  •,. (2014). Free Term Papers, Research Papers, Essays, Book Notes | Retrieved 28 February 2023, from

Leave a Reply