Neoclassical school of administration

The neoclassical school of administration is an academic current that is based on putting into practice the concepts of classical theory in the administrative process.

Neoclassical school of administration

In fact, due to the importance they give to administrative practice, it is known as an operational school or the administrative process. Its principles are used by most organizations in the world.

In addition, the name of neoclassical school responds to the fact that it is considered as a continuation of the administrative principles of the classical school, especially the principles proposed by Frederick Taylor and Henri Fayol.

The main representatives (of the neoclassical school) are Peter F. Drucker, Ernest Dale, Lawrence Appley, Harold Koontz, Cyril O’Donnell and George Terry. Historically it arises and develops between the years 1925 to 1946.

Characteristics of the neoclassical school

The main characteristics of the neoclassical school of administration are:

1. Emphasis on practice

In the first place, the neoclassical school gives priority to the practical part of administration, since what it seeks are concrete results. This implies that it is a pragmatic school, that is, the theory only has value if it works in practice.

2. It is based on the postulates of the classical school

Second, this school takes up most of the postulates of the classical school. But they perfect them by giving them a new structure and dimension so that they can adapt to the contingencies of the current time. This allows the principles of the classical school to have more flexibility and breadth in their application.

Also, it could be said that the neoclassical school arises as a reaction to the administrative school of human behavior. As a consequence, they use concepts such as linear and functional organization, authority problems, delegation of responsibilities and the departmentalization of companies.

3. Focuses on general principles of management

Third, the neoclassical school takes up the laws of scientific administration to find solutions to the practical problems of organizations. For this reason they return to use the concepts of the administrative process such as planning, organization, direction and control.

Meanwhile, the general principles of administration become the action guides of the administrative process. However, these principles should not be applied in a rigid and absolute way, but should be applied in a flexible and relative way, according to the circumstances.

4. Look for concrete results

Fourth, neoclassicals consider that an organization works to achieve specific objectives and results. These results and objectives are achieved when the organization operates efficiently. That is why the organization must be structured and organized based on these specific results.

Therefore, there must be organizational objectives that determine the results to be achieved. Organizational objectives serve as a parameter to measure and evaluate the performance of the company.

5. It’s eclectic

Finally, although this school is fundamentally based on the classical principles of administration, the neoclassical school is eclectic because it collects the content of other theories and administrative schools. Among them we find the following:

  • Human relations.
  • Bureaucracy.
  • Structuralist.
  • Mathematics.
  • Of the systems.
Neoclassical School of Administration 1
Neoclassical school of administration

Principles of the neoclassical school of management

The most important principles of the neoclassical school of management are:

1. Unity of command

First of all, unity of command refers to the fact that people must receive orders from a single boss, this term was coined by Henri Fayol. Therefore, if a person receives orders from a committee or a commission, the administrative system fails. This creates confusion and the process can become slow and inefficient.

2. Specialization

Now, specialization refers to the fact that each person, area or department must be in charge of and under their responsibility specific and specialized tasks. They consider that specialization increases efficiency.

Likewise, neoclassicals believe that different types of specialization can be applied, such as the following by:

  • Purpose
  • Operation or processes.
  • Geographic location or by area.
  • Customer type.

3. Authority and responsibility

Without a doubt, the neoclassicals affirm that there must be a close relationship between authority and responsibility, since authority is the faculty that one has to be able to command subordinates. It is exercised in a coercive manner.

While the responsibility is to fulfill the assigned obligations. Therefore, the person who has authority over his subordinates takes responsibility for the tasks they have to perform. Therefore, the level of authority must coincide with the level of responsibility assigned.

4. Line authority and staff

Naturally, line and staff authority is a way that the neoclassicals found to be able to relax the concept of authority of the classics, but without losing control. The head of the general staff must help those responsible for each line of authority to achieve the objectives. Consequently, the general staff transmits orders, controls and coordinates tasks of the line subordinates.

5. Scope of control

Indeed, what this principle seeks is to limit the number of subordinate people assigned to each superior. By limiting the number, it is achieved that the superior does not lose control over his subordinates. Ideally, each superior should have five or six subordinates in charge to function efficiently.

Branches of the neoclassical school of management

The neoclassical school of administration is divided into two branches:

  • Neoclassical of the industrial factory administration: Formed especially by engineers who followed the development of methods, techniques and processes proposed by Taylor.
  • Neoclassical management and general administration: This branch, formed by Gulick and Urwick, tries to respond to the needs and problems of business management, especially in its structure and control.

Advantages of the neoclassical school of management

Among the main advantages we can mention:

  • Renew the functions of the administrator.
  • It takes up the basic principles of administration.
  • Make the administrative process more flexible and adaptable.
  • Provides tools to lead groups of people.
  • It prioritizes efficiency and effectiveness.
  • Generates more flexible administrative models for organizations.
  • Use of departmentalization.

Disadvantages of the neoclassical school of administration

The most important disadvantages are:

  • It is very formal and does not consider the human factor.
  • Their contributions are considered of little relevance.
  • You can present contradictions in your approaches.
  • Its application is very specific, so generality is lost.
Neoclassical School of Administration 2
Neoclassical school of administration

In conclusion, it can be said that the neoclassical school was a continuation of the classical school of administration. But he refined his postulates, which allowed them to be more flexible and to be able to adapt to current changes, focusing on the results of the administrative process.