The Neoclassical School is made up of the continuators of the administration classics: TAYLOR and FAYOL.
It includes several authors, who fully accept the philosophical and methodological guidelines of the precursors, being able to define two main branches:
- Neoclassical of Industrial Administration. (Taylor's followers). Neoclassical of General Management and Administration. (Fayol's followers).
Chronologically it is framed between the years 1925 and 1946 together with the School of Human Relations (May), although its true moment of production and performance occurred between 1930 and 1948.
It focused on the formal dimension, continuing with the search for efficiency, through complementary or supplementary techniques to those inherited by the pioneers, leaving aside informal aspects such as conduct and behavior.
It was precisely in this dimension that the events that occurred transformed organizations, forcing researchers to study ways of adapting and modernizing traditional techniques of efficiency and rationalization.
These events were the Second World War, the economic expansion of the United States, the constant degree of economic concentration and the evolution of the technological level, which generated the following differential characteristics:
- Greater automation in their production processes. Less use of labor in production jobs. Greater number of members for the growth of organizations. Greater number of goals to be achieved in each organization, for its horizontal growth.
With these characteristics there were others that did not vary from the moment that Taylor and Fayol contributed their developments, which are:
- The constant search for maximum manufacturing efficiency A rigid management structure.
The authors of this school sought to satisfy the following needs:
- Adequacy of efficiency techniques to technological changes. Adequacy of efficiency techniques to new automatic systems. Adequacy of management procedures and principles to the greatest number of members and of the purposes of organizations. Formulation of principles of structure and control that enable the management of organizations. Formulation of departmentalization principles and functional authority to meet multiple organizational purposes.
Its purpose was to adapt and adjust the classic schemes to the new demands of the context without substantially modifying the classic models.
BRANCHES OF THE NEOCLASSIC SCHOOL
- Neoclassical Industrial Factory Administration:
Made up of engineers who continued to develop the methods and techniques of Taylor, Gantt and Gilbreth, focusing their attention on the factory and the study of methods and timing. Authors such as Barnes, Nadler and others, modified and developed these methods, managing to adapt to the new environment.
- Neoclassical General Management and Administration:
We can quote the following authors: Gulick, Urwick, Mooney, Koontz, etc.
They tried to respond to the needs related to business management problems (especially principles, structure and control).
Neoclassical Methodology
Gulick and Urwick showed greater concern for the treatment of the principles trying to achieve an application to the real problem of organizations.
Gulick explains that the task of managing consists of seven elements, two more than Fayol (foreseeing, coordinating, organizing, directing and controlling):
- Planning Organization Training of the school Direction Coordination Accountability Budget preparation.
With the initials of these elements the word is formed: POSDCORB, with which it names its administration model.
William Newman adds a sixth function to those set forth by Fayol, which he calls Exception: Execution by administrators of non-delegated tasks.
THE STATEMENT OF THE PRINCIPLES OF ADMINISTRATION
The Neoclassical school based the administration only on a set of principles, trying to broaden the explanatory bases and achieve greater regulatory efficiency based on a greater extension in terms of the number of principles as well as the applications of the original list of 14 points stated by Fayol.
Thus, Urwick determined 29 principles of administration and Koontz and O'Donnell reached 61.
These authors received many criticisms of the structure of principles stated by them, due to explanatory and normative failures of some of them.
The most important principles to which the neoclassical authors paid the most attention were:
- Command and Specialization Unit Authority and Responsibility Line Authority and General Staff Scope of Control
1) Command and Specialization Unit
FAYOL stated this principle as: for any action, an agent should not receive orders from more than a boss.
GULICK observes, supporting this principle, that well-run administrative units have a single administrator for the most part, further exposing that administrative units headed by committees or commissions fail because their mechanism is inevitably slow, cumbersome, wasteful and ineffective and it is not easy to collaborate with other departments.
Regarding the principle of specialization, the neoclassicals agree that its permanent application allows increasing efficiency.
This presentation of the principle is ambiguous, deducing from it that a greater specialization would bring about an increase in efficiency, when the real problem is knowing when and how to specialize together with the form of application of that specialization, which will emerge from the characteristics of the problem in question.
The neoclassicals establish the forms of specialization that exist, giving them, of course, a principled character.
The first is "specialization by purpose", which consists of grouping the different tasks of the company by type of activity or by community purposes.
The second is "specialization by base of operation or processes," which is the natural form emanating from the division of labor.
The third way is the “geographical or zone”, which consists of specializing by zonal subdivision.
The fourth way is the so-called "specialization by clientele" where tasks are grouped and specialized according to the type of clients.
It is evident that the application of these specializations or "principles" cannot always be applied with the same degree of efficiency, since often the application of some leads to contradictions with others; Such is the case of specialization by purpose with respect to the process, and specialization by area with respect to customers.
2) Authority and Responsibility
Among the neoclassical principles, special interest is accorded to the correlation that must exist between authority and responsibility.
We can cite the definitions of Koontz and O'Donnell that establish their conception by explaining that:
- Formal authority follows the basic force that makes managerial work what it is. Authority is the only cohesive force that exists in the company.
Urwick points out in this regard that the responsibility of those in authority must be absolute within the limits defined by the position. He further explains that supervisors are personally responsible for the acts of their subordinates and that, at all levels, authority and responsibility must coincide and be equal.
Together with the concepts of authority and responsibility, the neoclassicals defined the concept of delegation.
Urwick stated that efficiency can only be achieved when maximum delegation of responsibilities is achieved, further assuming that the lack of audacity to delegate and the lack of knowledge about how to do so were the most common causes of deficiency in organizations.
3) Line Authority and General Staff
Due to the way in which the Neoclassical School solved structural problems and especially due to its inflexible application of the principles of unity of command and specialization, they were forced to develop coordination mechanisms that made the concept of authority more flexible, without losing control.
The notable increase in the number of members and in the multiplicity of purposes in companies forced the neoclassicalists to find a way to apply it, without losing the unity of command or the responsibility of each function.
Gulick and Urwick agree that as the volume and scale of the organization's work grows, the need for senior managers to be constantly assisted by an increasing number of experts and specialists grows, also recognizing that the multiplication of These staff experts have placed senior management in front of complex new coordination problems.
The enunciation of the principle of authority of traditional and rigid line, was extracted from the military manuals and from the concepts of authority of Fayol.
Together with this, they defined the concept of a SPECIAL STAFF to which the administrator provides specific advisory responsibilities in matters that are beyond their control, as a result of greater specialization and the multiplicity of purposes and goals.
They also enunciated the principle of GENERAL STAFF, whose mission should be to help the line officer in achieving the goals of direction, coordination and control.
This GENERAL STAFF is not only an adviser, but must also prepare and transmit orders, must coordinate and control the tasks, although everything is done as a representative of the line officer and depending on the decisions that he has taken.
This principle tries to act as a patch of the inefficiency generated by the application of others, and does nothing but increase confusion and compel the "Neoclassical Administrative Doctrine" to take another step towards its final collapse.
4) Scope of Control
This principle consists of limiting the number of subordinates to each superior, so that he does not lose the possibility of controlling them, this being the only principle in which we find discrepancies in the thinking of the different neoclassical authors, these differences refer to the number or number of people that would be the control limit and not to aspects of substance or conception of the principle.
Urwick points out that the maximum limit of control scope is between five or six subordinates for each superior.
Gulick does not define numbers and tries to analyze the factors that influence the decision, such as superior command skills, his closeness to subordinates and the type of work they perform.
Newman sets limits between 3 and 7 subordinates for higher-level tasks, and between 15 and 20 employees for lower-level operational tasks.
Koontz and O'Donnell speak from 4 to 8 subordinates for the upper levels and from 8 to 15 employees for the lower levels.
ACME MODEL: The Organization Chart and the Formal Structure of the Organization
Basic tools exposed by Fayol were used to structure the organization:
- The organization chart and the structure of functions The manual of functions, authority and responsibility.
The organization chart is a graphic diagram showing the relationships of the different functions at the different levels.
The functions, authority and responsibility manual describes these elements for each position.
The neoclassical authors developed a structure model called ACME, a representative acronym for the Association of Consulting Management of Engineers, to respond to the needs of having a matrix model to structure their operations.
The general ACME scheme divides the company into seven functions:
- Production Marketing Finance and control Research and development Personnel management External Relations Secretariat and Legal
This model tries to establish a standard organization chart for all types of organizations and is still used today.
CONCLUSIONS
- They were continuators of the classics. They did not make substantial contributions. They were formalist and did not recognize the influence of behavioral variables. They were mechanistic and static models. Their lack of scientific rigor forced them to rely on the principles of administration, which lack the most important aspect of Scientific task: to obtain descriptions and explanations of the phenomenon. The techniques derived from the principles are applicable in some cases, but they have structural flaws that require an application analysis and are therefore unsafe and practical.
Examples:
- The ACME structure model, the technical and control scope formulas, the application guide for line, staff and functional authority, the concepts of unity of command and specialization.
All these tools have been formulated in such a way that in order to use them, there must be so many prior controls and so many adjustments and cuts that they do not justify their claim to models.
- The 1940s will historically be the point of greatest dissemination of the Neoclassical School and at the same time it will mark the sharpening of its contradictions and lack of methodology, causing new research to be carried out with greater scientific content.
PUBLICATIONS
- RM BARNES, Motion and Time Study (1939-1942-1958).G. NADLER, Motion and Time Study (1955).ALFORD AND BANGS, Production Manual (1946).HB MAYNARD, Methods, Time Measurement (1938), Industrial Engineer's Manual (1956).LUTHER GULICK, Notes on the Theory of Organization (1937).LINDALL URWICK, Elements of Administration (1943), Committees in Organization (1950), Management as a System of Thought (1955).WILLIAM H. NEWMAN, Programming, Organization and Control (1951).H. Koontz and C. O'Donnell, Principles of Management (1961).
THE NEOCLASSIC SCHOOL
Contributed by: MATEO, CARLOS. PEYRÚ, PABLO. VERNA ETCHEBER, ROBERTO.
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