What are the main propositions of Neo-classical theory?

The main propositions of Neo-classical theory are as follows :

  1. The organisation in general is a social system composed of several interacting parts.
  2. Within a formal organisation there exists an informal organisation. The two affect each other.
  3. Human beings are interdependent. Their behaviour can be predicted in terms of social and psychological factors at work.
  4. Motivation is a complex process. Many socio-psychological factors operate to motivate people at work.
  5. Human beings do not always act rationally. They often behave irrationally in terms of the rewards they seek from the work.
  6. A conflict between organisational and individual goals often exists. There is, therefore, a need to reconcile the goals of the individual with those of the organisation.
  7. Team work is essential for efficient functioning of organisations. But this is not automatic and has to be achieved.

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