The main propositions of Neo-classical theory are as follows :
- The organisation in general is a social system composed of several interacting parts.
- Within a formal organisation there exists an informal organisation. The two affect each other.
- Human beings are interdependent. Their behaviour can be predicted in terms of social and psychological factors at work.
- Motivation is a complex process. Many socio-psychological factors operate to motivate people at work.
- Human beings do not always act rationally. They often behave irrationally in terms of the rewards they seek from the work.
- 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.
- Team work is essential for efficient functioning of organisations. But this is not automatic and has to be achieved.