The major modification of the classical approach has been the tendency away from prescribing the “right” organizational structure to exploring why certain forms of organizational structure are more effective than others. This is best seen in the Neo Classical Approach found in a volume by Simon, Smithburg and Thompson.
The approach is classical in that it still pays considerable attention to formal structure and to rational considerations; it differs from the traditional approach in studying the actual ways, values (or goals or sub-goals) of an organization can be and are implemented. The values discussed by Simon, Smithburg and Thompson are: accountability, expertness and economy, Levels-of-conflict settlement, programme emphasis, centralization and decentralization.
1. Accountability: It is only an inexperienced administrator who would assume that orders properly issued will, as a rule, be properly carried out. Therefore there is a constant need to provide mechanisms of control to check on fulfillment of orders and adherence to regulation from quality specification to safety rules. Largely this task of supervision is built into the hierarchy of authority, that is the role of higher-in-rank includes the obligation to check on performance of the lower in rank.
2. Expertness and Economy: It is generally agreed that for a certain kind of activity -let us say electronic data processing in a multi- functional unit like a university department, the greater would be the economy that can be attained by concentrating all such activities on behalf of the various multi-functional units into one single – functional units. This will permit the full use of full-time personnel in the jobs, allowing the employees to become experts, or for the unit to hire experts. It also allows for greater routinization of the job. On the other hand, such concentration will often involve some loss of knowledge of the particular need of the various multi-functional units which use the “same” services. Generally, however, the less skilled the jobs, the less the need for a concentration in single functional units.
3. Programme Emphasis: To counter the tendency for the organization to replace its initial goals with what were formerly its means, the founders of the organization may take certain protective measures when designing and establishing the organization. By patterning the organization in such a way that it will emphasize direct service of its goal over service of its means, and by structuring its division of labour and hierarchy of authority accordingly, the founders can lessen the probability that the organization will grow to deviate from its original purposes. More power may be given those in command of direct services to goals than those who deal with removed matters; for instance, certain personnel may be permitted easier access to top executives. Means activities may be distributed among various units that service the goals directly. This assures that the executives in-charge of the goal activities also control the means activities.
4. Centralization and Decentralization: Simon, Smithburg and Thompson also examined the effect of centralization on the efficiency and effectiveness of an organization. In terms of the classical approach, the question is “When ever there are two or more organizational units, with one or more of them superior to the other in decision-making authority, which decision should be left to the lower one(s) and which should be made by the higher unit(s)?” The more decision-making authority held by those lower in the authority structure (and larger in number), the less centralized the organization is. Low centralization may be achieved either by limiting the kinds of decisions that have to be referred upward or at least approved at a higher level or by increasing the degree of autonomy given to the unit in each issue. Many factors affect the level of concentration: the cultural norms (centralization is more acceptable to the German’s than the British). educational level of the unit heads (the higher the level of education, the greater the decentralization the organization can tolerate), the personality of the top executive, and so on.
5. Levels-of-Conflict Settlement: According to Mary Paker Follett, conflicts in organization are inevitable. Conflict is the difference of appearance, opinion and of interests. As such, conflict is neither good nor bad, but provides opportunities for good or bad results. If resolved in the best method, conflict can result to efficiency in the organization. She opined that managers must learn to use conflict in a constructive manner.
Follett had suggested three ways of dealing with organizational Conflict.
1. Domination: In this case, one individual dominates the other on the basis of his physical strength, mental power and so on. The dominated individual has to sacrifice all his demands to accept the demands of the dominator. In other words, domination is a victory of one side over the other. Though easy for resolving conflict, Follett rejects this method because it brings resentment in the organization.
2. Compromise: This is generally the way people settle most of the conflicts. It means compromise in which each side sacrifices most of its demands to compromise with the other side in finding solution to some of their conflicts so that the activity which has been interrupted by the conflict may go on.
That is each side, surrenders or gives up part of its desire or wants in order to reach a settlement. Though a compromise is a widely accepted method of resolving conflicts, rarely people want to compromise as this involves giving up something.
3. Integration: It means that all the demands are brought into open and they are discussed in details to know the real demands of the parties. Then the conflict is resolved and no party has to sacrifice its real demand. Follett considered integration as the best method of dealing with conflict because it goes to the root of the problem and puts an end to the conflict permanently. If we deal with conflict through compromise, the conflict may come up again in some other form.
Simon, Smithburg and Thompson point to several advantages of resolving conflict at relatively 1ow levels in the organizational hierarchy.
Low level settlement reduces the work load of the most burden and most “expensive” higher-level executives. It permits rapid settlement of disagreements since the lines of communication are shorter, and it permits the executive who must serve as judge or arbiter to have a relatively full command of the facts and be able to draw on his personal knowledge of the conflicting parties.
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