What is the contribution of Neo-classical theory of organisation? Do you think that the neo-classical theory is an improved version of the classical theory. Discuss with examples.

The Neo-Classical Theory of organization emerged as a response to the limitations of the Classical Theory, introducing a more human-centered approach to organizational management. While the Classical Theory, represented by theorists like Frederick Taylor, Henri Fayol, and Max Weber, focused heavily on efficiency, structure, and control, the Neo-Classical Theory acknowledged the importance of human factors in achieving organizational effectiveness. Neo-Classical theorists sought to bridge the gap between rigid, mechanistic organizational structures and the human need for motivation, communication, and social interaction.

One of the most significant contributions of Neo-Classical theory is its emphasis on human relations. This theory, largely influenced by the works of Elton Mayo and his Hawthorne Studies, demonstrated that workers’ productivity is not solely driven by physical or monetary incentives, but ______ ____ ___ __________ ________.
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