Discuss the contributions to the “human side of enterprise” as articulated by Elton Mayo, Chester Barnard, Abraham Maslow, and Douglas McGregor. How does this organizational theory school of thought differ from the classical and neoclassical schools of thought? In your opinion, which school of thought is most applicable for public and/or nonprofit organizations and why?
Human side of enterprise
For decades and centuries, there have been debates both at the local and international levels in the best management style that should be applied by leaders and managers in an organization to keep their employees happy while at the same time increasing the production of the organization. As a result, different scholars have gone forth to design and develop theories that seek to explain their approaches and ideas regarding the management of people and organization. Examples of such scholars include Elton Mayo, Chester Barnard, Abraham Maslow, and Douglas McGregor, who developed the human side of enterprise theory largely known as Theory X and Theory Y (Shafritz, Jang, & Ott, 2016). Theory X is an authoritarian approach which emphasizes on the productivity and the aspect of a fair day’s work. On the other hand, theory Y emphasizes on participative leadership by assuming that employees who exercise self-direction and self-control show high levels of commitment.
Notably, the human side of enterprise theory differs from both classical and neoclassical organization theory in that classical theory advocates for scientific management and bureaucratic management of employees. Moreover, neoclassical theory of management brings the concept of behavior in the management as managers attempt to address management challenges. Unlike the human side of enterprise theory, the classical theory of management emphasizes on workflows and equal treatment of employees in an organization while neoclassical theories emphasized on the well being of the employees rather than production (Tsoulfidis, 2009). As a result, it is correct to state that the classical school of thought is the most applicable in nonprofit organization considering that classical theories emphasize on specialization, the division of labor, monetary incentives as well as implementing a hierarchical structure of management with three levels of management. These characteristics of the classical organizational theory improve the cohesion and collaboration among the employees as well as giving autonomy to individuals and teams in the organization, thus improving productivity and performance (Stoyanov & Diderich, 2017).
Shafritz, J. M., Jang, Y. S., & Ott, J. S. (2016). Classics of organization theory. Boston, MA: Cengage Learning.
Stoyanov, S., & Diderich, M. (2017). The Human Side of Enterprise.
Tsoulfidis, L. (2009). The Structure of the Neoclassical Theory. Competing Schools of Economic Thought, 157-186. doi:10.1007/978-3-540-92693-1_7