Health System Management: Part-2

Health System Management: Part-2

Proloy Barua*, Dr Phudit Tejativaddhana**, Reggie Dalman Hinoguin***

* PhD student, College of Health Systems Management (CHSM)
** Assistant Professor, CHSM
*** Lecturer, CHSM


In the previous post, we talked about the classical approach of management (Health System Management: Part-1). In this post post, we briefly discuss neoclassical approach of health system management and its basic components. Given the complexity and dynamism of health system, classical approach of management is inefficient to some extent.  So, neoclassical approach has emerged in health system management, which is briefly discussed below.

 The neoclassical approach of management: Neoclassical theory has made a significant contribution to an understanding of human behaviour at work and in the organisation. It has generated awareness of the overwhelming role of the human factor in the organisation. This approach has given new ideas and techniques for better understanding of human behaviour. Contributors to this approach recognise an organisation as a social system subject to the sentiments and cultural patterns of the member of the organisation, group dynamics, leadership, motivation, participation, job environmental, etc. which constitute the core of the neoclassical theory. This approach changed the view that employees are tools and furthered the belief that employees are valuable resources. It also laid the foundation for later development in management theory.

Classical and neoclassical approach to management made an outstanding contribution to the development of management thought. Under classical approach, attention was focused on job and machine. On the other hand, neoclassical’s approach to management emphasises on increasing production through an understanding of people. The key differences are presented in Table 1

Table 1: Classical and Neoclassical approach of management

Points of distinction Classical approach Neoclassical approach
Focus  functions and economic demand of workers Emotion and human qualities of workers
Structure Impersonal and mechanistic Social system
Application Autocratic management and strict rules Democratic process
Emphasize Discipline and rationality Personal security and social demand
Work goal of worker Maximum remuneration and reward Attainment of organisational goal
Concept about men Economic being Social being
Content Scientific management, administrative management, and bureaucratic management Hawthorne experiment, human relation movement and organisational behaviour
Relation Formal Informal
Nature Mechanistic Organistic

Source: Adapted from (Sarker & Khan, 2013)

Neoclassical approach is not free from limitations. First, it lacks the precision of classical theory because human behaviour is unpredictable. Secondly, its conclusions lack scientific validity and suffer from a clinical bias, and its findings are tentative. Lastly, its application in practice is very difficult because it requires fundamental changes in the thinking and attitude of both management and workers.

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