Another criticism of the classical theory which is considered as very serious comes from the exponents of behavioral school of thought. Classical theory of organisation is based on the assumption that productivity of the worker is a function of economic incentive and efficient organizational design. But Hawthorne studies and later researches suggest alternative propositions as challenges to the classical approach. it is argued that the classical theory is too mechanistic and ignores a number of important aspects of human behavior. By creating the structural framework based on formal activity- authority relations, the organisation conceived in terms of classical approach satisfies largely the physical and security needs. The needs for “Self- actualization” are not cared for by the classicists. Interaction of individual personality, conflicts, informal groups and participation are largely neglected by the classical theory of organisation.