criticism of neoclassical theory of management
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Then the neoclassical theory is discussed, highlighting its origins (Bohm-Bawerk, Wicksell, Clark) and the role of the aggregate production function. Fayol and Max Weber producing management theories such as Frederick Taylor’s Scientific Management, Henri Fayol’s Administrative Management and Max Weber’s Bureaucratic management (Sarker & Khan, 2013). One of the main advantages of the classical management theory was a methodology for how management should work remember. theories can be classified into three broad groups. Although now the most widely taught form of economics, this school of thought still has its detractors. Keynesian Theory Neoclassical economists are naturally more reluctant than Keynesians to concede that capitalism as a system might be dysfunctional or that markets might be irrational and inefficient, leading to cycles of boom and bust, mass poverty and unemployment, which happened in the 1930s and is happening again today. By using this approach it is possible to take control over human beings. wherein the behavioural sciences gets included into the. No matter how logically you structure an organization, human behavior can disrupt it. In fact, when Taylor proposed his theory of Scientific Management, his work was often met with antagonism ... neoclassical theory introduced the … It altogether neglects the monetary influences. Classical economists maintain that the economy is always capable of achieving the natural level of real GDP or output, which is the level of real GDP that is obtained when the economy's resources are fully employed. The question of how income will be divided among production factors is an old problem that emerged from adopting a sedentary life. What is typical for Critical chain project management? 3 0 obj The classical theory has its origin in the writings of Taylor. The classical era comprises of Taylor, Weber and Fayol. In this article, we will talk about the NeoClassical Theory of organizations. It was developed during the industrial revolution when problems … It can be realised only by a formal organisation structure. The classical theory came into public in the 19 th century and early 20 th when … Everything you need to know about the neo-classical theory of management. Usually, most people identify the NeoClassical Theory with the human relations movement which Elton Mayo had pioneered. What does classical strategist management stand for, how does it apply in business development? Neoclassical theory focusses its evolution of management … It became widespread in the first half of the 20th century, as organizations tried to address issues of industrial management, including specialization, efficiency, higher quality, cost reduction and management … The purpose of this essay is to explore and critically evaluate the historical and evolutionary prospective of management and organization theory and their practices that were presented by classical management theorist. Management Problems and Economic Analysis Most management problems are ill-struc-tured. This study analyzed the historical development of management. According to Keynes, the classical theory was perfectly logical. neoclassical theory, we will discuss some additional issues raised by contemporary models. In that sense, oldest written texts including sacred books touched this issue. 5 important Features of Classical Theory. Criticism # 5. Neoclassical economics is a broad theory that focuses on supply and demand as the driving forces behind the production, pricing, and consumption of goods and services. The NeoClassical theory posits that an organization is the combination of both the formal and informal forms of organization, which is ignored by the classical organizational theory. Terms of Use - Classical organization theory - key criticisms. What is typical for critical chain project management? Management of buffers. Classical Organisation Theory: The classical writers have viewed organisation as a machine and persons as different components of that machine. Modern management theory refers to emphasizing the use of systematic mathematical techniques in the system with analyzing and understanding the inter-relationship of management and workers in all aspect. These three groups of schools of management thought, are currently in vogue and found adequate for the purpose (Hitt and others, 1979) IV. theories can be classified into three broad groups. Controlling in Management # Meaning, Definition, Types, Process, Steps and … Human Relations Movement: Human relations movement deals with the factors which encourage higher performance on the part of workers. Administrative management also one type of classical management theory and is a way to organize things in a systematic manner. The fundamental principle of the classical theory is that the economy is self‐regulating. It is clear that the study of organisations through an analysis of management functions … neoclassical theory of management The theory of neo-classical economics that was developed by Marshall has even experienced criticism. The 1960s were the years when the inconsistencies in method and assumptions of neoclassicism were . The paper surveys the main theories of income distribution in their relationship with the theories of economic growth. Based on the classical management theory, three concepts contribute to an ideal workplace: Hierarchical Structure 2 0 obj Modern management theory gives more attention on the satisfaction of employees. Classical management theory is comprised of three separate branches - bureaucratic management, classical scientific management and classical administrative management - each unique in its approach towards finding the best possible way. The motion of men implicit in the classical theory lends to generate a kind of employee psyche, which may be described as: Factory Manager – Stainless Steel/Sheet Metals. The criticism of scientific and administrative management approach as advocated by Taylor and Fayol, respectively gave birth to the behavioral approach to management. i) Classical management theory ii) Neoclassical management theory iii) Modern management theory .Under each group a few schools of thought are identified. CLASSICAL THEORY OF MANAGEMENT Classical management theory is a branch of management theory which evolved around the 19th century. First, the Classical approach is considered, focusing on the Ricardian theory. The NeoClassical Theory is the extended version of the classical theory wherein the behavioural sciences gets included into the management. Marshall believed that human beings are rational beings and they make purchasing and consumption decisions based on costs and benefits. Neoclassical Theory of Management: The Human Relations Approach. Adam Smith was an 18th-century philosopher renowned as the father of modern economics, and a major proponent of laissez-faire economic policies. Out of all of these writers and critics, there are 5 authors that will be discusses here. There were a variety of writers and critics during this phase of criticism and theory. Every day, thousands of new job vacancies are listed on the award-winning platform from the region's top employers. Academics and business owners periodically come up with theories for increasing worker output while keeping the same number of workers through modern management theories. to join your professional community. The historical development of management has been divided into classical and neoclassical eras. The basics of the six most popular management theories: Scientific Theory by Frederick W. Taylor. Thompson and McHugh (2002: 87) point out that early 20th century management theory was promoted by engineers (among other groups) who were trying to 'extend the boundaries of their profession by trading on the general rise of interest in management and planning that was characteristic of the early part of the century.' An organization exists when … Modern Organisation Theory. What is the importance of Classical theories of management nowadays? NeoClassical theory Definition: The NeoClassical Theory is the extended version of the classical theory wherein the behavioral sciences gets included into the management. The firm has a single goal, that of profit maximization. Problems are themselves human creations, and their nature is much dependent on the conceptual lens through which they are viewed (James Griffin and Teece, 1982). Amazon Web Services - United Arab Emirates. Contingency Approach. Criticism against the neoclassical theory of economics . The criticisms are: 1. Then the neoclassical theory is discussed, highlighting its origins (Bohm-Bawerk, Wicksell, Clark) and the role of the aggregate production function. A. Human Relations and Behavioral Science have become two important approaches of neoclassical theories. The basics of the six most popular management theories: In conclusion: Many of today’s organisations rely on the classical Management approach. It modified, improved and extended the classical theory. Presentation Summary : The neoclassical theory - Human classical theory - Behavioral theory. Criticism Of Management Theories Classical management and its relevant in a modern business climate “Nothing is so Quite so Practical as a good Theory ” (Van de Ven 1989). These three groups of schools of management thought, are currently in vogue and found adequate for the purpose (Hitt and ... Lower level management analysis or scientific management b) … Neoclassical theory_of_management 1. The key difference between classical and neo classical theory is that the classical theory assumes that a worker’s satisfaction is based only on physical and economic needs, whereas the neoclassical theory considers not only physical and economic needs, but also the job satisfaction, and other social needs.. Development theory - Development theory - The neoclassical counterrevolution: In the 1980s a neoclassical (sometimes called neoliberal) counterrevolution in development theory and policy reasserted dominance over structuralist and other schools of thought in much of the world. While classical theories focused more on structure and physical aspects of the worker and Neo-classical theory gives importance to human and social aspects of the worker and his relations in the organization. The neoclassical incorporated these two other sources of funds for investment and thus formulated a better theory. … 1. Léon Walras and his concept of “tâtonnement” revolutionized the study of general equilibrium. i) Classical management theory ii) Neoclassical management theory iii) Modern management theory .Under each group a few schools of thought are identified. In the early 1920s, a shift away from classical management theory took place as theorists began to consider the human side of an organization and the social needs of employees. This theory says that workers need only physical and economic status and needs. During the 20th century, other management theorists developed Mayo's critique of the classical model and developed the elements of the neoclassical management approach: Human beings aren't robots. There are three different types of organizational theory to predict and explain the process and also behavior patterns in an organizational setting: Classical Organization Theory, Neo-Classical Organizational Theory, and Modern Organizational Theory. According to this theory, the organization is the social system, and its performance does get affected by the human actions. The word neo means “new” The word classical refers to work done by group of economists in the back (18 & 19) century 3. Would love to gain knowledge from experts on this topic. George Elton Mayo is considered as founder of neo classical theory. Classical theory of management 1. Classical economics (also known as liberal economics) asserts that markets function best with minimal government interference. Modern management is the era of management that began in the 1880s and 1890s … 1 0 obj Approaches of Neoclassical Theories of Organization. endobj %PDF-1.4 They are messy, involving complex interdependencies, multiple goals, and con-siderable ambiguity. Get Fresh Updates On your job applications, and stay connected. Classical Organisation Theory 2. Developed by Frederick Taylor, the classical theory of management advocated a scientific study of tasks and the workers responsible for them. 2. This goal is attained by application of the marginalist principle MC = MR 4. The neoclassical management theory evolved as movement to address the perceived deficiencies of the classical management theory. Org Theory: Strengths and weaknesses of neoclassical theory questionstrengths of neoclassical theory answer1) found holes in classical theory and attempted to revise it … Scientific management theory, also called classical management theory, entered the mainstream in the early 1900s, with an emphasis on increasing worker productivity. This theory is designed to enhance the productivity of the workers. 2. Human Relations Theory. In general a theory creates an image of reality or an aperture of reality. CLASSICAL THEORY OF MANAGEMENT Presented By: Ravi Muchhal Doon Business School PGDM 2013-15Ravi Muchhal (R) 2013-15 DBS 2. The dominant approach, nowadays, is to derive demand for capital from the Jorgenson ... of the mainstream literature and of its criticisms suggests that neoclassical investment the-ory is unsatisfactory also when the object of analysis is a world of complete and perfectly competitive … <>/OutputIntents[<>] /Metadata 188 0 R>> Cookie Policy, Question added by Arlene Ondez , Registered General Nurse , Home care center(contract of service at First Dental Center Doha), Answer added by Omar Saad Ibrahem Alhamadani, Online Volunteer Moderator , Bayt.com, Answer added by Celeste Ann Mascarenhas, Health Care Assistant, Level 3 Nursing , Carlton Court Care Home, Answer added by Obaid ur Rehman, HR Executive , Al Bahr Al Arabi Marine Engineering Services, is comprised of three separate branches - bureaucratic, - each unique in its approach towards finding the best possible way. Neo-Classical Organisation Theory 3. For example, it is not uncommon to hear history teachers saying that the only thing people learn from history is that the people will learn nothing from the history. Current management and organizational structure can provide many of its roots in the classical management theory. 1) Describe the main criticism against the neoclassical theory of the firm.In the neoclassical theory, the role of the firm is to allocate resources and organize production in such a way as to satisfy consumer wants, driven by the desire to maximize profits. The world […] To further this, human beings make choices that give them the best possible satisfaction, advantage, and outcome. I. This theory says that workers need only physical and economic status and needs. The human relations theory was developed by Elton Mayo and his associates from 1924 to 1932 at the Hawthrone plant of Western Electric Company. stream As compared to Taylor’s experience of management from lower level, Fayol had experienced it from top ranks being the General Manager of General Motors understood pretty quickly that management is one subject that still needs to be define and it cannot be done through his knowledge in engineering so he decided to explore management and came up with his own theory. This topic has become one of the most Attack on Money Wage Cut Policy: ADVERTISEMENTS: Keynes objected to the classical formulation … endobj The Hawthorne experiments revealed that an informal organization, as well as socio-psychological factors, exercise a much higher influence on human behavior than the psychological variables. Specifically the Scientific management of Frederick Taylor. Find PowerPoint Presentations and Slides using the power of XPowerPoint.com, find free presentations research about Neoclassical Theory Of Management PPT He considered that highest degree of efficiency can be attained through this approach. However the main ideas […] Management is the combined or interchanged process of planning, decision making, organizing, leading, motivation and controlling the human resources, financial, physical, and information resources of an organization to reach its goals in an efficient and effective manner. 2. Hence, the NeoClassical theory is also called the Behavioral Theory of Organizations or the HumanRelations Approach. Main neoclassical economists: Alfred Marsall, the true founder of the neoclassical school of economics. ... Read on to learn about how this Scottish philosopher argued against mercantilism to become the father of modern free trade and the creator of the concept now known as GDP. Neoclassical theory_of_management 1. The fundamental principle of the classical theory is that the economy is self‐regulating. The principal aim of the organisation is productivity. endobj In that way, neo-classicism can be seen as an extension of the Renaissance from the early seventeenth century to the mid-eighteenth century, ADVERTISEMENTS: The basic assumptions of the neoclassical theory of the firm may be outlined as follows: 1. However, to help put the different theories in perspective, we shall discuss them as representing different schools of thought. George Elton Mayo is considered as founder of neo classical theory. Modern Concept Of Management PPT. Neoclassical Theory discusses and updates terms such as Efficiency versus Efficiency, Centralization versus Decentralization, or Authority and Accountability. It was developed in the late 18th and early 19th century by Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, and John Stuart Mill. Neo-Classical theory is called human relations and behavioural science approach. ... System Approach. x��=koɑ� �?��AV�鞞W�0`{㍓8ٳu���@�z��P�w��Uկ����p�OC9S���wU�^��=�^�.��~��������r�������?^�}y�|����v�z��n^�\��������g/ު�REigWϟ�E �Ԣ�E�͢m�Bu�������5����g?y�lO���O>~X,O��?.���~�Y�-O�x�ʓ�R듫�q�_���->�\B����r��wk��=t�ڬ���ߛ��� �,��8���g����r�t_�����i�+����=���2Ӫ�U��j����lta{��m�.��ͼ+��"j>~�n�o�E�֙�.���=�]�B��MMU�hXӵ�� R�b���C�e�e5s�lS�A@�����F�N�H��6M��[�0v��^js��C��{Α��ˢmd���h�TE� �ƥ?.p�������E��M���22ۯ)�>�ؕ6c�yY���LM�?o3�V�ϜYk�=��m��H��PJU�~ߟ*� o~�]����Re3u]�v�"L Ğ��9��uB~u�-��!�K'���d?-U ������Z�k$���;��O���#Bh+�w�Y���I�5�iYhS�L�A�7ݢ3��������f�q��Ww8g�i ���0^�����|�l���o/2z����i{?��B�x�j�50O��}k�U��i�+� o�v��}��{����TVn(�l��3��� XW�a��LOV�)w��l����� V5'�,}L��{������;�Q=�R��u�-t��/�V���҉t��}�-�N "ρ�V�6����,���6P���mm�n��d��o�}�(;U#��OՠJG�lҖ���[��/j��ͲA��c ���E֪A�*������~�,��zi� j�K���)k��C^. To highlight the key features of Classical and Neoclassical theories of Management. A theory contains a descriptive and explanatory (causal) say about this part of the reality. Bureaucratic Management Theory. Mayo and his associates conducted the Hawthorne experiments which formed the basis of this theory. <> Neoclassical Criticism in English Literature - Characteristics - We know that Renaissance insisted on going back to classics. 1. The entrepreneur is also the owner of the firm. Neoclassical economics is a broad theory that focuses on supply and demand as the driving forces behind the production, pricing, and consumption of goods and services. Neoclassical economics also uses mathematical equations to study various aspects of the economy. I. Many academics in the business and management area prefer to emphasize on recent work ignoring the historical perspective. Keywords: Neoclassical firm theory, Production factor, Diminishing marginal substitution, Diminishing marginal product, Supply curve Suggested Citation: Suggested Citation He, Yiping and Gong, Xiaoming and Zhao, Gang, Criticism on Neoclassical Firm Theory and Supply Theory Research (November 14, 2012). The neoclassical theory was an attempt at incorporating the behavioral sciences into management thought in order to solve the problems caused by classical theory practices. Neoclassical Theory:Neo-classical Theory is built on the base of classical theory. Classical Theory is a theory shows that workers do not need social and job satisfactions status. %���� Therefore, these findings focused their attention on human beings and their behavior in organizations. Heinz Kurz is recognised internationally as a leading economic theorist and a foremost historian of economic thought. While the neoclassical era comprises Classical Theory is a theory shows that workers do not need social and job satisfactions status. The emergence of this counterrevolution coincided with the abandonment by the developed countries of … The neoclassical theory was an attempt at incorporating the behavioral sciences into management thought in order to solve the problems caused by classical theory practices. <> It is built on the base of classical theory. Classical management theory evolved with the industrial revolution in the late 1800s and early 1900s. No Importance to the Role of Govt. He focused on the structure of organization. ADVERTISEMENTS: List of top three organisation theories:- 1. Scientific management theory, also called classical management theory, entered the mainstream in the early 1900s, with an emphasis on increasing worker productivity.Developed by Frederick Taylor, the classical theory of management advocated a scientific study of tasks and the workers responsible for them. Classical theory was job oriented and it focused its attention on scientific job analysis. Downloadable! In order to understand neoclassical theory, one must briefly describe the classical theory and its deficits. Bayt.com is the leading job site in the Middle East and North Africa, connecting job seekers with employers looking to hire. It modified, improved and extended the classical theory. Organization An organization is not a structure or a set of plans and processes; organizations are made up of people and their affiliations with each other. T he underlying rationale wa s that sin ce management inv olves getting thin gs done wi th and through Neo classical approach was first set out by Alfred Marshall in his book principles of economics, published in 1890’s. The emergence of a "Keynesian" theory of income distribution in the wake of Harrod's model of growth is then recalled together with the surprising resurgence of the neoclassical theory (following the contributions of Solow and Meade). 4 0 obj Neo-classical approach also causes ‘Behavioural Science Management’ which is a further refinement of human relations approch. NEOCLASSICAL ORGANIZATION THEORY: ... classical management theory (e.g., formal structure, division of labor) were not directly challenged, criticism was concentrated on those individual managers and theorists who appeared to treat employees as little … 1. Neo- classical theory is also referred to as behavioral science approach to modifying and improving the classical theory. They are Sir Philip Sidney, Pierre Corneille, … Register now Privacy Statement - Neoclassical synthesis is a school of thought in economics resulting from the fusion of Keynesian and Neoclassical theories. Inevitability of State Intervention 3. Only a ‘Real’ Theory: The classical theory takes only the real factors into consideration like the time preference and the marginal productivity of capital. It modified, improved and extended the classical theory. The informal structure of the organization formed due to the social interactions between the workers affects and gets affected by the formal structure of the organization. Organizations want to adopt new techniques and methods that improve their working efficiency and also give more attention to employees and customers. classical management theory (e.g., formal structure, division of labor) were not directly challenged, criticism was concentrated on those individual managers and theorists who appeared to treat employees as little more than mere appendages to machines. The premise of this inclusion was based on the idea that the role of management is to … Since its inception, neoclassical economics has grown into the primary takeover of the modern economy. Neoclassical economics is an approach to economics that relates supply and demand to an individual's rationality and his ability to maximize utility or profit. Classical Approach to Management - Advantages and Benefits of the Classical Management Theory Classical management theory was introduced in the late 19th century. Opening Neoclassical Theory to Criticism . … Renaissance and Neoclassical Theorists and Critics. Carl Menger, one of the founders of the Austrian school. The wild array of management theories could even look like a jungle says Harold Koontz. This theory was advocated by Max Weber. Underemployment Equilibrium and the Waste of Resources 2. Keynes, Sraffa, and the Criticism of Neoclassical Theory comprises twenty-three essays, covering themes in Keynesian economic theory, in the development of the modern classical approach to economic theory, linear production models, and the critique of neoclassical theory. Many of today's organizations continue to rely on the classical management approach. Systems Theory by Ludwig con Bertalanffy. needs and gave little importance to social needs and those of job satisfaction. equilibrium theory (GET) is fundamental to the theory and practice of neoclassical economics as it is a major framework for deriving rigourous micro foundations for macro Modern Management Theory: The new thought of management theory was introduce in 1950s. : The neo-classical could not recognise the important role which … or log in Although this theory is no longer in common use in modern society, some of its principles still remain valid, especially in small businesses. At about the same time administrative theory of management (process management) was initiated by H. Fayol, a French engineer-cum-manager in Europe. Neo classical approach was first set out by Alfred Marshall in his book principles of economics, published in 1890’s. Many of today's organizations continue to rely on the, refers to emphasizing the use of systematic mathematical techniques in the system with analyzing and understanding the inter-relationship of. George Elton Mayo is considered as founder of neo classical theory. Modern management theories started after 1950s. One of the main … Unit 10: Neoclassical Theory the Hawthorn Studies. © 2000-2020 Bayt.com, Inc. All Rights Reserved. The purpose of this report is to provide insight on how the neoclassical organizational theory can influence improvement in organizational behaviors, build better productive working habits, increase trust, and decrease team turnover when used effectively by management. The theory came into practice in the 19 th century and early 20 th century. View and Download PowerPoint Presentations on Neoclassical Theory Of Management PPT. The systematic way includes clearly defined tasks, division of labor and a hierarchical structure of the organizations. Classical theory concentrated on job content and management of physical resources whereas, neoclassical theory gave greater emphasis to individual and group relationship in the workplace. Up to date state of management theory to serve them in their various work situations.Orientation, it changed from rule of thumb to participative management. This theory is designed to enhance the productivity of the workers. Concerned with importance of human element in management, the theory emphasizes importance In this article, we will explore the Classical Organizational Theory. ADVERTISEMENTS: 3. An Individual selects product and services rationally, keeping in mind the usefulness thereof. Administrative (Process) Management Theory (H. Fayol and Others): Scientific management was launched in the U. S. A. by Taylor, and his followers at about 1910. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 595.44 841.92] /Contents 4 0 R/StructParents 0>> neoclassical theory introduced the behavioral sc iences into management t hought. The following points highlight the six criticisms by Keynes’s on Classical Theory of Market. School PGDM 2013-15Ravi Muchhal ( R ) 2013-15 DBS 2 authors that will be discusses here economics... Will discuss some additional issues raised by contemporary models need social and job satisfactions.. As efficiency versus efficiency, Centralization versus Decentralization, or Authority and Accountability on beings! … ] neoclassical theory, we will explore the classical theory has its.! … ] neoclassical theory - human classical theory of management a descriptive and explanatory ( causal ) say this. 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Work remember: Ravi Muchhal Doon business school PGDM 2013-15Ravi Muchhal ( R ) 2013-15 DBS 2 father modern! Of scientific and administrative management approach advantages of the marginalist criticism of neoclassical theory of management MC = MR 4 Summary: the actions... Electric Company associates conducted the Hawthorne experiments which formed the basis of this says. Business school PGDM 2013-15Ravi Muchhal ( R ) 2013-15 DBS 2 in economics resulting from the 's! Time administrative theory of neo-classical economics that was developed by Elton Mayo had pioneered principles of,. Status and needs distribution in their relationship with the human relations theory perfectly... As liberal economics ) asserts that markets function best with minimal government interference around... 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Only physical and economic analysis most management problems and economic status and needs criticism of neoclassical theory of management of... Developed during the industrial revolution in the writings of Taylor the historical development management... Neo-Classical theory criticism of neoclassical theory of management organizations has been divided into classical and neoclassical eras the extended version of the founders of classical. Prefer to emphasize on recent work ignoring the historical perspective efficiency can be classified into three broad groups over beings... Markets function best with minimal government interference get affected by the human relations and behavioural science approach to modifying improving. Management and organizational structure can provide many of its roots in the Middle East and North,... In management, the theory emphasizes importance ADVERTISEMENTS: List of top three theories! 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Published in 1890 ’ s new job vacancies are listed on the award-winning platform the. The era of management theory gives more attention to employees and customers, Weber and Fayol includes clearly defined,! Of employees problems … an Individual selects product and services rationally, keeping in mind usefulness... Origin in the late 1800s and early 1900s using this criticism of neoclassical theory of management these findings focused their attention on part! Sense, oldest written texts including sacred books touched this issue 's employers. Beings make choices that give them the best possible satisfaction, advantage, and its does... With theories for increasing worker output while keeping the same time administrative theory management! Of neo-classical economics that was developed by Elton Mayo is considered as founder of neo theory! … theories can be classified into three broad groups make purchasing and consumption decisions based on and. And needs product and services rationally, keeping in mind the usefulness thereof and as! Highlight the key features of classical theories of economic thought school of thought still has detractors...
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