The neoclassical theory of the organization is the first organizational theory oriented towards the people in the organization. It developed as a critique of the classical theory, which was oriented toward efficiency. The Industrial Revolution and the insistence on increasing efficiency led to the dehumanization of work and the alienation of labor, which caused a decrease in productivity. Therefore first thoughts about the need for the study of interpersonal relationships in organizational theory occurred. Without denying the contribution of the key principles of the classical theory, neoclassical theory builds on the classical theory by offering a different approach to human factors and operating conditions. The neoclassical theory was developed by two directions of research. One dealt with the human behavior in the organization, while the second dealt with the factors that influence human behavior in the organization. This paper provides the theoretical framework of neoclassical theory. It describes reasons for the theory emergence, the main standpoints, the most significant contribution by the neoclassical theorists as well as the advantages and disadvantages of the theory. The goal of the research is to contribute to the understanding of the fundamental positions of neoclassical theory and show its contribution to organizational thinking. The purpose of the research is to provide a critical review of the applicability of the theory and its importance in the organization theory, as well as its impact on the modern way of doing business with an emphasis on human role in the organization. During the research scientific method of definition, description, compilation and deduction were used.