In today’s modern world, organizational theories are needed for every company to strive with rivals and to accomplish the long term targets. The main motive of this essay is to outline and explain the significance of various theories such as deterministic theory and strategic choice theory. Apart from this, it also portrays that how deterministic theories including resource based theory, institutional theory and population ecology theory are helpful to make a strong financial position and image in global market by carrying the business internationally. In this essay, the ideas and thoughts of different authors are identified and measured critically and effectively. A brief literature related to various organizational theories has been showcased in the task.
Strategic choice theory may be defined as a role that leaders or managers play in affecting an organization through making choices in an effective and dynamic political process. In other words, strategic choice theory is used to handle workshops for unique and effective decision making group. It is an ongoing process in which planned management of insecurity plays a significant and major role. It is stated by Raduan, Jegak, Haslinda & Alimin (2009), strategic choice theory was propounded when industrial relations in the U.S were changing constantly. The strategic choice theory begins with a consideration of relevant and effective forces in the macro environment that influence the employment relationships in the competitive market. It is further considered a systematic theory of strategy (Bradley, 2018). This theory provides an alternative that encourages the agency of group and individuals in the company to make choices, sometimes they serve their own requirements and needs that effectively affected the development and growth of those organizations (Helfat et al, 2009). The strategic choice is a formal part of an organizational learning process that implemented or used to the macro environment and internal political circumstances as well.
Along with this, strategic choice theory was investigated with regard to groups and individuals response and reviews in an effective way for reducing and handling disputes and risks (Revolvy, 2018). It is examined from the various studies that strategic choice theory monitors on the decisions to be made in an effective and dynamic planning situation whatever their matter and timescale. It maintains good and strong communication and cooperation between people with various skills, talents and backgrounds. By using this theory, the company can differentiate its operations and functions in the macro environment to gain competitive benefits. Aside this, the company can get various alternatives by implementing this theory in the competitive market. Aside from the pros, there are various cons of this theory which shows that this approach is not suitable for the organization. It is analyzed that strategic choice theory influences the profitability and productivity of the organization adversely (Kraus & Keltner, 2009).
It is noted that deterministic theory is a conceptual model or theory of the philosophical doctrine of determinism implemented to a system for analyzing and understanding everything that will and has occur in the system based on the various effective and unique physical outputs of causality. In today’s globalization world, each and every company uses organizational theories to attain long term goals and objectives in a hassle free manner. It is analyzed that organizational theories can be categorized into two parts including strategic and deterministic theories. These theories distinguish or differentiate based on the flexibility and readability which help in conducting business operations and activities effectively and smoothly (Sydow, Schreyögg, & Koch, 2009). There are various types of deterministic theories that have been drawn below.
It is one of the significant theory that being used by the organization. Resource dependence theory is a study of how the external resources of the company influence the actions, initiatives and behavior of the company. It is portrayed that external resources is a significant tenet of both the tactical and strategic management of any organization. The companies use resource dependency approach to observe and analyze the organizational adaptations to dependencies. Apart from this, resource may take many forms, or shapes such as workers, funding and raw material. If one organization maintains the wide range of resources then another firm would become dependent on its in order to make effective and symbolic relationship. According to Hillman, Withers & Collins, (2009), organizations adopt various resources based theories to cope up with rivals and to maximize profitability and outcomes internationally. It is studied that resource dependency theory is a managerial tool or framework implemented to determine and evaluate the strategic resources with potential to offer comparative benefits to the company effectively.
These resources could be exploited by an organization to attain sustainable competitive benefits. By implementing this theory, the company can maximize and boost their power effectively. Aside this, the company can determine and measure outputs and sustainability by applying this theory smoothly. As per Nienhüser (2008), resources dependency theory is outlined and underpinned by the idea that resources are key success factors to boost outcomes and efficiency with minimizing costs. Resources are managed and controlled by companies to maintain and determine the open access to resources. It is reported that organization typically develops redundancy into resource acquisition to minimize their reliance on single resource. It is analyzed by Javalgi, Dixit & Scherer (2009) that resources based theory is based on the fact that external environment have limited resources and companies are dependent on these resources to grow and survive in the competitive market. Uncertainty is faced by the organizations due to lack of control that may affect the operations of the firm adversely. The companies should make plans and strategies to utilize these resources adequately and effectively, that are being needed by other companies to make sure their own growth and survival (Heugens & Lander, 2009).
One of the significant and fundamental theories which used by the organizations is institutional theory. Weerakkody, Dwivedi & Irani (2009) stated that institutional theory is a process or approach on the deeper and more resilient attributes of social structure. It includes the processes and approaches by which structures such as rules, norms, standards, schemes, routines and regulations become a guideline for social initiatives and behavior. This theory put direct impact on the structures and policies of the firm (Weerakkody, Dwivedi & Irani, 2009). It can largely affect the development and progress of formal structures in the company, generally more profoundly that market pressures. Innovative and dynamic structures or frameworks that improve and enhance the technical efficiency and effectiveness are legitimized in the external environment. This theory is further used by the organizations to maintain or gain authenticity in the external environment.
It is portrayed by Carney, Gedajlovic & Yang (2009), institutional theory will reduce evaluation and avoid programs implementation to run the business smoothly and to maintain internal and external confidence in the formal structures while detecting their efficiency and effectiveness impact. Carney, Gedajlovic & Yang (2009) examined that the net impact of institutional theory is to maximize the homogeneity of company’s structures in an external environment. The organizations could adopt the similar structures or frameworks as a result of three types of pressures. The three types of pressures include coercive pressure, normative pressure and mimetic pressures (Weerakkody, Dwivedi & Irani, 2009). This theory further helps in gaining ample of opportunities in the international market. On the other hand, this theory or approach could unable to define the differentiation and changes among the various companies.
It is studied by Bueno (2009) that population ecology theory is significant and unique to compete with rivals in the global market. Ecologists examine various aspects of ecosystems. One of the major aspects is population ecology that helps in interacting and communicating with external environment. It is studies that ecologistics are interested in the development and growth of a population, the increase of the population, fluctuations in population and any other interactions and collaborations with the population in the global market (King, Morgan, Gimenez & Brooks, 2009). By implementing this theory, ecologists can also investigate the different groups of population that are unable to locate in same area but interact at specific time throughout the year. If this group of populations are similar and could still interbreed, they are a metapopulation. Individuals within a metapopulation can move from one population to other, which may support stabilize the size and trends of the overall population (Sabatelli & Shehan, 2009). Along with this, institutional theory defines the three situations such as retention, selection and variation. Retention explains that only developed and dynamic organizations are included in the population. Variation defines that only new organizations produce innovative opportunities in the international market. Selection also helps in choosing excellent organization which is suitable for the population. The major benefit of institutional theory is that it helps in providing good and strong organization structure for the population (McGlade, 2009).
Conclusion
It is concluded from the above study that various theories are being used by the companies to develop and grow business successfully, There are various deterministic theories like resource based theory, population ecology theory and institutional theory that help the companies to maintain an effective organizational framework and meet the desired objectives and targets. By studying this research, it is noted resource based theory is essential and suitable for each and every company to conduct business in a hassle free manner. It is analyzed that strategic choice theory is not suitable and effective for the organization in a long time.
References
Bradley.J.,(2018). Deterministic Vs. Strategic organizational structure [Online], Retrieved from com/deterministic-vs-strategic-organizational-structure-65533.html”>https://smallbusiness.chron.com/deterministic-vs-strategic-organizational-structure-65533.html
Bueno, N. P. (2009). Institutions and natural resources sustainability in poor socio-ecological systems: closing some dynamical loops. Journal of Interdisciplinary Economics, 21(3), 233-253.
Carney, M., Gedajlovic, E., & Yang, X. (2009). Varieties of Asian capitalism: Toward an institutional theory of Asian enterprise. Asia Pacific Journal of Management, 26(3), 361-380.
Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M., Singh, H., Teece, D., & Winter, S. G. (2009). Dynamic capabilities: Understanding strategic change in organizations. John Wiley & Sons.
Heugens, P. P., & Lander, M. W. (2009). Structure! Agency!(and other quarrels): A meta-analysis of institutional theories of organization. Academy of Management Journal, 52(1), 61-85.
Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A review. Journal of management, 35(6), 1404-1427.
Javalgi, R. R. G., Dixit, A., & Scherer, R. F. (2009). Outsourcing to emerging markets: Theoretical perspectives and policy implications. Journal of International Management, 15(2), 156-168.
King, R., Morgan, B., Gimenez, O., & Brooks, S. (2009). Bayesian analysis for population ecology. Chapman and Hall/CRC.
Kraus, M. W., & Keltner, D. (2009). Signs of socioeconomic status: A thin-slicing approach. Psychological science, 20(1), 99-106.
McGlade, J. (Ed.). (2009). Advanced ecological theory: principles and applications. John Wiley & Sons.
Nienhüser, W. (2008). Resource dependence theory-How well does it explain behavior of organizations?. management revue, 9-32.
Raduan, C. R., Jegak, U., Haslinda, A., & Alimin, I. I. (2009). Management, strategic management theories and the linkage with organizational competitive advantage from the resource-based view. European Journal of Social Sciences, 11(3), 402-418.
Revolvy.,(2018). Strategic choice theory [Online], Retrieved from https://www.revolvy.com/page/Strategic-Choice-Theory
Sabatelli, R. M., & Shehan, C. L. (2009). Exchange and resource theories. In Sourcebook of family theories and methods (pp. 385-417). Springer, Boston, MA.
Sydow, J., Schreyögg, G., & Koch, J. (2009). Organizational path dependence: Opening the black box. Academy of management review, 34(4), 689-709.
Weerakkody, V., Dwivedi, Y. K., & Irani, Z. (2009). The diffusion and use of institutional theory: a cross-disciplinary longitudinal literature survey. Journal of information technology, 24(4), 354-368.
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