Question:
Discuss about the Management Theory and Practice for Strategic Choice Theory.
As opined by AM Vermeulen et al. (2016), the strategic choice theory of the organization determines the fact leaders play an important role in the organizations by making important choices in an environment, which is considered as a dynamic environment. This theory provided an alternative to the fact that the individuals are required to make particular choices in their tenure in the organization, that have a direct as well as indirect influence on the smooth functioning of the organization (Hill, Jones and Schilling 2014). The strategic choices of the organization form an important part in the organizational learning process, which needs to adapt to the external environment as well as internal political condition of the organization. This theory focuses on the manager’s responses to the everyday disputes to the organization. There are several examples of strategic choices being made in the day to day functioning of the organizations (Hill, Jones and Schilling 2014). The senior executives of the firm have strong influence on the decision-making process of the organization. The strategic choice theory considers the relevant forces present in the external environment of the firm that has a direct influence on the employee relationships (Whittington 2014). There has been a huge change in the external environment of the organizations that enforces the managers to adapt their business strategies. The various options are filtered and checked if they are consistent with the beliefs, values as well as philosophies of the organization. The managerial choices are embedded in the institutional as well as historical structures of the organization. The managers need to determine the strategic feasibility of the various options and check whether they are actually possible in the organizational context (Hill, Jones and Schilling 2014). The strategic choices of the firm also depend on the organizational decisions as well as the current power distribution in the firm. The relationship nature between the government agencies, unions and external organizations also determines the nature of the strategic choices in the organization.
The strategic choices of the organization are determined by the industrial relations processes as well as outcomes that are continuously evolving as well as responsive to the organizational responses (Burke 2017). The relative importance of the environmental factors as well as responses does vary over a consistent period of time, but they always have an impact on the organization. The labor or the market changes have an independent effect on the effect on the organizational choices (Hill, Jones and Schilling 2014). The broader conception of the institutional framework relating to the various aspects of the industrial relations corresponds to the various activities of the management, government organizations and the labor (Hill, Jones and Schilling 2014). The managers need to make effective strategic choices regarding the day to day affairs of the government. The middle level management needs to take care of the collective bargaining process in the organization, which would help in better decision-making of the firm (Foss and Hallberg 2016). The strategic choice theory helps in the determination of the inter-relationships between the different activities of the firm and maintains consistencies between all work levels. This theory focuses on the various levels of strategic decisions that influence the smooth functioning of the firm (Hill, Jones and Schilling 2014). There can be changes in the competitive environment of the firm that can also have a changing consumer demand, in which the managers need to take adequate organizational decisions (Hill, Jones and Schilling 2014). There can be a sharp increase in the competitive pressures of the firm and the various production processes of the firm.
The strategic choice theory holds great importance for the various operational processes of the firm. The strengths of this theory are concerned with the fact that the organizations can have different kind of alternatives when they have to undertake crucial organizational decisions (Tokman, Richey and Deitz 2016). This kind of theory operates in the self-regulating as well as negative feedback pattern in which the organization is being able to achieve the organizational goals. The organizational analysis is often done to the macro level of the organization so that there is maximum micro-diversity.
As commented by Cicmil et al. (2017), the deterministic theories of management focus on the relationship between the organizations and their external as well as internal environments. The different deterministic theories such as institutional theory, resource dependency theory or the different versions of the neo-institutional theory helps in explaining the fact those organizations are molded by various institutional environments (Floudas 2013). For example, the population ecology theory helps in the examination of the fact why the organizations are failing and why there are some organizations that succeed. This also explains the fact all the organizations are not exposed to the same factors and hence they have different growth patterns in the organization (Hill, Jones and Schilling 2014).
The institutional theories of the management emphasize on the fact the organizations need homogeneity, continuity and consent are important for the creation of informal as well as formal relations within the organizations (Geisler and Wickramasinghe 2015). Despite this fact, the organizations need to respond to the different institutional environment of the organization. The managers need to take care of the various factors in the institutional environment such as internal activities of the organization as well as the various activities of the external groups (Hill, Jones and Schilling 2014). The managers need to focus on the grass roots democratic structure of the company management and various immediate effects. This is important for making important decisions for the firm (Murphy, Soroudi and Keane 2016). The managers need to abide by the various regulation, rules and norms so that there is effective team work (Hill, Jones and Schilling 2014). This would also help in the early accomplishment of the organizational goals. This theory focuses on the fact that the organizational change is due to the coercive pressures from the various institutional environment (Dubey, Gunasekaran and Ali 2015). The institutional cooptation can occur through both formal as well as informal mechanisms. The formal cooptation may occur through the process, which would effectively solve the issues of absorbing new elements into the leadership process of the organization (Hill, Jones and Schilling 2014). The strength of this theory lies in the fact that organizations can take part in their own functioning, which is often independent of the willpower of the managers.
The population ecology theory emphasizes on the fact that there are certain factors which are relevant context due to which there are some organizations which fail and there are other organizations that succeed (Naveh and Lieberman 2013). This theory analyses the effect of population characteristics on the organizational outcomes. This theory specifies the fact that the organizations are usually determined by the level of their external environment. This theory specifies on the fact that the organizational functioning are determined by the external environment. The successful organizations are said to be best fitting in the environment while the opposite is true for the organizations which fail (Hill, Jones and Schilling 2014). The organizations are said to be passing through several stages such as variation, selection and retention (Rockwood 2015). For example, the independent wine production can be related to the survival rates of the population. The variation stages of the organization are dependent on the fact that the organizations try to implement various new processes within the population. This stage of the organization is characterized by the fact that the organization is made up of flexible and loose relations (Hill, Jones and Schilling 2014). The organizations are said to be developed over tome and with time they become more tightly together and they are also adaptable to change (Merow et al. 2014). The selection process is considered as the process in which the organizations are being selected by the environment. This process favors the organizations which would be developing into solid organizational structures which become difficult to change over time (Hill, Jones and Schilling 2014). The retention is considered as the stage in which the organizations with certain structures flourish while the others end. When the organizations reach this stage, then they are characterized by inflexible relationships (Hill, Jones and Schilling 2014). The organizations face different kinds of constraints which limit them from changing their structures as well as adapt them to the external environment. In such cases, there is a considerable reduction in the individual organizational change as well as adaption.
The strengths of the deterministic theory lies in the fact that the organizations can best utilize the positive trends of the external environment as well as internal organizational environment (Gibson 2014). This theory emphasizes the fact that the organizational outcomes are not dependant on the direct actions of the managers and instead they depend on the organizational environment. The organizational context is not only related to the situational factors in the outside environment, but the internal dynamics of the organization also affects the organizational actions (Hill, Jones and Schilling 2014). For example, if the organization witnesses the fact that there is an increase in the consumer demand for special brand of soft drinks, then the company would be automatically launching more products in this range.
Conclusion
The analysis of the above strategic choice theories of management as well as deterministic theories of the organization specializes in the fact that both these theories are applicable to different circumstances. There are instances when the organizations depend a lot on the strategic actions of the managers and there are cases when the organization needs to give least attention to the attention of the managers. There are situations in which the actions of the managers have ultimate effect on the smooth functioning of the organization. There are other instances when the managers have a limiting effect on the organizational outcomes. In these cases, there are a lot of contributing factors in the external environment, which affect the functioning of the firms. There are also institutional factors, which can be attributed to the internal factors that affect the organizational functioning. It can be concluded that depending on the situation, either of the two above theories can be implemented.
References
AM Vermeulen, P., Zietsma, C., Greenwood, R. and Langley, A., 2016. Strategic responses to institutional complexity. Strategic Organization, 14(4), pp.277-286.
Burke, W.W., 2017. Organization change: Theory and practice. Sage Publications.
Cicmil, S., Cooke-Davies, T., Crawford, L. and Richardson, K., 2017, April. Exploring the complexity of projects: Implications of complexity theory for project management practice. Project Management Institute.
Dubey, R., Gunasekaran, A. and Ali, S.S., 2015. Exploring the relationship between leadership, operational practices, institutional pressures and environmental performance: A framework for green supply chain. International Journal of Production Economics, 160, pp.120-132.
Floudas, C.A., 2013. Deterministic global optimization: theory, methods and applications (Vol. 37). Springer Science & Business Media.
Foss, N.J. and Hallberg, N.L., 2016. Changing assumptions and progressive change in theories of strategic organization. Strategic Organization, p.1476127016671099.
Geisler, E. and Wickramasinghe, N., 2015. Principles of knowledge management: Theory, practice, and cases. Routledge.
Gibson, D.J., 2014. Methods in comparative plant population ecology. Oxford University Press.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Merow, C., Dahlgren, J.P., Metcalf, C.J.E., Childs, D.Z., Evans, M.E., Jongejans, E., Record, S., Rees, M., Salguero?Gómez, R. and McMahon, S.M., 2014. Advancing population ecology with integral projection models: a practical guide. Methods in Ecology and Evolution, 5(2), pp.99-110.
Murphy, C., Soroudi, A. and Keane, A., 2016. Information gap decision theory-based congestion and voltage management in the presence of uncertain wind power. IEEE Transactions on Sustainable Energy, 7(2), pp.841-849.
Naveh, Z. and Lieberman, A.S., 2013. Landscape ecology: theory and application. Springer Science & Business Media.
Rockwood, L.L., 2015. Introduction to population ecology. John Wiley & Sons.
Tokman, M., Richey, R.G. and Deitz, G.D., 2016. A Strategic Choice Theory Taxonomy of Retailers’ Strategic Orientations. Journal of Marketing Theory and Practice, 24(2), pp.186-208.
Whittington, R., 2014. Corporate Strategies in Recession and Recovery (Routledge Revivals): Social Structure and Strategic Choice. Routledge.
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