Running Head: THEORY 1
THEORY 2
Organizational Theory
Ivette Clark
Colorado Technical University
Dr. Jaime Sampayo
Organizational Strategy & Design
OCD870-01-2104C
28 Sep 21
An organization is one that is defined as an assembly of individuals who work together on order to achieve an objective that is common via division of labor. In addition, organizations provide means of utilizing personal strengths in a group with an aim of achieving more than what can get accomplished by the efforts that are aggregate of members of a group functioning individually. The business organizations are created mainly to deliver services or goods to the consumers in a manner that they can realize a profit after the transaction is completed. As time goes, economists, business analysts as well as academic researchers have ended up adopting various theories that aim at explaining that business organizations dynamics, that is inclusive of the ways in which organizations end up making decisions, distributing power as well as control, resolving conflicts in addition to resisting or promoting institutional change (Pryor, et.al, 2011).
The studies of organizational theory provide a focus that is interdisciplinary on the social organization’s effects on the attitudes and behavior of people in the organization, the individual characteristics effects as well as action on an organization and success, survival as well as performance of an organization. Fourth focus is on the environment’s mutual effects, inclusive of task and resource, cultural and political environments on the institutions and vice versa. Fifth is concerns with the methodology in addition to epistemology that are responsible for undergirding research on every single topic.
Among the different organizational theories that are considered to have been researched, the theory of open systems has emerged to be the one that is known extensively, however, the rest also have their own proponents. Several researchers focusing on organizational theory tend to propound a blending of theories with the argument that a business will end up embracing varying organizational strategies to react to changes within its structural design, experiences as well as competitive situations.
Organizational theory gets to study organizations mainly to identify the methods they use to solve their problems as well as the way they maximize productivity as well as efficiency. It is used in defining the applications as well as value of organizational theory from a point of view of the business. Application of organizational theory in an appropriate manner can have various benefits for the society in addition to the organization. Developments within the firm may help in boosting economic potential within a society as well as help in generating the essential tools to facilitate its system that is capitalistic.
Immediately an institution identifies an expansion window, it starts to develop, hence changing the economic equilibrium through ensuring it catapults itself forward. This expansion ends up inducing changes within the infrastructure of the organization as well as within its competitors in addition to the economy in general. This is because, while most organizations make efforts to have themselves integrated into societies that are capitalistic, they end up initiating an effect that is ripple in between additional competing organizations in addition to economic pressure that is already in existence (Suddaby, et.al, 2011).
Through the expansion window, the firm can develop through the production of additional products which results into alterations within the economic equilibrium, via catapulting itself towards a production environment that is new. These changes affect the company and the entire economy. Different companies end up observing these developments that are innovative and have them efficiently recreated. In addition, the essence of organization theory is to identify structures and sequences used by businesses in meeting the expectations of their stakeholders. Afterwards, the theory makes use of these same trends in formulating theories that are normative on how companies end up functioning at their best. Due to this, it is possible to note that organizational theory is utilized to learn the ways that are most suitable in running a company or identify companies that tend to be managed in such a manner that they have high probabilities of becoming successful.
For instance, an example on how development within theory of an organization enhances efficiency is within the factory production. Henry Ford got to create the assembly line, an organization system enabling efficiency which drove the United States as well as Ford economy forward. The factory production concept is known for amplifying production in general and enabled the company to have labor division to begin with. In addition, it had the workforce facets centralized and started having the trade as well as production rules defined which later resulted into specialization. Henry Ford was able to implement designs that are innovative through having the factory production modified alongside creation of the assembly line, which to date is still utilized within most factories in the contemporary society. These developments ease the process for a firm to produce, hence making the companies that are incentive to aggregate as well as use methods that are more efficient to run their businesses.
Implication for change managers
The organizational theory is also capable of helping a firm to identify the corporate practice that is malicious then utilize them in highlighting future measures that are precautionary. An environment that is static is capable of rapidly antiquating a company. Therefore, the issue of change is constant and a requirement that is essential for institutions bro remain competitive as well as survive within this global economy that is volatile. The organizational theory for change managers may help them in streamlining business procedures to eliminate groups or redundant systems. Nevertheless, it can have consequences that are negative. It enables managers in minimizing the impacts that are negative, this is because strategic change within a company is supposed to always aim at achieving improvement within the business as well as the performance of employees. At the end, the overall process of change is supposed to reflect a situation that is win-win for the company as well as the workers (Shepherd and Sutcliffe, 2011).
Implication of organizational theory on the employees
Employees tend to show resistance to change since they fear losing their job or been forced to take up extra responsibilities that the employee might be unequipped or unqualified to tackle. The organizational theory enables use of inspiring as well as encouraging techniques into implementation of change demonstrating to the employee that they are been forced to take part in the change, they should accept it as an integral part of the change process. An organization theory helps in making an employee feel as if they are contributors who are significant in the environment of work place each time, they are a part of a revolution that is successful. There are various organizational changes that need key restructuring, leading into life changes that are rapid for different employees. Organization theory helps in identifying issues that may affect the employees negatively in case of a change, these include loss of benefits, salary cuts, job positions downgrading and job relocation among others. It helps in addressing the factors effectively for the benefit of the employees.
Differences between public and private organizations
The private as well as public sectors a times partner with an aim of completing goals, like transportation or construction projects. Nevertheless, both sectors tend to have some differences that are significant. These include:
The difference that is most significant in between public as well as private organizations is mainly the ownership of the companies. The public firms they are controlled as well as owned by the government. On the other hand, the private organizations are managed as well as owned by people or private firms. The public organizations serve mainly with an aim of benefiting the public through providing services. On the other hand, private organizations have an aim of making profits. Third difference is that, with public organizations they get financial support as well as financing from the government. The financing may result from indirect as well as direct taxes. With the private organizations, they might get some funding support, though practically, they finance themselves through use of revenues, taking out loans or issuance of their shares. When it comes to employment, employees who work in the public organizations, tend to work for maybe local, federal as well as state governments and agencies that are public. They have salaries that are paid for typically by the tax dollars. Within the private organizations, people work for businesses that are owned privately, the profits made by the organization pays the salaries of their employees (Stead, 1972).
References
Pryor, M., Humphreys, J. H., Oyler, J., Taneja, S., & Toombs, L. A. (2011). The legitimacy and efficacy of current organizational theory: An analysis. International Journal of Management, 28(4), 209–228. ABI Inform
Suddaby, R., Hardy, C., & Huy, Q. (2011). Where are the new theories of organization? Academy Of Management Review, 36(2), 236–246. Doi:10.5465/AMR.2011.59330875.
Shepherd, D. A., & Sutcliffe, K. M. (2011). Inductive top-down theorizing: A source of new theories of organization. Academy Of Management Review, 36(2), 361–380. Doi:10.5465/AMR.2011.59330952. Business Sources Complete
Stead, B. (1972). Berlo’s communication process model as applied to the behavioral theories of Maslow, Herzberg, and McGregor. Academy of Management Journal, 15(3), 389–394. Doi:10.2307/254868.