Organization Theories And Organization Fit
The field of organisation theory has many competing theories to explain organisational effectiveness. Your task is to critically discuss how managers may use one of the following theories: Resource Dependency Theory, Institutional Theory, or Population Ecology, to develop a framework of understanding for an organisation. Your framework should explain interactions with other organisations. A discussion of how this framework will contribute to the control of the competitive landscape should be included. Your reasoning should be explained and referenced with evidence from peer reviewed journals.
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The essay has highlighted the role and importance of effective organizational theory to achieve its prime goal and objective. The report includes various journal articles in order to provide a response to the essay questions. This essay has emphasized the institutional theory that is a major part of organizational theory. Authors of different journal articles have talked about institutionaltheory; therefore, the report includes viewpoints of these authors in order to explain the institutional theory and role of the manager to implement effective form of institutional theory in an organization so that business organization could achieve its prime goal and objective.
The essay includes a journal article to explain few major sections such as role and importance of institutional theory, the role of manager to implement effective institutional theory in an organization, the role of institutional theory in order to provide better interaction with other organization. Each section has its own topic section that provides a brief summary of the paragraph. At the end of the essay, a conclusion part has been included that provides a brief summary of the entire report and its major points.
Role and importance of institutional theory
This paragraph has highlighted the role and importance of institutional theory. The authors of different journals have their own point of view and perspective and thus the study has highlighted their perspective in order to explain the role and importance of institutional theory. According to Haveman and Wetts (2019), it has been stated that institutional theory helps the business organization to influence and manipulate the development of the formal structure of the business organization. The authors have also stated that institutional theory majorly focuses on the external environment of the business organization on the activities of the organization. Moreover, this theory is also very important for the business organization as it helps to generate social behaviour within the organization by guiding the organization to generate better rules, norms and regulation. According toBitektine et al., (2018), it has stated that institutional theory generally helps the business organization to give a complex view of business organization performance. According to the author, institutional theory helps the business organization to achieve and sustain the legitimacy in the environment of the business organization. According to the authors, it can be stated that this theory ultimately helps the business organization in various ways such as it helps the business organization to reduce the isomorphic pressure. It also helps the organization to increase the managerial description and managerial effects on the outcomes of the organization.It is also a fact that this theory is very important for the shipping organization as because this theory enables to implement informational technology in order to increase the safety of the organization. Thus, it can be stated that institutional theory is also an important part of a management system that provides boost to the safety management system of an organization. However, this theory is becoming a trending organizational theory that helps the business organization to shaper its entire management (external and internal). The authors have stated that institutional theorists have indented to influence the environment of the business organization and it influences the expansion of the formal structure of the business organization, often more intensely compared to the market pressures. From the other perspective, it can also be stated that this theory is very important for the business organization to solve various external and internal issues of the organization, maximize the efficiency of the organization and the productivity of the organization. Moreover, it is also a fact that every business organization is aiming to manipulate their stakeholders effectively and there is a huge relationship between institutional theory and stakeholder’s theory.According to Popkova, (2018), it has been stated that stakeholders of the business organization may affect institutional logics and it is very limited to sort out the stakeholders according to their influence on the firm level and lack of conceptual clarity. Thus, the authors have argued that institutional theory and stakeholder theory influence sustainability reporting.
Role of the manager to implement effective form of institutional theory
This paragraph is all about the role of managers to implement an effective form of institutional theory.According to Cornelissenet al., (2015), it has been stated that organizational theory comes under a management theory; therefore, the role of manager is huge to implement better organizational theory (institutional theory). Various factorsare needed by the manager of the business organization to implement effective form of organizational theory (institutional theory) such as employee morale and ethics, effective form of leadership theory and better management skills of a manager. According to the authors, it has been stated that employee morale and ethics, effective form of leadership theory and better management skills of a manager are the major resources of management theories that ultimately help the managers to implement effective form of institutional theory. Moreover, it is also a fact that a manager plays an important role to bring innovation in the organizational theories for better performance of these theories. According to Frederickson et al., 2018, it has been stated that, there is relationship between management style and institutional theory(Williams and Horodnic, 2016). The authors argued that managers involve in all sorts of management activities that help the business organization to utilize the human resources effectively in order to achieve the best plans and objective of the firms. Moreover, there is various function of good management and these include effective planning to implement the institutional theories within the organization, organizing the planning and activities and at last leading. Therefore, from the above explanation it can be easily concluded the fact thatrole of manager is very important to implement better and effective form of organizational theory (Institutional theory) within the organization to get the best form of output result (Cardinale, 2018). Moreover, leadership also playing its major role to influence organizational behaviour as it helps to enhance the performance of the employees and productivity. Therefore, a good leader or manager always engaged to set a clear vision to the employees to understand the future stated of the business organization.
How Institutional theory helps in better interaction with other organization
There is an argument at the time of choosing locations, nonfamily and family firms or organizations are influenced differently with the help of institutional factors. Family firms have own resources like autonomy in the purpose of decision making, social capital and relational capabilities which can create them more easy to grow a sense related to the place as well as institutional advantage (Mair and Reischauer 2017). Resources of organizations and internal factors can influence how the organizational members operate in the foreign markets as well as create certain risky type operations easier in order to manage. In addition to this, there is no same value of locations for the organizations. According to Mair and Reischauer (2017), most of the organizations can develop the location capabilities which allow them for extracting the value from a specific location that the other organizations do not and develop the institutional advantage. The specific organizational characteristics can sometimes help them to transform most of the disadvantages into the advantages. At the time of emerging market, the organizations initiate their own business in anendpointalong with weak institutions, they have the special types of capabilities that help to enable the adaption to the undefined environment as well as protection them from negative influences that stem from the institutional empty spaces in the host country (Cornelissenet al. 2015). This judgment is reliable with the present research based on the institutional advantage that argues under some certain conditions, the institutional frameworkfrom which a focal organization originates could turn out to be a source of comparative advantage entirely enjoyed by the organizations which operate in that kind of institutional setting.
At the very first time, it notices very carefully the unbalanced and complex institutional systems in the emerging economies (Kostova and Marano2019). There are some arguments in some research papers that themultinational can have comparative competitive advantages in few cases. Koskela-Huotariet al. (2016) stated that, the institutional theory in organizational culture to interact with the other businesses is the conclusion of learning processes of institution embedded which are context specific. Once organizations acquire this type of advantage, they use it elsewhere. The experimental results are based on the significance of institutional advantage to the emerging market organizations (Kostova and Marano 2019). The second thing is that the organizations can take a “big tent” opinion of institutions in order to reflect the whole diversity in the institutional theories as well as go beyond the traditional dialogue, debate between its opinions of institutions as restrictions on behavior and institutional economics (Koskela-Huotariet al. 2016). The institutional theory is responsible for explaining that how organizations can build their own institutional capabilities as they can operate within the specific institutional agendas. The institutional advantage can be helpful for the organizations to do better in the national or home countries as well as also be the other source related to the competitiveness in international operations compare to the organizations from other international countries.
How Institutional Theory contributes to the control of the competitive landscape
Although, it has been asserted by numerous institutional theorist that the organizations within a sector tend to behave similarly, there are multitude studies contradicts the point of view. The study conducted byRaynardet al. (2015), proposed that normative and regulatory forces associated with environmental issues drive the companies to be innovative. It has been asserted by the study that such innovation should have ample opportunities to create competitive advantage through satisfying the stakeholder demands. The study conducted on 340 publicly traded US companies effectively supported that relationship between environment technology productivity and institutional pressure- resources interaction is evidently positive.
Another study conducted byMoréet al. (2016), identified that skills and resources are the primary variable for creating a sustainable competitive advantage for any business entity. In this context, the study also emphasized on knowledge appeal, which can be proved as a crucial institutional factor for creating greater competitive advantage(Bromiley and Rau 2016). Hence, the study concluded that organizationscannot obtain competitive advantage simply by evaluating the external environment. It has been highlighted in the study that in volatile external environment the capabilities and resources are the primal basis for a stable future approach. Above all, the study established that through a comprehensive institutional model, any organization can use its resources and knowledge based assets to create a sustainable competitive advantage.
Hillebrandet al.(2011) successfully established that the institutional theory is highly crucial to realize the effectiveness of CRM practices. The organizations have a history to confront the pressures created by trendsetters, media as well as competitors. However, this kind of practices can have negative effect on the CRM success. On the other hand, the institutional model can be crucial driver to motivate the organization to take sustainable competitive advantage through spontaneous CRM practices.
The essay has been quite successful to identify the role of institutional theory as leading factor for the success of business organisations. The paper asserted that the institutional theory helps the business organization to influence and manipulate the development of the formal structure of the business organization. The theory generally helps the business organization to give a complex view of business organization performance. This theory is becoming a trending organizational theory that helps the business organization to shaper its entire management. The role of manager is very important to implement better and effective form of organizational theory (Institutional theory) within the organization to get the best form of output result. The institutional theory is responsible for explaining that how organizations can build their own institutional capabilities as they can operate within the specific institutional agendas. It has been asserted by the study that such innovation should have ample opportunities to create competitive advantage through satisfying the stakeholder demands. The study established that through a comprehensive institutional model, any organization can use its resources and knowledge based assets to create a sustainable competitive advantage. The institutional model can be crucial driver to motivate the organization to take sustainable competitive advantage through spontaneous CRM practices.
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