An organization theory
An organization theory is defined as an assembly of people working together so as to achieve the common objectives through a division of labor. Organizational theory studies for organizations assist in the identification of how to solve problems and how productivity and efficiency can be maximized. These studies also assist in meeting the expectations of different stakeholders in an organization (Hodge, Anthony, & Gales, 2006). Organizational theory makes use of these patterns so as to come up with normative theories on how organizations can carry out its functions in the best way. Therefore, organizational theory can be used so as to learn the best way of running an organization or the identification organizations which can be managed in a way that will make them successful.
There are different schools of organizational theory which have their varying precepts. One of these theories is the classical organizational theory whose precept is that organizations are in existence so as to accomplish economic and production related goals. The other theory is neoclassical organization theory which is a revision of the classical organization theory especially on minimizing issues that are related to coordination of the administrative units’ needs and the humanness of the members of an organization. The human resource theory’s percept is to serve the human needs in organizations. The other organizational theory is that the theories of organizations and environments. The organization as an open system perspective terms an organizations as systems that comprise independent activities rooted and dependent on the general environment (Hodge, Anthony, & Gales, 2006). The modern structural organization theory’s percept is that organizations are rational institutions that are primarily aimed at achieving set objectives.
Theories of organization culture and change comprise intangible phenomena like beliefs, values, perceptions, artifacts, behavioral norms and behavior patterns. The other theory is the power and politics organization theory whose precept is that organizations are termed as complex systems where coalitions and individuals have their own beliefs, interest, values, perspectives, preferences and perceptions. The final theory is organizational economics theory that makes use of tools and concepts in the economics field to study structures and internal processes of an organization. From this history we learn that organizational theory has gone through various changes that have assisted it to grow into what it has become in the present day.
Today, organizations no longer depend on its products and services to create a competitive advantage. Organizations are operating in an era where there are a lot of risks and instability. New technologies, globalization and great transparency together with the business environment have given business managers a sense of unease. Organizations are now building their competitive advantage through its people. Many companies now claim that people are their competitive advantage (Bradmore, 1996). First, the employees have to create something that is valuable to the marketplace which means that there has to be customers who need or want what the workforce creates or does. They have to be willing to pull money from their budgets and give it to the company. The other thing is that the workforce has to come up with something new that something unique which sets the organization apart.
The other thing that an organization can do to build its competitive advantage is through its ability of adapting. In the world today there are numerous changes that are taking place. For an organization to remain competitive in the market, it has to keep up with these changes. A company’s ability to adapt to changes in the market will make it gain a competitive edge.
The other source of competitive advantage is organizational structure design. An organization structure is the framework around and systems which support the work that is being done in an organization. It is how the organization arranges people and how they are supposed to accomplish their tasks. An appropriate organization structure helps in the creation of a competitive advantage when it is in line with the strategy (Bradmore, 1996). A company strategy has to be supported by a structure that provides it with stability that is needed to use current competitive advantage and at the same time allowing the flexibility that is needed for future developments.
Management in the 21st century involves the implementation of the visions of a leader in the creation of procedures, processes as well as short-term goals so as to put forward the culture, purpose and structure of an organization. Management comprises more than just merely telling other people what they are supposed to do. There are four main pillars of management that include planning, organizing, leading and controlling.
Planning is the management function which involves the creation of objectives and the determination of the course of action that will be used in the achievement of these objectives. This pillar requires that mangers to know the different environmental conditions that an organization faces and make a forecast of any future conditions. Another thing it requires is that managers be good in making decisions (Owusu, 2005). Planning is a step that is ongoing and has the capacity of being specialized depending on the goals of an organization, departmental goals, division goals and team goals.
The second pillar of management is organizing and it involves the development of the organizational structure and the allocation of human resources so as to ensure that an organization has accomplished the goals it has set. An organizational structure forms the basis through which the efforts in the organization are coordinated. The decisions that are made regarding an organizations structure are termed as organization’s strategy (Owusu, 2005). Organizing at the organization level comprises making decisions on the how best to form departments for effective coordination.
The third pillar of management is leading that involves informal and social influences that are used to influence actions that other take. Effective leaders assist in making subordinates enthusiastic about the exertion of efforts so as to attain the objectives of an organization. The final pillar of management is controlling that involves making sure that the performance does not go away from the set standards. Controlling comprise three steps, the establishment of performance standards, comparison of actual performance against standards and the taking of corrective actions when need arises (Owusu, 2005). The performance standards are usually stated in monetary terms like costs, revenue and profits but can also be stated using terms like units produced and customer service.
Recently, organizational theorists have suggested that these four pillars are not sufficient when it comes to giving an explanation of how managers approach the business landscape in the 21st century. These theorists suggest that system thinking is a more comprehensive approach. System thinking is a management discipline that involves the understanding of a system through the examination of the interactions and links between the components that make up the entire system (McCluskey, 2009). System thinking involves the use of critical thinking when it comes to the analysis of relationships between systems’ so as to understand a situation to assist in better decision making. Decision making is a difficult task for the new world, but system thinking provides a decision-making model that assists the organization in dealing with and adapting with change.
P-O-L-C and systems thinking are similar in that they are used as a basis for making important decisions in an organization. They are used as a guide to shaping the decisions towards achieving the organization goals. They are also similar in that they help an organization plan ahead to prevent any eventualities in future. They act as a basis for making sure that an organization is well prepared to deal with any unforeseen circumstances in future. System thinking differs from P-O-L-C in that it helps in the understanding the structure and dynamics of the complex business systems that are in existence. System thinking assists an organization in dealing with organizational changes that might negatively impact an organization.
Bradmore, D. (1996). Competitive advantage: Concepts and cases. Brokvale, N.S.W.:Prentice Hall Australia.
Hodge, B. J., Anthony, W.P., & Gales, L, M. (2006). Organizational theory: A strategic approach. Upper Saddle River, NJ: Prentice Hall.
Owusu, C. (2005). The functions of management. Oundle: First & Best in Education.
McCluskey, D. M. (2009). System thinking: Multi functional coatings.