Define the 7 theoretical perspectives on organizations and provide 2 characteristics of each theory.
Theory is important in the organization. There are seven major theories on organization. One of this is the Transaction Cost Theory. This theory helps to explain why organizations exist. Its main concern is the efficiency of transaction. It is majorly applied on business organizations. The characteristics of this theory include the recognition of the human behaviour as a system that can be described by the exchanges of valued items and the need for social support. The second theory on organization is the Rational Systems Theory that recognizes the role of the organization in reaching the objectives. The recognition of every component of the organization as an important part in reaching the organizational objectives and its focus on concrete matters are the two key characteristics of this theory. The Contingency Theory is the third theory on organization that focuses on the constraints and opportunities that resulted from the environment of the organization. The characteristic of this theory includes the pursuance of the organizational objectives through internally rational arrangements and the explanation of the variations within and between organizations. On the other hand, the Institutional Theory looks into how history and place in the society characterize an organization. This theory also recognizes the role of external stakeholders and how organizations adapt to major social institutions. The key characteristic of this theory are the emphasis on the membership of the organization within a particular social matrix, or organizational field and the involvement in similar economic sectors that leads to the development of similar properties. Another major theory is the Network Theory that considers the network an organization belongs to in explaining the actions of the organization. The recognition of the similar role that organization within the same network should perform and the explanation of the relations between departments and individuals within an organization are the characteristics of this theory. Meanwhile, the Critical Theory focuses on the exploitation of some people by others. The key characteristics of this theory are the use of political program and the assumption that the negative impact of the organization on its members and the society may be decreased if the awareness and control of the workers are increased. Lastly, the Humanistic Theory focuses on the needs of every individual by matching individual’s and organization’s needs. The use of this theory in training problem solvers and the development of worker-oriented innovations are the characteristics of the Humanistic Theory (“Chapter Three: Organizational Theories and Perspectives” 2-5).
What is a weakness of each theory?
Every theory has its weakness. The Transaction Cost Theory supports the explanation of the organization’s existence but actual work of the organization is insufficiently described the existence of the organization. On the other hand, the weaknesses of the Rational Systems Theory includes modification of rational arrangements that are influenced spontaneous relationships such as informal groups; unclear and less simple organizational objectives; insufficient practices; and negligence of the challenges that resulted from outside factors. Meanwhile, the nature of the organization’s environment limits the rational arrangement in the Contingency Theory. In the Institutional Theory, the influences of the organizational field can be treated as a weakness because these influences affect how the members and leadership of an organization value some structures regardless of their importance. For the Network Theory, the isolation of the members of an organization can result to a different way of thinking among those who are away from the center of the organization and those who have direct communication with the superiors. Meanwhile, the political nature of the program is the weakness of the Critical Theory. For Humanistic Theory, its limitation by focusing on individual needs and not on the organization as a whole may be a weakness (“Chapter Three” 2-5).
Describe why various alternative theoretical approaches are necessary based upon the limitations of individual theories.
Different alternative theoretical approaches are needed because every theory has its limitations and cannot fully help in explaining all of the components of the organization. There are some theories that adequately explain a particular part of the organization but are not highly applicable for the others. Also, there might be some theories that sufficiently explain a certain management issue but are to abstract to apply practically (“Chapter Three” 6).
Identify 3 themes shared in common by multiple (two or more) theories.
One of the themes shared in common by multiple theories is the functional nature of organizations that is described as the payoff generated and given to the members of the organization and the society. This theme is characterised in transaction cost theory and rational systems theory.
The second theme is the open systems perspective that considers the surroundings or the environment as an important factor wherein organizations are dependent with. This theme describes multiple theories such as the contingency, institutional, and network theories.
Lastly, the potential for conflict is emphasized in both critical and humanistic theories but is approached differently. In critical theory, the opposing characteristics between workers and the management are considered. On the other hand, humanistic theory recognizes the role of management innovations in meeting the needs of every individual and the organization (“Chapter Three” 6).
Works Cited
“Chapter Three: Organizational Theories and Perspectives.” SOCI 375Lecture Notes. 2016. PDF file.
