Organizational Theories: Examining Resource Dependency And Population Ecology Theory

analyse and interpret the evidence. Consider the implications, significance and impact of what you have been discussing, and conclude the paragraph with a critical conclusion you have drawn from the evidence

For quite some time, there has been some discussion concerning organizational theories regarding if organizations adopt strategic choices or not when they are designing their framework. However, some authors have proposed that the environment of the organization shapes the size, technology, strategies and the necessary innovation rates. Strategic management commonly focusses on the analysis of success or failure of the organization when enlightened by diverse environmental settings. Considering one strategic management core assumptions, corporations may approve diverse strategic reactions, according to their external and internal characteristics for instance level of availability of vital resources, the changing aspects of the exterior environment, level of structural competencies (Boxall & Purcell, 2011). Furthermore, the strategies of an organization may vary depending on the undertaking intended for growth and development, or survival or discontinuity strategies. Nonetheless, in spite of form and content of the organizational policies, this core assumption holds: strategy exists as a kind of organizational reaction to external and internal variables, hypothetically intervenient on deliberated decision making (Mahmood et al., 2012).

The management concept emerged many years ago as a resultant of an intricate evolutionary process. There are various forces that drive management (Nyaguthii, 2016), and they include social aspects which are represented in the social norms. These mostly arise from the beliefs and values of the community helping to form the social contracts. They also allow the companies together with their workforce, customers, investors and the creditors interact. Political aspects including trade policies, political institutions and government regulations similarly influence the environmental scrutiny, organizational structure and design, as well as employees’ rights. Finally the economic aspects which form the crucial market economy alongside other models, for example economic freedom, compete with other markets and the private sector. Additionally, economic forces determine the circulation of services and goods provided by the organization in the society.

This theory examines the link between organizations and the assets or resources they require for operations. Assets or resources can be represented in various forms, which may include human resources, raw materials, personnel, as well as funds. For instance if there are two companies which work together interdependently, one of the company may maintain a bigger share of the capital, while the other becomes dependent on it so as to continue in operation. This scenario creates a mutual relationship. When there is excessive of dependency uncertainty arises leaving some companies at a risk of being controlled from outside. This external control on the dependent organizations may be carried out by governments or superior organizations, and may significantly affect the organization’s operations, for instance personnel or funding policies. Where such scenarios arise, the managers ought to strategize alternative corporate plans and tactics so as to mitigate the risk involved.

Resource dependency theory

For instance, Binaries Security is the proficiency security firm for a big media corporation, Nation Multimedia and it is the only client the security firm has for business. In this situation, the firm offering security services is entirely reliant on the media corporation as its only income source. Here, there are a myriad of risks related to these kinds of business models. This association bestows on the Nation Multimedia higher influence during service as well as remuneration negotiations. The mangers of the Binaries Security firm will require to engage other clients so as to lower the degree of dependency upon one client and in so doing, they will lower the risk associated. There is a lot of literature on this theory describing the origin of power together with dependency. This theory explains how corporations use their influence to control and manage the firms that depend on them. Managers and the directors endeavor to form and improve partnerships with other companies so that they can strengthen their organizations and have control over them.

Corporations hinge on multidimensional capita: personnel, raw material, resources, extra, since they are not in a position to amass all these initiatives to acquire all these manifold resources. Therefore, corporations thrive through the application of the principles of criticality and insufficiency. The resources that a company cannot function without are categorized as critical, they are the resources an organization needs to be in operation and evade closure. For instance, a milk bar cannot operate without fresh milk. A business may implement different countervailing approaches for instance, it may link up with various suppliers, or it may integrate horizontally or vertically (Sung & Choi, 2016).

Resource dependence theory elaborates more on how the external firms which supply, distribute and to some extent finance a business compete with it. Even though managerial decisions have higher influential power compared to non-managerial decisions, collectively, the non-executive decisions impact the organization more significantly. The executives within the organization appreciate that their accomplishment is inextricably knotted to client demands. Executives' professions flourish every time the customer demand swells. Consequently, clients are the critical resource upon which organizations rely on. Even though this appears apparent when it comes to revenue, it is essentially organizational motivations that make administration appreciate clients as a valuable resource.

The effects of resource dependence upon the charitable sector have widely studied and discussed on during the recent times. Researchers have maintained that theory on resource dependence is among the major enticements which have made the charitable organizations to be commercialized recently. They have urged that the governments have reduced the budget on the grants and funding for their social events. There is also cut throat competition between the charitable organizations and the private sectors. This has resulted to the charitable organizations applying marketing strategies like the private sector in order for them to obtain resources to keep thriving in the market. This marketization eventually leads to poor quality of services offered by the charitable organizations.

Population ecology theory

The core components of the paradigm pinpoints the role played by the environment in influencing if the organization will survive or not. The model draws profoundly on the concept of survival for the fittest as proposed by Darwin. Population ecology, in its unadulterated form, compares the process of survival of an organization as competing for vital resources. The companies which compete successfully assume control on the scarce resources and this allows them to thrive and flourish, while those which do not favorably compete are faced out. Selecting different and fresh organizational forms in the population levels of companies arises as a consequence of organizational inaction, which is suggested as the key justification for companies failing to transform (Nolan, 2013). These organizational inactions can arise as result of internal or external influences. The internal factors include investing in equipment or plants which do not give the returns or rather the sunk costs, failure to deliver enough, correct and timely information to the management, in-house political wrangles which deter the reallocation of raw materials and personnel as well as limitations originating from the tradition and past of the company. The external causes of inaction may include financial and legal hurdles that are enforced on the output and input of marketplaces, external limitations on the information accessibility, social acceptability, concerns which limit the elasticity of the company to transform its methods of conducting business or activities together with the dilemma of joint rationality (Seet, 2010).

In the population theory, research is done at the level of a population but not at the level of an organization which facilitates a scientific analysis of the organization. This also allows generalization of the populations as well as correct predictions of the behaviour of the organizations. However, this paradigm has some drawbacks since the various characteristics found in the distinct organizations get lost during the aggregation process. Actually, this high analysis level may hide several of the underlying links among specific organizational features and organizational rates of survival (Nolan, 2013).

The functioning model within the population ecology holds that the environmental forces select organizations which survive. The rational inference following this line of thought holds that managers and directors do not play any role to shape the strategies of the organization. A research was conducted using a two dimension analysis i.e. using a micro – macro level of analysis as well as deterministic orientation versus voluntary orientation (Zimmermann, 2011). The results categorized the role played by the managers within the population ecology as of no action, i.e. inertia. The managers were classified as interactive, proactive or reactive with their organizational environments (Adegboye, 2013).

The organizations’ institutional theory positions institutions at the centre of the enquiry of organizations’ conduct and design (Peng, 2003). From this point of view, organizations are local examples of broader institutions. The norms, rules and beliefs of the institutions although sometimes they are not regarded seriously, have the capacity to shape the formation and distribution of organizational customs, design characteristics, as well as the practices. Compliance with the established prescriptions of an institution is perceived as a way to gain acceptability, to decrease doubt, and to increase lucidity of activities and actions of an organization (Gansemer-Topf, et al., 2018).

The institutional theory arose as a result of dissatisfaction of the other theories to give a comprehensive analysis of the action of the organization. The business organizations never operate in void space. They handle a manifold of outdoor influences, including legal requirements, cultural differences, norms and conventions, besides the issues raised by a myriad of stakeholders, for instance regulatory agencies, customers, suppliers, trade unions or NGOs. At this viewpoint, efficiency is constantly subjected to collective and mutual redefinition. The persisting expectations, the resultant rules and beliefs, clarify choices taken in organizational norms and the approved structures. This explains there exists homogeneity of practices and design structures amongst many organizations (Mkala & Wanjau, 2018).

The leaders in an organization, both senior and middle directors have a role to ensure balance of the environment, social as well as the financial aspects of the company. This reduces conflicts since the wrangles are resolved amicably which makes everyone to be integrated in the organization’s systems. The superior managers have the obligation to bring in a sense of sustainability along with its associated benefits. This allows the workforce in the organization to make some tradeoffs since they are confident that their superiors will support them. This enhances all the elements of an organization and they are able to achieve the set strategic goals (Coy, 2018).

The theories discussed above adopt diverse assumptions concerning dimensions regarding the relationship between organizational strategies and the environment. The usefulness of these theories can be concluded thus, to their effectiveness in understanding complementary individual, organizational and environmental elements theoretically secondary to the strategic adaptation occurrence. For instance, whereas population ecology assumes a deterministic standing concerning the probability of organizational success and survival, institutional theory deals with the prospect of strategic choice in order for the organization to adopt the prevailing environment. Evidently, attempts of classifying the mentioned theories along with others in the deterministic-voluntaristic scale could attract much criticism (Wandaka, 2016).

The main objective of strategic management is to ensure the competitiveness of any organization. Many theories including those mentioned above pay focus on single traits in companies for instance culture, power and sometimes sense making. Furthermore, the managers can apply the practical tactics which may include changing organization development and administration, which are all aimed at implementing successful changes. Process and structure are quite important in resource dependency theory, because they consider cognitive components of those who make decision. The resource dependency theory method also integrates many features dealing with strategic management, the dynamic competencies outlook, along with innovation exploration. This, alongside decision-behavioral features, makes it predominantly suitable for organizations to achieve the best actions.

The management has the obligation of making it possible for the workforce to give the best contribution to the organizational objectives. Therefore, the managers achieve the desired results for their companies whether small or big, through the establishment of an enabling environment for the personnel to operate effectively. The management is thus the engine, dynamic element for every organization. Organizations that do not have managers or the management is poor, production resources exist as ordinary resources and never transform into production. Therefore, the management determines the success and survival of an organization, particularly during the competitive economic periods (Head & Mayor, 2006).

Conclusion

It is important to restate the role of managers in the conclusion. They are charged with designing as well as maintaining a favourable setting in order to efficiently accomplish the organizational objectives. They plan, organize, staff, leading and control the functions of the organizations. The management roles are quite essential throughout the organizational levels.

In the resource dependency theory, the managers should ensure that their companies do not over depend upon one client. This theory allows the managers in the corporations to use their influence to control and manage the organization that depend on them. Managers and the directors endeavor to form and improve partnerships with other companies so that they can strengthen their organizations and have control over them.

In the population ecology, the environmental forces select organizations which survive. Here, the managers and directors do not play any role to shape the strategies of the organization but the population dictates the success of the organization. The institution theory considers norms, rules and beliefs of the institutions which have the capacity to shape the formation and distribution of organizational customs, design characteristics, as well as the practices.

References

Adegboye, M. (2013). The applicability of management theories in Nigeria: exploring the cultural challenge. International Journal of Business and Social Science, 4(10).

Boxall, P., & Purcell, J. (2011). Strategy and human resource management. Macmillan International Higher Education.

Coy, H. S. (2018). The Use of Performance Measurement Data in Nonprofit Organizational Sustainability (Doctoral dissertation, Walden University).

Gansemer-Topf, A. M., Downey, J., Thompson, K., & Genschel, U. (2018). Did the Recession Impact Student Success? Relationships of Finances, Staffing and Institutional Type on Retention. Research in Higher Education, 59(2), 174-197.

Head, K., & Mayer, T. (2006). Regional wage and employment responses to market potential in the EU. Regional Science and Urban Economics, 36(5), 573-594.

Mahmood, Z., Basharat, M., & Bashir, Z. (2012). Review of Classical Management Theories. International Journal of Social Sciences & Education, 2(1).

Mkala, M., & Wanjau, K. (2018). The role of training resources in implementation of entrepreneurship education program in technical training institutions in Kenya. Business Management Review, 21(2), 1-13.

Nolan, R. L. (2013). Management: Theory and Practice, and Cases (No. 14-026). Harvard Business School.

Nyaguthii, G. A. (2016). Factors Affecting Change Management: A Case Study of Kenya Trade Network Agency (KENTRADE) (Doctoral dissertation, United States International University-Africa).

Peng, M. W. (2003). Institutional transitions and strategic choices. Academy of management review, 28(2), 275-296.

Seet, P. S. (2010). Conceptualizing the entrepreneurial process using Chinese classics: a paradoxical perspective. International Journal of Business and Systems Research, 4(5-6), 541-564.

Sung, S. Y., & Choi, J. N. (2016). To invest or not to invest: strategic decision making toward investing in training and development in Korean manufacturing firms. The International Journal of Human Resource Management, 1-26.

Wandaka, S. M. (2016). Role of human resource management function on implementation of change among county governments: Case study of Kakamega County. Strategic Journal of Business & Change Management, 3(4).

Zimmermann, N. (2011). Deterministic and Voluntaristic Theories of Organizational Change. In Dynamics of Drivers of Organizational Change (pp. 9-63). Gabler.