Exploring Organisation Theories And Organisational Fit

Exploring Organisation Theories and Organisational 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.

This essay is a critical review of the influential ideas about the role of managers in shaping organsational outcomes. Most critical essays follow this type of structure:

Introduction Open the essay with a short introduction to the area. Provide a response to the essay question. Provide a summary or 'road map' of your essay (a very brief outline of what you will discuss)

Main body The main body of your essay will consist of paragraphs, which are akin to building blocks in the construction of your argument.

Ensure that you: develop a discussion, informed by the key academics in the field, which answers the essay question demonstrate your knowledge of the field offer exposition and evidence to develop your arguments. Evidence will be the references to seminal works and key empirical studies use relevant examples and authoritative quotes - however only use quotes for effect. Excessive quoting does not demonstrate your understanding of the field. if your question has multiple parts, consider using subheadings to break up the text into a logical structure.

Main body

In the essay, discussion will be start by providing the short introduction about the resource dependency theory by explaining what is it and how it is being used in the organisations. Afterwards, several points has been covered regarding the resource dependency theory by arguing on several points.

Resource dependency theory is concerned with how the organisational behaviour tends to get affected by the external resource that is utilised by the organisation. It plays a significant role for the managers as it provides the ability to alter, gather as well as exploit the raw material faster than the competitors. In this regard, Hitt, Xu & Carnes (2016) stated that the resource based theory can be confusing because resources can be sued in several ways. For some of the managers, it might be possible that cash is the significant resource. By critically stating this statement, it can be stated that organisation or business competitors can acquire them. a strategic resource is an asset that is rare, valuable, non-substitutable and difficult to imitate. It is therefore directly based on the idea that environment have very limited resources. Several scholars have also presented that organisations strive to sustain and acquire the resource because they are limited. Hence, it is important for the manager to give their best in managing the dependency on the resources by using several tactics. Resource dependency theory gives emphasis on the exchange and flow of resources between organisations. Managers of different organisations are also required to respond to the dependencies by making possible efforts to manage such dependences. Several factors influence the level of organisational dependency on the different resources. The first factor is the overall significance of those resource for the organisations in achieving success and growth. The second factor is the scarcity of the resources that pushes an organisation to be depending on the resources. The last factor tends to influence the resource dependence is the level of competition present in the market. If competition will be high, every organisation will run toward taking the limited resources. Due to this, it might be possible that at one point of time, organisation has no resource. For solving such measures, manager can properly ensure the research (Shafritz, Ott,  & Jang, 2015).

In the words of Schnittfeld & Busch (2016) resource based theory is that organisational theory that tends to elaborate the inter organisational and organisational behaviour in terms of the resources that is required by the organisation to must take into consideration for its functioning and survival in the environment wherever it operate. It motivates the organisational team members to effectively make sure the utilisation of resources. By ensuring effective strategies in the organisation, it is possible to get the better output and better product at the same time. a manager must put on the use of different motivation tool or strategies so that they can run the business properly. Employees usually get motivated and work hard when they are given the benefit attach to their performance. For example- organisation can decide certain benefit when an employee brought the best by making use of the limited resources. Moreover, it is seen that resource dependence theory is one of the reason why firms tends to engage in the acquisition and mergers. At the same time, it also offers the focused perspective why firms tend to acquire another firms. Including managers, RDT perspective by the board is also one such significant study.

It is true that managers can effectively use the resource-based theory. IN order to ensure the effective sue, manager must engage in the transaction with other organisations and actors in its environment for acquiring the resources. On the negative side, it might be possible that the organisation needs can be scarce that might not obtainable. In order to develop such dependency, manager might develop some of the strategies in order to increase its bargaining position related to the resources. It might be possible that these strategies will include the political actions. Several companies are successful by adjusting their business strategies for adapting the power relationships. This theory concerns more than the external organisation that distribute, provide, finance as well as compete with the firm. Managers in the organisation understand their success is directly linked with the demand of customers. There are times, manager formulate such strategies that helps in meeting the demand of customers easily. At the same time, several times strategies fail due to change in external market condition. Therefore, customers are seen to be the most feasible resource on which any organisation depends. Several scholars have also argued that the resource dependency theory prove to be the major reasons non-profit organisations tends to become more commercialized (Xia, Wang, Lin, Yang & Li, 2018).

It is such theory that explains the dependence of one organisation on the other for getting resources. Due to this, it influences the power over one organisation without any resource.  For example: an organic grocery store can only ensure the purchasing of the tomatoes from one farm. It is because the firm is clear about the local source of the organic tomatoes. At the same time, it is also seen that the organisations who are working with the sustainability issues have more dependency of the resource as compare to other. Due to this, the major source of the resource for sustainability organisation is the government that tends to provide the required finance for such organisations to start their work. On the negative side of the organisations who are dealing with sustainability issue is too much dependency on the sources that might impact their work (Dong, Gao, Sun & Liu, 2018). It is also seen that organisations are required to resist, adapt and change the environment where it is working. The main limitation of this theory is that it fails to clarify the relationship between resources and power. Besides this, it has also not included the consumers from the environment.

The most significant example of the resource dependency theory can be seen in the healthcare industry. “Outpatient substance abuse treatment facilities” do not work as the independent entities rather than it depend on the several external factors such as payers, referral sources as well as licensing. It is rightly stated that the OSAT programs rend to vary in terms of the number of referral sources. Due to this, managers at one point of time must depends on several resources to support their work. Similarly, resource concentration also shows the extent to which authority and power over the critical resources in business are widely concentrated and disbursed in some of the sources this theory does not. The best way to manage the dependencies to avoid the reliance on some of the resource. For example- if any of the car manufacturing will depend too much on the automobile company for tyres, it might increase the cost of company. Therefore, for reducing the cost, it can open its own manufacturing unit that will help in ensuring the instant changes by meeting the demand of customers (Payan & Tan, 2015).

From the positive perspective of resource based theory, it is stated that it tends to reduce the dependence on few of the sources of the critical inputs. On the negative side, it is found that this theory does not take into account the possibility that a resource provider might lead to the increase in administrative and treatment demand programs. It might also be possible due to the instant environmental changes or changing internal environment, resources are not enough to change instantly (Biermann & Harsch, 2017).The negative side of this theory is also the varied requirement of the resources. It is true that organisation do not require one resource for the successful operation but it requires different resources in order to run the business effectively.

For ensuring the proper use of the resource based theory, a manger might work on different aspects. The first thing is to ensure the proper control on the resources by ensuring closing supervision of the working of employees. a proper plan is also required to be prepare by the manager to use resources properly. It can be possible by knowing the activity of each department. After knowing the working and activities of each department, it is possible to allocate the resources effectively (Hazen, Skipper, Ezell & Boone, 2016). Beyond that, they will not be able to use the extra resources. This will stop the unnecessary wastage that might create resource deficiency in the organisation. In the strategic decision-making also, appropriate strategy can be used by the organisation. For any of the business organisation, environment consists of the set of several external conditions that have the significant potential to influence the organisation. for example” environment also contains the customs. Due to thus, KFC have shifted toward the healthier eating. It includes both macro environmental factors as well as micro environmental factors. In this regard Fang (2018) has rightly stated that a manager must understand the environment that surrounds the organisation to fulfil the responsibilities. It is also required to understand that any of the environmental event or trend is likely to create the opportunities for one and threat for another organisation. Environment also tends to shape the several strategic decision (Mellahi, Frynas, Sun & Siegel, 2016).

When any entrepreneur starts new business, it has to be quite careful not to depend too much on any of the outside actor. The presence of several resource dependencies with some of the powerful actor also brings difficulty for the new venture to acquire significant resources. A manager is therefore required to manage the relationship with different actors such as embeddedness, formal contracts and strategic alliance. When any person starts its new business, it also has to rely on the finance that is the major resource of the organisation. it can also block the further working of the organisation if it will not be able to arrange on the right time (Yan, 2016). Due to this, it is significant for every entrepreneur to effectively research the market so that it will come to know the different sources and gathering of the resources.

In this way, it can be stated that resource dependency theory tells the idea that resources are the most significant element to the success of organisation that has control or access over the resources. At the same time, survival and success are two most significant elements that are not certain. A good manager always manages the inert dependencies by creating several new patterns of the inter-organisation power and inters dependence. Managers also take several strategic actions fir reducing the environmental dependence such as joint ventures, mergers, executive changes, and political activities. At the end, it can be said that resource dependence theory tends to analyse how a manager in each organisation try to get the crucial resources such as people, money, materials, technical knowledge and support services from the environment. In addition to this, the top management that further help in reducing the dependency and uncertainty ensures the power of strategic decision. It can also be argued that this theory however give emphasis on the term that organisation always try to reduce the dependency on the other organisation. for any organisation to succeed, it must strive for the autonomy and independence from the other organisations.

References

Biermann, R., & Harsch, M. (2017). Resource dependence theory. In Palgrave handbook of inter-organizational relations in world politics (pp. 135-155). Palgrave Macmillan, London.

Dong, D., Gao, X., Sun, X., & Liu, X. (2018). Factors affecting the formation of copper international trade community: Based on resource dependence and network theory. Resources Policy, 57, 167-185.

Fang, W. U. (2018). A Study of the Relationship between Customer Concentration and Corporate Donation: Based on Resource Dependence Theory and Transaction Cost Theory. Contemporary Finance & Economics, (1), 9.

George, G., Schillebeeckx, S. J., & Liak, T. L. (2018). The management of natural resources: An overview and research agenda. In Managing Natural Resources. Edward Elgar Publishing.

Hazen, B. T., Skipper, J. B., Ezell, J. D., & Boone, C. A. (2016). Big Data and predictive analytics for supply chain sustainability: A theory-driven research agenda. Computers & Industrial Engineering, 101, 592-598.

Hitt, M. A., Xu, K., & Carnes, C. M. (2016). Resource based theory in operations management research. Journal of Operations Management, 41, 77-94.

Mellahi, K., Frynas, J. G., Sun, P., & Siegel, D. (2016). A review of the nonmarket strategy literature: Toward a multi-theoretical integration. Journal of Management, 42(1), 143-173.

Payan, J. M., & Tan, J. (2015). Multiple levels of trust and interfirm dependence on supply chain coordination: a framework for analysis. In Creating and Delivering Value in Marketing (pp. 122-128). Springer, Cham.

Schnittfeld, N. L., & Busch, T. (2016). Sustainability management within supply chains–a resource dependence view. Business Strategy and the Environment, 25(5), 337-354.

Shafritz, J. M., Ott, J. S., & Jang, Y. S. (2015). Classics of organization theory. Cengage Learning.

Xia, J., Wang, Y., Lin, Y., Yang, H., & Li, S. (2018). Alliance formation in the midst of market and network: Insights from resource dependence and network perspectives. Journal of Management, 44(5), 1899-1925.

Yan, W. A. N. G. (2016). Development strategy of hospital social work from the perspective of resource dependence. Chinese Rural Health Service Administration, (7), 18.