Management is one of the most economic fields in the world today. The field of management might involved various theories and strategies for it be to successful as one of the determinants of most economic activities of the world (Pippin, 2015). Some of the common theories used in management include the agency and determinist theories. The agency theory is a theory that intends to explain the relationship between the agents and principals of any business activities. The major aim of this theory is to solve the various problems faced by an organization based on the risks the organization faces or the goals of the organization (Sappington, 2017). For instance an agency relationship that might most likely apply in the field of finance is that between the organizational executives and the shareholders of the organization involved. The agency theory for such an organization should revolve around the stakeholders and he organizational executives based on this theory.
The determinist theory on the other hand, refers to the philosophical views that are brought about by situations like the decision of a person and the various actions of the people concerning some unavoidable and important situations that the organization might be faced with (Barnes, 2016). Therefore, in this discussion, the agency and determinist theories would be discussed with reference to the possibility of combining the use of the two theories to create a universal theory that would be used to improve the practices of an organization (Pippin, 2015). The study would incorporate the various features of the theories and the possible ways through which they might be used jointly to develop a proper management system for the organization to improve its services based on the aspects of the two management theories.
Understanding Organizational Action through the Theories
Through the two theories as discussed above, their contributions to organizational management are a representation of a different meaning of organizational action (Bourgeois, 2014). As discussed above, the determinist and agency theories when considered demand certain forms of action from the organization hence they are capable of showing a different meaning of organizational action (Lane, 2017). The actions taken by an organization while applying the agency theory differ from the actions that might be considered for use for the determinist theory. Alternatively, when the two theories are used jointly, it is possible for the organization to come up with a different action plan from the actions shown while the theories were considered separately (Barnes, 2016). The theories are hence capable of providing a new meaning to organizational action because their separate or combined uses both give a new meaning to organizational action.
The agency theory shows how to properly arrange relationships in which a party decides on the work while the other part, agents in this case execute the work as planned by the executive or the managers of the organization. In such a relationship the essential contracts an operator to consider all the important procedures or to play out an errand the central cannot or is reluctant to do (Spaargaren, 2012). For instance, in such collaborations the principals are the shareholders of the organization involved, designating to the operator like the administration of the organization, to perform assignments for their sake. Organization hypothesis expect both the main and the operator are persuaded independent from other people intrigue. This presumption of self-intrigue poses the organization hypothesis towards unavoidable innate clashes (Bourgeois, 2014). Accordingly in case both of the sides are inspired independently without motivation from other people, specialists would probably go to look after the self motivated people as targets that go astray and clash with objectives of primary systems. Nevertheless, specialists need to act in accordance to their guiding principles.
Based on this theory, the success of an agent is determined when the available resources are fully used by the agents in an effective manner that favors the relevant organization. The situation should put the organization ahead of all other competing organizations also (Sappington, 2017). Agency misfortune is distinction between the most reliable outcome for vital and an outcome of demonstrations of specialist. For example, while an operator demonstrations reliably with the major advantages, agency misfortune becomes zero. The more a specialist's demonstrations go astray from the vital advantages, the more agency misfortune increments (Wehmeyer, 2014).
Explore performed on agency hypothesis shows that organization failure is limited when two particular articulations become valid (Bandura, 2015). The first is that main and specialist share regular interests. Basically, this implies that both the primary and specialist crave similar results. The second is the essential is proficient on the results of operator's exercises. Consequently, the chief knows if their operator's activities help in the primary's best advantage (McNay, 2013). On the off chance that both announcements are not accurate and that it resembles the organization problem would be subsequently, liable to occur.
One complaint to organizational hypothesis states that it depends more on a suspicion of self-intrigued operators who try to boost personal financial riches (Spaargaren, 2012). The tests are thusly, to get operators to set aside the self interest, or work in a manner that they may augment their riches when as yet improving the number of the chief. In this manner, a standard of agency obligation and action is important, not on the grounds that operators are all around narrow thinkers, but rather because the potential for the contrasts between the first and the specialist's advantages exists (Wehmeyer, 2014). In agency connections the operators have ethical obligations regarding their activities that they cannot expel essentially on the grounds that she goes about as a specialist for another.
With the above discussion on the agency theory in consideration, it is possible that the action of the organization would depend solely on the outcome of the management situation from the use of the theory. The reaction of the organization when the results are negative would be different from those that would be experienced should it turn out that the results are positive (Whittington, 2016). In a case where the results are positive, it would most likely be that the organization would react by motivating the various practices that led to its success as opposed to the reaction that is most likely to be implemented if the results from the use of the theory are negative. In a negative situation, corrective measures would be considered hence the organization might be required to improve its efforts as a result (Boudreau & Robey, 2015). It is in order therefore to claim that the agency theory would give a new meaning to organizational action as it fluctuates with the nature of the results obtained when the theory is implemented.
As mentioned earlier, determinism as a philosophy refers to the situation where most events within an organization in addition to moral decisions are controlled by other causes that existed before (Bishop, 2017). The previous instances but of similar nature are used in judging and controlling present activities. This theory might looks simple and ineffective but it has been used in the management of many businesses across the world effectively because it is a cheap means of attaining solutions to certain problems within the organization. Referring to previous instances that resemble the current problems faced would be easier than formulating a new solution (Martin, 2014). The theory has been helpful in solving agent instances within organizations because it is easy to refer to already existing formulas and systems than developing a new solution when the time available would be inadequate.
As presented by the above situation, the use of the determinist theory would have a direct influence to the decisions made by the organization. The actions taken by the organization therefore depend on the effectiveness of the determinist theory (Lane, 2017). When the organization is faced with a problem, it will take an action based on the possible reference it is offered by the determinist theory (Whittington, 2016). The determinist theory as its name suggests helps in determining the most appropriate solution to refer to in case the problem faced within the organization is similar to any that had been solved earlier. The determinist theory is a cheaper way of making decisions within an older organization especially because most of the problems that the organization might face are recurring (Boudreau & Robey, 2015). A repeat of a problem that had been solved would only require a similar solution that the determinist theory helps in identifying the most appropriate organizational action.
Another aspect of the determinist theory is its capability to keep data over a long time. The storage of data enables the theory to avail the necessary solutions to the problems faced by the organization (Martin, 2014). The theory is important in providing easy solutions to the various problems that in normal cases finding a solution might not be easy. The other aspect of the theory is that once a solution is included into the theory, it would be updated automatically. The update of the solutions is helpful in finding appropriate solutions to various problems that would be termed as modern organizational problems that are often experienced within most organizations (Bishop, 2017). Organizational action is dictated by the theory because the theory provides the relevant solution upon an organizational action is executed.
In another attempt, the combination of the two theories, agency and determinist theories would also be useful in defining organizational action. The use of agents as in the agency theory after the management of the organization has released an order could be incorporated with the determinist theory in that the determinist theory would provide the action for which the agents would be ordered to execute the plan decided on by the organization (Giroux, 2013). The combination of the two theories according to researchers would be more helpful than when they are used separately. The researchers argue that because the determinist seems the simpler of the two theories, it would be necessary to use it for simpler organizational problems. In such cases, if the determinist theory fails to deliver a solution, the agency theory would be used to formulate a solution or to improve on the solution suggested by the determinist theory (Bakewell, 2012).
These theories have been discussed by most researchers over time because they are the most commonly used for most organizations of the world. It has of late been cited that the combination of the two theories is the best way to formulate proper solutions to the modern organizational problems (Bandura, 2015). The technological errors have been identified as the recent organizational problems because the world has highly been computerized. The most appropriate solutions to such digitized problems have been realized to be formulated by the combination of these two theories (McNay, 2013). The uses of the theories have been urged by researchers not only because they help in defining organizational actions. For every challenges faced by any organization, the actions towards rectifying the problems are created from the two theories.
To sum up, organizational theory as a field of organizational theory comprises of several theories that are used in management as an explanation to various organizational actions. The above discussion is a critical analysis of the contributions that agency theory and determinist theory make to the understanding of people on organizational action (Giroux, 2013). The theories have been discussed into details in this case to provide a clear understanding of their various aspects that help in defining organizational action. The other part of the discussion involves the cases where the systems are used separately and when they are combined to create a universal theory. There is a possibility that the two theories might be used jointly to form one universal theory of organization (Bakewell, 2012). The combination has in fact been proved as one of the most effective ways of generating most effective solutions to the common problems faced by most organizations today. The discussion should be helpful for any organization that intends to either use or improve the two systems into their operations.
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