Contribution of Strategic Choice and Determinist Theory to Organizational Action

This essay critically analyzes the contribution of the strategic choice and determinist theory to the understanding of the knowledge related to organizational action. It also provides the inclination of the writer towards one of the theory after weighing all the pros and cons of the theory and its implication in the business ecosystem.

Management Theory and
Practice

Essay
The world and the business ecosystem has seen a sharp turn over the last
twenty years, and the major part in the change has been played by Globalization,
evolution of technology and rapid proliferation of Internet and social media into every
walk of life. All these changes in the business have also lead to changes in the behaviour
of the organization, changing culture, changing roles, importance of manager and more
so have impacted the entire organization. However, In order to achieve the ultimate
goal of sustainability, it is required that organization rather than being in the
fragmented state, come together and work towards the shared goals. The above
mentioned introduction can serve as a preamble to this essay, which will critically
analyse the contribution of the strategic choice and determinist theory to the
understanding of the knowledge related to organizational action. The essay will also
provide the inclination of the writer towards one of the theory after weighing all the
pros and cons of the theory and its implication in the business ecosystem (Hammouda,
2017).
Strategic choice theory is one of the recent additions to the organizational
behaviour theories, the theory describes and sheds a light on the roles the managers
and the leaders play in influencing the organization in making choice in the rapidly
changing business environment. Prior to strategic choice theory, a common perception
was built that organizations are constructed and designed along the operational
requirements which in turn is based on the external environmental. However, strategic
choice theory came with an alternative which emphasized on the presence of agency of
individuals and other formal groups in the organization to make choices and help in the
development of the organization (Asmah & Kyobe, 2018). The outcome of which will be
making strategic choices which are in sync with the changing external and internal
business environment, thus adaptive in nature and helps in driving positive outcome.
Strategic frameworks tools such as the PESTLE, Porter 5 Forces, SWOT, BCG Matrix and
others come handy while assessing the internal and external environment of the
industry, basis of which the agency of individual and the group can make a choice
reflecting the strategic approach of the organization. An example of the strategic choice
theory can be seen from the strategy of Amazon, the e-commerce behemoth adopted a
GLOCAL strategy for its international expansion. The GLOCAL strategy which says “Go

Global and Act Local “ was the absolute strategy which helped Amazon make a strong
base in South east Asia and other developing markets. The GLOCAL strategy was clearly
a resultant of the organization’s assessment of the present business and market
scenario, basis of which the company made a cogent choice to reach in a comfortable
position. Thus, the strategic choice theory not only takes into account the present
business environment, it also helps in making the right strategic choice which helps in
moving an inch closer to the goal of sustainability(Durand, Grant & Madsen , 2017).
Resource dependency theory was founded in the year 1970 by Jeffrey and Gerald
Salancik, the theory is underpinned by the fundamental belief that resources are the
critical element to the success of the organization and is also a strong basis of power for
the organization. In short, the resource dependency theory is mostly concerned with
how the behaviour of the organization is a direct factor or is affected by the external
resources which the organisation utilizes such as the raw materials and others.
Resources are limited and mostly perishable in nature, a lot of time, cost and energy is
utilized in extracting the raw material for the business and to ensure that they are
timely transported and used in the business. The resource dependency theory primarily
becomes important and of strategic use, because the way the organisation handles,
stores and ships its raw materials or resources can be a harbinger of its success and a
point of competitive advantage. One of the major lacunae in the resource dependency
theory is that it is mostly focussed on the raw material which the business requires,
whilst leaving besides other important resources such as financial and human(Russell,
2018).
The resources which the business requires are mostly owned and controlled by
other organization or suppliers, thus it is required to carefully plan the indent of the
resources to ensure that no bottlenecks are created in the business organisation due to
shortage of the raw materials. In order to combat this, most of the organization rather
than relying on just single vendor or supplier, prefers a strong vendor team. For
instance, Apple the 1 Trillion Dollar company has multiple vendors such as Samsung,
Huawei, LG and others to satiate its processor requirement. The theory however in
particular is extremely important and finds utility in all the business industries (Devi ,
Khandelwal & Das, 2017).

Institutional theory can be seen as a theory which provides deeper and resilient
aspects of the social structure. In a nutshell, the institutional theory takes into account
the process by which the various norms, rituals, rules, structures, routines become
established as the authoritative guidelines for the social behaviour. The theory further
digs deeper to explain how these deciding elements are created and adapted over time.
The implication of the institutional theory is that legitimacy of an institute conforms its
survival. For instance, for a school to succeed as an institution, everybody has to agree it
is a school and work, but if people have disagreement over the school, the institution
will fail. Thus, organization wants to become more and more similar to become easily
recognizable, which would also decrease the institutional diversity. It is the need to
become recognizable and acceptable, which makes the institute make accidental and
deliberate choice to mirror the norms, values and ideologies or the organizational field
(Pige, 2017).
The institutional theory is flaked and not so popular due to its belief of
conforming to a ritual or a norm, but in the present business day this can most definitely
hinder the growth of the organisation. Formal legitimacy can be seen as one of the
limiting factors towards the growth and development of the business. The pronouncers
of this theory mentioned that the net resultant of the institutional pressure is to
increase the homogeneity in the structure of the organisation (Friedrich et. al., 2018).
The firms are under three kinds of pressure to adopt a similar structure which are:
 Coercive Pressure from the Legal environment.
 Mimetic pressure to copy the leader strategy and norms (Barca,
2017).
 Normative pressure from the like minds the organization have
hired in the form of professionals and other associations.
All the theories discussed so far look at the organization from the standpoint of
the relationship they share with the environment in a bid to understand the action of
the organization and the reasoning behind the same. However, the theory of population
ecology states that organization exists and are found within population and it has also
been found that the organization which survive are the ones which respond
appropriately to the environment. The environment in the case can be either internal,

external or it can be also related to any other organization working in the same industry
(Anderson, 2018). Thus, the new entrants in the industry basically follow the strategies
of the leader, not only because the strategies have proven to work, but this way the
newer organization creates a perception that it is legitimate and easily get the attention
and the resources it requires. For instance, in the e-commerce industry, most of the
players are following in the footsteps of Amazon, this helps them in creating their own
customer base and make decent profits. The theory which puts across plethora of
benefits for the newer organization also states that older organization are comfortable
in their status quo, they are slower to adapt to the environment due to its huge
structure and size. On the other hand, newer organizations quickly adapt to the
environment and climb up the ladder. The theory is mostly flaked due to its inability to
critically evaluate and assess all the elements of the environment it has to assess
beforehand, inability to pick the right signals of the environment can help in colossal
losses. For instance, Nokia, once a major handset manufacturer failed as a company as it
completely misread the signals of the environment (Faber, 2017).
The discussion made above in the essay provides the readers detailed insights
into the different schools of organizational theories which vary with each other in
context of degree of adaptability each model assume in the marketplace. For instance,
the deterministic theory by and large states that the marketplace functions on its own
and more or less is self- controlled. Businesses, however at the very same time are
required to keep a close watch on the market and respond to the changing times, thus
comes the role of leader and manager in the picture. Contingency theory of leadership
calls for the leaders to be flexible, in order to make the most of the changing times.
Additionally, assessing the external environment also helps the organization to keep a
close eye on the unexpected challenges and the opportunities. Hence, it can be said that
determinist theory is extremely balanced in its approach and helps organization to
make better strategic decisions (Uli & Abatecola, 2017).
The strategic choice theory on the other hand believes that it has certain control
over the market and also the consumer behaviour. The theory does not leave everything
to the forces of the market; it tries to manipulate the market by its various strategies
such as pricing, product, place, positioning and its advertising. All these strategies not
only manipulate the market but also have a great impact on the consumer behaviour.

For instance, Steve Jobs of Apple with his marketing genius and inspirational ad
campaigns not only changed the smartphone market for good, but also paved a way for
the future innovations and discoveries. Thus, the Strategic choice theory is a better
model to explain the action of the organization in tandem to the environment (Ryazanov
& Christenfeld, 2018).
Towards the end, the essay can be brought to a logical end by concluding that
Strategic choice theory is a much better model than the deterministic theory of
organizational behaviour. The above conclusion can be drawn from the various
examples presented in the essay and also with the viewpoint that strategic theory is
both a proactive, reactive and adaptive approach to a business environment, whereas
determinist theory is more of an adaptive approach to the environment surrounding the
business. The need of the hour is to assess and ascertain the market, creating goals and
objectives for the firms in sync with its objective of sustainability and towards the end,
corroborate the environmental scan efforts and organizational efforts to reach the goals
of sustainability and better profits (McCarthy, 2017).

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