Deterministic Theory vs Strategic Choice Theory in Organizational Design

Running Head: MANAGEMENT THEORY AND PRACTICE 1
Management Theory and Practice

MANAGEMENT THEORY AND PRACTICE 2
Introduction
Organization theory includes the approaches for analyzing the organization and its related
stakeholders. The term Organization can be defined as a shared entity of various individuals that
is created and organized for meeting the specific needs and to practice common objectives. The
field of organizational theories is regarded as a knowledge structure by involving many concepts
to know about and describe the organizational structure and its activities. In modern business
management studies, there are many authors and researchers who state that opinions among
different theories and concepts of organization show the competition level of their thoughts and
opinions. Some of the scholars suppose that these organizational theories are derived from the
results of practical research and implemented to resolve the issues in real life business world.
This essay answers the question that “which is the most compelling theory between strategic and
deterministic theories”.
This essay includes the discussion about how different deterministic theories such as resource
dependence theory, institutional theory and population ecology theory make contribution to the
structuring and activities of organization. In this essay, the theories are analyzed by conducting a
critical analysis of the thoughts and ideas about the managers’ roles in generating positive
consequences for the firm. After analyzing the contribution of deterministic and agency theories,
it can be stated that it is complex to combine these theoretical models in one concept. The first
part of the report includes the discussion about both strategic choice and deterministic theories.
Moreover, it consists of the arguments on all three theories of organization. At the end, the essay
critically analyzes three theoretical concepts such as resource dependence theory, population
ecology theory and institutional theory.
Introduction about Both Theories
As per the opinion of Okasha, Elsaid & Abdelghaly (2013), organizational structure is a model
that highlights how the business activities are directed for achieving the goals of organization.
These business activities include rules, roles and responsibilities of employees. There are two
theories of organizational structure i.e. strategic choice and deterministic theories. Both of these
concepts are distinguished on the basis of adaptability level that they suppose in affecting the
market. Strategic choice theory is a system theory that emphasizes on the decisions to be made in

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any particular situationi. This concept states about the roles of leaders and managers in
generating diverse choices in a continuous process. Other theory of organizational structure is
deterministic concept which describes that external market and environment have a significant
monitoring and control on business processes. As per this theory, businesses are forced to accept
the changes in the market. There are three theories under determinism concept i.e. resource
dependency theory, institutional theory and population ecology theory. These theories have
different impacts on the organization and its structural design.
Considering the explanation of both the theories, it can be noted that deterministic theory is more
compelling as it focuses on the availability of resources and environmental impact on business. It
creates more compelling effect on organizational behaviourii.
Option 1: One is More Compelling
Arguments
Looking at both strategic choice and deterministic theories, it should be noticed that
deterministic theory is more compelling than strategic choice as area of this theory is wider than
another one. On one side, strategic choice is a concept which explains the roles and
responsibilities of leaders in the making impact on its staff and available dynamic options. In
opposite to this, deterministic theory of organizational action provides the organizational
structure and culture which has less control on organizational functions. As per this concept,
market and external environment has more control on the businesses. However, it is dependent
on an organization which organizational structure they want to choose to operate their business
activities. Among these theories, deterministic theory would be best fit as it helps the
organization to know about both its internal and external environment. It will be good for both
for-profit and not-for-profit businesses because it indicates less control on actions and these are
defined and controlled by external marketiii.
Among deterministic theories, resource dependence theory is one of the most crucial theories
that direct the companies to work as per the availability of resources. The companies may take
the support of other firms for resource availability. Before introducing anything new, the
companies need to analyze the external market and they need to accept the market trends and
changes. Institutional theory is another theory of determinism that imposes different rules and

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norms which the companies need to comply with to operate their business successfully. It is
more appropriate than strategic choice theory as it develops the potential and capacity to
businesses so that they can adopt and work according to the environmental changes. It is more
compelling as it provides more opportunities to businesses in order to develop an effective
organizational structureiv.
More Compelling Idea
As the above arguments states that deterministic theories are more compelling than strategic
choice theory so it is very important to understand the concepts and ideas about these three
theories i.e. resource dependency theory, population ecology theory and institutional theory.
Among these organizational theories, the major deterministic theory is the resource dependence
concept that describes that how the companies interact with the external environmental factors
and how they gather and use the resources so that they can be utilized for organizational benefits.
This theory recommends that a firm should manage its external environment for acquiring the
resources as per the organizational requirement for extensive future growth. This theory was
given by Jefferey and Gerald which emphasizes on power-practicing faces and behavior of
organization. This concept focuses on the link between a company and its resource holders. This
theoretical concept suggests that the managers at workplace should possess a great understanding
about needed resources of manufacturing and logistic process. In addition to this, they should
have the information if there is resource scarcity in the organization. It supports them to
formulate different strategies and tactics as per the needs and demands of resources. It can reduce
the resource dependencies in the organizationv.
Davis and Cobb (2009) have given their views that there can be different types of assets and
resources such as human resources, raw materials, financial resources, tangible and intangible
resources and final products. If a business entity attempts to manage its assets then other will be
dependent on this. Among companies, very much dependency will generate uncertainty in
external business atmosphere. In that situation, managers need to plan the operations and in order
to eliminate the associated risks and challengesvi. The adoption of resource based concept can be
known by the instance of ACME organization. ACME is an information technology company
that is working for a media firm i.e. XYZ multimedia company. By looking at this example, it
can be understood that IT organization is totally dependent on media firm because this is the