Management Theories and Practices (PDF)

Running head: MANAGEMENT THEORIES
MANAGEMENT THEORIES
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This essay discusses the two major organisational theories which are more complex
and sophisticated than other organisational theories. These are institutional theory and power
or organisational politics theory. These two theories have a huge connecting and positive
effect on the organisation. The traditional companies operating in the past global context used
the theories to get a guideline for making their operations easy (Lok 2017). Now the
contemporary companies have been using these complicated theories to solve many emerging
issues which are developing with globalisation. This essay discusses the operations of Qantas
Airways which is the oldest airline of Australia. The essay summarises four articles based on
these two theories mentioned, Effect of the theories on organisation, their limitations,
stakeholders’ perspectives and the method used by the managers to mitigate such differences.
Qantas Airways is considered to be the largest airline in Australia due to its fleet size,
international flight and destination. It is the second oldest airline of the world. It does its
business from the Sydney Airport chiefly. The company has more than 70% share in
Australian domestic market. There are many subsidiary airlines working in Australia in the
same route under the same QantasLink banner. The company has some important subsidiaries
like JetConnect. JetConnect provides service between New Zealand and Australia. This
Airways also possesses a low cost airline Jetstar Airways. It operates in both the domestic as
well as international markets within New Zealand and Australia.
Despite the fact that this organisation has earned reputation for excellence in
operational reliability, safety, engineering, maintenance and high class customer service, this
company has been involved in some corporate scandal in 2017. This company has employed
more than 30,000 worker working with them among which 93 % are from various parts of
Australia (Qantas.com 2018). The management structure of this company is quite good which
exactly fits the needs of the time. There is a majority of Non-Executive Directors. They have
extensive commercial experiences hence along with the executive director bring

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independence, judgement and accountability so that maximum benefit to the stakeholders,
employees, customers, shareholders government regulators and the members of communities
can be ensured. The experience of the company in this business or industry is the most
attractive part for which it can be chosen for discussion.
Institutional theory:
Institutional theory focuses on the irrepressible aspects of organisational structure.
This theory considers the processes through which the structures, schemes, norms, routines
are established as the authoritative guidelines for the organisational behaviour (Scott 2005).
Various components of this institutional theory explain how these elements can be created
diffused, adopted and adapted over time and space. Institutional theorists proclaim that
institutional environment strongly influences the development of the formal structures in the
organization, more intensely than the market pressures.
Power or organisational politics theory:
Organisational politics is the process in the human interaction which involves power
and authority. This theory is a tool for assessing the operational capacities and balance the
diverse views of the interested parties. This is the use of social networking and power within
the organisation for achieving changes which benefit the individuals and organisation within
it. The influence of the individuals in the organisations can serve personal interests which
effect the organisational culture greatly.
Summary of article 1.
In the article Why would corporations behave in socially responsible ways? an
institutional theory of corporate social responsibility, John Campbell has tried to merge the
Institutional theory with corporate social responsibilities of the organisations. In this article

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the authors have raised question which he discusses in detail. He states, “given the incentives
for maximizing profit and shareholder value, let alone acting opportunistically, why would a
corporation ever act in socially responsible ways, even at the most minimal level?”
(Campbell 2007). By analysing the institutional theory, the author has found out that the
institutionalists realise the importance of institutionalisation beyond the market. It ensures
that the corporations are reactive to the benefits of the social actors beside themselves, chiefly
in this current increasingly global economy (Scott 2005). In this article the author has argued
that connection among corporate behaviour and basic financial conditions is arbitrated by
various institutional conditions such as public and private regulations, independent or
nongovernmental organizations monitoring corporate behaviour, associative behaviours of
the corporations, institutionalized norms and organised dialogues with the stakeholders.
Summary of article 2.
The article “Can institutional theory be critical?” by Suddaby has discussed
institutional theory from a critical perspective. The institutional theory challenges the
hegemony of economic explanations of the social works by questioning the predominant
assumptions regarding the efficiency and necessity of production in attaining proper
organisational objectives. In this article the author has tried to perceive institutional theory
from the aspects of critical management studies. The focus is on the similarity between CMS
and institutional theory which is an approach for effectively understand the organisational
practices as the product of social pressure. This theory has been escribed as an apt one to
explain organisational behaviours defying economic rationality. To the author, both these
aspects of organisational behaviour have their roots in the Hegelian as well as Kantian
theories (Suddaby 2015). The institutional theory supports the fact that the organisations exist
in the social contexts where not only the economic rationality but appropriate conduct defines
organisational behaviour (Scott 2005). These factors have become recommended cognitively

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which influence the managerial assumptions of rationality as well as efficiency. This is how
the institutional theory subordinate’s human agency to shared norms which was once
institutionalised, gain powerful status. In this article the author has defined the three stages of
institutional theory which consequently mingles with other organisational; theory such as
contingency theory of organisational management.
Summary of article 3.
The article named “Political Skill In Organisations” by Ferris et al. has pointed out
that political skill is a construct which is very important in improving efficacy of the
organisations (2007). The authors of this article have conceptualised the power or
organisational politics as a skill which the very impart to gain competitive advantage for self
as well as for the firms. To these authors, this skill provides the ability to effectively
understand others at work, and to use such knowledge to influence others to act in ways that
enhances one’s personal and organisational objectives” (Ferris et al. 2007). To the authors,
skills of organisational politics, demonstrate influence on the others and transforms
intrapersonal processes which includes strategies tactics, networking along with positioning.
Organisational skills efficiently influence others as it builds confine, assertiveness and self-
promoting qualities to establish strong networks and perforce. To the authors of this article,
proper execution of political skills can help the individuals not only to improve interpersonal
objectives but also to facilitate the team members’ interactions which is very important for
running the business successfully.
Summary of article 4.

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Geppert and Dörrenbächer in their article “Politics and Power within Multinational
Corporations” have pointed out that the power and politics in the organisation has not gained
enough attention but these are the indispensable components of running business effectively
(2014). The systematic examinations of the current multinational companies disclose the fact
that the power politics as an essential contribution in the mainstream international business as
well as the sociological research of the global companies. This paper of Geppert and
Dörrenbächer has started with a critical review of power and politics of the context of the
proper functioning of the global companies. It seeks to understand the differences that are
clearly visible in the former researches on these two mainstream approaches and how the
effect of power and politics on the work culture along with the perspectives of the business
have been changed with time. The socio political studies of the MNCs have been discussed
from various perspectives especially from the bottom up and more actor centric perspectives.
After discussing the past discourse of this study as well as the present studies, the authors
have suggested to view from more micro‐political viewpoint as well as focus in the details on
the micro‐foundations of power relations.
Effect of the theories on organisation:
The institutional theory captures some very important matters in the organisation
which has been discussed before. The company as operating in the multinational level, has a
specific structure which is the chief elements of any organisation. The institutional theory
provides no emphasis on the personal interest of the individuals (Lok 2017). On the contrary,
this theory always supports for the group work based on the specific relationship among the
employees. This theory touches the issue of stability which is very much important in this
global context where the political and economic stability can affect the proper functionality
of the companies. The institutional theory also speaks for shared values which the managers
feel to be the most important while motivating their employees to work according to the

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objectives set by the company (Glove et al. 2014). This theory points out how the
organisations involve legitimacy beyond the demand of the individual actors. This particular
theory analyses and regulates the individual behaviour which contains the productivity,
discipline and overall growth of the firm. Institutionalisation makes this process easier for the
management through which they can have an effective control of the individual behaviour of
the members and motivate them in support of the firm. One of the most important factors that
the organisational setting points out is the concern for organisational change. The
organisation has changed its strategies, policies, decisions and management many times.
Therefore, institutionalisation helps to bring an equilibrium through changes so that the
organisation can make the best decisions without any opposition.
Through power politics theory, Qantas can analyse various issues which are effective
in their business. Starting from governing how the decisions will be made in the higher
authority level, to the interactions of the employees among one another this theory helps the
organisation to effectively function with different stakeholders and the employees. This
company mentioned is not yet global but operates in the neighbouring countries along with
the home country Australia. In this organisation, the impact of power largely depends om
how the employees as well as the authorities are using their own power. This theory matches
with the constantly changing power management and control exercise on the actions and
decision of the company. Organisational power politics have two contradictory facets where
on is positive another is negative. The positive power politics of the company will greatly
facilitate the organisation to higher its productivity and negative power will hamper the
creativity, quality, and productivity of the firms (Glove et al. 2014). Positive power politics
build employees’ confidence as well as motivates the employees to toil harder. This also
results in the higher-level stations gaining influence through worker respect as well as
communication but rather than the coercive efforts. To inspire employees in improve

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productivity, the organizations need to develop the political work culture stress-free for the
employees to appreciate.
Limitations:
The institutional theory along with organisational politics both have some limitations.
The institutional theory points out the importance of bring together all the stakeholder,
employees, policies and other related issues of running a successful business so that the
authorities have everything in their monitor. Based on these, the company will be able to
effectively work in any situation and face any challenge. However, this particular theory does
not discuss about the most important issue of current organisational setting that is diversity.
The diverse culture with which the company is struggling to cope up (Vromen, Xenos and
Loader 2015). In addition to this, there are substantial evidences which confirms that
organisations in different economies react contrarily to the similar challenges therefore,
maintaining one institutional structure in every case can be harmful for the organisation. In
the organisational politics theory, there is a need of micro‐level political game‐playing which
will help in the growth of the multinational companies.
Differences in perspectives:
The stakeholders are directly related with the policies and organisational changes.
This is the reason why they have different perspectives about the operations of the
organisation. The stakeholders of Qantas include the employees, suppliers, state and national
government, competitors, international NGOs and safety regulators. The institutional theory
supports the company to have an authoritative guideline on the associated norms and
schemes, the stakeholders may not agree with these authoritative policies (Vromen, Xenos
and Loader 2015). The ownership issues in Qantas and its anti-competitive behaviour has

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faced the stakeholders but if the company follows this institutional theory to run the business,
it will get no support from any of the stakeholders.
In respect of organisational politics, the stakeholders are part of it either directly or
indirectly. The employees are the chief participants as they are the direct contributors or
receivers of workplace culture effects. The issue of workplace discrimination has been
already recorded in the organisation therefore, the stakeholders will be taking part in the
workplace issues essentially (Webster et al. 2018). The leadership changes, individual views
manipulate complete productivity of the organisation which highly affect the revenues hence
the stakeholders. The stakeholders’ perspectives therefore, support for positive organisational
politics which is based on a three‐dimensional framework for the organizational power.
These are episodic, rules of the game and domination in which the stakeholders also can
participate eventually.
Responsibilities of managers to mitigate differences:
The managers of the global companies or the MNCs, face a huge problem in solving
these issues especially when the stakeholders demand changes of policies from the
organisations. In order to mitigate these issue regarding institutional theory and
organisational and power politics, the managers follow some essential part so that the
organisation get a consistent support from the stakeholders as they get usually (Naseer et al.
2016). First of all, every stakeholder of the company aims to serve their interest best which is
completely against the institutional theory but to solve this problem, the need to upgrade the
communication system so that there is no communication or knowledge gap in the
organisation. Thus all the associates will have chance to get involved with the company.
Secondly the mangers need to identify the stakeholder analysis of stakeholder interest so that
the company can perfectly evaluate the types as well as the level of power of the

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stakeholders. Based on this issue the policies of the organisation will be changing and the
stakeholders will not create any issues regarding this. finally, the managers need to set the
institutional strategies in such a manner so that the firm can be the best competitive
advantages. These measures will effectively mitigate these differences.
Therefore, it can be concluded that there is various issue which bother the companies
while operating in the market. The mangers of the company need to have proper insight and
intelligence so that they can properly balance the authority of the firms as well as the
expectations of the stakeholders including employees. The institutional theory supports the
view of controlling organisation from centre and organisational politics measures the effect of
power politics on the functionality of the organisations. Despite the fact there are various
limitations of these theories they can effectively help the companies to cope up with the
situations which affect their business.

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References:
Campbell, J.L., 2007. Why would corporations behave in socially responsible ways? An
institutional theory of corporate social responsibility. Academy of management Review, 32(3),
pp.946-967.
Cornelissen, J.P., Durand, R., Fiss, P.C., Lammers, J.C. and Vaara, E., 2015. Putting
communication front and center in institutional theory and analysis.
Ferris, G.R., Treadway, D.C., Perrewé, P.L., Brouer, R.L., Douglas, C. and Lux, S., 2007.
Political skill in organizations. Journal of Management, 33(3), pp.290-320.
Geppert, M. and Dörrenbächer, C., 2014. Politics and power within multinational
corporations: Mainstream studies, emerging critical approaches and suggestions for future
research. International Journal of Management Reviews, 16(2), pp.226-244.
Glover, J.L., Champion, D., Daniels, K.J. and Dainty, A.J.D., 2014. An Institutional Theory
perspective on sustainable practices across the dairy supply chain. International Journal of
Production Economics, 152, pp.102-111.
Lok, J., 2017. Why (and How) Institutional Theory Can Be Critical: Addressing the
Challenge to Institutional Theory’s Critical Turn. Journal of Management Inquiry,
p.1056492617732832.
Naseer, S., Raja, U., Syed, F., Donia, M.B. and Darr, W., 2016. Perils of being close to a bad
leader in a bad environment: Exploring the combined effects of despotic leadership, leader
member exchange, and perceived organizational politics on behaviors. The Leadership
Quarterly, 27(1), pp.14-33.

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Qantas.com (2018). Fly with one of the world’s most experienced airlines | Qantas IN.
[online] Qantas.com. Available at: https://www.qantas.com/in/en.html [Accessed 17 May
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Suddaby, R., 2015. Can institutional theory be critical?. Journal of Management
Inquiry, 24(1), pp.93-95.
Vromen, A., Xenos, M.A. and Loader, B., 2015. Young people, social media and connective
action: From organisational maintenance to everyday political talk. Journal of Youth
Studies, 18(1), pp.80-100.
Webster, J.R., Adams, G.A., Maranto, C.L. and Beehr, T.A., 2018. “Dirty” Workplace
Politics and Well-Being: The Role of Gender. Psychology of Women Quarterly,
p.0361684318769909.
Zaleznik, A., 1970. Power and politics in organizational life(pp. 47-60). Harvard Busines
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