Management Theory and Practices

This essay discusses the significance of deterministic and strategic choice theories in organizational management. It outlines resource-based theory, institutional theory, and population ecology theory and their impact on organizational growth and development. The essay also highlights the pros and cons of these theories.

Running head: Management theory and practices
Management theory and
practices
2018

Management theory and practices
Introduction
In today’s modern world, organizational theories are needed for every company to strive
with rivals and to accomplish the long term targets. The main motive of this essay is to outline
and explain the significance of various theories such as deterministic theory and strategic choice
theory. Apart from this, it also portrays that how deterministic theories including resource based
theory, institutional theory and population ecology theory are helpful to make a strong financial
position and image in global market by carrying the business internationally. In this essay, the
ideas and thoughts of different authors are identified and measured critically and effectively. A
brief literature related to various organizational theories has been showcased in the task.
Strategic choice theory
Strategic choice theory may be defined as a role that leaders or managers play in
affecting an organization through making choices in an effective and dynamic political process.
In other words, strategic choice theory is used to handle workshops for unique and effective
decision making group. It is an ongoing process in which planned management of insecurity
plays a significant and major role. It is stated by Raduan, Jegak, Haslinda & Alimin (2009),
strategic choice theory was propounded when industrial relations in the U.S were changing
constantly. The strategic choice theory begins with a consideration of relevant and effective
forces in the macro environment that influence the employment relationships in the competitive
market. It is further considered a systematic theory of strategy (Bradley, 2018). This theory
provides an alternative that encourages the agency of group and individuals in the company to
make choices, sometimes they serve their own requirements and needs that effectively affected
the development and growth of those organizations (Helfat et al, 2009). The strategic choice is a
formal part of an organizational learning process that implemented or used to the macro
environment and internal political circumstances as well.
Along with this, strategic choice theory was investigated with regard to groups and
individuals response and reviews in an effective way for reducing and handling disputes and
risks (Revolvy, 2018). It is examined from the various studies that strategic choice theory
monitors on the decisions to be made in an effective and dynamic planning situation whatever
2

Management theory and practices
their matter and timescale. It maintains good and strong communication and cooperation
between people with various skills, talents and backgrounds. By using this theory, the company
can differentiate its operations and functions in the macro environment to gain competitive
benefits. Aside this, the company can get various alternatives by implementing this theory in the
competitive market. Aside from the pros, there are various cons of this theory which shows that
this approach is not suitable for the organization. It is analyzed that strategic choice theory
influences the profitability and productivity of the organization adversely (Kraus & Keltner,
2009).
Deterministic theories
It is noted that deterministic theory is a conceptual model or theory of the philosophical
doctrine of determinism implemented to a system for analyzing and understanding everything
that will and has occur in the system based on the various effective and unique physical outputs
of causality. In today’s globalization world, each and every company uses organizational theories
to attain long term goals and objectives in a hassle free manner. It is analyzed that organizational
theories can be categorized into two parts including strategic and deterministic theories. These
theories distinguish or differentiate based on the flexibility and readability which help in
conducting business operations and activities effectively and smoothly (Sydow, Schreyögg, &
Koch, 2009). There are various types of deterministic theories that have been drawn below.
Resource dependence theory
It is one of the significant theory that being used by the organization. Resource
dependence theory is a study of how the external resources of the company influence the actions,
initiatives and behavior of the company. It is portrayed that external resources is a significant
tenet of both the tactical and strategic management of any organization. The companies use
resource dependency approach to observe and analyze the organizational adaptations to
dependencies. Apart from this, resource may take many forms, or shapes such as workers,
funding and raw material. If one organization maintains the wide range of resources then another
firm would become dependent on its in order to make effective and symbolic relationship.
According to Hillman, Withers & Collins, (2009), organizations adopt various resources based
theories to cope up with rivals and to maximize profitability and outcomes internationally. It is
3

Management theory and practices
studied that resource dependency theory is a managerial tool or framework implemented to
determine and evaluate the strategic resources with potential to offer comparative benefits to the
company effectively.
These resources could be exploited by an organization to attain sustainable competitive
benefits. By implementing this theory, the company can maximize and boost their power
effectively. Aside this, the company can determine and measure outputs and sustainability by
applying this theory smoothly. As per Nienhüser (2008), resources dependency theory is outlined
and underpinned by the idea that resources are key success factors to boost outcomes and
efficiency with minimizing costs. Resources are managed and controlled by companies to
maintain and determine the open access to resources. It is reported that organization typically
develops redundancy into resource acquisition to minimize their reliance on single resource. It is
analyzed by Javalgi, Dixit & Scherer (2009) that resources based theory is based on the fact that
external environment have limited resources and companies are dependent on these resources to
grow and survive in the competitive market. Uncertainty is faced by the organizations due to lack
of control that may affect the operations of the firm adversely. The companies should make plans
and strategies to utilize these resources adequately and effectively, that are being needed by other
companies to make sure their own growth and survival (Heugens & Lander, 2009).
Institutional theory
One of the significant and fundamental theories which used by the organizations is
institutional theory. Weerakkody, Dwivedi & Irani (2009) stated that institutional theory is a
process or approach on the deeper and more resilient attributes of social structure. It includes the
processes and approaches by which structures such as rules, norms, standards, schemes, routines
and regulations become a guideline for social initiatives and behavior. This theory put direct
impact on the structures and policies of the firm (Weerakkody, Dwivedi & Irani, 2009). It can
largely affect the development and progress of formal structures in the company, generally more
profoundly that market pressures. Innovative and dynamic structures or frameworks that improve
and enhance the technical efficiency and effectiveness are legitimized in the external
environment. This theory is further used by the organizations to maintain or gain authenticity in
the external environment.
4

Management theory and practices
It is portrayed by Carney, Gedajlovic & Yang (2009), institutional theory will reduce
evaluation and avoid programs implementation to run the business smoothly and to maintain
internal and external confidence in the formal structures while detecting their efficiency and
effectiveness impact. Carney, Gedajlovic & Yang (2009) examined that the net impact of
institutional theory is to maximize the homogeneity of company’s structures in an external
environment. The organizations could adopt the similar structures or frameworks as a result of
three types of pressures. The three types of pressures include coercive pressure, normative
pressure and mimetic pressures (Weerakkody, Dwivedi & Irani, 2009). This theory further helps
in gaining ample of opportunities in the international market. On the other hand, this theory or
approach could unable to define the differentiation and changes among the various companies.
Population ecology theory
It is studied by Bueno (2009) that population ecology theory is significant and unique to
compete with rivals in the global market. Ecologists examine various aspects of ecosystems. One
of the major aspects is population ecology that helps in interacting and communicating with
external environment. It is studies that ecologistics are interested in the development and growth
of a population, the increase of the population, fluctuations in population and any other
interactions and collaborations with the population in the global market (King, Morgan, Gimenez
& Brooks, 2009). By implementing this theory, ecologists can also investigate the different
groups of population that are unable to locate in same area but interact at specific time
throughout the year. If this group of populations are similar and could still interbreed, they are a
metapopulation. Individuals within a metapopulation can move from one population to other,
which may support stabilize the size and trends of the overall population (Sabatelli & Shehan,
2009). Along with this, institutional theory defines the three situations such as retention,
selection and variation. Retention explains that only developed and dynamic organizations are
included in the population. Variation defines that only new organizations produce innovative
opportunities in the international market. Selection also helps in choosing excellent organization
which is suitable for the population. The major benefit of institutional theory is that it helps in
providing good and strong organization structure for the population (McGlade, 2009).
5

Management theory and practices
Conclusion
It is concluded from the above study that various theories are being used by the
companies to develop and grow business successfully, There are various deterministic theories
like resource based theory, population ecology theory and institutional theory that help the
companies to maintain an effective organizational framework and meet the desired objectives
and targets. By studying this research, it is noted resource based theory is essential and suitable
for each and every company to conduct business in a hassle free manner. It is analyzed that
strategic choice theory is not suitable and effective for the organization in a long time.
6

Management theory and practices
References
Bradley.J.,(2018). Deterministic Vs. Strategic organizational structure [Online], Retrieved from
https://smallbusiness.chron.com/deterministic-vs-strategic-organizational-structure-
65533.html
Bueno, N. P. (2009). Institutions and natural resources sustainability in poor socio-ecological
systems: closing some dynamical loops. Journal of Interdisciplinary Economics, 21(3),
233-253.
Carney, M., Gedajlovic, E., & Yang, X. (2009). Varieties of Asian capitalism: Toward an
institutional theory of Asian enterprise. Asia Pacific Journal of Management, 26(3), 361-
380.
Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M., Singh, H., Teece, D., & Winter, S. G.
(2009). Dynamic capabilities: Understanding strategic change in organizations. John
Wiley & Sons.
Heugens, P. P., & Lander, M. W. (2009). Structure! Agency!(and other quarrels): A meta-
analysis of institutional theories of organization. Academy of Management
Journal, 52(1), 61-85.
Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A
review. Journal of management, 35(6), 1404-1427.
Javalgi, R. R. G., Dixit, A., & Scherer, R. F. (2009). Outsourcing to emerging markets:
Theoretical perspectives and policy implications. Journal of International
Management, 15(2), 156-168.
King, R., Morgan, B., Gimenez, O., & Brooks, S. (2009). Bayesian analysis for population
ecology. Chapman and Hall/CRC.
7

Management theory and practices
Kraus, M. W., & Keltner, D. (2009). Signs of socioeconomic status: A thin-slicing
approach. Psychological science, 20(1), 99-106.
McGlade, J. (Ed.). (2009). Advanced ecological theory: principles and applications. John Wiley
& Sons.
Nienhüser, W. (2008). Resource dependence theory-How well does it explain behavior of
organizations?. management revue, 9-32.
Raduan, C. R., Jegak, U., Haslinda, A., & Alimin, I. I. (2009). Management, strategic
management theories and the linkage with organizational competitive advantage from the
resource-based view. European Journal of Social Sciences, 11(3), 402-418.
Revolvy.,(2018). Strategic choice theory [Online], Retrieved from
https://www.revolvy.com/page/Strategic-Choice-Theory
Sabatelli, R. M., & Shehan, C. L. (2009). Exchange and resource theories. In Sourcebook of
family theories and methods (pp. 385-417). Springer, Boston, MA.
Sydow, J., Schreyögg, G., & Koch, J. (2009). Organizational path dependence: Opening the
black box. Academy of management review, 34(4), 689-709.
Weerakkody, V., Dwivedi, Y. K., & Irani, Z. (2009). The diffusion and use of institutional
theory: a cross-disciplinary longitudinal literature survey. Journal of information
technology, 24(4), 354-368.
8