Organizational Theory

Running head: ORGANIZATIONAL THEORY
Organizational Theory
Name of the Student
Name of the University
Author Note

1ORGANIZATIONAL THEORY
Introduction:
The modern organizations are observed to follow various organizational theories in
order to manage the operations of their organizations. These theories vary depending on the
type of leadership or management of the organization. Along with that it can also be said that
the organizational theories generally contain the variation of the approaches in order to
analyse the organization. The organizations are following different theories like the
bureaucracy, contingency, power politics, scientific management, institutional, paradox, and
practice theories depending on market parameters (Jones and Jones 2013). With the
application of this theories, the organization operates their business but each and every theory
relates to some sort of issues along with the advantages. The paper describes two of the
organizational theories in context of an organization named Lakeland Wonders. The paper
specifies the focus of those theories in the organizational context and the limitations of those
theories as well. Apart from that, the paper will also specify the knowledge and the
capabilities, required by the managers of the organization to overcome the differences of
perspectives generated from the organizational theories.
Overview of the organization:
Lakeland Wonders was a small scale business organization from Minnesota, United
States. The organization was primarily a classy manufacturer of the wooden toys. The
organization operated in the manufacturing industry. The organization was a renowned name
in the small scale business industry. But in the recent times it was significantly falling behind
market competitors as the design section of the organization was not doing anything
innovative and was significantly lacking the will to meet the customer trends. The
organization was having three major plants for their business operations in Minnesota and it
was experiencing the excellence of almost 5000 employees (hbr.org 2018). The organization
was having a hierarchical structure where the employees were divided into several layers and
Mark Dawson was the senior Vice President for the organization with Cheryl Hailstrom as
the Chief Executive Officer. The organization was feeling the vulnerability around them and
to get rid of that situation, they introduced Cheryl as the CEO of the organization. The
organization was having a board of directors on top of the senior level management and in
that board, Sean Curtiss’ company was having two seats along with the Swensen children
who were having the same number of seats as well. Walley Swensen and Karen Winks from
the Northern Minnesota Trust had one seat each in the Board of Directors as well (hbr.org

2ORGANIZATIONAL THEORY
2018). The organization was conducting business in the concerned industry for more than 94
years. The organization was observed to follow the contingency theory in its approach to
introduce and plan for the implementation of an idea of business expansion which included a
precise focus on the offshore manufacturing and midmarket capturing. Along with this, the
case also specified the organizational culture theory which had significant impact in the
restructuring of the workforce with the objective of a rapid increment in the growth of the
organization.
Organizational Theories:
Two of the chosen organizational theories are the organizational culture and the
contingency theory. These two theories are chosen because the mentioned case is
significantly influenced by them. The contingency theory is considered to be an
organizational framework which claims that there is no perfect method to arrange or organize
a company or there is no perfect way to create decisions (Otley 2016). Rather the method has
significant focus on the external and the internal equations because a contingent leader will
concentrate on the organizational situation in order to make decisions. In the contingency
theory, the leader has the right to apply his or her own way of leading as the theory suggests
that a leader must act according to his or her assessment of the situation. The contingency
theory is significantly influential in the business categories like the Technology, Suppliers
and Distributors, Unions, Customer and Competitors, Consumers interest groups and
Government (Mikes and Kaplan 2013). On the other hand the organizational culture theory
significantly focuses in connecting the values and the behaviours which has high influence on
the social and psychological environment of any organization (Shafritz, Ott and Jang 2015).
In a nut shell, the theory of organizational culture portrays the collective beliefs, values of the
organizational members. Many of the researchers of the organizational culture stated that the
benefits of the theory will be in the form of the competitive advantages generated from the
innovation and the customer service along with the stable and effective performances from
the employees (Young and Ghoshal 2016). Apart from that, the theory is significantly
influential in increasing the team bonding, creation of a high employee morale and it also
helps the company to get aligned to the achievement of the goals in a strong manner. The
theory of the organizational culture has great significance in leading the organizational
change that may be a merger or an acquisition (Alvesson, 2016.).