Systematic Literature Review of Organizational Theory: BUSI 610

This report presents a systematic literature review on organizational theory, exploring its evolution, key concepts, and practical applications. The study delves into the foundations of organizational theory, examining the importance of definitions, analytical techniques, and evidence types. It highlights the close association between organizational theory and accounting theory, explaining how organizations structure themselves and why accounting practices take their specific forms. The review covers the historical development of organizational theory, including classical, neoclassical, and modern perspectives. It discusses the importance of organizational design, structure, and the factors influencing decision-making within organizations. The report also examines the impact of organizational theory on service delivery and its relevance in today's business environment. The study underscores the need for efficient organizational theories to mitigate risks and maintain a competitive edge in the market. The report reviews the positive and normative aspects of organizational theory and the impact of accounting practices on decision-making. The review concludes with a discussion of the limitations of universal systems of organizational characteristics and emphasizes the importance of social and historical differences between various organizational types.

Running head: ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE
REVIEW
ORGANIZATIONAL THEORY: A SYSTEMATIC
LITERATURE REVIEW
Name of the Student
Name of the University
Author Note

ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW 1
Abstract:
The purpose of this study is to do a literature review on the theory of organisation. The
foundations are putting in a place for the revolution on organisational theory. In this paper,
some of the major building blocks that are analytical, for the development in the
organisational theory are discussed and outlined. The development in the theory of the
organisation shall be hastened with increasing the understanding ability about the importance
of the tautologies, choice of the definitions, the techniques that are analytical as well as the
evidence type. The accounting is one of the integral parts of the organisational structures, the
development in the organisational theory shall be associated closely by the development of
the accounting theory. The theory will also explain, what is the reason behind, the
organisations follow the form what they actually do as well as why the practices of the
accounting follow the form what they do. Because the theories that are positive, are required
for the making of the purposeful decision and the development shall also provide a good
scientific base for regulatory bodies of the government and manager's decisions.

2ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
1 Introduction:
A major challenge that is faced by the social scientists for developing a body of the
theory for explaining why the organisations take the form of what they do as well as why
they behave as they do. The objective of this paper is to outline some of the emerged aspects
of the lines of the researches on the organisation and to take attention to the methodological
issues that are related and have an important role in the research (Agbim, 2013). The relation
between the theories that are normative and positive, the importance to the effort of the
research of the choice of definitions and tautologies, nature of the evidence as well as the role
of the mathematics. The research in the theory of organisations since late of the 1970s has
revealed limitations of the theory of universal systems of characteristics of the organisations
that are successful. Instead of the new researches have focused on the social and historical
differences between several types of organisations and many of them may not be reduced to a
system or rational model. The theory of the organisations is an analysis of an organisation
that is macro in type which is how the structure of the organisations is designed for
integrating people with the organisations. It is so predictive and descriptive particularly about
a state of affair within the organisations (Aubry & Brunet, 2016). The other words, the
organisational theory is a body of the knowledge that is considered as well as the literature
that is developed over the years and also reflecting what goes on in the organisations. This is
a set of the propositions in the structure of the organisations that are different. There are
basically two types of organisational structures, one of them is Centralized organisational
structures and Decentralized organisational structures. From the viewpoint of a big picture, an
organisational structure is either decentralized or centralized. The centralized structure has
the linear hierarchies with a line of commands that is clear between subordinates and
superiors such as, exist in the army (Donaldson & Joffe, 2014).

3ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW

4ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
2 The concept of organisational design and structure:
There are so many different definitions and opinions on the organisational structure.
The structure means the duty arrangement that is used for the work that is to be done. This is
the best that is represented by a chart provided by the organisation. . Organizations need
proper accounting services to make proper application of their financial resources. Without
proper accounting services, it is possible to ensure that the financials resources are being
invested according to the organizational requirements. In addition to that, accounting also
helps in keeping track of financial expenditure and organizes those expenditure so that it is
easy to refer when details about those expenditure is required in budget preparation for the
organization. The practices that are related to the accounting differ clearly across the
organisations. Frequently, the capital assets are not recorded by non profits based on the
balance sheet of them as well as it don't calculate the depreciation. The development in the
theory of the organisation shall be hastened with increasing the understanding ability about
the importance of the tautologies, choice of the definitions, the techniques that are analytical
as well as the evidence type. The accounting is one of the integral parts of the organisational
structures, the development in the organisational theory shall be associated closely by the
development of the accounting theory. The explanations of the differences are satisfactory are
not exist. It describes the roles, responsibilities and rules within one organisation. Some
issues that are determined by the organisational structure are:
 The specific job description of people
 What people actually do
 How each and every job roles fit within the overall system
 How the functions of the job are grouped by workgroup, section, department,
team and branch.

5ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
 To whom each of the employees reports to
The structures are shaped typically like a pyramid. The directors sit on the top of the
pyramid, then the decision making is passed down by the executive team and CEO, to the
managers of the department as well as the line managers, finally the workforce to the bottom
layer of the pyramid. There are basically four types of organisational structure within the two
categories they are, divisional, functional, matrix and futarchy (Erhemjamts &
Venkateswaran, 2013).
3 Introduction to the organisational theory:
A general frame of the references to explain the patterns of the understanding
behaviour in the organisations is furnished by the theory of an organisation. It also furnishes a
base related to the science for the managerial actions for controlling, influencing and
predicting the behaviour of the view for increasing the efficiency of the organisations
(Espinosa & Lindahl, 2016) The study of functioning, performance and structure of the
organisations as well as the behaviour of the individuals and groups who are related to the
organisations are also encompassed by the theory of the organisations. The accounting is one
of the integral parts of the organisational structures, the development in the organisational
theory shall be associated closely by the development of the accounting theory. The theory
will also explain, what is the reason behind, the organisations follow the form what they
actually do as well as why the practices of the accounting follow the form what they do. The
theory of the organisation is the set of a concept that is interrelated, propositions and
definitions which present a systematically view of the behaviour. It is also a set of the
propositions that seeks to of the groups, subgroups and individuals interacting in some
patterned relatively to explain how to sequence and the individuals of the activity the intent

6ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
of that is goal directed. According to Daft, (2015) the evolution of the management and the
organisation can be explained into three parts. They are as follows:
3.1.1 Classical organisational theory:
The classical organisation theory represents the views that are accepted traditionally
about the organisations such as, the organisations were views as human beings and machine
as machine components (Fiss, Marx & Cambré, 2013). The classical theory is the starting of
the systematic study about the organisations. Many of the principles and concepts that are
related to the classical theory hold good even in the current situations. This because, even
after advance in technology, it has improved ways organizations work and also increased
efficiency of organizational process, but it is still about effective integration of machine and
human resources that drives organizations, only ways to integrate them has changed, the
concept is still the same.
3.1.2 Neo-Classical organisational theory:
The neoclassical organisational theory is focused on or the main attention is
mechanical and physiological variables of the functioning of the organisations. This theory
does not consider about integration of human resources separately as according to this theory,
effective management of physiological aspect ensures effective management of human
resources as well. Testing of the variables cannot provide positive results.

7ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
3.1.3 Modern organisation theory:
The modern organisational theory is of the recent origins that is having developed in
the early 1960s. Both the external and internal variables have been studied for analysing the
organisation’s nature.
4 Literature review:
The importance of the organisational theory, positive and normative theory and decision-
making and the influencing factors will be discussed in these sections.
4.1 Importance of Organisational theory:
An organisation is kind of a system that is of dividing labour in which every person of
the organisation is specialized on some activities that are given, and also they are
interconnected with the activities of the other members. Some of the organisations are
dynamic in nature as well as subject to changes which may arise from both the outside and
inside of the organisation. The theory of the organisation can execute the sociological
relationship between the members of the organisations individually along with the actions of
them on to the organisation. The structure of the organisational system has to be managed in
a manner that is effective in nature, for enhancing the service delivery of them to the
customers (GalbRaith, 2014). The quality of the service to the customers would be in terms
of access and speed as well as that is corresponding to the general objectives and goals of the
organisations. The Qianlong Community Health service (QCHS) is a health care organisation
that is specialized in the provision of services related to counselling to the surrounding
community. This has a huge base of the client who books for taking an appointment on
regular basis. The waiting time for the client's increases thus the quality of the service of the

8ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
delivery of them is reducing as far the timeliness is a concern. The organisations have to
come up with the theories of the efficient organisations for curbing the risk of losing the
market share as well as the clients to the competitor’s o of them. Without proper
organizational theory, it is not possible to ensure smooth execution of organizational
activities and there might be mismatch between organizational requirements and
organizational activities, which might put the organization at risk.
4.2 Positive and normative theory and decision-making:
In the prior period to the mid of the 1970s, the theory of the accounting was normative.
It is focusing on to the policy of the prescription for public policy or management –
questions, the treatment that is appropriate for inflation, rate of exchange, leases, and
inventories and so on have been involved there (Goetsch & Davis, 2014). The questions
related to the policy are of course and both important and interesting as well as they are
answered in the best possible way with the knowledge of a huge range of the theories that are
positive which is, the knowledge that is all about the behaviour of the world. As an example,
it can be said that the accountants have concerned justifiably to the affects of the General
Price Level Adjusted (GPLA) on the numerical numbers related to accounting. However, a
manager can be interested to maximize the value of the firm of him as well as it must have to
estimate either implicitly and explicitly that how such kind of the procedures of accounting
will affect the value of the firm. As well as how the General Price Level Adjusted effects in
the value of the firm is an issue that is positive purely in the sense that, in social sciences, the
term that is used. The questions that are normative, take that form, “How should price level
changes be reflected in the accounting statements?” And the questions that are positive has
taken the form: “How does GPLA affect the value of the firm?” answers to the questions that
are normative and always depending on to the choice of objective or criterion function that is

9ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
one of the matter of the values. Therefore, the propositions that are normative are also
refutable never by the evidence. The answers of the questions that is positive, on the other
hand, the involvement of the discovery of few aspects of how is the behaviour of the world as
well as always refutable potentially by the contradictory evidence.
4.3 The Influencing Factors:
The influencing factors is considered among factors that is described by the theory of
contingency as well as by incorporating the elements of the approach of the strategic choice.
It is noted by many of the authors that the impact of those elements and factors on the
organisational structures (Grossman & Siegel, 2014). In response to several circumstances of
environmental, it is conditioned by the decisions regarding the organisational level that is
internal. The primary factors are:
i. Decentralized of decision making
ii. Customer interaction
iii. Value of Innovation
iv. Marketing consideration
v. Intensifying competition
vi. Liberalization of the Economy.
4.4 Customer interaction:
The interaction and relationship between the business partners recently have received
some interest among the managers and researchers recently. Interaction with consumers at
business level is important as it provides context for deploying business strategies that is
consumer oriented. However, level of interaction and influence of that interaction depends on

10ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
type of business and hence detailed assessment of consumer interaction is required. However,
there are lack of standard frameworks for executing this assessment. Therefore, there is
demand for conducting quality research in this context to offer insight into this aspect. Some
of the authors have even suggested that the ways for doing business that is emerging, are
actually the new marketing paradigm. Both the innovation and marketing, the research is
exploring the effect of the interaction of the customer into the context of the development of a
new product. The companies have involved the customers of them increasingly in some of
their processes. Turning the customers as a partial member of the organisation (Islam, M. Z.,
Jasimuddin & Hasan, 2015). The theory of the organisation can execute the sociological
relationship between the members of the organisations individually along with the actions of
them on to the organisation. The structure of the organisational system has to be managed in
a manner that is effective in nature, for enhancing the service delivery of them to the
customers. This was the starter of the customer participation concept that is having the
relationship with the resources and the actions, which are supplied through the customers at
that time they have been involved in the processes of the firm. When customers are involved
in the business process, it is easier for organization to integrate their inputs in the business
process and this ensures enhanced consumer satisfaction, which is important for success of
business. When consumers ate not involved in the business, it is often difficult to manage
their expectations as this varies according to the products and service delivered. Hence, an
integrated framework is required in this context. This framework is not effective if there is
not scope for allowing integration of consumer suggestion and feedback. Not only that, the
framework should also be able to provide modification of the business process and service
design so that design is effective and efficient and in accordance with consumer expectation
and feedback. It is implied by the CP that the interaction between the employees of the firms
and customers, it is suggested that those interactions of the customers with the insiders that

11ORGANIZATIONAL THEORY: A SYSTEMATIC LITERATURE REVIEW
can trigger the change of the organisation. Change in organization is often a difficult to
manage if proper plan is not developed and hence a well-planned plan and strategy is
required to ensure proper change control in the organization so that it does not affect the
business process in the organization.
5 Overview of the organisational theory:
There are so much debate about the theory of organisation. Various researchers have
provided various opinions in this context and there is lack of correlation between these
theories. For some of the observers, it is one of the points at which the organisational study
has come to be dominated by the theories of the system. This was characterized by a desire
for identifying the mechanisms and universal principles which helps the organisations to
enable to be more effective and efficient (Lee, Kozlenkova & Palmatier, 2015). The research
in the theory of organisations since late of the 1970s has revealed limitations of the theory of
universal systems of characteristics of the organisations that are successful. Instead of the
new researches have focused on the social and historical differences between several types of
organisations and many of them may not be reduced to a system or rational model (Zaridis &
Mousiolis, (2014). The objective of this paper is to outline some of the emerged aspects of
the lines of the researches on the organisation and to take attention to the methodological
issues that are related and have an important role in the research. At the same time, the new
researches have explored the organisation diversity forms in the industrial societies that are
advanced, have displaced increasingly bureaucracy with much flexible and the configurations
that are network based. The research has also raised the questions about the relationship
between socioeconomic environments and the internal characteristics of the organisation in
which the organisations exist as well as it increasingly focused on dynamic changed of the