Discussion
Analyze the actual place of the deterministic and strategic theories while studying the organization action.
Organizational structure describes the business approach adopted by owners and their response to the market. Two general theories are proposed in context of the organizational structure that is deterministic and strategic. It must be noted that these models are completely different from each other in various aspects such as degree of adaptability assumed by the owners in manipulating the marketplace. This paper mainly analyzes the actual place of the deterministic and strategic theories while studying the organization action. These theories are compared on the basis of their philosophical underpinnings, decision making, and the environment. Although, we argued in this paper that usually strategic choice theory prevails, and also recognize various factors which mainly restrict the choice and discretion of the managers.
In this, critical evaluation is done in context of the contribution made by the strategic choice and determinist theories (Resource Dependency Theory; Institutional Theory; Population Ecology) for understanding the organizational action. This paper also determines the more compelling perspective. In other words, it can be said that this essay is the critical review of the role played by the managers in shaping the outcomes of the organization.
Brief discussion of theories & their adaptability approach:
Deterministic structure- the deterministic theory in context of the organizational structure states that market place exercise control on itself either less or more, which means no person or factor can exercise control on the market. Business organizations are compelled to respond the changes reflected by the market and continuously analyze the unexpected challenges and changes occurred in the consumer patterns. Structure of the organization determine by the overall industry, marketplace and social environment. In this theory, main aim of the company is to focus on their survival and also ensure profitability for growth in the market.
Strategic choice structure- theory related to the strategic choice is wide, as this theory stated that business organizations exercise some control in context of its position in the market and also on the behavior of the consumer. Business holds the power to control the market such as through advertising, changing its pricing strategies and networking with other companies. In this theory business mainly focus on the clear goals and in this business leaders can manipulate the market for reaching its goals (Bradely, n.d.).
The most important difference between these two theories is degree of adaptability that is assumed by each theory. In context of the determinist structure, business organizations are forced to become flexible for responding the changes occurred in the market and in context of the strategic choice theory changes and flexibility are embraced by the organization by believing that changes are done to meet the demands of the consumer and for increasing the brand awareness and market position.
It must be noted that, there are number of theorists and organizations which adopt the mixture of these two theories n context of the organizational structure, and for this mixed method experts identified different reasonable and time-specific business objectives and also measure these objectives against industry-wide standards (Bourgeois, 1984).
Critical Evaluation
An effective strategic choice theory facilitates the organization to make such strategic decisions which are sustainable in nature. This theory mainly defines the role played by the leaders or leading groups in lieu of influencing the organization for making the choices. Those who are responsible to make strategies are engaged in the process of surfacing the most important strategic issues. These leaders and managers face number of uncertainties and they need to explore the issues, relationship among them, make comparison of their relative potential effects with the performance of the organization. Leaders also explain the strategic issues in front of the planning team and explore the strategies in context of the choice space which are open to them for addressing the issues or strategic elephants. These facts make it clear that there is requirement to set the levels of targets in the complete performance in context of the advantage provided to the benefit to beneficiaries. Set these targets in lieu of deciding the failure and what would be the satisfactory performance, reflects the major choice (Rond & Thietart, 2004).
Generally, strategic choices made by management mentions the point of view related to the power relationships in different organizational contexts, peoples who bear the management accountability are not restricted by the usual contextual factors such as availability of the technology or other environmental factors like market demand, but number of times they also exercise considerable discretion in making the choices. It is suggested that organizational executives own a considerable number of choices and these choices are in contrast to some extreme versions of a contingency interpretation of managerial work (Gopalkrishnan & dugal, 1998). Sometimes, it is suggested by the experts that behavior of managers in context of the organizational structures are contingent on the basis of these different contextual factors such as size, technology, and environment trends.
It is necessary for the managers of the organization become aware what choices they can exercise, even though such context might be constraining them to the great degree. It must be noted that strategic choice theory is the key process which enables the manager to make the choices. Managers are also prepared by the exploration of the strategic options in context of the inevitable challenges introduced by the life. Therefore, Strategic decisions and contingency planning in lieu of these circumstances work together. It can be said that, this theory also helps in developing the corporate strategy in the organization. It must be noted that, this process explores the number of strategic options on the road to isolate the major strategic decisions that mainly becomes the essence of the corporate strategy developed by the organization. These choices which can be made by the managers of the organization include number of things such as they can choose the time and stage when business compete, method adopted to win the competition in the industry segments (Ruffini & Boer, 2014).
Deterministic Theory
After considering the above facts, it can be said that managers play most important role in the organization structuring, as it is the managers who have discretion to take important decisions related to the organization operations.
On the other hand deterministic theory of organizational structure stated that no other factors can control the market, and it is only the market itself which exercise control on it. In this business organizations are under pressure to give response to the changes and also consider the challenges which are unexpected in nature (Zimmermann, n.d.). There are different perspectives of this theory which is used to evaluate this theory:
Resource Dependency theory: this theory is developed in lieu of the organizational behavior, which stated how organizational behavior is affected by the external resource which is utilized by the organization such as raw materials. This theory is considered as important theory because it assess ability of the organization to gather, alter and exploit raw materials faster as compared to their competitors. There are number of experts which encourage the organizations as a resource in terms of the scarcity. RDT is considered as the idea under which resources are considered as most important factor of the organizational success, and the basis of power is the access and control of the resources (CIPD, n.d.). In lieu of this theory, managers play important role as resources generally resources are not in the control of those organizations which need them and this increase the importance of managers because managers of the organization is under obligation to frame such strategies which facilitates the open access to the resources. However, in this managers are not fully aware about the challenges and always work under the pressure of scarcity of resources. It is necessary for the managers to frame their strategy and arrange their resources in such manner as it becomes possible for the company to continue the production if there is any scarcity or unexpected challenge (Archibald, n.d.).
Population Ecology: this theory is considered as the study of the factors which affect the population and it also consider the question how and why changes occurred in the population over the time. This theory has its deepest historic roots and richest development in the study related to the population growth, regulation, and dynamics, or demography. This theory in context of the organizational environment is proposed as an alternative to the dominant adaptation perspective. In this theory, managerial role is little critical as compared to others because this area is complex in nature and affected by such factors which are difficult to determine (Hannan & Freeman, 1977).
Resource Dependency Theory
Institutional theory: RDT theory and population ecology theory is the theory which proposes the way through which organization can respond in different manner to environmental cues, but institutional theory is the theory which provides rich and complex view of the organization. As per this theory, normative pressure influences the operations of the organizations, which means pressure arise from the outside of the organization, and many other times this pressure is arise within the organization itself (Daft, 2008). Through this theory, managers try to understand the pressures imposed by the institutions for the purpose of becoming more similar, and this definitely reduces the institutional diversity. It must be noted that, organizations are confronted with pressure which is imposed from many other areas other than the task environment. Number of strategies, structures, and practices are used by the organizations to deal with these pressures and these are socially expected from them. Particularly, manager focuses on the ways of thinking and behaving such as behavior impact of the senior managers and actions taken by the mangers to handle these pressures (Raynard, Johnson & Greenwood, 2015).
On the basis of above facts, it is easy to determine that strategic choice theory is more compatible for the organizations structure because this theory has high degree of adaptability and it provides opportunity to control the factors up to some extent which affect the position and profitability of the company in adverse manner. Strategic choice theory ensures the flexibility at the early stage and in this it is easy for the organization to entertain the changes, but this is not the situation in context of the determinist theories because in this flexibility is little less and respond to changes is difficult for the organization. Therefore, it can be said that strategic choice theory is more compelling.
Conclusion:
As stated above, this paper represents the critical evaluation of two theories that are determinist theory and strategic choice theories in terms of the organizational structure. The deterministic theory in context of the organizational structure states that market place exercise control on itself either less or more, which means no person or factor can exercise control on the market. On the other hand, the more widely accepted theory is found in the strategic choice structure, as this theory believes that business organizations exercise some control in context of its place in the market and also on the behavior of the consumer. The most important difference between these two theories is degree of adaptability that is assumed by each theory.
References:
Archibald, M. Resource dependency theory. Available at: https://www.britannica.com/topic/resource-dependency-theory. Accessed on 30th May 2018.
Bourgeois, L. (1984). Strategic Management and Determinism. The Academy of Management Review, Vol. 9 (4), pp. 586-596.
Bradely, J. Deterministic Vs. Strategic Organizational Structure. Available at: https://smallbusiness.chron.com/deterministic-vs-strategic-organizational-structure-65533.html. Accessed on 30th May 2018.
CIPD. What is Resource Dependence Theory (RDT)?. Available at: https://www.hrzone.com/hr-glossary/what-is-resource-dependence-theory-rdt. Accessed on 30th May 2018.
Daft, R. (2008). “Organisation theory and design”, tenth edition, South-Western Cengage Learning.
Gopalkrishnan, S. & dugal, G. (1998) “strategic choice versus environmental determinism: a debate revisited”, The International Journal of Organizational Analysis, Vol. 6 Issue: 2, pp.146-164.
Hannan, M. and Freeman, J. (1977). The Population Ecology of Organizations. American Journal of Sociology, Vol. 82, No. 5, pp. 929-964.
Raynard, M. Johnson, G. & Greenwood, R. (2015). Institutional theory and strategic management. Available from: https://www.researchgate.net/publication/274138289_Institutional_Theory_and_Strategic_Management. Accessed May 30 2018.
Rond, M. & Thietart, R. (2004). Chance, choice and determinism in strategy. Available at: https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/workingpapers/wp0405.pdf. Accessed on 30th May 2018.
Ruffini, F. & Boer, H. (2014). Strategic choice and determinism in operations management. Available at: https://www.researchgate.net/publication/266968187_Strategic_choice_and_determinism_in_operations_management. Accessed on 30th May 2018.
Zimmermann, N. Deterministic and Voluntaristic Theories of Organizational Change. Available at: https://link.springer.com/chapter/10.1007%2F978-3-8349-6811-1_2. Accessed on 30th May 2018.
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