McGregor's Theory X and Theory Y, Open Systems Theory, and in general a recognition of the complexities of what fosters and supports greater productivity on the part of people.
At this point the evolution of organizational theories begins looking at how the factors of the distribution of knowledge, the integration of process for knowledge management, and in general the recognition of personal productivity as the basis of competitive advantage. This specific phase in the evolution of organizational theories is so fundamentally disruptive to previous theories that the effects are found in global economic theories, including the theory of comparative advantage. One of the thought leaders in the area, Dr. Michael Porter (1990, pp. 32-78) whose groundbreaking analysis of productivity pointed to individual's ability to fundamentally re-order processes would eventually surface in the 21st century as a Business process Management (BPM) revolution. When one considers the evolutionary shift from seeing assets as the primary means of productivity to personal worker productivity, the corresponding growth in organizations' cultures also begins to grow in importance (Cordes, 2007, pp. 747-767). Cultures and their ability to quickly assimilate and create a shared knowledge base, a collective memory if you will, is becoming increasingly critical.
Oliver, Kondal, Kandadi, 2006, pp. 6-24). Also attributable to this specific evolutionary aspect of organizational theories is an increasing reliance on using technologies to manage and quickly access the shared memory of the organization. In fact the use of technology to further support the use of collective knowledge is beginning to have a reciprocal effect on organizational theory (Volkoff, Strong, Elmes, 2007, pp. 832-848), forcing more selective and targeted divisions of labor and a more decentralized delegation of authority. This has also lead to line and staff authority being more aligned to the individualized needs of projects and less hierarchical, centralized than had been the case in previous phases of organizational theory evolution. From the perspective of personal productivity being the dominant form of lasting competitive advantage as defined by Porter, the balance of power has begun to shift from authoritarian-based theories to more developmental and in highly skilled occupations, democratic approaches to management. Organizational theories now reflect the more heterogeneous aspects of cultures, systems, and processes for managing knowledge. In short, organizational theories have now become the most critical aspect of how organizations' structures evolve and grow over time. The emergence of contingency and systems theories are illustrative of this latest evolution of organizational theories. No longer is it enough to concentrate on simply one aspect or area of an organization, the combined effects of the integrative processes are what matter most today. Across these integrative aspects is a common core orientation on how to enable employees to attain the highest levels of performance possible.
Contemporary organizational theories are indeed a product of a series of evolutionary processes, as this paper illustrates. The progression of organizational theories has in fact grown to become more reciprocal with other factors than ever before, as the shift from capital and equipment to individuals' contributions has proven to be the new foundation for lasting competitive advantage.
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