Organizational Theory the Theoretical and Term Paper

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Further, coercive and reward power are often highly distributed through the more agile organizations and as a result must be applied immediately to behavior to be effective.

In the context of Dr. Edgar Schein's (1983) analysis and presentation of results in his working papers referenced in this document, an industry's growth and culture is well defined in the following quote. In the working papers, Schein (1983) writes:

For an organizational culture to exist, there must be a definable organization in the sense of a number of people interacting with each other for the purpose of accomplishing some goal in their defined environment. The founder of an organization simultaneously creates such a group and, by force of his or her personality, begins to shape the culture of that group. But the culture of that new group is not there until the group has had its own history of overcoming various crises of growth and survival, and has worked out solutions for how to cope with its external problems of adaptation and its internal problems of creating a workable set of relationship rules.

Power topologies and their continued use are influenced by organizations; culture and the definition of cultural distance (Hofstede, 2006). These three factors contribute to the organizations' willingness to change over time. This is particularly true in globally-based organizations where cultural differences will vary significantly across each geographic region an organization operates in. From research cited on cultural distances (Geert Hofstede, 2006) and more specifically to the application of power distance as a variable in explaining the performance of organizations in rapidly changing industries, the implications of Power Distance as defined by Hofstede set the foundation for an organization looking to ensure agility and responsiveness to both customers and outside forces over time. In his working papers and books, Hofstede defines Power Distance as follows:

Power distance, that is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more vs. less), but defined from below, not from above. It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others"

Power Distance is defined by intellectual ability to quickly solve problems and turn the non-standard into the standard, to take deviating customer requirements and deliver them in the context of a shrink-wrapped package. This is the essence of growing an agile organization at the employee level. Working to productize non-forming customer requirements and looking to capitalize on them is a major strength industry leaders in manufacturing industries for example are attempting, redefining the concept of the agile organization in the process. This is juxtaposed to hierarchical organizations less willing to change despite obvious messages from the external environment.

Sustaining and Solidifying Trust

The one factor that has been researched in the context of both its theoretical and practical applicability to organization theory is trust. The lack of trust exacerbated by the growth of offshoring, outsourcing and the concentration on transparency and compliance. Often in responding to these factors organizations leave their employees sensing a lack of relative status, uncertainty about their futures, and a tendency to become negative about the changes as the subordinate is not involved in the decision process. Yet just as important as creating an agile organizational structure is the need for anchoring managerial change strategies in trust. The many facets of trust as they relate to manager- subordinate relationships hinges on consistency, transparency, and authenticity of interactions over time leading researchers to draw the conclusion that the catalyst of trust is transparency (Ergeneli, Sag, Ari, Metin, 2006; p. 60) and greatly increases the speed and accuracy of interactions across entire organizations. The ability of managers to create these levels of consistency, transparency, authenticity and genuineness has a direct implication in the ability to effectively lead associates through change. While the concept of change management is often discussed in the context of major strategic shifts internally, change management in essence happens with each new departmental goal or objective is introduced within a department or division of an organization (Ergeneli, Sag, Ari, Metin, 2006; p. 41). The longevity of trust and the ability of organizations' leaders to enable change by living it also is a critical aspect of managing in the 21st century.


The understanding of people and organizational management principles is essential for navigating an organization through the turbulent times ahead in the 21st century. Not only is more change coming, but the nature of change itself is already forcing organizations to work at create more agile, responsive organizations that can respond more effectively to customers, competitors, suppliers and distribution channels. The essential areas of managing for optimal performance, capitalizing on power taxonomies to enable and sustain change, and the critical need for trust all must be considered as foundational areas of organization theories for meeting the challenges of leading an organization in the 21st century. The focus on infusing ownership and a sense of accountability surrounding results while at the same time alleviating the need for a highly structured, hierarchical and slow-moving organizational structure are critical in the coming years. There must be strategic direction of creating self-sustaining working teams that are managed to optimal performance while relying in the power taxonomy of an organization to define performance norms, values and expectations. Finally, underscoring all of these factors is the need for motivational theories including Herzberg, Vroom, Lawler, Achievement motivation, and McGregor's Theory X/Y models to further act as catalysts for delivering a sustainable and strong foundation over the long-term by creating a climate of trust in the organization. Ultimately for any organization to survive into the 21st century, optimal performance, an appreciation for and managing of power taxonomies, and the continual strengthening and sustaining of trust are all critical.


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Geert Hofstede, 2006 - Summary of Ideas about Cultural Differences. From Geert Hofstede's personal website: Accessed on December 7, 2007:

Brian K. Heger 2007. Linking the Employment Value Proposition (EVP) to Employee Engagement and Business Outcomes: Preliminary Findings from a Linkage Research Pilot Study. Organization Development Journal 25, no. 2 (July 1): P121-P132, P233. (Accessed December 6, 2007).

Anna Kadefors (2004). Trust in project relationships - inside the black box. International Journal of Project Management, 22(3), 175-182. Retrieved December 6, 2007, from ABI/INFORM Global database. (Document ID: 668122161).

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Raza Mir, Ali Mir, Hari Bapuji. (2007). Offshoring, exit and voice: implications for organizational theory and practice. Critical Perspectives on International Business, 3(3), 211. Retrieved December 6, 2007, from ABI/INFORM Global database. (Document ID: 1367675241).

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