Organizational Theory Organizations Environment Each Perspective Examines

Organizational Theory

Organizations Environment Each perspective examines organizations perceived relationships environment differently. Describe differences. What enacted features organization's (U.S. Postal Service) environment ways features displayed perceived consistent perspectives? Text: Organization Theory by Mary Jo Hatch.

Each perspective examines organizations and their perceived relationships to the environment differently. For this discussion, describe these differences.

Contingency theory stresses the fact that an organization's decision-making processes are in constant dialogue with the environment. An organization's policies are always contingent upon its particular market situation. This theory of organizational behavior stresses the situational nature of decision-making on the part of organizations. An organization in a 'mature' or perfectly competitive market environment with an established demand for its product will need to make different decisions regarding pricing and marketing than an organization with clear market dominance and a near monopoly. Complexity of the individual organization and rate of change of the external environment will determine how the firm should self-govern (Hatch 2006: 79).

Contingency theory stresses the need for constant assessment and re-assessment by the organization of external circumstances. In contrast, resource-dependency theory stresses the finitude of organizational resources, and the fact that organizations with limited resources will strive to create relationships with organizations that possess more extensive resources. Resource dependency theory has more stable propositions for how organizations operate than contingency theory. For example, many U.S. companies have outsourced operations to China because of reduced costs of labor in that nation; individual Chinese organizations often seek the resources of knowledge of the West, creating mutual dependencies (Hatch 2006: 74). Scarcity of land or a desire for untapped markets can cause an organization to strive to expand abroad, and scarcity of resources such as oil will impact the decision-making of firms and nations.

Unlike the situational nature of contingency theory, resource-dependence theory makes blanket statements about the nature of organizational decision-making and is heavily influenced by the notion that most economic decisions of a firm are governed by the principle of scarcity, and the need to make trade-offs. In contrast to resource-dependency theories of the firm, population ecology models of organizational theory examine the effects of scarce resources upon the organization as a whole in the context of the wider environment (Hatch 2006: 83). A critical difference between resource-dependence theory and population ecology models are that in the latter, groups of industries and their development are studied, rather than individual firms.

Finally, institutional theories of firm development stress that organizations have relatively durable models of behavior which are fixed and unalterable. Enactment theory stresses the role of the individual in shaping organizational actions: what seems to be the result of an institutional structure is often, when analyzed more closely, not a product of bureaucracy but of individual circumstances that change over time (Hatch 2006: 85).

What are some of the enacted features of your organization's (U.S. Postal Service) environment and the ways these features are displayed or perceived that might be consistent with one of the perspectives (contingency theory)?