Organization Theories Transaction Cost Economics (TCE) – Opportunism, Information impactedness – efficiency, outsourcing vs. integration Agency Theory.

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Presentation transcript:

Organization Theories Transaction Cost Economics (TCE) – Opportunism, Information impactedness – efficiency, outsourcing vs. integration Agency Theory – Nexus of contracts. Fiduciary Duty. Principal-Agent legal structures. Alignment of interests, financial market controls. Output control vs. process control. Agency costs. Systems Theory – Open/Organic, Closed/Mechanistic, Socio-technical system, Micro uncertainty macro predictability Institutional Theory – Original Selznic: Institutions “infused with value distinct from that created to reach to basic profit/product objectives of the firm. Modern: Dimaggio and Powell: Instituional Isomorhism, Collective Rationality, Mimetic, Coercive, Legitimacy forces. Resource Based View – Unique Resources and Capabilities Packages. Core competencies. Resource Dependency – Power, Politics, trade-offs Population Ecology: – Consonance, Industry evolution, niches, survival of strategic groups, punctuated equilibrium A sociology vs. an organization theory – Sociology: A loosely coupled system or web of beliefs and practices that solve the common problem of living together sustainably. – Organization Theory: Reason why there are organizations and what they are as entities in and of themselves.

McGregor, 1967 Original Open Systems Organization Theory Organizations are open systems – Subsystems with an organization are also open systems Organizations are organic systems – Actively adaptive and dynamic. Neg-entropy. Organizations are socio-technical systems – Interactive-interdependent processes of people and technologies.

Selznick, 1957 Orignial Institutional Theory Organizations become Institutions Institutions are infused with value that is distinct from that created to reach to basic profit/product objectives of the firm. Institutional forces restrict change Leaders of institutions must be statesmen