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Organization Theories

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

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Organization Theories

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  1. 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: InstituionalIsomorhism, 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.

  2. McGregor, 1967Original 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.

  3. Selznick, 1957Orignial 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

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