Organization theory lectures
What is a complete organization theory?
Theory = way of looking to reality
1. bigger scheme; mission with OT
Claim: Without organization theory, no organization analyst! Why?
Core competence of an organist. (S-)he is able:
- to explain organizational states/traits (dv’s) with (configurations of)
sociological, psychological and economic predictor variables (iv’s)
- and advice how to affect the relevant predictors in the pursued direction to
achieve favoured states/traits of organizations!
professionals; use jargon (vaktaal), but you need to explain what the jargon means
Every Theory offers pre-tested combinations of predictors and organizational
states/traits
what do theories do for you;
- offer you a set of explanations for different states/predictors
- software for your future competence
- every theory offers pre-tested combinations of predictors and organizational
states/traits
- you’re a defender or prospector
,Paper Whetten;
How to make a credible story:
- boxes and arrows are not enough!!!!
- What is the raw material of each theory!!!
- definition of organization theories:
“How particular conditions result in particular kinds of [organizational]
phenomena/outcomes” (Collins).
“A good theory explains, predicts and delights” (Weick)
“…theory is a statement of concepts and their interrelationships that
shows how and/or why a phenomenon occurs “(cf. Gioia & Pitre, 1990).
We want to be as efficient as possible, if it is within our norms and values. If it is
outside our norms and values, we resist.
what kind of elements are prerequisites for ‘organization theory’?
1. constructs – what of the theory
Which factors (concepts/constructs/variables) should be considered as part of
the explanation of the social or individual phenomena of interest?
To judge whether the ‘right factors’ were included factors should be
comprehensive, and parsimonious!
Explanatory/explained variables – independent/dependent variables/ factors;
causes/outcomes)
, Ex; size/age/level of competition/level of demand: level of strategic change
2. how – arrow between explanatory and explained
After having identified a set of factors, and assigning the status of dependent
or independent variable question is How are these factors related?
Operationally: draw an arrow for each separate independent variable!
independent/dependent variables, factors; causes/outcomes
Ex; size/age/level of competition/level of demand level of strategic renewal
Specify the how; identify types of relation between x and y, specify how
empirically; (decreasing, increasing, inverted u shape)
- Is the relation causal, or is it an association, or just a difference?
– If causality requirements don’t apply, there is only
association or difference possible
– One requirement for association: two variables covary!
– To assume causal relations, three requirements apply:
– 1) IV precedes DV in time,
– 2) IV and DV covary,
– 3) there is not a spurious correlation (a third variable causing
the effect, that cannot be attributed to the IV)
– Empirical relations have different shapes/functional forms:
– Linear (Positive – Negative),
– Non-linear, that is a second order power function (convex,
concave);
– Non-linear: Third order power function: S-curve.
3. why – why is it a good story/logical
What are the underlying psychological, economic, sociological mechanisms
that justify – make plausible – the choice of factors, and the proposed
relations?
Defining why constitutes the theory’s arguments that explain. It is the
theoretical glue that weld’s the what and the how into a logically plausible
model.
The ‘Why-part’ makes explicit the theoretical positioning and reasoning of the
researcher. Also the why’s should allow for deriving testable propositions
(involving concepts), hypotheses (involving measures)
Three examples;
, Why; the hypothesis; The larger the size of a CEO’s network the higher his/her
decision quality
Why; the argument: Individual CEO’s with a relatively large network have
better acces to information about business trends, strategies of competitors
via their relations and therefore they can make better informed decisions.
4. who – are we talking about, where – talking to dutch/belgians, amount of
time covered by the data (20 years period of study is different from 2)
sometimes there are changes. never part of the conceptual model!! But in
the methods section
Finally; Theories help us to understand why organisations do what they do, and how
they do it.
Management implicitly uses theory: if Manager does A, B will happen!!
A causal link between A and B is assumed.
So theories are used and referred to in practice.
“There is nothing as practical as a good theory.” (Kurt Lewin).
Rational choice theory
Runaway trolley dilemma – how many people will die in a particular situation?
Rational choice theory = What choices people make on their rational decision
making. Try to explain behavior of people by rational actions.
Not just 1 theory, but a family of approaches that assume that;
- human beings pursue goals and
- being confronted with opportunities and limitations for reaching their goals,
humans do so in a more-or-less intelligent way. (you have to choose between
different options, because you have limited time etc. You can’t try
both/everything)
- intelligent = anticipation of the consequences of one’s action and the
evaluation of the consequences for the realization of one’s goal(s).
History
rational choice theory was originally developed by economists, being a predominant
paradigm voor economist from the 1950’s. From the 1970’s, it became a predominant
theory in the social and, later, behavioral sciences. However, despite shared roots,
the economics version and the social science version are NOT the same!
assumptions;
1. active agents, active goal directed behavior (you make an active decision to
go to the lecture if you want to pass the exam) you are a producer of your own
destiny
2. scarcity, you can’t do everything, it obliges you to make the choice
3. interdependence, you don’t live in a vacuum, external effects (positive and
negative). Interdependence among active agents, some goals can only be
achieved jointly.
4. Incomplete and assymetric information
formally;