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A theory is essentially a set of concepts, propositions and ideals that have a direct relationship (Mullins, 2005). Therefore, the main approach used in the development of a theory is correlation which often assumes a causality relationship. Theories aim at providing systematic explanations of a phenomenon and they can do that from various point of views. The existing organizational theories seeks to provide an explanation of the functioning of the organizations and the main ideals that affect the development of the organization. The theories look at the aspects that affect the individual and group functionality since people are the main components of any organization (Schermerhorn, 2005). The paper will look at the ideals postulated in the classical theory, neoclassical theory, bureaucratic theory, systems theory and contingency theory in the organization setting. It will also go further to offer an opinion on the theories that are best situated to explain the functionality of the organization.
The advancement of the theories led to the onset of a systematic study of the organization. The theory essentially looks at the anatomy of the modern formal organization. Formal organizations have job unit or authority and responsibility being the major definitions of the scope of the organization (Schermerhorn, 2005). There is a deliberate creation of the organization with a succinct and definitions of the scope of each job. Each job has accountability and responsibility assigned to it. The theory looked at the organization as a machine. The workers were supposed to the moving parts or cogs in it and they had to work at their respective role for them to attain the overall goal of the organization. The theory posits that there is a perfect way of doing a job. The major flop of the theory is that it ignored the social aspects of the organization by designating workers as machines.
Neo classical theory
Shortcomings identified in the classical theories led to the development of the neoclassical theories. In this new body of knowledge, the organization was viewed as a social system. Therefore, the theories considered the input of human being as a major influence on the success of the organization. The theories also recognized the existence of an informal section in each organization that acts as a complement of the formal organization. The behavior and morals of the human being in the organization is dependent on a number of socio-psychological factors that motivate the people. The existence of the human beings in the organizations setting necessitates the creation of a common approach to work that reconciles the interests of the organization with those of the individual.
Neo classical theories opine that the team work in any organization is not automatic or inherent but it has to the gradually developed. Therefore, the organization is not a mechanical approach that is designed to increase the productivity. The major difference between the classical and neo classical organizational theories is in the recognition of the people influence in any organization. Neo classical theories have led to the development of a new approach to management such that the organizational structure of most of the modern organizations is developed in such a manner that it accommodates the interests as well as the influence of the people (Mullins, 2005). The organization structure designs that have been influenced by the propositions in this theory include; the development of a flat structure, decentralization at the lower management levels to act as incentive for creativity and recognitions of the informal organization as a complement for the formal organization. It has however been tainted to be shortsighted and too descriptive.
This theory was advanced by max weber. The theory has had a significant effect in the modern organizations since it is the most commonly used approach in the design of the organization (Heizer & Render, 2004). The word given to the theory has a negative connotation in that the management is deemed to be corrupt, inefficient and ineffective (Schermerhorn, 2005). It is also deemed to use, to a large extent, red tape to thwart the initiative of people at the lower levels of the organization. Therefore, the origination is less inclined to succeed since the initiative has to originate from the top management (Heizer & Render, 2004). The salient features in the bureaucratic organizational theory include the assertion that a particular person in an organization is major conduit of power or authority. The other salient feature is that within the social framework, there is a special instance of power called domination that can be enforced on another person despite the common resistance of human structuring.
The theory is similar to classical theories of scientific management since the theory postulates that the organization is more of a mechanized system that is composed of complex intertwined and connected elements that perform the function of creation of value (Schermerhorn, 2005). The components have the inputs, processes for conversion of inputs, outputs and feedback loops. The major shortcoming of this organizational theory is that it simplifies the organization. It also fails in the recognition of the input of the external environmental influences.
This theory is different from all the other theories in that it does not provide a single way of restructuring or running an organization. It accommodates the influences of external factors by looking at each organization in its own context. The theory is large contextual and it accommodates the fact that there is no heuristics in running an organization. The theory provides a solution to issues that organizations face that are unique to them owing to their external environment and nature of the business (Drucker & Maciariello, 2008). This theory is the most relevant of all the organizational theories since it provides tailor made solutions to an individual organization.
Drucker, P., & Maciariello, J. (2008). Management (1st ed.). New York, NY: Collins.
Heizer, J., & Render, B. (2004). Principles of operations management (1st ed.). Upper Saddle River, N.J.: Pearson/Prentice Hall.
Mullins, L. (2005). Management and organisational behaviour (1st ed.). Harlow, England: Prentice Hall/Financial Times.
Schermerhorn, J. (2005). Management (1st ed.). New York: J. Wiley.
Human resource incorporates an important department in any organization. Human resource refers to a set of individuals who makeup the workforce of any organization. Its management, on the other hand, refers to strategies used by the organization while dealing with the workforce related to the organization. Watson Company is a well-known company for its welfare to its employee and as well its employee-oriented schemes of operation.
The company has a large workforce with over 800 workers, 80 management level employees and 150 administrative staff members. The company has a mission based on employee equality in that they ensure that services within the company are equal for all employees. Example is in their cafeteria where despite them being in different locations, their amenities, infrastructure and foods provided are of the same quality. Relations between the management and its employees are commendable and the company has not lost any employee despite a late reported trade union in the company. The paper highlights a case of human resource problem experienced in Watson Public Ltd Company.
Over the past few days, the company is experiencing some problems while supplying their products. Some of the problems include quality issues of its products. The company is experiencing and facing numerous complaints from its clients following the sudden change in the quality of its products. In other cases, some clients are reporting cases of product mismatch. As compared to earlier days, product mismatch (errors during packaging) are arising. This is affecting the company negatively as they are losing some clients.
Lastly, severe cases of recklessness in the company is cropping up when its clients experience some delays in getting their ordered goods. These occurrences within the company are affecting it negatively and its competitors are using it as loop holes for overcoming it. When intervened by the management, they realize the behavior of their employees resulted from some decisions made by the management. The management hired new employees to higher-level posts without having consideration of some potential internal candidates. Another reason for the behavior by the employees was that the newly hired employees occupied higher ranks while the existing employees occupied same levels.
“If it isn’t scientific, it’s not good practice, and if it isn’t practical, it’s not good science,” is a quote by Morris Viteles, which is very common. Science provides evidence and reasonable explanations to describe reality. Therefore, if the situation is not scientific, this means that there is no evidence or reasonable explanations for the situation. For scientific evaluation, evidence is collected and then evaluated to prove if it is factual or fiction. Therefore, if something is not scientifically proven, then this might mean that it may either be factual or fictional. Science also needs to be practically proven in some certain situations. The reasonable explanations and theories used in science need proving, and some have to undergo practical testing. Therefore, if it cannot be proven scientifically, it is not good science. Research and practice play a vital role in the development of the organization. Research and practice need to be used concurrently to improve the performance of an organization.
Organization development refers to a field of research, practice, and theory that is directed to increasing the effectiveness and knowledge of people to achieve more success in an organization (McNamara). Organization development is a constant and continuous process that involves diagnosis, implementation, action planning, and evaluation (Gallos, 2006). The goal is to transfer knowledge, information, and skills from one individual to another in an individual. The process should increase the capacity of the individual’s in solving problems and the management of the future. Organizational development started from human relations in the 1930’s and at this time, psychologists discovered that organizational processes and structures increased worker motivation and behavior. Industrial organizational psychology is the scientific study of the workplace (Sizler, Cober & Erickson, 2011). Methods in psychology are used to evaluate critically business matters. The business matters reviewed are coaching, talent management, performance, organizational development, balance of life and work, and effective talent management. Industrial-organizational psychologists can identify behavior of workers and establish methods that can be used to increase productivity.
Action research is a process that is used to improve the social problems that people face in their everyday activities. Historically action research has been associated with the works of Kurt Lewin, who is constantly referred to as the founder of action research. Kurt Lewin reviewed the research methodology of action research and referred to the methodology into three terms. According to Kurt Lewin, action research methodology is dynamic, cynical and collaborative in nature. Through repeated cycles of planning and implementation, the researchers and groups involved in active research can enforce changes needed for social improvement (Gallos, 2006, p. 456). Action research is significant since it involves collaboration between the members since they have a common goal to achieve. Action research is used widely in universities and organizations to enforce change in a transitional way. The two types of action research are practical action research and participatory action research.
The practical action research method studies the social issues that constrain the lives of individuals. There are various social issues in the lives of individuals that action research can be used to solve. Organizational psychologists may at time focus on how ethnic and cultural diversity work out in the setting of an organization. One would wonder whether it is healthy to have ethnic and cultural diversity in an organization and the role it plays (Borman et al., 2004, p. 89). To create a conducive working environment, organizations must ensure that their workers feel comfortable and that there is no ethnic and cultural discrimination. The company should also ensure that there is no ethnic community or culture that is treated better than the other (Hofstede & Minkov, 2010, p. 123). Therefore, as a consultant for change, the use of practical action research would very effective. The use of action research can be effectively useful for a consultant of change since the research methodologies can be used to foster change.
Action research refers to research that is used to solve an immediate problem or show the process of solving a progressive problem. Action research is carried out by individuals working in teams, and their main agenda is to improve the way they solve issues and problems. Action research is used as an important approach to consultation when it comes to efforts of organizational change. Individuals who often use action research accredit the method with an empowering experience (Stringer, 2014, p. 178). Action research is deemed to provide positive effects for a number of reasons. Action research is relevant to the participants, and this is the main reason for the use by many people. Researchers are the primary consumer of findings, and every research project is carried out according to the rules set by researchers. The theoretical models in action research differ on the organizational issues and offer different intervention strategies to the various problems.
Cooperative inquiry is one of the major theories of action research, and it was explored by Peter Reason and John Heron. Cooperative inquiry refers to the carrying out of research with professional individuals, rather than carrying out research on people (Gallos, 2006, p. 79). In cooperative inquiry, everyone who is involved actively in the research decisions is considered as a co-researcher. In cooperative inquiry, there are four types of knowledge, which are in the research cycle. The four types of knowledge are practical understanding, propositional knowledge, presentational knowledge and experiential knowledge. Practical understanding refers to knowledge that comes with the proposals in the research while; propositional knowledge refers to the research methods papers used in research (Costello, 2007, p. 49). Participatory action research is a significant method for development and intervention within groups and communities. The method is used by universities, international development agencies, and local community organizations. The success of an individual as a consultant for organizational change depends on the ability to assess the unique circumstances that face an organization.
Costello, P. J. M. (2007). Action research. London: Continuum.
Gallos, J. V. (2006). Organization development: A Jossey-Bass reader. San Francisco, CA: Jossey-Bass.
Stringer, E. T. (2014). Action research. Los Angeles, Calif: SAGE.
McNamara, C. (n. d.). Organization development (OD)—The field and resources for OD professionals.
Silzer, R., Cober, R., & Erickson, A. (2011). Where I-O worlds collide: The nature of I-O practice. Society for Industrial and Organizational Psychology, Inc.
Development is an aspect that has eluded Third World countries for over a century now yet nations that were at par with most of these Third World nations in the early 19th centuries are now middle-income economies while some have attained ‘developed’ status. Despite constant interactions between the developed and developing countries, it seems that the development gap between the rich and the poor is widening. This article examines some theories that have been developed to try and explain this phenomenon.
Keywords: development, modernity, developing countries.
Critical Development Theory
In the previous century, economic growth was primarily concentrated in developed countries which continued to record impressive economic growth trajectories while their developing counterparts continued to wallow in underdevelopment. When the world ushered in the 21st century, the levels of optimism were understandably high as globalization, underpinned on the principles of a free-market provided hope that at long last, social and economic reforms characterized by flexibilization, privatization, and deregulation would quickly translate into unprecedented economic growth for all nations. Globalization was viewed as the ship that would charter the course of underdeveloped countries to prosperity. However, the reality has been anything but as a majority of underdeveloped countries have continuously remained in the lower percentiles of economic and social growth while the wealthy nations continue to develop and accumulate more wealth. So, what happened to the much vaunted socio-economic reforms that were supposed to be the blueprint for growth and development especially of developing countries? The answer lies in policies and practices that were developed by these developed countries on the governance of trade and investment.
There are many aspects on which economic development can be measured such as Gross Domestic Product (GDP), Nominal GDP, Purchasing Power Parity (PPP), and Global Income Distribution, among many others (Henderson, Dicken, Hess, Coe, & Yeung, 2011). The International Monetary Fund (IMF) recently concluded research on the North and South American countries that showed that “on average, there has been no convergence of per capita income levels between these two groups of countries” (Munck & O'Hearn, 1999, p. xiii). The report added that contrary to what many economists expected, the number of low-income (poor) nations had actually increased from 52 to 102 since 1965 and 1995 respectively based on global income distribution. Instead, the rich countries have become more affluent as the developing countries have become poorer. Take, for instance, in Latin America where the average income per capita fell to almost a third of their North American counterparts in the 70s and further to a quarter of their northern neighbors during the 90s. From the mid-70s onwards, the terms of trade for the underdeveloped countries fell by half (Munck & O'Hearn, 1999) yet they trade with their American partners on almost equal terms.
Several theories have attempted to explain the economic disparities between western developed countries and the many underdeveloped countries found in other parts of the world, and one of these arguments is the development theory. This theory posits that after World War II, the United States emerged as a dominant power and thus its perspectives on modernization became the template for most countries all over the world who sought development as the one demonstrated by the U.S. model (Martin & Sunley, 2016). In retrospect, this also meant playing second fiddle to American imperialism on all matters trade included, and therefore for underdeveloped nations, the only way to develop was by accepting to be dominated and having their destinies shaped by a western way of perceiving and conceiving the world.
Development, in a discursive context, is part of a broader scheme by the so-called ‘developed’ countries to control and manage (and even create) a Third World that is under their influence economically, culturally, and politically (Martin & Sunley, 2016). It is part of a scheme where the lives, plans, hopes, and imaginations of a people are determined by other people who ironically, don’t share the same ideals, hopes, and values. This agenda of development is well hidden behind a façade that seeks to portray it as a ‘necessary and desirable’ process and as an integral part of human destiny (Munck & O'Hearn, 1999, p. 3). The simple truth, however, is that the socio-economic and political transformations of underdeveloped countries cannot be separated from the cultural reproduction of the western states. In trying to identify the reasons why some countries are perpetually poor while others are becoming wealthier and wealthier, Munck & O’Hearn (1999) argue that secondary importance has been paid to the importance of cultural practices and the role it plays in developing the thinking process. The more recognized political and economic dimensions have overshadowed culture and that this oversight could be one of the underlying reasons why development, in the real sense of the word, has eluded impoverished countries.
Contrary to popular thinking, ‘development’ is not a natural process that happens everywhere myopically, rather, it is a system of values and practices that was constructed from a western culture point of view which therefore makes the whole concept unique to western idiosyncrasies (Munck & O'Hearn, 1999). One of the prominent theories that have been used to explain micro-economics of development is the Transaction Cost theory. According to this theory, countries that nurture the development of institutions that lower ‘transaction costs’ are generally poised to have better-performing economies. Transaction costs include such things as negotiation, information, monitoring, and enforcement of contracts. Therefore, when there are no transaction costs, assigning rights to properties does not matter because these rights can be exchanged and adjusted to promote production (Bardhan, 1989).
On the other hand, if these costs are high (as is usually the case), then property rights become critical. This is how; historically, the process of growth has always been a trade-off between transaction costs on the one hand, and specialization and economies of scale on the other. Take the case of a peasant community. Obviously, the transaction costs are indeed very low, but because there is limited division of labor and specialization due to a small market, the costs of production are quite high (Bardhan, 1989). The same scenario repeats itself in a large complex economy in that as the interdependence network grows wider and impersonal exchanges start to take root, the wide scope of opportunistic behavior that follows, e.g., shirking, stealing, etc., drive the transaction cost up. The western societies realized this and devised well-structured institutional frameworks (e.g., formal contracts, vertical integration, well-defined property rights, corporate hierarchy, bankruptcy laws, and etcetera) that constrained the participants and reduced the uncertainty of impersonal exchanges (Bardhan, 1989). In other words, these institutional frameworks reduced the transaction costs and allowed large-scale productivity gains as well as improved technology.
The other theory that has also been widely used to elaborate on the development gap between nations of the world in the Imperfect-information theory which argues that information was an essential part of transaction costs. This approach provided a more rigorous perspective especially when it came to designing contracts, paying more attention to the details (terms and conditions) of the contractual agreements than the transaction cost theory (Bardhan, 1989). These formed the basis of shared meanings and beliefs of western societies. Thus, when the underdeveloped nations import goods, technology, and economic policies from the western worlds, they cannot achieve the same degree of accomplishments because according to Munck & O’Hearn (1999), “everything is set to go, but the symbolic engine is missing” (p. 2). The fabric the Westerners wove centuries back still holds their fundamental beliefs and practices in place and ensures that the critical factors that are necessary for production are in place as their knowledge system continues to devise mechanisms that keep the transaction costs low.
Therefore, as developing countries blindly imitate the economic models of western countries, they realize that these models are not working for them and even as they engage in trade, their western counterparts manage to get better trade deals and continue to generate more wealth. This is simply because the cultural practices that they utilize in interpreting knowledge are not the same as that of western countries and until this is done, the development impasse will still not be overcome. This is the mind-trap that developing countries are stuck in – they rely on developed countries to essentially provide them with everything. This hegemony that the developing nations have willingly accorded their developed counterparts is the sole reason as to why it is becoming difficult for Third World countries to rise and define their own development criteria as the European, American, and Asian superpowers of the 21st century have done.
This hegemony does not end in the cultural, political, and economic spheres but even in the domain of knowledge (Munck & O'Hearn, 1999). The technology that drives the economies of developing countries originates from the West from the food crops they cultivate, to farming systems, and even to the education system - everything has a western imprint on it. The developed countries continue to control and manage Third World countries because they control knowledge. During the 17th and 18th century when Britain and France were at the peak of their powers, they embarked on a universal mission to ‘spread’ modernity and civilization throughout the world. Cultures and societies that did not embrace the ‘modernity and civilization’ message were subsumed as ‘backward’ and ‘uncultured’ (Munck & O'Hearn, 1999, p. 8). Since then, modernity is a concept that is exclusive to North America and Europe.
Thus, even as underdeveloped countries engage in the formulation of economic and social policies that are meant to spread the tides of prosperity to all nations of the world, there will always be that one-sided tendency of monologue instead of dialogue that is deeply rooted in the perception that knowledge comes from the developed western countries to impoverished Third World countries. This attitude affects the power relations between these countries and results into unequal sharing of resources and opportunities to prosper.
Bardhan, P. (1989). The New Institutional Economics and Development Theory: A Brief Critical Assessment. World Development, 17(9), 1389-1395.
Henderson, J., Dicken, P., Hess, M., Coe, N., & Yeung, H. W.-C. (2011). Global production networks and the analysis of economic development. Journal of Economic Development, 9(3), 436-464.
Martin, R., & Sunley, P. (2016). Paul Krugman's Geographical Economics and Its Implications for Regional Development Theory: A Critical Assessment. Journal of Economic Geography, 76(3), 259-292.
Munck, R., & O'Hearn, D. (1999). Critical Development Theory: Contributions to a New Paradigm. London: Zed Books.
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