Business Organizational Theories - Research Paper Example

? Business Theoretical framework Business Theoretical framework Business theories are used to explain different aspects of business related subjects such as management, human relations, classical styles, leadership, quality management, and organizational development. These theories help in understanding the different functions and operations that govern or stimulate business processes on a daily basis Business Social/ Ethical Theories Business social theories seek to explain the relationship that business establishments have with the larger society and their responsibilities towards the societies that support them. There are three key theories that seek to explain business ethics. The stockholder theory expounds on the fact that businesses are only obligated to earn profits for their stakeholders and are not necessarily indebted to the wider society (Shafritz, Ott and Jang, 2005). This theory holds the premise that a company is only morally obligated to fulfill the expectations of the people who invest in it. The social contract theory, on the other hand, which is another business social theory, stipulates that all companies function under a tacitly understood contract with the community they are established in. Business decisions are often affected by the social theory that is supported a company. For instance, if a small company was approached with a buyout offer by a larger organization that is known for its unethical practices, the stakeholder theory would support its consideration of how its stakeholders would gain from its agreement to this contract (Shafritz, Ott, and Jang, 2005). However, the social contract theory would call for the consideration of how the bigger companies operations would affect the entire community. Business Economic Theories Business economic theories seek to explain how businesses function in local and international financial systems. The business cycles theory holds that during a business cycle course, an economy develops, reaches a definite peak, and then experiences a downturn which is then followed by a recession prior to beginning another upturn. Another business economic theory, the "under-consumption" theory, holds that an excessive amount of income is directed to the wealthier classes instead of being channeled into investments that will create more opportunities for the disenfranchised groups in society (Shafritz, Ott and Jang, 2005). This can result in social instability. Business Educational Theories Business education management theories are basically the foundation of any operational and productive businesses, and seek to explain how the organizations of different eras have been organized. The classical management theory is a theory that seeks to explain the best way for employees to execute their responsibilities. It is divided into the classic administrative and classical scientific branches. The classical scientific division mainly has to do with scientific mindset of boosting productivity (Shafritz, Ott, and Jang, 2005). Later management theories which moved from concentrating on the division of tasks to the issues that affect employees, were based on concepts such as those espoused by Abraham Maslow; who theorized that all workers possess a hierarchy of needs that needs to be acknowledged and catered to so that they can experience satisfaction with their lives. The Japanese scholar, Dr. William Ouchi, would create the Japanese Management Style which supports Maslow’s hierarchy in its assertion that even though it is natural for employees to want to work, all jobs should be created with the aim of keeping workers happy by means of fulfilling their psychological needs. Business Leadership Theories In business organizations, good managers will inspire their workers and assist them to realize their personal as well as professional objectives. Business leaders accomplish this by using various leadership theories. The trait theory holds that leaders who have characteristics such as openness, intelligence, self-efficacy, adjustment capabilities, and conscientiousness will be propelled by their positive qualities to the top even in the presence of hardship. The style leadership theory, on the other hand, defines leadership as being a result of behavioral styles such as authoritarianism, or the laissez-faire style. The functional theory proposes that the main responsibility of leaders is to make sure that workers’ needs are met so that the employees may be inspired to achieve organizational objectives. The transformational theory states that leadership is based on the leader’s ability to punish or reward workers on the basis of their performance, while the transformational theory holds that leaders have the responsibility to focus on future goals while coming up with ways of convincing their workers to follow them into their ideas of the future (Friedman, 2005). The environmental leadership theory supports the premise that business leaders employ psychological processes to promote self sustaining environments in which workers reinforce each others’ work-related ideas. The business contingency theories do not believe in the capacity of leaders, but hold that leaders are subject to various situations that arise. This means that good leaders may be viewed as being incompetent if they oversee a company in a time when it is undergoing hardships. Business Psychological Theories Business psychological theories seek to establish what causes motivation among business workers. The expectancy theory presumes that workers’ behaviors are the result of conscious choices that are made by the individual workers. Each employee has a different set of factors such as skills, past experience, abilities, and knowledge. This theory also holds the premise that workers may work successfully together if rewards due to good performance are availed and if the rewards will meet essential needs. The process theory, another business psychological theory, holds that workers’ motivation is mainly based on the importance of rewards to different workers (Mankelow, 2008). The attribution theory, on the other hand, holds that workers are basically rational living creatures and so are intrinsically motivated to comprehend their environments and seek to change it in positive ways. The agency theory, yet another theory, holds that workers’ and companies’ interests can conflict and bring about lesser motivation among workers. Business Organizational Theories Organizational theories attempt to explain the inner workings of organizations do as to inspire the understanding and appreciation of organizations. The neo –classical organizational theory holds that workers are the main factor of utmost importance within organizations. This theory addresses the importance of looking after social issues that affect employees in an organization (Bolman and Deal, 2008). This is because it deems that the only way through which to achieve organizational objectives is through raising employee morale. This can only be achieved by improving the environment in the workplace. The classical organizational theories, on the other hand, view employees as just being one part of a number of other factors. A good example of a classical theory is Weber's bureaucratic approach. Weber’s theory holds that the main things of importance in the makeup of an organization are its regulations, work-related procedures, and hierarchical structures. The socio-technical concept proposes that maintaining good communication between an organization’s workers, customers, and contractors is the only thing that can ensure the organization’s productivity. The systems theory, on the other hand, combines the aspects of neo-classical and classical theories in a balanced melange that can be viewed as being the main determinant of organizational productivity. Each organization, according to this theory, is divided into structures that have to thrive within themselves before they can further organizational objectives. References Bolman, L. G., & Deal, T. E. (2008). Reframing organizations: Artistry, choice, and leadership. San Francisco: Jossey-Bass. Friedman, T. L. (2005). The world is flat: A brief history of the twenty-first century. NY, NY: Farrar, Strauss, and Giroux. Mankelow, G. (2008). Social responsibility of small business human resource management practices. The International Journal of Human Resource Management, 19(12), 2171-2181. Shafritz, J. M., Ott, J. S., & Jang, Y. S. (2005). Classics of organizational theory. Belmont, CA: Thomson Wadsworth Read More