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GSBS6060 Strategic Management | Choice and Determinism Theories

Exploring the Paradigm Wars in Organisation Theory

The field of organisation theory is characterised as a fragmented body of knowledge, with many competing theories to explain organisational action.

Your task is to critically analyse the contribution that strategic choice and determinist theories (Resource Dependency Theory; Institutional Theory; Population Ecology) make to our understanding of organisational action. Which perspective do you find most compelling - strategic choice or determinism? Explain your reasoning. 

Answer:

The underlying literature is that strategic choice and environmental determinism bring out mutually exclusive yet competing revelations of organizational adaptation (Hrebinak & Joyce, 1985). This essay will analyze both the choice and determinism as independent variables that can be explained to establish the context of organizational adaptation. The most pervasive and core arguments in understanding organizational adaptation entail distinguishing if it is derived managerially or environmentally. Adaptation is viewed as a process that displays choice and selection visa vis environmental forces that are peremptory. In a nutshell, the matter is considered as one that commands voluntarism or determinism in change processes that are strategic.

Choice vs determinism

Based on exhaustive reviews by scholars, there seems to be distinct differences between strategic choice and determinism theories of organizational adaptation. One of the arguments is the typology that they are a continuum that spans from determinism to strategic choice that classifies primary schools of organizational analysis into mutually exclusive classifications. Though the placement of analytical schools in different classes implies the kind of debate on choice or determinism. Most approaches regarding the matter of strategic choice or adaptation focus on mutually exclusive ends that end up becoming a sole continuum. A similar implication is that prevailing literature is a mere assumption that binary differences between choice and determinism consider the reality of organization behavior and transformation.


lign: justify;">The determinism theory postulates that a marketplace has less control of itself. Firms are thus compelled to adapt to changes in the market and have to constantly seek unexpected changes and variations in consumer patterns. The general industry, marketplace, and the environment dictate how organizations are to be structured. A company’s mission here should entail setting goals focused on enabling such a company survive while generating revenues and profits.

Strategic choice structure

This theory has received a credential in its applicability and is embedded in the strategic structure where it is believed that a business exercises some degree of control and leverage in both the market and also in influencing the behavior of the consumer (Thiétart & de Rond, 2004). The business, in this case, has leverage on some aspects such as advertisements, varying its pricing strategies and developing networks with other enterprises. Through focusing on its goals and objectives, the strategic choice is of the view that managers can manipulate the market to attain its goals and objectives.

The distinctive difference that exists between deterministic and strategic theories with regards to the organizational structure is the extent of adaptability that each theory carries. The deterministic organizational framework asserts that the business is compelled to be dynamic with regards to changing environmental conditions even when it is not desirable. The strategic choice, on the other hand, adopts changes and flexibility in the hope that adapting to anticipate consumer demands would increase brand awareness of the organization while establishing its position in the market.

Determinism versus strategic choice

The works in debates involving determinism and voluntarism contrast with endeavors devoted to the premise that strategic choices are greatly determined by pressures that are both environmental and institutional in nature (Bradley, 2018). Porter’s implication that profitability is a function of the five generic forces remains to be part of the strategic choice. The resource-based view analogy remains focused on primary resources and capabilities as prerequisites for the success of the firm. They, however, contrast other works that demonstrate how organizations can define their future and take active control of their environment. There are two assumptions that explain such conflicting approaches. One is the resistance and rigidity that accustom organizations that prevents such institutions from adapting to changing situations allowing the environment to choose the fittest from a particular population. Similarly, internal abilities catalyze the particular paths that firms can follow. Second, it involves a belief advanced by organizations regarding controlling the means to direct their environment to facilitate the provision of the necessary inputs responsible for ushering in success. Thus, organizations are able to control their destinies by developing a set of conditions that assist them to achieve their objectives.

The role that strategic choice plays in organizational structure, environment and improving a company’s performance is of great importance. The contemporary way of viewing the structural contingency theory is incomplete and irrelevant. Analyzing only the environmental, technological and size of the firm aspects ignore other internal components of individuals in the organization and the very choices that they make. However, there are other important components, for instance, the domain and entails the markets that a firm decides to operate in, boundaries, on the other hand, define the limits that the organization is willing to go as defined by the management. Others Include the goals and actions advanced by decision makers.

However, the most vital element is the decision makers’ analysis of the position of the organization in environmental regions prioritized as critical and the action taken internally. Strategic choice contrasts the population Ecology in the sense that both pose different questions and analyze organizations on different scales of analysis. The dominant coalition in this context refers to individuals who hold the most power as a group over a particular period of time. However, this does not imply that other people within the organization cannot impact in the decision-making process. However, the dominant coalition has to seek support and cooperation thus somehow there is a political process at play.

Defining strategy as the determination of long-term goals, the evolution of course of action and the allocation of important resources crucial to meet such goals, then the vital element in organizational theory would be the strategic choice. It also essential to fathom how adaptation with the environment takes place through the strategic choice theory. The strategic choice explains how the effectiveness of organizational evolution impedes on the dominant coalition notions of environmental scenarios and the decision it advances regarding how organizations tolerate and endure such conditions. The adaptive cycle entails three phases. The entrepreneurial challenge deals with the type of product. The engineering problem handles the relevant choice of technology appropriate for production and the administrative problem identifies the rationale of structure and the priority areas for innovations in the future.

However, some theorists have proposed a blended approach that combines mixed methods to be adopted by the organization. The model integrates components from deterministic and strategic choice theories. This translates to having some ideas in both the environment and industry that are out of range for the business to control through the extent to which they can be controlled in their environment and share of the market can be done by the business.

Why Strategic choice is superior to determinist theory

The failure by determinists to give a logical explanation of the way organizations restructure despite the presence of many competitors and how such institutions manage to adapt their operations amidst stiff competition makes a strategic choice the working theory. There are many arguments that portray how managers participate in fundamental large as well as mutual activities at the start of the reorientation stage. Based on a research that was conducted that entailed 25 producers of minicomputers, it came out clear that it is through the appointment of a new leader that led to the increase of chances of having impactful changes in the organization, strategy, and power-sharing in such institutions. The presence of a new manager is instrumental in ensuring that there is a unique experience for the enterprise and a different approach of effective action to be taken by the organization together with the anticipation of positive changes.

The population theories on the other hand postulate that the environment holds an optimal amount of slack. Such theories assume the level of coupling that may either be tight or loose depending on the environmental functionalities. Therefore, organizations find themselves possessing less power of how they can utilize slack to assist them to adapt and vary with regards to environmental uncertainties is evident that lack of slack resources by organizations make them be loosely entangled to the environment. It is also apparent that organizational slack has been classified as the shock of potential resources that facilitate the development of creative strategic behavior and shield the organization from unforeseen environmental uncertainties. However, strategic choice theorists develop their argument that the availability of slack at one particular time frame has the effect of strengthening powerholders to effectuate the required structural changes which enable such firms to perform better in the near future. It is through slack that organizations are better placed to implement innovations in the field of technology that can impact positively the position of the company in the environment. It is the level of coordination by the managerial activities that are responsible for providing the desired level of slack which is also an outcome of effective teamwork by the top management.

The idea that the environment controls the market thus limiting the activities of organizations by determinists is vague and lacks logical explanation. Strategic choice proponents demonstrate that managers have the power and discretion to dictate the environments that they wish to operate. This makes managers have an impact on the decision-making process in attempting to suit their perception of the world. Based on some research conducted that analyzed the association between the environment and performance it was apparent that irrespective of the conflicting managers’ views regarding the environment from the objective examination, this had little effect on the organization’s performance. It was concluded that managers had the power to drive in organizational performance through them having varying subjective ideas that fail to match the features of the objective environment.

The theory of strategic choice expounds how managers play a vital role in influencing an organization through decision making in a dynamic political environment. Based on other theories, there was a perception that organizations were to be designed as guided by the operational requirements as per the external environment (Zimmermann, 2014). However, strategic choice gave an alternative that focused on the agency provided by people and groups within the organization to take part in making choices strategic to help in their departments. Such choices would in return influence the growth and development of those organizations. It is the strategic choices that became part of the learning process adopted by the organization to help it adapt to the external environment and the internal political environment as well.

Apart from the organizational settings, the strategic choice theory was advanced to help deal with people’s responses in their daily disputes. The results revealed that complainants, as well as respondents, utilized a number of strategies that have evolved over time to assist them to resolve a particular dispute.

It is apparent that works developed by determinism and strategic choice theories strive to distinguish the applicability of such theories. Despite insightful endeavors at integrating determinism and choice, no understanding theory has managed to expound on the concept of causation strategy (Moulin, 2014). Particularly, the strategy has been found to lack a theory of choice. Such an observation seems ironic as choice and causation are the very heart of the discipline. It is clear that determinism and strategic choice theories provide analysis at both the organizational and industrial levels. Also, resource-based theorists evaluate the applicability of strategic choice at the organizational level. It is the resource-based theorists that argue that managers acquire advanced knowledge and unique abilities that facilitate the development of high-performance levels in an organization.

Conclusion

The determinists postulate that the performance of an organization is constrained by legal and competitive components that prevail in the environment. They also go further asserting that the environment singles out the organizations that it believes will survive in the long-run. The determinists are of the view that at the industry level, environmental resources are limited and it is, therefore, the role of organizations to adapt their activities so that they can benefit from the many advantages of an evolving ground. The existence of inertial structures enables organizations to sail through difficulties with a lot of easiness. However, compared to the determinist theory, strategic choice is more practical in the real world and applicable in contemporary business units. Managers as per the strategic choice are change agents responsible for propelling the organization in the direction and in an environment that is deemed safe

References

Bradley, J., 2018. Deterministic Vs. Strategic Organizational Structure. [Online]
Available at: https://smallbusiness.chron.com/deterministic-vs-strategic-organizational-structure 65533.html[Accessed 21 October 2018].

Hrebinak, L. G. & Joyce, W. F., 1985. Organizational Adaptation: Strategic Choice and Environmental Determinism. Administrative Science Quarterly, 30(3), pp. 336-349.

Moulin, H., 2014. The strategy of social choice. Elsevier, 1(1), pp. 6-14.

Thiétart, R.-A. & de Rond, M., 2004. Chance,Choice and Determinism in Strategy. [Online]
Available at https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/workingpapers/wp0405.pdf
[Accessed 21 October 2018].

Zimmermann, N., 2014. Deterministic and Voluntaristic Theories of Organizational Change. Dynamics of Drivers of Organizational Change, 1(1), pp. 9-63.

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