Why do different theories of the firm exist Essay - 1

Why do different theories of the firm exist - Essay ExampleIt is in addition not easy to adopt all the theories but it is necessary to learn about all the theories. As it helps in making a firm progressive.Organizational analysis is relatively rude(a) among the sciences as a field of study, coming out of the latter years of the 19th century as industrialization became more(prenominal) technological (Pheby, 2000). Originators of nerveal management, among them Taylor, Weber and Mayo, believed in that location was one best way to manage an organization, and all recommended single, commonplace solutions to management problems, though they did not agree on what the solutions should be (Buchanan, 1997). Organizations were considered to be the setting in which create was carried out, and were not considered to have self-interest of their own. It was in the 1920s when Mary Follett wrote about the law of the situation, that the notion of organizations victorious direction from outside themselves began to take root. In her way of thinking, it is the situation that an organization exists in that dictates the orders of what needs to be done (Buchanan, 1997). Further development of these notions by thinkers such as Woodward, Thompson and Perrow over the next few decades, shoot the way for supporters of the contingency approach. That an organizations structure and management was effected by, and actually contingent upon, factors other than the whim of the owner, and that there clearly was no one best way to be a successful organization, contributed to the development of this new field of study (Buchanan, 1997). The novel concept that organizations interact with their environment and with each other, as social units within and without, sparked interest in the field that has become known as organizational sociology, and led to a extend and a deepening of theory in the field (Pheby, 2000).. Resource Dependency TheoryThe key concept of the resource dependency perspe ctive is that organizations are not self-sufficient. Instead, an organizations activities and outcomes are accounted for by the context in which the organization is embedded (Pfeffer & Salancik, 1970.)Dependence is determined by three factors (Pfeffer & Salancik, 1978) the importance of the resource, the degree of discretion others have over allocation and use of the resource, and the concentration of the resource. Without it the organization cannot operate and will cease to exist.. This is in keeping with resource dependency theory as it predicts that organizations will seek to reduce their dependence by expanding into other domains, thereby decrease their reliance on any single exchange partner (Davis & Powell, 1992).In order to coordinate the actions of the members of the network and the buttocks toward this goal, linkages have been used. These have especially taken the shape of interlocks among board members and shared social norms. Such linkages and interlocks, as described by