All too often organisations are caught between fulfilling the individual needs and aspirations of their workforce and meeting their desired goal (Wagner & Hollenbeck, 2010). When this happens, we talk of an organisational dilemma. It is important to ensure that an employee feels that his/her aspirations or individual needs are met but at the same time, the purpose for which the organisation was established should not be relegated to the periphery (Mele, Pels & Polese, 2010). In a bid to solve such organisational dilemma, various theories have been proposed, tested, and adopted by the business world. The premise of this essay therefore, is to identify three such theories namely, systems theory, resource dependency theory, and structural contingency theory. In addition, each of these three theories shall also be analysed in an effort to identify their usefulness in solving global organizational dilemmas.
Systems theory draws our attention to the synergy, interconnections, and interdependence of various elements within the organisation, as well as between the organisation and its surrounding environment. The theory views the organisation as an organism, meaning that its various parts are all interconnected. In this regard, systems theory affords us an analytical framework which enables us to view an organisation from a general context (Mele et al., 2010). The fact that systems theory acknowledges interdependence of the human resource within an organisation means that conflicts between their divergent values can be minimised because these have been accommodated for by the system. In addition, the theory also recognises the effect that the environment had on organisational function and structure, as well as the impact of outside stakeholders on the organisation (Wagner & Hollenbeck, 2010). Such a broader perspective of viewing organisational behaviour means that the organisation will strive to minimise conflicts with the environment and outside stakeholders because they are all interconnected.
Resource Dependency Theory
Resource Dependency Theory (RDT) entails studying the impact of external resources on organisational behaviour. Procuring external resources is regarded as a key principle in the tactical and strategic management of any organisation (Davis & Cobb 2010). RDT has implications concerning how an organisation recruits employees and board members, contract structure, production strategies, and external organisational links, among others. RDT acknowledges that organisations rely on resources that originate form the environment. The environment, to a significant extent, encompasses other organisations as well. What this means is that the resources that one organisation requires to accomplish its set goals could be in the hands of other organisations (Drees & Heugens, 2013). Resources in this case act as a basis of power. The implication of all this is that legally independent organisations are completed to rely on each other on the simple reason that they are in need of similar, if not same, resources. This is indicative of a direct association between power and resources. Such resources are multidimensional in nature and include capital, labour, and raw materials, among others. Based on the understanding that resources and power are mutually dependent, organisations learn to depend on each other, and this is likely to eliminate, if not minimise, potential dilemmas.
Structural Contingency Theory
Structural Contingency Theory hinges on the premise that there is single structure that can be considered optimal for all organisations. Rather, the most effective structure is that which fits what are known as contingencies. Examples of contingencies include organisational strategy, level of uncertainty of organisational environment, and size of organisation (Donaldson, 2001). The effectiveness of a certain structural type is reliant on the level to which it fits the contingencies. For instance, the most suitable level of specialisations yields the highest performance in an organisation, depending on its size. Therefore, a small organisation with low specialisation can realise the highest level of performance, while a large organisations that seeks the highest performance requires high level of specialisation (Burton & Børge 2004). Recognising the right contingencies enables an organisation to overcome potential conflict with other organisations in terms of specialisation and desired level of performance, because they are different for a small organisation and a larger one.
From the foregoing arguments, it is rather clear that organisations theories have proven crucial in solving organisational dilemma. Towards this end, various organisations have come to rely on such theories as systems theory, resource dependency theory and structural contingency theory to show the interdependence between organisations, their reliance on same resources, and contingencies, thereby minimising possible dilemmas.
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