Organizational theories are models used to describe methods of organizing groups to achieve common goals and predict how the practices might impact work and employees. Various organizational theories exist, including classical theory, open system theory, neoclassical theory, human resource theory, modern structural theory, power and political theory, and economic theory.
The classical theory assumes that organizations exist to accomplish goals related to production and economics. Organizing for production is done through systematic and scientific inquiry, and the organization or workers act according to economic principles. In this theory, production is maximized by division of labor and specialization (Shafritz, Ott, & Jang, 2011).
Neoclassical organizational theory revises the classical theory and reduces problems arising from the human nature of corporate members, improves the coordination of administrative units and the decision-making processes. In neoclassical organizational theory, organizations cannot exist as islands isolated from the external environment.
The open system theory involves an organization’s adaptive interaction with the environment in order to reach the ultimate goal of survival. The organization is considered as an active system where there is input, throughput and output.
The modern structural organizational theory considers organizations as rational institutions that aim to accomplish set objectives, so formal rules and authority are used to achieve rational organizational behavior. This theory finds organizational control and coordination in order to achieve rational behaviour.
The economics theory uses concepts and tools found in economics to identify the internal processes and structures of an organization. In this theory, the fundamental problems of organizations including inducing managers and employees to act in the best interest of the organization, and control of resource allocation are dealt with.
The power and politics organizational theory identifies organizations as complex systems of individuals and partnerships with own interests, beliefs values and preferences. Individuals and partnerships always fight for organizational resources, and organizational goals result from bargaining by individuals and partnerships (Shafritz, Ott, & Jang, 2011).
Management theories and styles
Management theories are methods or ways of managing organizations. Management style is how the manager or the management team deals with workers while exercising authority to achieve organizational goals. There are various theories and types of organizations, including the classical management theory, human relations theory, neo-human relations theory, and system theory.
The classical management theory emphasizes on structure and concentrates on what is considered good for the organization. The classical management theory concentrates on authority, division of labour, and developing a system and structure of performing duties. There is also a hierarchy of authority and a system of rules in the classical management theory.
While classical management theory concentrates on structure of organizations, the human relations theory concentrates on human factors. The human relations theory emphasizes on human relations and behaviour within organizations and how human needs act as decisive factors in achieving organizational goals (Mahmood, Busharat, & Bashir, 2012).
Neo-human relations management theory focuses on human motivation in terms of incentives and satisfaction, and also leadership. Employees have to satisfy each level of need before they can be elevated to the next level.
A system theory is different from the other management theories because it focuses on organizations as systems and the complexity and interdependence of relationships. The organization is considered a system that has constantly interacting groups of activities that form the organization.
Some of the management styles that exist include participative, paternalistic, mechanistic, exploitative, organic, authoritative, visionary, bureaucratic, democratic and defensive (Uche, & Timinepere, 2012).
Organizational and management theory that closely resemble a retail store business
The organizational theory that most closely applies to a retail store is the open system organizational theory. In the retail industry, organizations have to adapt to the ever changing external and market environment in order to remain competitive. The open system theory involves active organizations that keep on changing in order to adapt to the changing environment. There are various effective ways of running organizations provided that goals and objectives are met. The retail store uses the open system theory to adjust to an organizational way that would suit the business at any given point in time, particularly considering the competitive nature of the retail industry (Field, & Dubey, 2001).
The management theory that most closely resembles the retail store is the classical theory. The retail store business is managed in such a way that there is a practical manager and employees act in what is considered best for the firm. There is division of work and as a well as hierarchy of authority among the managers. There are rigid procedures and rules that can be quite demotivating to the junior employees. The management style that closely resembles the management of the retail store is exploitative as the management team tends to exploit junior employees.
What to change to make the organization better
In order to make the organization better, the management of the retail store could focus on the modern structural organization theory to act rationally to meet set goals and objectives. The organization could also use the human relations management theory to initiate motivation among managers and employees. The organization should also stay away from the exploitative management style in order to be sensitive and cater to the social needs of the workers (Amago, 2008).