Organizational Theory in Businesses Research

organizational theory, leadership theory development, and management theory and practices. This includes addressing the impact of these aspects on businesses and their efforts to bring about effective and successful performance in the business realm. To start with, organizations can be perceived as machines, cultures, organisms, political structures, transformational systems or structures, and also constituents of domination (Morgan, 2006). In order for any individual to gain an understanding regarding the form of an organization it is considered necessary to employ metaphors. This is because using metaphors may prevent one-sided perspectives. In general, a flawless viewpoint cannot consist of only one theory.

Taking into perspective contemporary scholarly researchers, according to Heugens and Scherer (2010), comparisons are made between an organization and a machine. This analogy works from the sense that an organization has a dominant body, and also that it partly operates as a machine because it possesses dissimilar parts. The view or understanding of an organization can also be perceived by means of culture. An organization becomes relational with a community by the exemplification of beliefs that are acknowledged as being representative of crowds or groups’ philosophies and opinions. Finally, from a postmodern standpoint, the depiction of an organization is by a set structured principle by which individuals are administered.

Organizational theory can be defined as the use of the intellectual capabilities to attain information concerning the proposed determination and the practice of change in the social structure that consists of the organizations in an intricate contemporary way. The designs are bound to take into consideration incidents that are both internal and environmental. As pronounced in the modern viewpoint of an organization, as offering support to the parts that are moving, the theory of organization addresses consistent and definite factors supporting its purposes entirely so as to be effective and efficient (Heugens and Scherer, 2010).

Organizational Theory Perspectives

Organizational theory is centered on three perspectives. These three perspectives are the post-modern perspective, the modern perspective, and the symbolic-interpretive perspective. Each of the aforementioned perspectives has dissimilar approaches when it comes to the manner in which an organization is managed (Hatch and Cunliffe, 2006). The modernist perspective encompasses objectivists who lay emphasis on the realism of knowledge that is constructed by being centered on theorization as well as conceptualization. For instance, an organization generates its earnings or profits based upon the ability of the chief executive to initiate and institute the right decisions during a period of investing the capital for the organization (Amlus et al., 2014). The outcomes of these decisions and actions are measured in a direct manner in the form of profits and also losses. In this organizational theory, outcomes of the decisions and actions made are acknowledged by making use of the five senses that human beings have, through what humans touch, taste, hear, see, and smell (Hatch and Cunliffe, 2006).

Another perspective of organizational theory is the symbolic interpretive perspective. This perspective in particular takes into account experiences that cannot be felt, or are beyond the five senses of human beings, such as emotion and intuition. The outcomes of this particular perspective cannot be effortlessly simulated by others; this is the reason why modernists disdain symbolic interpretive outcomes. The assurance the researchers address is to be spot-on to individual experiences and to take into consideration explanations and clarifications made by others. The symbolic interpretive perspective concentrates on significance and understanding, and the outcomes ought not to be extended further than the setting in which they were fashioned. Symbolic interpretive organizations have the sense that if employees have an understanding of the organizational culture and the cultural connotation of actions, verbal and nonverbal communication, and internal signs and objects that employees will start to comprehend themselves (Hatch & Cunliffe, 2006).

In particular, this perspective outlines organizational structure in the sense that it looks to what adds to work that is significant by reforming structure via observation and involvement. The symbolic interpretive approach recognizes the reasons why work is fashioned in a particular manner by having steady practices in work through understanding and human collaborations to achieve organizational objectives (Hatch & Cunliffe, 2006).

Lastly, there is the post-modern perspective of organizational theory. This particular perspective swerves and deviates from the two previously mentioned perspectives. This is because it has an indisposition or reluctance to pursue truth or to create long-lasting ontological or epistemological obligations. For example, the post-modern perspective differs from viewpoints of the modernist customs of scientific attempts, or the symbolic-interpretive explanations of the significance of human implications leading to action. Perceived from these other perspectives, postmodernists appear to skim between theoretical situations. They every so often decline to take even a momentary metaphysical stand because that they have confidence in that doing so honors some kinds of understanding over others and this encroaches upon postmodern ethics. (Hatch & Cunliffe, 2006).

Synthesize interdisciplinary business knowledge, concepts, and models to advance the theory and practice of business management

Organizational behavior is a study that encompasses the examination and analysis of the influence that persons, groups, and structure have on behavior within organizations. The main intent is to employ such behavioral understanding so as to make organizations function in a more effective manner. In other words, it is the analysis of what individuals undertake in an organization and how their behavior has an influence on the performance of the organization. By having an understanding of the manner in which individuals interrelate and work together with others in the organization, then improvements can be undertaken for a company. An apparent characteristic of organizational behavior is discerning the detailed behaviors of personnel or groups of workers in diverse settings, and how they respond to certain occasions or circumstances (Robbins and Judge, 2013).

Organizational culture, also referred to as corporate culture, is considered to encompass the association and affiliation between members of the organization and the manner in which they interact and interconnect with each other as they undertake their duties and roles for the organization. Having confidence in and partaking in similar objectives and expectations within an organization is what outlines the organizational culture (Hatch, 1993). An organization that has resilient and solid mutual beliefs and strives towards a common objective and vision is able to have an effective and efficient business operation. Organizational culture has noticeable features and characteristics that take account of day-to-day observations of work practices within the organization or through individual considerations or understandings from members of the organization who are directly influenced by occurrences that have taken place (Stokyo, 2009).

Form of an Organization Model

Organizations can be considered to be comparatively current or contemporary in the history of mankind. However, organizations have risen and have come to be largely important and of great significance in the present day society. Organizations have come to be essential and fundamental to the lives of people with immense influence. It is imperative to take note that organizations presently are around or encircle us and fashion our lives in several manners as they pool and bring together resources to attain certain objectives (John, 2014).

Organizations have individualities in common in the sense that they are in existence with a mission. In particular, the mission statement speaks out and proclaims the purpose of the organization with causes for its presence and being. A mission statement delivers context and perspective to aid direct the organization’s policies and activities by explaining in simple terms the general objectives of the organization and/or corporation. For that reason, they are purposely designed in a structural and organized manner, connecting the entity to external setting (John, 2014).

The organizational model can come about in different forms. There are four forms of organizational structures which are most common or prevalent and which can be applied by any organization. These four forms include: [1] the matrix structure; [2] the divisional structure; [3] the functional structure; and [4] the entrepreneurial structure. To start with, the functional structure encompasses where work flow that is effective is reliant on the incorporation of different tasks within the organization. The majority of businesses make use of this basic approach in structuring their organizations. In particular, the functional form of an organization is deemed to be forthright and more often than not effective in practice. This organizational form is considered one that is the most appropriate for businesses that are small sized or medium sized, and that do not have a wide array of product portfolios or requirements for production. This implies that this organizational form is best suitable for businesses that offer products or services which are one-lined. Functional structure can be labeled as an organizational form which embraces the least possible departmental units; the form is not intricate with connecting each top management section with more sub-departmental partitions connecting to the relevant departments. This form of organizational structure is best utilized by organizations that are made up of a small number of organizational members and participants (John, 2014; Aguirre and Alpern, 2014).

The entrepreneurial organizational form is an adjusting form that brings process activities as well as management with a connection to attaining profitability upon distinct prospects. The organizational form holds steady and resilient management practices in view of that so as to attain essential promptness, liveliness, and originality to make the most of chances. In this organizational form, the departments within the organization are diversified, where the connection between the departments are numerous and every top management division bears a resemblance to other sub-departments that exist below them; for instance, like the operation division which includes warehouse and logistics sections, and a quality assurance section (John, 2014; Aguirre and Alpern, 2014).

The other organizational form discussed is referred to as the matrix organizational structure. This organizational form is employed by businesses for short intervals or time periods to come up with solutions for problems or for the completion of projects. What is more, it can be a long-lasting agreement in business where work is allocated by project, intersecting into functional divisions. In this organizational structure, the personnel have more than one superior. Another organizational structure is the divisional organizational structure, which is essentially a form of organizational structure that is categorized by having different departments within the organization. These internal divisions are created to facilitate organizations that are large sized; more often than not these organizations are in the manufacturing industry or production sector, or are centered in more than one market or geographical expanse (John, 2014; Aguirre and Alpern, 2014).

Evaluate the efficacy of business principles and practices to effect change in cultural environments

Since the onset of the 21st Century, organizational change management as well as transformation have come to be long-lasting elements of the business world. There has been the opening up of enormous new markets and also labor pools; innovative and novel technologies have placed once-superior business models back to basics, and at the same time flows in capital and demands from the investors have come to be less foreseeable. So as to take these challenges into account, companies have come to be more and more sophisticated and cultured in terms of business principles and practices employed to effect change in cultural environments. Organizations have come to be more thoughtful and aware of the role that culture plays (Aguirre and Alpern, 2014).

The usefulness of business principles and practices has come to be perceived with regards to effecting change in cultural settings. One of these principles is organizations and leaders acting their ways into new thinking. Several change principles and practices appear to make the assumption that individuals will commence to change or modify their behaviors once official elements such as orders and inducements have been set in place. Individuals who operate or function together on cross-functional groups will begin working in partnership because the outlines on the chart display they are intended to do as such. In the other sense, managers will come to be clear communicators for the reason that they have a directive to convey a message regarding the principles and practices. Far more vital to the achievement of any change in business principles and practices is making sure that individuals day-to-day behaviors replicate the imperative of change. This is accomplished by beginning with outlining a vital small number of behaviors that will be important to the realization of the initiative. Leaders have to perceptibly model these novel behaviors themselves, because employees will have confidence in the notion that real transformation is taking place only when they perceive it happening at the topmost level of the organization or business (Aguirre and Alpern, 2014).

Analyze the overall functional structure and strategy of the business in terms of its interaction with its competitive, financial, and regulatory environment

The functional analysis of business activities is usually observed as a top-down fragmentation or breakdown which commences with the wide-ranging goals and objectives of the organization, identifying the functions which achieve those objectives, and from then on fosters those functions and/or activities down to the level of transactions which are frequent and repeated. To be more specific, functional analysis makes use of organizational examination that incorporates the analysis of the corporate environment, and the regulatory environment, and takes into consideration the transactional and structural analysis. Intrinsically, structural analysis makes allowance for scrutinizing and examining the precise details that constitute the whole. In contrast, transactional analysis takes into consideration examining the actions themselves in a manner that is more precise.

The functional structure of an organization is divided into key areas depending on the purpose of the organization. Some of the functional areas that are deemed to be important include marketing, research and development, finance, human resources, manufacturing, and also information and technology. The marketing function is a significant segment of any organization as it makes sure that the business processes of the business in the long run meet the wants and/or needs and desires of its consumer base. Every organization seeks to have a distinctive and unique marketing mix. The marketing function might incorporate aspects such as the market share and also the position of the organization in the marketplace. Other features include the standing of the organization in the social order, its status as a market leader, and also the combination and complexity of the organization’s product range and selection (Kotler and Keller, 2014). The research and development (R&D) function of an organization is connected with the invention, originality, and advancement of new products. While this is very important, the improvement of already existing products is of comparable value, because the predilections of consumers are continually shifting. R&D is a substantial way of achieving future progress and maintaining a relevant product in the industry and marketplace. The central determination of the R&D function is to generate and produce goods and products that meet the needs and/or desires of the customers of the forthcoming periods. The manufacturing function takes into consideration the production protocols of any organization in the way in which the products and services are made and thereby delivered (Martin, 2014).

The finance function is central to the effective set-up and practice of any organization. The finance specialists within the organization operate with the rest of the management team to ensure and ascertain that resources are competently and positively achieved, persistent, and placed in the best well-being of all of the organization’s stakeholders. On the other hand, the human resource function of an organization is intended to function as the bonding agent that fixes all the units and divisions within the organization aforementioned. The human resource function accomplishes this by taking on two leading approaches: [1] circulating a shared human resource practice within the organization; and [2] working towards employee development, particularly with respect to mid-level officials for impending senior management responsibilities (Aswathappa, 2005).

Analyze an organization in terms of its key functional units and evaluate how each functional unit develops culture and perspective

The strategy and structural design of the organization ought to be strengthened by the organizational culture. In particular, the culture lays emphasis on the desires to be effective within its setting. There is an interaction between the organizational functions and the organizational culture as it is considered that culture is part and parcel of function and function is part and parcel of culture. The functions of an organization are sequences or successions of undertakings or actions of one or more entities. These activities are implemented openly or indirectly for the determination of attaining the organization’s goals and objectives, and together efficiently handling and overseeing circumstances of the organization (John, 2014). At the time the function is the main plan of the aspect to be taken into consideration, the main area of control and action are the prevailing problems. So as to create function, there ought to be sub-functions with actions and undertakings being executed in one or more capacities. The responsibilities ought to be implemented by an individual, a group, or sets of individuals, in a manner that is in connection to the organization (John, 2014). In an organization that is deemed healthy and fit, responsibilities are acknowledged, well-defined, distinctive, and undertakings are either reliant or self-determining. In general, organizations are systematized along function lines. It is along these function lines that each and every group implements duties which are similar or related along the same functional lines in the vertical organizational alignment, all focused in the direction of a central or focal point of control (Modell, 2007).

Examining functional units and their integration is pertinent to organization theory for the reason that operation of the organization is time and again looked at as one of the elementary functions of most organizations. In addition, this is more often than not a significant question in all business theory. The individual’s strong suit is employed within a group to accomplish more than anticipated or projected. Inspecting organization theory, the social functional integration is beneficial for placing together social structures. Integration has been separately assumed and hypothesized across all aspects of the organization. It encompasses organization approach, organization theory, manufacture and operations management, and information systems. The departments or units within the organization are created or fashioned with the purpose of distributing the different duties in accordance to fortes or technical proficiency. Units or departments work together with or interrelate with each other in a synchronized fashion and this in turn brings about the same culture and perspective. However, it can be pointed out that once in a while redundancy might take place, causing undesirable consequences of the planned purpose. This is a practice of accomplishing adjacent and unified organization between numerous departments, collections, organization, and system (Halley, 2012; Heugens and Scherer, 2010).

The effectiveness of the organization is in fact determined by the level in which functional integration plays an important role. In accordance with Halley (2012), in order for functional units to take place, the fundamental approaches employed by the organization ought to be instituted to set circumstances which are effective and efficacious to integration that is effective. In addition, it is imperative for the internal control to be effective in order to be able to evaluate the level of efficiency. Organization theory is of benefit with regard to defining functional integration simply by jointly including the whole structure for indication. This encompasses the workplace setting, the interaction of the personnel and so on. With effective leadership practices, the functional units of any organization will ultimately improve and be effective.

How leadership may influence business performance through effective use of business principles and practices

The conception of management competency has come to be universal within the element of performance evaluation and growth within establishments. Leadership competencies thump the pressure from the predominantly practical inevitabilities of specific job roles to the easier social potentials necessary from persons at different levels in the organization. As a result, with the institution of the notion of leadership, competences have been prolonged to a far-reaching number of personnel than those beforehand strategic management capabilities. This development of the idea of competencies upsurges extra apprehensions because of its predisposition to cover and entrench rather than expose and contest certain beliefs concerning the setting and enactment of leadership (Bolden and Gosling, 2006). The argument made by Meindl et al. (1985) is that it will be challenging and difficult for research to overcome the mythologies on the subject of the power of leaders to alter organizational results, for the reason that leadership has come to be so idealized or exaggerated in the society. What is more, their research studies show that the interest in organizational leaders and their characteristics has been highest when the business performance or performance of the national economy has reached very high or low levels. It is considered that the level of performance of the public sector can improve of the level of leadership can improve.

Leaders shape the manner in which individuals think as well as behave. This is for the reason that leaders are perceived by others as role models, and personnel glance through to see if their behavior matches and is steady with the organization’s advocated principles and philosophy. Leaders set the plan. Leaders impact the organization’s culture and in sequence the long-standing efficacy and level of performance of the organization. Leaders and supervisors institute the setting within which organizational participants endeavor for brilliance and work in partnership to attain organizational objectives. The business practices and principles employed by the leaders have an enormous and huge significance on the level of performance of the business or organization as one is able to gain an understanding on the organizational culture as well as the role in which the norms and expectations play in the effectiveness of the business. It is imperative to take note that leadership facilitates the shaping and fashioning of the culture. In turn, the culture of the organization shapes the leadership. In tandem, both of these aspects drive the level of performance of the business (Human Synergistics International, 2012).

Companies and businesses have been able to survive and continue existing through mergers as well as acquisitions, growth or deterioration organically or inorganically reliant on how effective the business strategies, practices and organizational shaping are. For this reason, it is deemed that the department is effective when it comes to investigating and scrutinizing factors that impact business performances for the duration of organization rearrangement periods. On the other hand, for several years now, organizational leadership and culture have been researched and the prevalent finding or result is that there is a strong link between leadership and culture and in addition, leadership generates or implements organizational culture. One other prevalent result is that the level of business performance is impacted by the organizational culture (Yildirim and Birinci, 2013).

Research proves that there is a correlation between organizational culture and business performance typically by means of leadership style. The most substantial leadership and culture models that pushes effective business results and performance through business practices are transformational leadership and transformation culture. Transformational leaders can be described those who ultimately increase the originality, motivation and devoutness of their followers whereas transactional leaders take into account the individual and future well-being of their followers. In particular, transformational leaders give emphasis to what practices one can undertake for his or her company whereas transactional leaders concentrate on what the company can undertake for the personnel through business practices. On the other hand, transformational leaders transform their followers, enable them to cultivate and generate new essentials, predispositions and values for the reason that that their desires are met. For that reason, the followers might grow, progress and transform to leaders (Yildirim and Birinci, 2013).


This particular paper lays emphasis on organizational theory, organizational systems, and also the functional components within an organization. In addition, the paper discusses different business principles and practices. In accordance to Hatch and Cunliffe (2006), it is suggested that the intricacy of the organizational theory makes it quite challenging and hard to talk about as well as discuss. Organizational theory is centered on three perspectives. These three perspectives are the post-modern perspective, modern perspective and the symbolic-interpretive perspective. Each of the aforementioned perspectives have dissimilar approaches when it comes to the manner in which an organization is managed (Hatch and Cunliffe, 2006). In accordance to Morgan (2006), organizations can be perceived as machines, cultures, organisms, political structures, transformational systems or structures and also constituents of domination. Heugens and Scherer (2010) assert that organizational theory can be defined as the use of the intellectual capabilities to the attainment of information of the proposed determination and the practice of change in the social structure that consist of the organizations in an intricate contemporary way. The designs are bound to take into consideration incidents that are both internal and environmental. As pronounced in the modern viewpoint of an organization, as offering support to the parts that are moving, the theory of organization is the steady and definite factors supporting its purposes entirely so as to be effective and efficient.

The overall functional structure and strategy of the business does have interaction with the regulatory setting in the sense of ethics. Value is considered to be the central or focal point of organizational culture which is made up of essential and important viewpoints and philosophies that are equally shared by the personnel of an organization. The plain reasoning that provides a backup for the need for ethical guiding philosophies is that activities in organizations are the consequence of decisions by individuals and human beings have a propensity to try to find validation for their activities further than the principle of cash (Price, 2007).


Aguirre, D., Alpern, M. (2014). 10 Principles of Leading Change Management. Strategy + Business.

Amlus, H., Jusoh, M. S., & Osman., Ibrahim. (2014). The Influence of Organizational Leadership and Strategic Alignment on Company Performance: Malaysian Manufacturers Context. American-Eurasian Journal of Sustainable Agriculture (Impact Factor: 2.54). 03/2014; 8(8):15-22.

Aswathappa, K. (2005). Human Resource and Personnel Management. Tata McGraw-Hill Education

Bolden, R., & Gosling, J. (2006). Leadership Competencies: Time to change the tune? Leadership, 2: 147.

Kottler, P. T., Keller, K. L. (2014). Marketing Management. New York: Prentice Hall.

Halley, M. D. (2012). Integration from structural to functional. Healthcare Financial Management, 66 (6), 74-7

Hatch, M. J. (1993). The dynamics of organizational culture. Academy of Management Review, 18(4), 657-693.

Hatch M. J., & Cunliffe A. L. (2006). Organization theory. Oxford, UK: Oxford University Press

Heugens, P. R., & Scherer, A. G. (2010). When organization theory met business ethics: Toward further symbioses. Business Ethics Quarterly, 20(4), 643-672.

Human Synergistics International. (2012). The Impact of Leaders on Culture. Retrieved 8 September, 2015 from:

John, H. (2014). Synthesis of Organization, Management, and Leadership Theory by Gareth Morgan’s Images of Organization. Academia.

Martin. (2014). Product Research and Development (R&D). Entrepreneurial Insights. Retrieved 7 September, 2015 from:

Meindl, J. R., Ehrlich, S. B., Dukerich, J. M. (1985). The Romance of Leadership. Administrative Science Quarterly, 30 (1): 78 -103.

Modell, M. E. (2007). Functional Analysis. A Professional’s Guide to Systems Analysis, 2nd Ed.

Morgan, G. (2006). Images of Organization. Thousand Oaks, CA: Sage Publications, Inc.

Price, R. M. (2007). Infusing Innovation into Corporate Culture. Organizational Dynamics.

Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior. New Jersey: Pearson Education.

Stokyo, P. (2009). Organizational Culture and the Management of Organizational Memory. Canada: Canada School of Public Service.

Yildirim, N., Birinci, M. (2013). Impacts of Organizational Culture and Leadership on Business Performance: A Case Study on Acquisitions. Procedia – Social and Behavioral Sciences 04/2013; 75:71-82

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