What Are the Five Contemporary Organizational Theory Models?

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What Are the Five Contemporary Organizational Theory Models?
Organizational theories study the behaviour of humans within organisations. (Aidon/Digital Vision/Getty Images)

Organizational theories study how people act within organisations, the principles that guide successful business management and how organisations interact with each other. They encompass many viewpoints focusing on various areas such as communication, economics, social and business interactions, individual and industrial psychology, management and leadership. The contemporary models of organizational theory focus on one or more of these disciplines.

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Population Ecology

The population ecology organizational theory model focuses on the impacts of dynamic changes of phenomenon related to the birth and deaths of organisations and organizational forms. The study of population ecology is done over a long period of time. Most organisations have static structures that hinder adaptation to changes. The organisations with inflexible models of organisations are then more likely to crumble and cease to exist while more new flexible businesses , better adapted to change, will start-up and strive. In population ecology, success then depends on an intrinsic ability to adapt in a changing environment.

Resource Dependence

The resource dependence model examines influence of power in the relation of exchange resources. In the resource dependence theory, organizational success happens when a business maximises its power and influences in gaining the resources needed for the businesses' survival. In this theory model, organisations that lack in resources will seek to become allies of other organisations who have more resources. The dependence relationship means that organisations become reliable on each other's capacity to have access to necessary resources, and the power is given to the organisation who possesses the highest amount of resources. The resource dependence organizational model theory originally discussed the relationship between organisations, but it also applies to the relationships between groups of a same organisation.

Contigency

The contingency organizational theory is actually a amalgamation of behavioural theories which contend that there isn't one best way of organising or leading an organisation, but that other internal and external constraints help determine which organisation and leadership types are best for the business. The four core elements of contingency theory are that there is not a universal way to manage, an organisation's design must fit with its environment, effective organisation also depends on its fit with its subsystems and organizational needs are best satisfied when all previous three elements are met to achieve the main objectives of its work groups.

Transaction Cost

Transaction costs organizational systems takes into account social-psychological dimensions that are not considered in the costing of the production of goods or services. Transaction costs are difficult to measure and rely on human activities, but understanding the impact of human psychology in relation to its the organisation's operations is crucial to gain a full picture of an organisation's economics.

Institutional Model

Finally, the institutional organizational theory model studies institutions' structures and processes in relation to the functions of global governance. According to the model, institutional-based organisations should innovate in their structures, posses a participatory structure encouraging public and private participation, have strong transnational coordination capacities, and establish dispute resolution mechanisms. Examples of organisation that follow the institutional model include the World Trade Organization, International Labor Organization, The World Health Organization and the United Nations Environment Program.

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