Strategy in Context: Institutional Theory in Organization Studies

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Strategy in Context: Institutional Theory in Organization Studies

Managers are responsible for ensuring their organizations advancement and overall success in attaining their set goals and objectives. The vision of any company is achieved through a long-term plan of various steps and measures known as a business strategy (Reddy, 2018). Every strategy is developed within a specific context of external and internal factors that impact the organization. This paper will discuss business strategy within the context of political and institutional theory perspectives.

The decision-making process of any business venture is highly complex. According to Jankelová (2019, p. 89), an efficient strategic decision-making process results from a gradual, stepbystep ongoing analysis of information. The structure of the strategic decision-making process depends on the design of the organization itself (Rhee et al., 2017; Duff, 2019). Companies can break down decisions into smaller components delegating some of them to the department leaders and associates, promoting discussion and collaboration between different divisions or branches (De Smet et al., 2017). It is advised to map out the decision-making strategy and clearly define the role of each group of stakeholders in it.

External environmental factors can have a substantial impact on the companies business strategy. Thus, the political perspective on strategy involves acquiring political connections and active participation in and knowledge of public life (Gama et al., 2018). For example, a soft drinks company can include sugar-free drinks into its range of products if a tax on drinks with sugar is considered or passed. Similarly, the institutional theory perspective considers organizations and their practices as the product of social pressure rather than an economic one (David et al., 2019; Zhao et al., 2017). If society lobbies for environmentally friendly products and production, companies should consider adopting them to secure public support. Political and institutional theory view business strategy and decision-making process as politically and socially motivated and believe that companies should pursue political and social support to succeed.

Overall, there are many difficulties that managers may face in their day-to-day duties. Managers are recommended to secure several political connections to ensure the company always has political support. For example, political figures can be offered a position on the board of members. Furthermore, managers are advised to monitor the social sphere and support the most influential movements. In addition, managers are urged to hire advisors who can monitor the political and social fields to advise on various movements.

References

David, R. J., Tolbert, P. S., & Boghossian, J. (2019). Institutional theory in organization studies. Oxford Research Encyclopedia of Business and Management, 123. Web.

De Smet, A., Lackey, G., & Weiss, L. M. (2017). Untangling your organizations decision making. McKinsey & Company.

Duff, V. (2019). A composite organizational structure. Small Business.

Gama, M. A., Bandeira-de-Mello, R., & Spuldaro, J. D. (2018). Political strategy and the growth of business groups. RAUSP Management Journal, 53(1), 3548.

Jankelová, N. (2019). Strategic decision making and its importance in small corporations. In O. L. Emeagwali (Ed.), Strategic management: A dynamic view (pp. 87104). Books on Demand.

Reddy, N. (2018). Want A Successful Business? Build An Effective Strategy. Forbes.

Rhee, J., Seog, S. D., Bozorov, F., & Dedahanov, A. T. (2017). Organizational structure and employees innovative behavior: The mediating role of empowerment. Social Behavior and Personality: An International Journal, 45(9), 15231536.

Zhao, E. Y., Fisher, G., Lounsbury, M., & Miller, D. (2017). Optimal distinctiveness: Broadening the interface between institutional theory and strategic management. Strategic Management Journal, 38(1), 93113.

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