Comment on how TWO organisational theories underpin principles and practices of organising and of management?

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Nathaniel Hobby answered
With regards to business, organizational theories are positions of understanding or thought processes concerning how a business should be run, or ways in which a business can be structured in order for it to be profitable and successful.

Examples of organizational theories include:
  • human relations theory
  • Marxist theory
  • network analysis
  • economic sociology
To pick a couple, the human relations theory focuses on how people relate to one another and how people make decisions and behave specifically in a workplace setting. The studies focus on the work of psychologists, for example Maslow, who suggests that there are certain things that employees will need to have (safety, warmth and food and drink for example) in order to become comfortable, from which they can then begin to work harder as they are happy.

This theory can be applied by attending to the basic needs of employees, making your office more comfortable and safe to work in. Once this has been done, the study suggests that employees would become 'self-actualized' or satisfied and therefore far more focused on other, non basic tasks such as their work and productivity.

Economic sociology looks at the relationship between finances and social interaction. With regards to business, this would look at how the financial state that a workplace is in (profits and loss) would affect the mentality of its workforce. The theory would suggest that if a company is doing well, its employees would be more motivated to continue to work well.

However, if the company is doing badly financially, this could impact on the motivation of the staff. To apply this, perhaps managers would look at how much or little they tell their staff about profit margins as the knowledge would have a direct impact on the motivation of these colleagues and their ability to work well.

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