Management and Organization Theory

Management and  Organization Theory

Conclusion

The three main goals of this book are to help you (1) learn about the most important theories in the field of management and organization, (2) apply that knowledge to real organizational problems and situations, and (3) conduct your own research projects that advance the management and organization literature. I will explore each of these goals in this conclusion.

Learn About the Field of Management and Organization 

The first main goal of this book is to help students, faculty, practicing managers, and consultants learn about the field of management and organization. Toward that end, I will discuss two important topics with regard to theories in this field (1) the levels of analysis in theories and (2) the chronology of theory creation.

Levels of Analysis

The level of analysis in a theory refers primarily to what the theory is examining, or the “focal unit” of the theory (Mathieu & Chen, 2011). A number of different levels of analysis are possible: individual, group, unit, division, organization, industry, region, society, culture, nation, continent, international, intercontinental, global, and universal. Theories in the field of management and organization tend to follow one of two major categories of analysis: micro or macro. Micro refers to an individual person or group level of analysis. Macro refers to an organization, industry, or nation level of analysis.

The appropriate level of analysis for a theory is open to debate. Some researchers argue for the strict separation of the different levels and for the strict separation of micro versus macro theories. For example, Turner (2006) argued for strict distinctions among micro, meso, and macro levels of analysis, stating that “they are the way reality actually unfolds” (p. 353). However, other researchers argue for the growing necessity of multilevel or meso-level research (House, Rousseau, & Thomas-Hunt, 1995; Kavanagh, 1991; Klein & Kozlowski, 2000).

Implications of the Theory for Managers

Transaction cost theory examines the importance of costs not  directly related to the production of goods and services. When you are budgeting for specific projects, be sure to include all of the extra costs involved for you that are not directly related to producing your product or services, such as searching, bargaining, monitoring, and enforcing your contracts with others. For example, if you are buying a product, include the purchase price, but also include in your costs the time you spent searching stores, comparing products, and making your purchasing decision.

Be aware of how your trading partners act toward you. For instance, do you have to treat them harshly and include as many controls and constraints in your contracts as possible in order to prevent bad behaviors, or are your trading partners fun and easy so that it is a pleasure to do business with them? Can you create trusting, mutually beneficial trading relationships without contracts, where both sides thrive, or is it not possible for you to do so? The more you know about your trading partners and what it costs you to maintain relationships with them, the better you will be able to reduce your costs yet create trading conditions under which everyone can benefit.

To Patrick—thank you so much for all your love, support, encouragement, and wisdom

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