A Synopsis of Rational Approaches to Corporations - Term Paper Example

Rational Approaches and Open Systems Approach Name: Course: College: Instructor: Date: Introduction Today’s business environments are characterized by chaotic and volatile conditions that are brought about by rapid technological, social and economic changes (Mahmud 2009, p.1). New technology is being introduced into the industries every day while the population continues to grow rapidly. This is compounded by the fact that economic conditions nowadays have been marred with volatility due to changing regional and global political climate. All these have forced organizations to look for managers capable of applying rational decisions to exploit opportunities presented by this dynamism while at the same time reducing possible risks imposed by the associated uncertainty. Such managers find rational approaches to organization appealing because they offer a logical and step-by-step process to rely on in solving organizational problems. Moreover, managers have also been forced to view organizations as open systems i.e. living entities that exist and operate as a part of a larger environment. Such a perspective has assisted them to anticipate both internal and external factors as well as the underlying relationships. In this way, the managers are substantially equipped to help the organizations survive, compete and adapt to the turbulent business environments. As such, the aim of this paper is two fold; first, the discussion will provide a synopsis of rational approaches to corporations and reasons as to why managers find such approaches appealing; then the discussion will present arguments why open systems approach is beneficial to managers. Rational Approaches to Organizations and Organizing According to Scott and Davis (2007, p.36), rational approaches emphasize on the need for methodical examination of a problem followed by selection and accomplishment in a reasonable, step-by-step process. According to this approach, the process of decision making can be divided into eight stages (Daft 2007, pp.454-55). In the initial stage, managers are involved in monitoring the external and internal environment that will show deviations from the acceptable planned behavior. In defining the decision problem, managers respond to deviations identified in the first step by looking at issues such as where, when, who was included, who was affected and how current operations within the organizations are influenced. For instance, a store manager can approach this step by defining if profits are low because total sales are less than planned or because some merchandise are not moving as required. In the third step, managers are involved in determining level of performance outcomes that should be attained by a particular decision. Having identified the problem, rational managers then proceed to the next step of diagnosing the problem. Here, the managers dig deep below the surface to evaluate the root causes of the problem. The fifth step involves developing alternative solutions in which the managers contemplate about the various options available to solve the problem so as to achieve the expected performance outcomes. Having identified the options, the next stage requires managers to evaluate the alternatives. Use of statistical methods and personal experience becomes handy to evaluate the likelihood of success of the various options. In the seventh stage, managers apply analysis of the problem, alternatives and expected outcomes in choosing the single best alternative that has the best possibility for success. In the last stage of rational approaches, managers use administrative, managerial and persuasive capabilities to ensure that the chosen decision is carried out effectively. There are some elements in this systematic and step-by-step process that make managers believe that rational approaches to organizations and organizing are more appealing compared to other approaches such as behavioral approaches. Strengths of rational approaches Managers find rational approaches appealing because the approaches assist them in making clear and reasonable decisions even with minimal information. The systematic procedures underlying the approaches provide managers with an opportunity to identify problems facing organizations; identify causes of the problems; select various options available to deal with the problems; and use scientific methods to come up with the best possible alternative that will solve the problems effectively and efficiently. Griffin and Moorhead (2009, p.200) argue that managers find rational perspectives attractive because they provide an ability to separate decision making process from emotional or social pressures. The in-dept analysis associated with the approaches helps managers to make decisions about the various ways to deal with organizational problems based on the available information. In addition, the information is subjected to scientific techniques that are capable of providing quantified outcomes free from personal emotions and preferences. In environments characterized with dynamism and munificence, managers find it appealing to apply rational approaches to identify and take benefit of the many opportunities and avoid potential errors associated with such environments. Environmental aspects of enthusiasm and munificence moderate the association between rational approaches and organizational performance. This is the case because the environments present managers with high levels of discretion and in turn, rational approaches present managers with an opportunity to make decisions that have greater effects on performance than environments that are low in executive prudence. In munificent situations, there are many opportunities that compel managers to use rational approaches to identify and exploit many of the opportunities presented by the situations. On the other hand, dynamic situations are marred with significant uncertainties that make managers to opt for rational perspectives so as to avoid possible errors (Saynisch 2010, p.22). Rationality reduces the effects brought about by uncertainties because managers will be compelled to search for essential information before making the decisions. Weaknesses of rational approaches Antagonists of this approach argue that it is hypothetical and therefore, it is not fully attainable in dealing with real organizational problems that are characterized by uncertainty, complexity and rapid changes. This argument is not absolutely true because the issues of uncertainty and rapid changes are well addressed in these approaches. In the alternatives’ evaluation stage of rational approaches, managers usually use statistical or scientific techniques to gauge the likelihood for success of the various options. Bryman (1984, p.400) argues that this is an indication that such techniques take into consideration the aspect of uncertainty that may be encountered during implementation stage of the chosen option. On the other hand, it is possible for rational managers to integrate issues brought about by rapid changes into their decisions. This is because the approaches provide managers with a monitoring window in which they evaluate performance of their decisions against the planned objectives. Therefore, deviations due to rapid changes will be identified early enough and necessary improvements done on the chosen action plan. Other opponents argue that the rigid assumptions associated with the approaches are unrealistic. They argue that in real organizations, managers are not in position to effect rational decisions in a logical way because the amount of information available to managers is limited by cost and time restraints (Griffin & Moorhead 2009, p.200). This is a valid argument as the systematic procedures of rational approaches require substantial time and costs in order to evaluate and process information about the possible alternatives. Moreover, not all options lend themselves to quantification implying that statistical techniques will not be possible and therefore, managers may find themselves taking a lot of time in doing comparative studies of the available options. It is also unlikely for managers to know all possible outcomes of every alternative because of inability to predict future organizational objectives. Open Systems Approach to Organizations In systems approach to analyzing organizations, firms are viewed as either open or closed systems. Open systems perspective views organizations as living entities that exist and operate as a part of a larger environment (Scott & Davis 2007, p.87). It considers the impacts of external factors and takes internal factors in respect to varying external environment. It is based on the principle that there is no organization that can operate successfully if it leaves out government rules and policies, conditions from suppliers and other external elements on which the firm relies on. With regard to these issues, open systems can be said to be more beneficial to managers than closed system approach that views organizations as autonomous entities that are insulated from extra-organizational factors. Benefits of open systems to managers Taking an open systems approach can help managers to make decisions that will help the organization to succeed, survive and cope with factors in its environment. In the real world, organizations interact with other firms, institutions, government agencies and associations in an interdependent manner (Daft 2007, p.15). These entities introduce to the organization external forces that subject new demands, compelling the firm to respond, comply, adapt and innovate so as to survive in the turbulent environment (Stebbins 2010). In this case, managers taking an open systems approach are able to evaluate internal factors or activities in terms of the imposed new conditions and strategize on how to meet new challenges or take advantage of new opportunities. Therefore, this approach is beneficial to managers as gives them an opportunity to analyze external demands so as to come up with appropriate internal responses that will make the organization survive in the larger environment. Another advantage of open systems approach is that it helps managers to build strong relationships between their organizations and their external environment. Organizations operate in a loop, receiving inputs from the environment with throughput and output being the feedback that comes back on the loop to be reinput into the organizations. For instance, production firms collect raw materials (input) from suppliers and convert them into finished products (output) through work. The firms sell the products to consumers who relay back information regarding use of the products. This feedback from the customers acts as a re-input to the loop because the information compels managers to choose to maintain or improve the products’ features (Andreadis 2009, pp.6-7). The feedback symbolizes impacts of other external entities of the organization and organizational decisions that affect the environment have inescapable consequences to the relationship the organization has with its stakeholders. For instance, managers viewing organizations as open systems can direct the organization to having strong relationship with government agencies. This is because such managers are in positions to make and improve their decisions to avoid potential conflict of interests and to conform to varying regulations issued by the government agencies (Macedo, Abreu & Camarinha-Matos 2010). Conclusion Managers find rational approaches appealing because the approaches assist them in making clear and reasonable decisions even without presence of clear information. In environments characterized with dynamism and munificence the perspectives are attractive in identifying many opportunities and avoid potential errors associated with such environments. Taking an open systems approach can help managers to make decisions that will help the organization to succeed, survive and cope with factors in its environment. It also helps managers to build strong relationships between their organizations and external environment References Andreadis, N 2009, ‘Learning and organizational effectiveness: a systems perspective’, Performance Improvement, vol.48, no.1, pp.5-11. Bryman, A 1984, ‘Organization studies and the concept of rationality’, Journal of Management Studies, vol. 21, no. 4, pp.391-408. Daft, RL 2007, Organization theory and design, 9th edn, Cengage Learning, Florence, KY. Griffin, RW & Moorhead, G 2009, Organizational behaviors: managing people and organizations, 9th edn, Cengage Learning, Florence, KY. Macedo, P, Abreu, A & Camarinha-Matos, LM 2010, ‘A method to analyze the alignment of core values in collaborative networked organizations’, Production Planning & Control, vol.21, no.2, pp.145-159. Mahmud, S 2009, ‘Framework for the role of self-organization in the handling of adaptive challenges’, E:CO, vol.11, no.2, pp.1-14. 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