L10: Environmental school

Question 1

What is key uniqueness of environmental school?

Answer 1

Environment is more important than the organization.
This school reacts to whatever is happening in the environment. The organization is something passive that is dominated by the environment

Question 2

What are the premises/characteristics of the environmental school?

Answer 2

1. Environment is central actor
2. During formation, the organization shapes itself to the environment, as time progresses it becomes harder to adjust to environment
3. Long-time survival depends on early choices
4. Over time, leadership becomes less able to influence the performance and survivability
5. Organizations that survive selection pressures end up clustering together where they share simlar technologies etc.

Question 3

What are the main theories in the environmental school?

Answer 3

1. Contingency theory
2. Population ecology
3. Institutional theory

Question 4

What is the contingency theory?

Answer 4

There is no one best strategy
Organizations can be deliberately organized and managers can choose formal structure
Strategy is all about finding the right structure that fits the environment

Contingency theory discusses 4 dimensions of the environment;

1. Stability (stable to dynamic) this ensures different levels of predictability
2. Complexity (simple to complex)
3. Market diversity (Integrated to diversified)
4. Hostility (Munificent to hostile)

Question 5

What is the population ecology view?

Answer 5

The population ecology view opposes the contingency theory

Question 6

What are factors that increase or decrease an organization’s chance of survival? (population ecology view)

Answer 6

• Liability of smallness = Larger organizations are more endowed with resources and thus less likely to fail. Small organizations cope difficulty and die early
• Liability of newness = organizations new to am industry are more likely to die
• Liability of adolescence = greatest danger is in transition from infancy to maturity

Question 7

What is critique on the population ecology?

Answer 7

• where did these variations in the population come from?
• organizations are not fruit flies and decisions are not programmed by genetic endoment
• one organization may die because of the aggressove actions of the other, not because of an abstraction called the environment

Question 8

What is the institutional theory?

Answer 8

depicts organizations as open system strongly influenced by the organzations’ environment
Suggests that organizations are not detached from broader social interests, beliefs and occurrences
Institutions -> social structures that have attained a high degree of resilience

Question 9

What is Isomorphism?

Answer 9

Key element of institutional theory -> Tendency to adopt the same procedures and practices as other companies and firms

Question 10

What are the 3 types of pressures that lead to isomorphism?

Answer 10

1. Coercive pressure = Pressures to conform, exerted through standards, regulations, rules and norms (central to legitimacy)
2. Mimetic pressure = Imitate leading firms to gain institutional legitimacy
3. Normative pressure = Results fro the strong influence of professional expertise, identities and ideologies

Question 11

What is critique on the environmental school?

Answer 11

• Contingency theory focuses on vague and abstract dimensions of the environment
• Environments oscillate in their munificence, complexity etc. Environments are not set in stone; you cannot manage strategy at such aggregated levels
• Organizations have no real strategic choice in the eyes of the environmental school.
• Organizations shape their own environments as well

Question 12

What are contributions of the environmental school?

Answer 12

We can learn about populations and environments of organizations

Our choices are constrained

Question 13

What is the notion of fit?

Answer 13

Each environment has a finite number of resources. Number of organizations in an organization grows until carrying capacity is reached.
Competition reduces number of organizations in environment. Most efficient prg. are remained

Question 14

Central actor
How is strategy formed
What is most important
Environment
complex/simple
loose collection/thightly integrated
unique/generic
How does org change
kind of organization

Answer 14

Central actor   -  environment
How is strategy formed   -   emergently
What is most important   -   Environment
Environment     - competitive
complex/simple  -  simple
loose collection/thightly integrated   - loose
unique/generic   -   generic
How does org change   -   occasionally
kind of organization   -   machine organizations