Chapter I: Theories of CSR and Management 1- Institutional approach on CSR 1.1.Basic Principles of Institutional Theory 1.1.1. Overview The pure growth of the theory of open systems is none other than the practice of the theory of institutions to organizations. Therefore, in Open Systems Theory, the obligations of the operational environment place the organization as a production system that no longer operates according to an instrumental logic. In the field of institutional theory, the organizational environment is now seen as a social phenomenon both institutional and operational . The introduction of a recent concept of exogenous variables gives institutional theory a strictly concordant analytical framework. In response, this new framework admits to attaching the rise of certain organizations to that of certain institutions and to develop the similarities or isomorphism, behaviors, forms and structures outcropping in an organizational field. By dispersing, if these institutions expand their domains, and therefore with the necessary conditions, this theory …show more content…
Consequently, as the majority of their successors date back to the twentieth century, the early institutionalist sociologists were able to very much agree with the model of Spencer and Summer (1876-1896). The fundamental functions of harmonizing societies with their contexts are guaranteed by the institutions following this model. Structural Functionalism describes the institution in two words: a concept and a structure . The first informs about the object or activity of the institution while the second attribute body to the concept by providing all the instrumentalities necessary for its implementation. In addition, the institution is the result of a change, institutionalization, transforming, slow and
Since organizations are open and complex adaptive systems they must interact with their external environment. The external environment could consist of many things such as money, people, materials, technology, information, etc. The external environment supplies these inputs and then the organization will create goods or services using the inputs provided by the environment. Organizations are then turning the resources they are provided with into final outputs. This is called an open system. Once the organization has provided the final output for the environment, the environment then consumes the output and then provides consumer feedback that the organization analyses to see
“What do you mean Mufasa had a son!?” Scar roared, scaring the hyenas who had brought the news of calamity.
The external environment is crucial to any company or organization because it allows management to see and understand things outside of their daily routine. The societal environment might focuses on the influence the external environment might have on the company’s strategy. In the long run, it might be beneficial or perhaps unfavorable. The general five forces are economic, technological, political-legal sociocultural, and demographic forces.
Institutional Paradigms are considers the wide spread effects of social structures such as rules, regulations, or authoritative guidelines shape how the organization looks or acts (Tolbert & Hall, pp. 181). The following essay will outline both the benefits and disadvantages of the Institutional theory, as well as, give a reference on how the institutionalization processes shapes an organizational decision-makers ' choices, and a conclusion of my personal opinion of the theory will be provided.
It is depicted that modern organizations tend to incorporate the aspects of the open systems with those of the natural and rational perspectives. Examples include the institutional, transaction cost, and the contingency and the contingency theories. Organizations adopt the open system that accommodates the other two theoretical perspectives for it to exist (Davis & Scott, 2006). These organizations tend to have structures that are based on the processes, the products, and the function.
Organizations can have open or closed systems. Open systems interact with environment through giving and receiving information (Vogt, 2013). Contrary to widely held belief that organizations are closed systems, the virtue of the fact that they exchange resources with their environment qualifies them to be open systems. Public relations department is considered to be an open system because it interacts with the outside environment on a regular basis (Vogt, 2013). In closed systems all interactions and knowledge are transmitted within the system only. This hampers growth because the flow of information cannot allow for interaction with the outside environment (Vogt, 2013). Closed system organizations are known for setting up a hierarchy of offices, creating rules that guide performance, and separating personal and professional rights. Closed systems hold efficiency and control in high esteem. A company's production line is a typical example of closed system. Any deliberations from top level management or information from competing production lines cannot interfere with its activities (Vogt, 2013). Workers in that line are obligated to their tasks on that line with interference from any quarter. Research and Development within organizations like the computer organizations are a closed system because such departments do not interact with outside division. This is purposefully done to protect trade secrets and inventions from being leaked to competing
Structural Functionalism aims to understand society in an objective way. It views society as an entity that is “objectively real”. It emphasizes the unity of society, and how individuals perform roles and how these roles are vital in meeting the needs of the collective whole. For instance, because every society has stratification, stratification must have certain functions and these functions can contribute to the survival of the social system as a whole. Furthermore, structural
Structural functionalism is also known to be viewing each institutions, relationships, roles, and norms that relates together into constituting a society serving system. There are two theorists who were major contributors of this sociological perspective. These are Herbert Spencer and Robert Merton
Assumptions of Organizational Economics Theory: organizations are superior to markets in managing complex and uncertain economic exchanges because they reduce the cost of transactions; different approaches to organizational economies share a common attention to explaining the emergence and expansion of organizations, hierarchies,
There is also the systems theory approach to contemporary management. This approach focuses on the relationship that exists between the organization and the general public. It defines an organization as a system that is either closed or open, but in most cases open. In that regard, an open system is defined as an organizational interaction with its own environment by way of inputs and its outputs. Therefore, it can be said that the environment impacts on the organization while the organization also has an impact on the environment.
An open system approach is that which views an organization as an integration of different parts
Since 1998, Bank of America has become one of the most successful financial institutions in the industry. With the mission to “make financial lives better, through the power of every connection”, Bank of America has maintained aligning operation with its vision. While assisting its clients understand their money, the company also puts a lot of effort into helping the communities by executing Corporate Social Responsibility (CSR). It is undeniable that the company has successfully addressed many critical problems in the environmental, social and economic arenas, as it continually receives awards and recognitions for its CSR efforts.
There are many theories and strategies that managers used to achieve business success. The strategy research and ‘practical’ models assumes that organizations are able to adapt to their environment. However that is not necessarily the case as there are many examples of mainstream approach that has been criticised for not taking into account how environments can also constrain individuals and organisations. Mainstream approach such as organizational ecology and institutional theory is argued for not considering on how environments are also one of the factors that constrain individual and organisations which are also known as task environment. Task environment is the external environment of an organization which affects its
One of the ways to view the world sociologically is by Structural functionalism. This theory views society as one complete unit with everyone working together to do their role. Everyone relies on each other to make sure everyone does their role to have the society run smoothly. Since everything is looked at as a whole the parts are studied as to how the contribute as a complete thing to the society. This type of theory also relies on norms, values, and beliefs; this keeps the society running smoothly. “Emile Durkheim (1858-1917), one of the founding fathers of sociology, was a structural functionalist”, (Claerbaut, ch. 2). The main structures in this type of society are Politics, religion, education, family
Consumers all over the world are pressuring companies to become more socially responsible. Corporate Social Responsibility (CSR) is a measurement of a business’ impacts on society, both positive and negative. Pharmaceutical companies in particular are held to a high ethical standard by the public due to the nature of their product. Novartis, one of the largest healthcare and pharmaceutical companies in the world, aspires to be a model of ethics and philanthropy in the industry and sets a global standard of CSR for all businesses. This paper examines some of Novartis’ most recent CSR actions that contribute to the company’s sublime reputation, but also investigates lawsuits against Novartis and shortcomings with its transparency which the administration continually fails to address.