Organizational Change and Development

In the past, people have been treated the organization as a closed system, that is to say, organizational behavior and performance are the results from unilateral decision by managers, ignoring the existence of the environment. However, as an open system, the organization and its external environment are interaction and mutual penetration. Environment should be seen as the organizational material, energy, the ultimate resource of information and the key to organization renewal. This paper will discuss the contribution of environmental determinist theories by interpreting Institutional Theory, Population Ecology, Resource Dependence Theory and Business Ecosystem Theory. 2. Institutional theory Starting from the sociological system theory, institutional theory focuses on the isomorphism and similar between organizations, and put it down to the requirements of the institutional environment outside the organization. (Tidd, 2001) In institutional theory, the organization faces with two different environments: technical environment and institutional environment. Technological environment requires the organization must be efficient and organized by the principle of maximum production, while the institutional environment requires organizations must be legitimacy. Meyer and Rowen pointed out that many organizations even had to have the internal operations separated from organizational structure in order to reduce the negative impact from the institutional environment requests on the efficient operation. DiMaggio and Powell further put forward three mechanisms lead to convergence of the organizational type and organizational behavior. Camarinha-Matos, & Afsarmanesh, 2007)The first one is forcing mechanisms, such as government regulations and cultural expectations. The second one is imitation mechanism. When faces with uncertainty problem, organizations tend to adopt the solution used by other organizations in the same organizational field. The last one is regulatory mechanisms, which comes from development and complication of professional networ ks in professional training, and organizational field. Sequential studies take a large number of empirical analyses on the mechanism above. Take Galaskiewicz and Wasserman for example, they confirmed the importance of networking to the mechanism of imitation. They noted that, although the successful organization may be easy to become the object of imitation, the organization managers tend to imitate the organization they trust, such as those that have the interpersonal association with their own organization.