Strategic Choice Theory
jinjisoshiki Strategic Choice Theory was developed when industrial relations in the U.S. were changing rapidly. Because most of the popular theories at that time were generated during periods of relative stability in U.S. industrial relations practice and consequently are overly static, they have difficulty explaining behavior when the basic parameters of the system appear to be changing. For example, Dunlop's systems model was widely accepted in 1960's and 1970's. But there are some anomalies in the model. First, the model could not foresee the declines of union membership after that time. Rather conventional models assume that labor unions were a permanent participant in their employment relationships. Second, conventional models assume that there is a consensus ideology. But based on the models, we could not tell whether or not managerial values, strategies, and behavior in industrial relations were changed. Third, the traditional industrial relations models treat management as reacting to union demands, pressures, and initiatives. But there were many managerial initiatives and changes that affected the transformation in U.S. industrial relations and they have occurred within management. Therefore, they added a more dynamic component to industrial relations theory by developing the concept of strategy, or strategic choice. Then they tried to demonstrate that industrial relations practices and outcomes are shaped by the interactions of environmental forces, union leaders, workers, and public policy decision makers (e.g., Kochan, et al., 1984). Strategic Choice Theory starts with consideration of relevant forces in the external environment that affects employment relationships. Changing external environment induce employers to make adjustment in their competitive business strategies. In making these adjustments, the range of options considered are filtered and constrained so as to be consistent with the values, beliefs, and philosophies engrained in the mind of key decisionmakers. As choice are also embedded in particular historical and institutional structures, the range of feasible options available at any given time is partially constrained by the outcomes of previous organizational decisions and the current distribution of power within the firm and between it and any unions, government agencies, or other external organizations it deals with. Thus, industrial relations processes and outcomes are determined by a continuously evolving interaction of environmental pressures and organizational responses. The relative importance of either the environment or the parties' responses can vary over time. Therefore, labor- or product market changes do not have independent effect or operate in a unique or deterministic fashion. Then, choice and discretion on the part of labor, management, and government affect the course and structure of industrial relations systems. Moreover, history plays an extremely important role in shaping the range of feasible strategic adaptations. Their broader conception of the institutional framework of industrial relations is as follows. It divides the activities of management, labor, and government organizations into three tiers: (1) a top tier of strategic decision making, (2) a middle or functional tire of collective bargaining or personnel policy making, and (3) a bottom or workplace-level tier where policies are played out and affect individual workers, supervisors, and union representatives on a day-today basis. In this framework, the middle tier encompasses the most traditional terrain of industrial relations, since it focuses on the practice of collective bargaining and personnel policy formulation and on the development and administration of the key public policies governing labor-management relations. The traditional of business unionism that has dominated the American labor movement has made it appear that few important strategic
affect future industrial relations outcome at all three levels of the firm. Kochan. changes in business strategy and their related production decisions affect the validity of existing organizational structures. particularly the extent of vertical integration.choices or ideologically driven decisions are being made at the top tier. The three-tier framework encourages analysis of the roles that labor. the strategic choices made by firms that remain in the market require them to rearrange their capital in order to take advantage of new profit opportunities. if the firm chooses to remain active in the market. This three-tier framework helps identify an important development that existing industrial relations systems theory does not specifically address: the apparent inconsistencies and internal contradictions in strategies and practices occurring at different levels of industrial relations within firms. First. adjustments in its competitive strategy may be needed. They described that industry relations in Rubber Tiers were affected not only by changes in the environment but also by the diverse decisions made at the corporate level to adjust those changes. this framework considers the effects that various strategic decisions exert on the different actors in the system. whether to make or buy various components. and the nature of the workplace environment. downward shift in the formal structure of bargaining. The key consideration is whether wages and labor costs have been taken out of competition. the structure of worker rights. management. Researchers have been conducted several types of study on Strategic Choice Theory. this framework recognizes the inter-relationships among activities at the different levels of the system and helps explain the origins of any prevailing internal contradictions or inconsistencies among three levels. Third. Rubber Tiers. some field studies or case studies have been conducted to examine the Strategic Choice Theory. The environment can also change abruptly because of competitive shocks. and declining unionization. and government play in each other's domain and activities. Second. Second. some empirical studies were conducted to make sure the transformation of industrial relations systems as suggested in Strategic Choice Theory. The types of interactions are as follows. Birecree (1993) analyzed the International Paper Company (IP) during
. Changes in the competitive environment can occur gradually as products change in response to changing consumer demand or as low-cost competition grows. & Cappelli (1984) studied a single industry. Australia. McKersie. Finally. Strategic choices that are relevant to the bottom tier are those most directly associated with the organization of work. the firm must reassess its commitment to its current line of business and decide whether it wants to attempt to compete in the environment or to withdraw and reallocate its capital resources. Katz (1993) studied the bargaining structure of six countries (Sweden. Second. the management and motivation of individuals or work groups. and the organizational arrangements used to carry out basic strategies all affect industrial relations at lower levels of the system and therefore are central to analysis of industrial relations. Yet the basic decisions involving such things as what businesses to invest in. First. the effect of employer initiatives. Italy. A sharp increase in competitive pressures forces firms to make decisions that can have far-reaching effects. Shifts in business strategies are affected by the current state of industrial relations and. in turn. UK and US) and confirmed the substantial increase in the intensity of local bargaining. The business decisions are influenced by the history and current state of industrial relations in the firm and the industry. where to locate worksites. First. Germany.
In summary. He conclude that Strategic Choice Theory need to be improved by marrying with structural theories of variation. heavily. on the social constructs to help define the structure and processes of an organization.a company will adopt.S. action. The most basic principle and distinct characteristic to the institutional theory is conformity. This study is significant because they apply and test the Strategic Choice Theory using empirical data. Their result that market pressure and structural characteristic of the company are important predictors of strategy choice supports the validity of the Strategic Choice Theory. there are various theories of organization that can be utilized such as the institutional theory (I. rules. The institutional theory depends.T) of organization. and even in workplace-level innovations. Nonetheless. common method variance). Using four types of variables (ideology. He suggests based on the result that context variables play a more important role in managerial strategies toward unions. in order to receive legitimacy and support´. steel minimills and suggested that variation in workplace industrial relations policies is related to differences in business strategy.. They make up for the limitation of generalizability in each case study and provide the validity of Strategic Choice Theory. random measurement error. and requirements that an organizations must conform to. genaralizability. Although each study might have its methodological limitation (e. but as a whole. they contribute the grounding and testing the Strategic Choice Theory providing significant result and making up limitations each other. product mix. However. although managerial ideologies have statistically significant effects to other variables. or mixed strategy combining elements of union avoidance and collaboration -. unionmanagement collaboration. It is suggested that the theory is on the way of evolution and more comprehensive theory could be build by the efforts of enthusiastic Industrial Relations researchers. outcome. wide range of research has been conducted to examine Strategic Choice Theory. This theory focuses on the environmental factors experienced by an organization such as ³external or societal norms. Arthur (1992) analyzed U. Cooke and Meyer (1990) developed a model predicting which of three broad labor-relations strategies -.
The concept of organization serves as a key factor in determining if an organization or company reaches its goals and objective while exemplifying their mission. and context variables). Godard (1997) focused on managerial IR ideologies that seem to be central in Strategic Choice Theory.the 1980s and revealed that important structural changes in product markets.union avoidance. there is also a research that raise question on the validity of the theory. For example. and technology of production contributed to IP's perceived need for significant changes in work practices and compensation by 1985. Third. some hypotheses testing researches using statistical analysis have also been conducted.g.
and requirements in its daily operations of an organization. both paradigms incorporates external factors in its framework to demonstrate the validity and importance of external factors in contributing the organization.School of Public Health is non-traditional school of public health because it utilizes the Problem-Based Learning (P. and diversity within a particular field. it is pivotal that Dr. Management is more aware of social views and opinions and more willing to incorporate societal norms and expectations. High level of constraints can prove to be deleterious to the organization because it can inhibit versatility. In this example. strategy. Isomorphism has proven to be a beneficial component of the institutional theory because it can offer an alliance between organizations with the same focus (i. and marketing was not taught. In my opinion. we are presented with a Management /Organization Paradigm and Management Operation paradigm. political. So. the theory is quite promising because it bridges the gap between societal views and organization¶s actions. rules. usually seen in public health through the development of a coalition). there are a few disadvantages associated with the theory. For example. so one¶s focus may shift to the competition rather than the service or product. the program in an astute effort to obtain legitimacy the program may conform. The concept of conformity establishes ³rational myths´ in which it is just ³rational´ that an organization would incorporate certain social norms. the program would be viewed as illegitimate. The institutional theory places emphasize on the crossroads of the environmental factors and their influence on organizations and corporations. it must conform to the ³rational myths´. many organizations began to resemble one another because they are faced with the same social pressures. within this type of environment. However. rules.Conformity is the meter stick that is used to determine the legitimacy of an organization. the level of conformity presented by the Institutional theory. In the Management Operation Paradigm. Despite. or requirements. It is this concept of legitimacy that oftentimes makes organizations resistant to change in fear of breaking away from the norm because their legitimacy may be challenged. shows how the skepticism produced by the institutional theory maybe diluted over time with further understanding and the transformation of societal norms whereas PBL has become a more acceptable learning style. Amayo attempted to construct a clear mission statement and concise core values and objectives so that the organization conforms with the norms surrounding a governmental communicable diseases agency and matches the goals of its constitutes.L) format and non-traditional methodology of learning. creativity. One example of this is within the arena of academia. Drexel University. This concept of unifying these two entities: environment and management has proven to be the ultimate advantage to theory in addition to isomorphism. also. One disadvantage to the institutional theory is that it places a tremendous amount of constraints on management to conform to the norms. As a result of conformity. Within the case. In order for an organization to be endorsed as a valid one. the external factors-legal. Also. rules. this example. Nonetheless. It may encourage or create competition among similar organizations who are trying to serve that same population or market. isomorphism may not be beneficial. management may have a minimal amount of freedom to make decisions which may hinder the structural process with an organization. and requirements into it mission and goals. and legitimacy of a corporation or organization.e.
. the legitimacy of the institution was questioned due to the PBL format and non-traditional methodology of learning and may have hindered its acceptance into the world of Public Health. societal expectations and norms dictate the requirements needed to achieve an MBA degree because if accounting. regulations. However in a slim market.B. structure. In the case. Another disadvantage to the theory is the creation of ³cookie-cutter´ organizations and the legitimacy of organization that are outcast from the ³cookie-cutter´ format.
This means that the relationship between both is constantly changing so that one can accommodate the other. It is for this reason that that the institutional theory is a promising theory. In addition. the institutional theory can provide a few downfalls that may hinder productivity. and etc. Nevertheless. structure . plays a vital role in determining the legitimacy of an organization. values. This approach is important because as explained within this paper.
. and have much more power in the operations of an organization. vision. despite its disadvantages. the paradigms suggests that the relationship between the mission statement. Many other theories of organization do not extend the same level of power to its stakeholders in which the stakeholders set the standards.and social which sets the stage for the institutional theory in the paradigm because one can see the direct connection that the external factors plays in the framework of an organization as noted by the flow chart of the paradigm. and strategic plans to the basic principles of a theory in an effort to determine which theory fits best with that particular organization. This approach examines the capability of an organization mission. this theory is not advantageous for every organization but can be determined by a ³best fit approach´. vision. as a whole (society). and strategic management of an organization. directly. (see Paradigms in case for other component of organization)and external factors are oscillating components that goes back and forth in the development. The institutional theory can be a rewarding concept to an organization because its stakeholder. goals.
The page links into discussions on different pages of the encyclopaedia of informal education. the
. We exami ne some key theorists and themes. or can organizations learn themselves? From this exploration we suggest that there are particular qualities associated with learning in organizations. there is a surprising lack of attention to what it entails.learning in organizations
In recent years there has been a lot of talk of 'organizational learning'. for example. Here we explore the theory and practice of such learning via pages in the encyclopaedia of informal education.and double-loop learning · informal learning · communities of practice
We have structured this page around three basic questions:
What is learning?
What is organizational learning? Is it individuals that learn in organizations. In Britain and Northern Ireland. theories of learning do not figure strongly in professional education programmes for teachers and those within different arenas of informal education. It is almost as if it is something is unproblematic and that can be taken for granted.
For all the talk of learning amongst policymakers and practitioners. Get the instructional regime right. and ask whether organizations can learn?
contents: introduction · learning · learning in organizations experiential learning single.and double-loop learning informal learning distributed cognition communities of practice · can organizations learn? · further reading and references linked pages: learning · experiential learning · chris argyris: single.
but they participate in frameworks that that have structure. when we come to examine the literature of human resource development and more generally that of organizational and management change. It is not so much that learners acquire structures or models to understand the world. In this orientation the basic concern is for human growth. or ideal forms. To explore these areas go to:
learning. the idea that µlearning¶ may in some way be problematic is only rarely approached in a sustained way. and representatives of different disciplines now vie over who has the correct model of organizational learning«. they were concerned with cognition . The latter takes us into the arena of competing learning theories .message seems to be. and learning (as measured by tests and assessment regimes) will follow. Two developments have been highly significant in the growth of the field. Where behaviourists looked to the environment. Learning involves participation in a community of practice. The behaviourist movement in psychology has looked to the use of experimental procedures to study behaviour in relation to the environment. but it has only become widely recognized since around 1990.
Learning in organizations
As Mark Easterby-Smith and Luis Araujo (1999: 1) have commented the idea of organizational learning has been present in the management literature for decades. the cognitive orientation. those drawing on Gestalt turned to the individual's mental processes. First it has attracted the attention of scholars from disparate disciplines who had hitherto shown little interest in learning processes. In order to start thinking about learning we need to make the simple distinction between learning as a product and as a process. A consequence of this is that the field has become conceptually fragmented. The second development is that many consultants and companies have caught onto the commercial significance of organizational learning« Much of the effort of these theorists has been devoted to identifying templates. The former takes us to learning as either a change in behaviour or a change in our mental state. the social/situational orientation. We look to the work of Maslow and Rogers as expressions of this approach. In other words. This lack of attention to the nature of learning inevitably leads to an impoverishment of education.the act or process of knowing. A helpful way of making sense of writing on organizational learning is to ask whether writers fall into one of two basic camps. The dividing line between them is the extent to which the writers emphasize organizational
. In a similar fashion. the humanist orientation. which real organizations could attempt to emulate. (Easterby-Smith and Araujo 1999: 1-2) The central template or ideal form in the 1990s and into the twenty first century was the notion of the learning organization.ideas about how we might gain understandings. What is learning? Is it a process or a product? How might it be approached?
Four different orientations to theorizing learning: the behaviourist orientation.
information both inside and outside the organization. Experiential learning. and take note of David Boud and associates useful contribution on the nature of reflection.
. Those operating within the social perspective may view organizational learning as a social construction. interpretation of. alterations in strategy and so on. But is there really such a thing? We examine the current debates and conceptualizations and what some of the implications may be for those interested in developing the educative qualities of organizational life. but is generally explicit and in the public domain«. single and double-loop learning. observation and emulation of skilled practitioners and socialization into a community of practice. A classic expression of the technical view can be found in the work of Argyris and Schön on single. such as the µfeel¶ that s skilled craftsperson has. From this view. Here we can again turn to Easterby-Smith and Araujo (1999: 3-5): The technical view assumes that organizational learning is about the effective processing. and response to. This information may be quantitative or qualitative. Single-loop learning with it¶s emphasis on the detection and correction of errors within a given set of governing variables is linked to incremental change in organizations. or the intuition possessed by a skilled strategist. learning is something that can emerge from social interactions. notes that when we review the processes of organizational learning µwe encounter ³learning from experience´ as a genuine component of almost all approaches¶.and double-loop learning and organizational learning. as a political process. Christine Prange (1999: 27) in her review of organizational learning theory. and Kurt Lewin¶s use of the notions of feedback and action learning. Lave and Wenger (1991) and Wenger (1998) provide a fascinating example of the social perspective in action in their studies of apprenticeship and communities of practice. 1996). We examine the notion of theories of action. or they may be derived from tacit sources. Double-loop learning involves interrogating the governing variables themselves and often involves radical changes such as the wholesale revision of systems. We will also look at the notions of experiential learning and informal learning. Informal learning. normally in the natural work setting. and the organizational orientations and practices linked to each. 1987) also provides some insights into the use of µtacit¶ sources in his exploration of reflective practice. Here we will explore the notions of single.and double-loop learning (1978. go back to John Dewey¶s (1933) exploration of thinking and reflection. This model of learning goes back to some work that Argyris and Schön did in 1974. but it found its strongest expression and grounding in organizational dynamics in 1978. and/or as a cultural artifact (Easterby-Smith and Araujo 1999: 5-7).learning as a technical or a social process. These experiences may derive from explicit sources such as financial information. Single. The social perspective on organization learning focuses on the way people make sense of their experiences at work. We review Kolb¶s (1984) famous formulation. All of a sudden a number of researchers and policy pundits have rediscovered µinformal learning¶. Interestingly Donald Schön (1983.and double-loop learning and community of practice. In the case of explicit information it involves a joint process of making sense of data« The more tacit and µembodied¶ forms of learning involve situated practices.
the whole system of interrelated factors. There are those who argue that it is individuals. (Salomon 1993: xiii) This is not a new idea ± for example. What characterizes such daily events of thinking is that the social and artifactual surrounds. who learn. alleged to be µoutside¶ the individual¶s heads. In other words. are not content-free tools that are brought to bear on this or that problem.. not organizations. rather. However.the world inside. what is inside is me . but the µperson-plus¶.everything that happens outside the wall it forms becomes the other . Cognitions. learning refers to the processes of thinking and remembering that take place within an individual¶s brain.the world outside. when we look at µreal-life problem-solving situations. when we come to examine human behaviour in its everyday context.. not only are sources of stimulation and guidance but are actually vehicles of thought.Communities of practice. a rather different set of cognitive processes appear: People appear to think in conjunction or partnership with others and with the help of culturally provided tools and implements. In other words.
Can organizations learn?
Prange (1999: 27) comments that one of the greatest myths of organizational learning is the µwho question¶. and the cultivation of educationally desirable skills and competencies has treated everything cognitive as being possessed and residing in the heads of individuals. µthe way in which learning might be considered organizational¶. that is. social. the arrangements. In this three relatively simple and apparently 'natural' ideas rule (Sampson (1993: 34): the boundary of the individual is coincident with the boundary of the body. It links into a dialogical understanding of selfhood and the work of people like George Herbert Mead (Cole and Engeström 1993 provide a useful historical overview of the development of thinking around distributed cognition). they emerge in a situation tackled by teams of people and tools available to them. cultural. and technological factors have been relegated to the role of backdrops or external sources of stimulation (Salomon 1993: xii) This notion relates to a particular view of selfhood. and structures of these surrounds change in the process to become genuine parts of the learning that results from the cognitive partnership with them. the individual is best understood as a self-contained entity. John Dewey recognized the significant of the environment in being and learning. it would seem. This notion has been popularized by Lave and Wenger (1991) and Wenger (1998). the body is a container that houses the individual. the study of cognitive processes. cognitive development. In this way of coming to understand our selves the body plays a crucial role. We explore the idea that organizations may be a constellation of communities of practice. Moreover. it is not just the µperson-solo¶ who learns. Traditionally. The skin becomes a boundary .
. These are the media of organizational learning. for example. A weaker. but should be taken in µan interdependent dynamic interaction¶ (ibid. are continually working to add pieces and to get a view of the whole. These are the shared descriptions of the organization which individuals jointly construct and use to guide their own inquiry«. and because by the time they occur again circumstances may have changed substantially. their continuing efforts to know and to test their knowledge represent the object of their inquiry. our inquiry into organizational learning must concern itself not with static entities called organizations.We can see how individual and organizational learning may connect in the work of Chris Argyris and Donald Schön (1978. In their review of individual and social aspects of learning. At the same time. They need to know their place in the organization. The µproper unit of psychological analysis should be joint (often. but with an active process of organizing which is. version would hold that µsolo¶ and distributed cognitions are separate from one another. Pea 1993). this does not mean that they learn very well. Both ideas are often difficult to grasp as the notion of individual cognition is very deeply ingrained in much that is written about the area. a cognitive enterprise. yet possession of a database constitutes a kind of organizational knowing. or less radical. rare high-stakes events²marriage decisions in an individual or major shifts of direction in a business²are difficult learning targets because they do not occur often to disambiguate the lessons of experience. This is the function of organizational maps. Patterns of division of labour within an organization are kinds of know-how that have no easy individual analog¶. As Salomon and Perkins (1998) put it. Individual members are continually engaged in attempting to know the organization. and to know themselves in the context of the organization.: xvi). [Members] require external references. Hence. There must be public representations of organizational theory-in-use to which individuals can refer. Those interested in distributed cognition take this further. but not necessarily) socially mediated activity in a cultural context¶ (Salomon 1993: xv). version would take the position that cognition in general needs to be reappraised and approached as principally distributed (see. The picture is always incomplete ± and people. µwe do not ordinarily consider possession of an artefact knowledge. For instance. at root. They suggest that each member of an organization constructs his or her own representation or image of the theory-in-use of the whole (1978: 16).or more radical. 1996). The strong. The learning of the collective suffers from a startling range of limitations« Some of these are equally characteristic of solo and collective learning entities. thus. (Argyris and Schön 1978: 16-17) With this set of moves we can see how Chris Argyris and Donald Schön connect up the individual world of the worker and practitioner with the world of organization. It can be argued that there are stronger and weaker versions of distributed cognition. A strong theme in the literature on organizational learning is the weakness of the learning system involved. Organizing is reflexive inquiry«. Organizational theory-in-use. Cole and Engeström 1993. is encoded in private images and in public maps. Salomon and Perkins comment: If organizations can learn. continually constructed through individual inquiry.
These derive from the fact that any organization by definition is a collective. and with noisy and loss-prone information channels connecting them. advocates of a policy are likely to interpret any difficulties with it as reflecting an insufficiently vigorous pursuit of the policy. It will tend to be: Situated and concerned with communities of practice. passing information through their own filters. with individuals and larger units in different roles that involve different perspectives and values. Many of the fundamental phenomena of learning are the same for organizations« However. As a result. In summary.
Contradictory. µThe social entity can often be divided against itself. different individuals and units within an organization may hold somewhat different criteria of success. can learn. like individuals. with different tacit beliefs and concealed agendas harboured by different subgroups or individuals¶ (Salomon and Perkins 1998). More µinformal¶ and involve far less µteaching¶ than in the individual case
Relatively unregulated. it seems likely that organizational as against individual learning has a number of characteristic features. organizations.
. how it is learned. organizational learning also has distinctive characteristics with reference to what is learned. and the adjustments called for to enhance learning. while opponents interpret the same data as signifying a bad policy. For example. Feedback about the results of organizational actions may be distorted or suppressed as people rush to protect their turf or to maintain a positive climate«. Also.Other problems of learning are exacerbated by the specifically organizational character of the learning.