Sustainability of globalization and environment pose real challenges to management of business institutions. The aspect of keeping abreast of all the changes in the socio-cultural trends, economic, technological and political-legal in order to make informed decisions is an uphill task. Therefore, theories have been developed to enable Business Corporations address this challenge. Managers of various institutions or organizations can adapt the most suitable theory in the day to day learning of the organizations so as to enable it not to be extinct (Wheelen & Hunger, 2011).
The population ecology theory proposes that once a company undergoes successful establishment within a certain environmental niche but is unable to keep abreast or adapt to the changes in the environment. The company will be replaced by those companies that have adapted to the new environmental conditions. In contrast, Institution theory, suggests that upcoming organizations successfully adapt to the environmental changes by emulating successful corporations in that environment. The theory further proposes that adaptation of corporations is dynamic in nature. A similar view is held by the organizational learning theory. In this theory, corporations adjust to environmental changes defensively while using the knowledge offensively to adapt to its environment (Wheelen & Hunger, 2011).
In managerial organization, different managers apply different managerial strategies in running of the institutions. Transactional leadership is inclined to maintaining way operations. Some scholars have equated it to the process of keeping the ship afloat. Managers who employ the use of this style use incentives and the disciplinary authority to ensure employees perform optimally. On the hand, transformational leadership gives emphasis on team work, collaboration and motivation of employees to perform thus achieving a better change for the institution(Wheelen & Hunger, 2011).
These leadership styles are crucial for any organization in guiding it to success. While transactional style provides distinct merits in its ability to handle small operational issues quickly, the transformational styles are paramount in strategic development of micro business or small business (Wheelen & Hunger, 2011).
Moral relativism refers to the philosophical positions which try to highlight the differences in moral judgments among different cultures and people. There are four forms of moral relativism and they are;naive relativism, role relativism, social group relativism, and cultural relativism. Naïve relativism that is based on the presumption that decisions on morality is a personal decision. Therefore, individual people have the right to make their own decisions in life. Role relativism states that social roles are tagged along with certain obligations. Social group relativism has the believe that morality goes hand in hand with the norms or practices of an individual’s peer group. Lastly, cultural relativism argues that people should comprehend the practices of other societies and not criticize or judge them (Wheelen & Hunger, 2011).
Core competency refers to the skills possessed by an individual or organization that gives them an edge above their competitors. VRIO framework is a large strategic scheme of organization and falls within its internal analysis procedures. It is used to evaluate the organization’s capabilities and all its resources. VRIO stands for the 4 question framework that you ask about capability or resource to determine competitive potential. The question of value looks at the company’s ability to exploit a chance or evade a threat with the capability. That of rarity deals with control of the capability or the resource. The imitability question looks at whether the skill is difficult to imitate and lastly the issue of organization deals with how the firm is organized. When the answer to any of the questions in VRIO is yes for any particular competency, then that competency is considered to be a distinctive competence and strength (Wheelen & Hunger, 2011).
The conflict between stakeholders and agency exists due to their interests in an organization or company. Their interests have been noted to be polar opposites. While the agency or directors of the company want to make more profits for the company so that they can invest more, the stakeholders want more returns. This prompts for balance to be struck for efficient management of the organization (Wheelen & Hunger, 2011).
Depending on what structures and cultures a company adopts the same can either be its strength or a source of its weakness depending on the implementation. There are various cultures that can be adopted by the company they include, the role culture, and task culture flat culture, among others (Wheelen & Hunger, 2011).
It is not possible to adopt a cost leadership strategy simultaneously with a differentiation strategy because they have specific clientele bases. While differentiation strategy targets a small clientele base there by charging high prices the cost leadership targets a large clientele base there by charging minimal prices (Wheelen & Hunger, 2011).
Wheelen, T. L., & Hunger, D. J. (2011). Strategic Management and Business Policy: Toward Global Sustainability. New Jersey: Pearson Prentice Hall.