Organization Theory

Organization theory refers to a large and multidisciplinary body of scholarly work that focuses on understanding organizations. Most of this work has been written by scholars in the disciplines of sociology, business management, and economics. These scholars have focused most of their attention on analyzing and theorizing about business firms and, more recently, associations and nonprofit organizations. Scholars in this field have aimed at developing a general theory of organization and analytical tools that are designed to apply to all types of formal organizations, including those in the public sector.

Organization theory literature is primarily concerned with explaining organizational structure, performance, and survival. Scholars addressing these questions may adopt one of a variety of units of analysis. They may focus on individual organizations, sets of related organizations, or entire populations of organizations. They may also focus on relationships both within and between organizations. A large number of competing theoretical approaches exist. While there is no consensus on how precisely to classify the various theories, seven approaches are especially prominent: structural contingency theory, resource dependence theory, population ecology, economic approaches, sociological institutionalism, network theory, and postmodern and critical approaches.

With regard to the analysis of governance structures and processes, the literature on organization theory offers a set of potentially useful theoretical approaches. It also offers a particular overarching perspective as well. From the vantage point of organization theory, the world consists most fundamentally of organizations and interorganizational relationships. An organizational approach to the study of governance thus focuses on analyzing the organizations and interorganizational relationships on which governance structures are constructed and that animate governance processes. While some scholarship on governance does explicitly adopt an organizational approach, the political scientists that dominate this research area have not engaged extensively with organization theory. Scholars in the discipline of public administration have tended to narrowly focus on the functioning of government organizations, eschewing a broader engagement with the main body of organization theory.