Introduction
It is important to note that organizational theories are critical in healthcare. The main reason is that they determine the organizational structure and design, which can either enhance or hinder a healthcare facility’s capability and its business needs in a successful manner. A theoretical framework’s applicability is tied to the core problems experienced by a business. Thus, each organizational theory has its own strengths and weaknesses depending on the situation.
Main Body
There is a wide range of organizational theories with their corresponding pros and cons. Structural contingency is realistic and planned but lacks a theoretical base. Resource dependence can decrease competition but can be prone to external control risks (Mick & Shay, 2014). Institutional theory is blind toward human agency by solely focusing on naturalistic perspectives. Population ecology describes organizational categories well but fails to assess individual organizations. The social network is solution-oriented but vulnerable to unreliable information, whereas transaction cost economics is ideal for larger organizations but views human nature as inflexible (Stiles et al., 2001). Complexity is not properly developed but is known to enhance creativity (Mick & Shay, 2014). Principal-agent can allow an agent to represent an enterprise but poorly accounts for different incentives.
The theories interact with each by providing a multifaceted view of a problem. If implemented correctly, they can complement each other’s weaknesses, but situational awareness is still vital. For example, CVS Health Corporation follows structural contingency by focusing on its product types, and it is institutional due to its size (CVS Health, 2021).
Conclusion
In conclusion, organizational theories need to be used on the basis of the unique condition in which an organization operates. They can be combined to enhance their utility, but their weaknesses should be recognized as well.
References
CVS Health. (2021). Annual Report [PDF document]. Web.
Mick, S. S., & Shay, P. D. (2014). Advances in health care organization theory (2nd ed.). Jossey-Bass.
Stiles, R. A., Mick, S. S., & Wise, C. G. (2001). The logic of transaction cost economics in health care organization theory. Health Care Management Review, 26(2), 85-92. Web.