Rational Approaches to Organizations Essay Example | Topics and Well Written Essays - 1500 words

Rational Approaches to Organizations - Essay Example It also highlights through examples how taking an open system or a natural systems approach could benefit managers. Rational Approaches to Organizations Rational approaches present a planned and systematic approach to decision making. Applying such an approach helps managers to maintain order and resoluteness in the decision-making process. Dyck (1997) observes that rational approaches generate reason and order through a sequence of steps starting with the discovery of an opportunity or a predicament and culminating with measures to be undertaken in regard to the decisions reached. Mintzberg (1990) argues that rational approaches are based on meticulousness of analysis and assessment of all probable courses of action. This may be appealing to managers considering the fact that future actions are predetermined at the strategy setting stage. Rational approaches to strategy formulation comprise environmental scanning, portfolio and industry analysis, all which are focused on establishin g the business opportunities and threats. Environmental scanning helps managers to determine the nature of the operating environment and to set strategies for utilizing emerging opportunities as well as dealing with potential threats (Robbins & Barnwell 2006). Portfolio analysis is the formal structured examination that encompasses decisions regarding the relative significance of the accessible business opportunities where a company can invest. It allows the management to devise strategies that can supplement the business portfolio in regard to emerging investment openings and products (Ferraro et al. 2005). Industry analysis helps managers to understand the nature of a particular market in which an organization presently sells its products or is planning to penetrate in future. Such rational approaches allow managers to determine the significance of the various strategic business units and prioritize the allocation of resources depending on market attractiveness (Williamson 2000). Strategy development through this process culminates in a well-detailed scheme with various courses of action that are meticulous with monetary aspects and resource affiliated data. This process is characteristic of the standard SWOT (Strengths Weaknesses Opportunities and Threats) analysis in strategy development. Mitzenberg (1990) developed a comparable approach to strategy development. His planning approach involves formulating a strategy with a time line, goals and objectives which are stated and formulated to help achieve the organizational objectives. A plan is a critical source of direction for the company since it contains clearly stated objectives. Planning is a continuous process as variables keep changing hence the need for management to be ready for changes through out the organization’s life cycle (Glueck 2009). Litzenberg's planning model is limited in the sense that it is suitable for static operating environments otherwise the management needs to continuously review plans in a constantly changing environment. Plans can also not be relied upon in the long run due to technological and infrastructural advancements. The rational approaches integrate an evaluation of the organization and its operating environment with the underlying assumption that changes in the business environment will seldom affect the plan.