Organizational Theory - Development in Organizations Affecting The Modern Era

Development in Organizations Affecting The Modern Era

The rise in organizational development has a largely impacting role on the modern era. As many organizations thrive to integrate themselves into capitalistic societies, they initiate a ripple effect between other competing firms and already existing economic pressures. Once an organization sees window for expansion, it begins to grow by producing more and thus alters the economic equilibrium by catapulting itself forward into a new environment of production. This expansion induces changes not only within its infrastructure, but also affects competing organizations and the economy as a whole. Other firms observe these innovative developments and recreate them efficiently. Developments in organizations help boost economic potential in a society and help generate the tools necessary to fuel its capitalistic nature.

One example of how development in an organization affects the modern era is through factory production (lecture 9/17). The concept of factory production amplified production as a whole and allowed for the start to organized division of labor. It centralized facets of the workforce and also began to define the rules of production and trade, which also led to undeveloped forms of specialization. Henry Ford implemented an innovative design by modifying factory production and creating the assembly line, which is still used throughout many factories in contemporary society (Lecture 9/17). These developments make it easier for a company to produce, and thus incentivize the aggregation of firms to utilize more efficient methods of running their companies.

Organizational development can also help identify malicious forms of corporate practice and use them to highlight future precautionary measures. The accident at Three Mile Island helped determine ways to ensure the prevention of similar incidents (Perrow). In this example, developments in organization can lead to stronger government regulations and safety mandates placed on production.

It is also important to realize that a cluster of developing organizations can improve the economy of the entire city it is occupying. “When factors of production are geographically concentrated, firms gain the additional benefits of spatial proximity or, agglomeration economies… such an advantage becomes self reinforcing through a dynamic process of increasing returns” (Saxenian, 358). World economies also have a pole or center represented by one dominant city (Braudel, 81). As organizations develop, they increase the economic welfare of their city.

However, one observation noted by Charles Perrow is that the development of larger organizations leads to a decline in small, autonomous, informal groups (Perrow, 727). Small organizations are absorbed during a larger organization’s expansion and become highly dependent on it for their existence – essentially becoming satellites (Perrow, 727). Unfortunately, “Small formal organizaitons lose their autonomy or actually disappear – their functions surviving under control or auspices of centralized bureaucracies and shaped by the needs of those formal organizations” (Perrow, 728). With larger bureaucratic effort from parent organizations, there has been a small need for autonomous self sustaining firms. What solidifies this argument is the pressure placed on wage dependency. Development in organization fosters an environment nourishing specialization, trade, and capitalism. Without wage dependency, the few “self-sustaining farmers” will have limited mobility and find it hard to grow at all (Perrow).

Even though the decline in small business might not seem to substantiate how the development in organizations leads to increased aggregate economic return, it exemplifies the cut-throat nature of capitalism. As organizations develop, they devour the smaller organizations that cannot keep up, but also allow for the evolution of innovative management and production techniques for other larger companies. The development of organizations demands a higher level of skillset from workers as it continues to grow. It also builds precautionary measures on cutting edge technology. It amplifies the need for specialization and accounts of functionalism in various organizations and their respective societies. Through much advancement in the interaction of capitalistic bureaucracies, the development of organizations is what has driven contemporary firms to thrive in its modern day society.