Management Theories Management Theories

Management theories enhance organizational management through
empirically backed practices that have been developed for many years.
Resource dependence theory, resource-based theory, and relational
contract theory are some of the core management theirs considered in
this paper. The resource dependent theory is based on proposition that
external resources affect the internal behavior of the organization. The
theory assumes that organizations depend on resources that originate
from the organization’s surrounding or environment (Mensing, 2013).
Resource dependent theory is widely applied in supply management where
managers consider acquisition of resources as the core determinant of
actions taken by the organization regarding the supply of resources from
the external environment.
Resources-based theory holds that efficient and effective application of
useful resources mastered by a given firm determines its competitive
advantage (Grant, 2001). The theory is based on the assumption that
profitability of an organization can be enhanced in a highly competitive
market if all advantageous resources are exploited. This implies that
the competitive difference between firms` results from tactical ability
of their respective managers to deploy resources in more productive
ways. Resource-based theory has wide application in enhancing supply
chain and innovation within the organization with the objective of
enhancing productivity and competitiveness in the market.
Relational contract theory view contracts as forms of relations instead
of the traditional view of contracts as discrete transactions. The
theory is based on the assumption that contracts fall under the
relational range from discrete to the highly relational transaction, but
there is no total separation of elements of a relationship
(Diathesopoulos, 2010). Under the relational contract theory, all
transactions (including the simple ones) are analyzed in the wider view
of the social and economic context. The theory is applied in the
management of consumer-suppler relation and formulation of regulations
necessary for consumer protection.
References
Diathesopoulos, M. (2010). Relational contract theory and management
contracts: A paradigm for the application of the theory of the norms.
Selected Works, 4, 1-125.
Grant, M. (2001). The resource-based theory of competitive advantage:
Implications for strategy formulation. Californian Management Review, 1,
114-135.
Mensing, L. (2013). Theoretical foundation of supply management:
Contributions of the resource dependence theory. Enschede: University of
Twente.
MANAGEMENT THEORIES
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MANAGEMENT THEORIES
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