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Strategic Choice Theory was developed when industrial relations in the U.S. were changing
rapidly. Because most of the popular theories at that time were generated during periods of
relative stability in U.S. industrial relations practice and consequently are overly static, they
have difficulty explaining behavior when the basic parameters of the system appear to be
changing. For example, Dunlop's systems model was widely accepted in 1960's and 1970's.
But there are some anomalies in the model. First, the model could not foresee the declines of
union membership after that time. Rather conventional models assume that labor unions were
a permanent participant in their employment relationships. Second, conventional models
assume that there is a consensus ideology. But based on the models, we could not tell whether
or not managerial values, strategies, and behavior in industrial relations were changed. Third,
the traditional industrial relations models treat management as reacting to union demands,
pressures, and initiatives. But there were many managerial initiatives and changes that
affected the transformation in U.S. industrial relations and they have occurred within
management. Therefore, they added a more dynamic component to industrial relations theory
by developing the concept of strategy, or strategic choice. Then they tried to demonstrate that
industrial relations practices and outcomes are shaped by the interactions of environmental
forces, union leaders, workers, and public policy decision makers (e.g., Kochan, et al., 1984).

Strategic Choice Theory starts with consideration of relevant forces in the external
environment that affects employment relationships. Changing external environment induce
employers to make adjustment in their competitive business strategies. In making these
adjustments, the range of options considered are filtered and constrained so as to be
consistent with the values, beliefs, and philosophies engrained in the mind of key decision-
makers. As choice are also embedded in particular historical and institutional structures, the
range of feasible options available at any given time is partially constrained by the outcomes
of previous organizational decisions and the current distribution of power within the firm and
between it and any unions, government agencies, or other external organizations it deals with.

Thus, industrial relations processes and outcomes are determined by a continuously evolving
interaction of environmental pressures and organizational responses. The relative importance
of either the environment or the parties' responses can vary over time. Therefore, labor- or
product market changes do not have independent effect or operate in a unique or
deterministic fashion. Then, choice and discretion on the part of labor, management, and
government affect the course and structure of industrial relations systems. Moreover, history
plays an extremely important role in shaping the range of feasible strategic adaptations.

Their broader conception of the institutional framework of industrial relations is as follows. It


divides the activities of management, labor, and government organizations into three tiers: (1)
a top tier of strategic decision making, (2) a middle or functional tire of collective bargaining
or personnel policy making, and (3) a bottom or workplace-level tier where policies are
played out and affect individual workers, supervisors, and union representatives on a day-to-
day basis. In this framework, the middle tier encompasses the most traditional terrain of
industrial relations, since it focuses on the practice of collective bargaining and personnel
policy formulation and on the development and administration of the key public policies
governing labor-management relations. The traditional of business unionism that has
dominated the American labor movement has made it appear that few important strategic
choices or ideologically driven decisions are being made at the top tier. Yet the basic
decisions involving such things as what businesses to invest in, where to locate worksites,
whether to make or buy various components, and the organizational arrangements used to
carry out basic strategies all affect industrial relations at lower levels of the system and
therefore are central to analysis of industrial relations. Strategic choices that are relevant to
the bottom tier are those most directly associated with the organization of work, the structure
of worker rights, the management and motivation of individuals or work groups, and the
nature of the workplace environment.

This three-tier framework helps identify an important development that existing industrial
relations systems theory does not specifically address: the apparent inconsistencies and
internal contradictions in strategies and practices occurring at different levels of industrial
relations within firms. First, this framework recognizes the inter-relationships among
activities at the different levels of the system and helps explain the origins of any prevailing
internal contradictions or inconsistencies among three levels. Second, this framework
considers the effects that various strategic decisions exert on the different actors in the
system. The three-tier framework encourages analysis of the roles that labor, management,
and government play in each other's domain and activities.

Shifts in business strategies are affected by the current state of industrial relations and, in
turn, affect future industrial relations outcome at all three levels of the firm. The types of
interactions are as follows. Changes in the competitive environment can occur gradually as
products change in response to changing consumer demand or as low-cost competition
grows. The environment can also change abruptly because of competitive shocks. A sharp
increase in competitive pressures forces firms to make decisions that can have far-reaching
effects. First, the firm must reassess its commitment to its current line of business and decide
whether it wants to attempt to compete in the environment or to withdraw and reallocate its
capital resources. Second, if the firm chooses to remain active in the market, adjustments in
its competitive strategy may be needed. Third, the strategic choices made by firms that
remain in the market require them to rearrange their capital in order to take advantage of new
profit opportunities. Finally, changes in business strategy and their related production
decisions affect the validity of existing organizational structures, particularly the extent of
vertical integration.

The business decisions are influenced by the history and current state of industrial relations in
the firm and the industry. The key consideration is whether wages and labor costs have been
taken out of competition.

Researchers have been conducted several types of study on Strategic Choice Theory. First,
some empirical studies were conducted to make sure the transformation of industrial relations
systems as suggested in Strategic Choice Theory. Katz (1993) studied the bargaining
structure of six countries (Sweden, Australia, Germany, Italy, UK and US) and confirmed the
substantial increase in the intensity of local bargaining, downward shift in the formal
structure of bargaining, the effect of employer initiatives, and declining unionization.

Second, some field studies or case studies have been conducted to examine the Strategic
Choice Theory. Kochan, McKersie, & Cappelli (1984) studied a single industry, Rubber
Tiers. They described that industry relations in Rubber Tiers were affected not only by
changes in the environment but also by the diverse decisions made at the corporate level to
adjust those changes. Birecree (1993) analyzed the International Paper Company (IP) during
the 1980s and revealed that important structural changes in product markets, product mix,
and technology of production contributed to IP's perceived need for significant changes in
work practices and compensation by 1985. Arthur (1992) analyzed U.S. steel minimills and
suggested that variation in workplace industrial relations policies is related to differences in
business strategy.

Third, some hypotheses testing researches using statistical analysis have also been conducted.
They make up for the limitation of generalizability in each case study and provide the validity
of Strategic Choice Theory. For example, Cooke and Meyer (1990) developed a model
predicting which of three broad labor-relations strategies -- union avoidance, union-
management collaboration, or mixed strategy combining elements of union avoidance and
collaboration -- a company will adopt. This study is significant because they apply and test
the Strategic Choice Theory using empirical data. Their result that market pressure and
structural characteristic of the company are important predictors of strategy choice supports
the validity of the Strategic Choice Theory.

However, there is also a research that raise question on the validity of the theory. Godard
(1997) focused on managerial IR ideologies that seem to be central in Strategic Choice
Theory. Using four types of variables (ideology, action, outcome, and context variables). He
suggests based on the result that context variables play a more important role in managerial
strategies toward unions, and even in workplace-level innovations, although managerial
ideologies have statistically significant effects to other variables. He conclude that Strategic
Choice Theory need to be improved by marrying with structural theories of variation.

In summary, wide range of research has been conducted to examine Strategic Choice Theory.
Although each study might have its methodological limitation (e.g., genaralizability, random
measurement error, common method variance), but as a whole, they contribute the grounding
and testing the Strategic Choice Theory providing significant result and making up
limitations each other. It is suggested that the theory is on the way of evolution and more
comprehensive theory could be build by the efforts of enthusiastic Industrial Relations
researchers.

^   
 
 

The concept of organization serves as a key factor in determining if an organization or


company reaches its goals and objective while exemplifying their mission. Nonetheless, there
are various theories of organization that can be utilized such as the institutional theory (I.T)
of organization. This theory focuses on the environmental factors experienced by an
organization such as ³external or societal norms, rules, and requirements that an
organizations must conform to, in order to receive legitimacy and support´. The institutional
theory depends, heavily, on the social constructs to help define the structure and processes of
an organization.

The most basic principle and distinct characteristic to the institutional theory is conformity.
Conformity is the meter stick that is used to determine the legitimacy of an organization. The
concept of conformity establishes ³rational myths´ in which it is just ³rational´ that an
organization would incorporate certain social norms, rules, and requirements into it mission
and goals. In order for an organization to be endorsed as a valid one, it must conform to the
³rational myths´. In this example, societal expectations and norms dictate the requirements
needed to achieve an MBA degree because if accounting, strategy, and marketing was not
taught, the program would be viewed as illegitimate. So, the program in an astute effort to
obtain legitimacy the program may conform. As a result of conformity, many organizations
began to resemble one another because they are faced with the same social pressures.
Isomorphism has proven to be a beneficial component of the institutional theory because it
can offer an alliance between organizations with the same focus (i.e. usually seen in public
health through the development of a coalition). Within the case, it is pivotal that Dr. Amayo
attempted to construct a clear mission statement and concise core values and objectives so
that the organization conforms with the norms surrounding a governmental communicable
diseases agency and matches the goals of its constitutes. However in a slim market,
isomorphism may not be beneficial. It may encourage or create competition among similar
organizations who are trying to serve that same population or market, so one¶s focus may
shift to the competition rather than the service or product.

Despite, the level of conformity presented by the Institutional theory, the theory is quite
promising because it bridges the gap between societal views and organization¶s actions.
Management is more aware of social views and opinions and more willing to incorporate
societal norms and expectations, rules, regulations, and requirements in its daily operations of
an organization. This concept of unifying these two entities: environment and management
has proven to be the ultimate advantage to theory in addition to isomorphism. Nonetheless,
there are a few disadvantages associated with the theory. One disadvantage to the institutional
theory is that it places a tremendous amount of constraints on management to conform to the
norms, rules, or requirements. High level of constraints can prove to be deleterious to the
organization because it can inhibit versatility, creativity, and diversity within a particular
field. Another disadvantage to the theory is the creation of ³cookie-cutter´ organizations and
the legitimacy of organization that are outcast from the ³cookie-cutter´ format. One example
of this is within the arena of academia. For example, Drexel University- School of Public
Health is non-traditional school of public health because it utilizes the Problem-Based
Learning (P.B.L) format and non-traditional methodology of learning. In my opinion, the
legitimacy of the institution was questioned due to the PBL format and non-traditional
methodology of learning and may have hindered its acceptance into the world of Public
Health. However, this example, also, shows how the skepticism produced by the institutional
theory maybe diluted over time with further understanding and the transformation of societal
norms whereas PBL has become a more acceptable learning style. It is this concept of
legitimacy that oftentimes makes organizations resistant to change in fear of breaking away
from the norm because their legitimacy may be challenged. Also, within this type of
environment, management may have a minimal amount of freedom to make decisions which
may hinder the structural process with an organization.

The institutional theory places emphasize on the crossroads of the environmental factors and
their influence on organizations and corporations. In the case, we are presented with a
Management /Organization Paradigm and Management Operation paradigm, both paradigms
incorporates external factors in its framework to demonstrate the validity and importance of
external factors in contributing the organization, structure, and legitimacy of a corporation or
organization. In the Management Operation Paradigm, the external factors-legal, political,
and social which sets the stage for the institutional theory in the paradigm because one can
see the direct connection that the external factors plays in the framework of an organization
as noted by the flow chart of the paradigm. In addition, the paradigms suggests that the
relationship between the mission statement, values, vision, and etc. (see Paradigms in case for
other component of organization)and external factors are oscillating components that goes
back and forth in the development, structure , and strategic management of an organization.
This means that the relationship between both is constantly changing so that one can
accommodate the other.

The institutional theory can be a rewarding concept to an organization because its


stakeholder, as a whole (society), plays a vital role in determining the legitimacy of an
organization, directly, and have much more power in the operations of an organization. Many
other theories of organization do not extend the same level of power to its stakeholders in
which the stakeholders set the standards. It is for this reason that that the institutional theory
is a promising theory, despite its disadvantages. Nevertheless, this theory is not advantageous
for every organization but can be determined by a ³best fit approach´. This approach
examines the capability of an organization mission, goals, vision, and strategic plans to the
basic principles of a theory in an effort to determine which theory fits best with that particular
organization. This approach is important because as explained within this paper, the
institutional theory can provide a few downfalls that may hinder productivity.
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learning in organizations

In recent years there has been a lot of talk of 'organizational learning'. Here
we explore the theory and practice of such learning via pages in the
encyclopaedia of informal education. We exami ne some key theorists and
themes, and ask whether organizations can learn?

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We have structured this page around three


basic questions:

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What is organizational learning?

Is it individuals that learn in organizations, or can organizations learn themselves?

From this exploration we suggest that there are particular qualities associated with learning in
organizations. The page links into discussions on different pages of the encyclopaedia of
informal education.

A 

For all the talk of learning amongst policymakers and practitioners, there is a surprising lack
of attention to what it entails. In Britain and Northern Ireland, for example, theories of
learning do not figure strongly in professional education programmes for teachers and those
within different arenas of informal education. It is almost as if it is something is
unproblematic and that can be taken for granted. Get the instructional regime right, the
message seems to be, and learning (as measured by tests and assessment regimes) will follow.
This lack of attention to the nature of learning inevitably leads to an impoverishment of
education. In a similar fashion, when we come to examine the literature of human resource
development and more generally that of organizational and management change, the idea that
µlearning¶ may in some way be problematic is only rarely approached in a sustained way.

In order to start thinking about learning we need to make the simple distinction between
learning as a product and as a process. The latter takes us into the arena of competing
learning theories - ideas about how we might gain understandings. The former takes us to
learning as either a change in behaviour or a change in our mental state. To explore these
areas go to:

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Four different orientations to theorizing learning:

the behaviourist orientation. The behaviourist movement in psychology has looked to the use
of experimental procedures to study behaviour in relation to the environment.

the cognitive orientation. Where behaviourists looked to the environment, those drawing on
Gestalt turned to the individual's mental processes. In other words, they were concerned with
cognition - the act or process of knowing.

the humanist orientation. In this orientation the basic concern is for human growth. We look
to the work of Maslow and Rogers as expressions of this approach.

the social/situational orientation. It is not so much that learners acquire structures or models
to understand the world, but they participate in frameworks that that have structure. Learning
involves participation in a community of practice.

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As Mark Easterby-Smith and Luis Araujo (1999: 1) have commented the idea of
organizational learning has been present in the management literature for decades, but it has
only become widely recognized since around 1990.

Two developments have been highly significant in the growth of the field. First it has
attracted the attention of scholars from disparate disciplines who had hitherto shown little
interest in learning processes. A consequence of this is that the field has become conceptually
fragmented, and representatives of different disciplines now vie over who has the correct
model of organizational learning«. The second development is that many consultants and
companies have caught onto the commercial significance of organizational learning« Much
of the effort of these theorists has been devoted to identifying templates, or ideal forms,
which real organizations could attempt to emulate. (Easterby-Smith and Araujo 1999: 1-2)

The central template or ideal form in the 1990s and into the twenty first century was the
notion of the learning organization. A helpful way of making sense of writing on
organizational learning is to ask whether writers fall into one of two basic camps. The
dividing line between them is the extent to which the writers emphasize organizational
learning as a technical or a social process. Here we can again turn to Easterby-Smith and
Araujo (1999: 3-5):

The ‘  view assumes that organizational learning is about the effective processing,
interpretation of, and response to, information both inside and outside the organization. This
information may be quantitative or qualitative, but is generally explicit and in the public
domain«. The 

‘ on organization learning focuses on the way people make
sense of their experiences at work. These experiences may derive from explicit sources such
as financial information, or they may be derived from tacit sources, such as the µfeel¶ that s
skilled craftsperson has, or the intuition possessed by a skilled strategist. From this view,
learning is something that can emerge from social interactions, normally in the natural work
setting. In the case of explicit information it involves a joint process of making sense of
data« The more tacit and µembodied¶ forms of learning involve situated practices,
observation and emulation of skilled practitioners and socialization into a community of
practice.

A classic expression of the technical view can be found in the work of Argyris and Schön on
single- and double-loop learning (1978, 1996). Lave and Wenger (1991) and Wenger (1998)
provide a fascinating example of the social perspective in action in their studies of
apprenticeship and communities of practice. Interestingly Donald Schön (1983; 1987) also
provides some insights into the use of µtacit¶ sources in his exploration of reflective practice.
Those operating within the social perspective may view organizational learning as a social
construction, as a political process, and/or as a cultural artifact (Easterby-Smith and Araujo
1999: 5-7).

Here we will explore the notions of single- and double-loop learning and community of
practice. We will also look at the notions of experiential learning and informal learning.

Experiential learningdChristine Prange (1999: 27) in her review of organizational learning


theory, notes that when we review the processes of organizational learning µwe encounter
³learning from experience´ as a genuine component of almost all approaches¶. We review
Kolb¶s (1984) famous formulation, go back to John Dewey¶s (1933) exploration of thinking
and reflection, and Kurt Lewin¶s use of the notions of feedback and action learning; and take
note of David Boud and associates useful contribution on the nature of reflection.

Single- and double-loop learning and organizational learning. This model of learning goes
back to some work that Argyris and Schön did in 1974, but it found its strongest expression
and grounding in organizational dynamics in 1978. Single-loop learning with it¶s emphasis
on the detection and correction of errors within a given set of governing variables is linked to
incremental change in organizations. Double-loop learning involves interrogating the
governing variables themselves and often involves radical changes such as the wholesale
revision of systems, alterations in strategy and so on. We examine the notion of theories of
action, single and double-loop learning, and the organizational orientations and practices
linked to each.

Informal learning. All of a sudden a number of researchers and policy pundits have
rediscovered µinformal learning¶. But is there really such a thing? We examine the current
debates and conceptualizations and what some of the implications may be for those interested
in developing the educative qualities of organizational life.
Communities of practice. This notion has been popularized by Lave and Wenger (1991) and
Wenger (1998). We explore the idea that organizations may be a constellation of
communities of practice.

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Prange (1999: 27) comments that one of the greatest myths of organizational learning is the
µwho question¶, that is, µthe way in which learning might be considered  ‘¶.
There are those who argue that it is individuals, not organizations, who learn. In other words,
learning refers to the processes of thinking and remembering that take place within an
individual¶s brain.

Traditionally, the study of cognitive processes, cognitive development, and the cultivation of
educationally desirable skills and competencies has treated everything cognitive as being

   and residing  ‘   of individuals; social, cultural, and technological factors
have been relegated to the role of backdrops or external sources of stimulation (Salomon
1993: xii)

This notion relates to a particular view of selfhood. In this way of coming to understand our
selves the body plays a crucial role. The skin becomes a boundary - everything that happens
outside the wall it forms becomes the ‘ - the world outside; what is inside is  - the
world inside. In this three relatively simple and apparently 'natural' ideas rule (Sampson
(1993: 34):

the boundary of the individual is coincident with the boundary of the body;

the body is a container that houses the individual;

the individual is best understood as a self-contained entity.

However, when we come to examine human behaviour in its everyday context, when we
look at µreal-life problem-solving situations, a rather different set of cognitive processes
appear:

People appear ‘ ‘  ‘ 


 ‘ 
with others and with the help of
culturally provided tools and implements. Cognitions, it would seem, are not content-free
tools that are brought to bear on this or that problem; rather, they emerge in a situation
tackled by teams of people and tools available to them... What characterizes such daily events
of thinking is that the social and artifactual surrounds, alleged to be µoutside¶ the individual¶s
heads, not only are sources of stimulation and guidance but are actually    ‘ ‘.
Moreover, the arrangements, functions, and structures of these surrounds change in the
process to become genuine
 ‘  ‘    that results from the cognitive partnership
with them. In other words, it is not just the µperson-solo¶ who learns, but the µperson-plus¶,
the whole system of interrelated factors. (Salomon 1993: xiii)

This is not a new idea ± for example, John Dewey recognized the significant of the
environment in being and learning. It links into a dialogical understanding of selfhood and
the work of people like George Herbert Mead (Cole and Engeström 1993 provide a useful
historical overview of the development of thinking around distributed cognition).
We can see how individual and organizational learning may connect in the work of Chris
Argyris and Donald Schön (1978; 1996). They suggest that each member of an organization
constructs his or her own representation or image of the theory-in-use of the whole (1978:
16). The picture is always incomplete ± and people, thus, are continually working to add
pieces and to get a view of the whole. They need to know their place in the organization.

Hence, our inquiry into organizational learning must concern itself not with
static entities called organizations, but with an active process of organizing
which is, at root, a cognitive enterprise. Individual members are continually
engaged in attempting to know the organization, and to know themselves in
the context of the organization. At the same time, their continuing efforts to
know and to test their knowledge represent the object of their inquiry.
Organizing is reflexive inquiry«.
[Members] require external references. There must be public representations
of organizational theory-in-use to which individuals can refer. This is the
function of organizational maps. These are the shared descriptions of the
organization which individuals jointly construct and use to guide their own
inquiry«.
Organizational theory-in-use, continually constructed through individual
inquiry, is encoded in private images and in public maps. These are the media
of organizational learning. (Argyris and Schön 1978: 16-17)

With this set of moves we can see how Chris Argyris and Donald Schön connect up the
individual world of the worker and practitioner with the world of organization.

Those interested in distributed cognition take this further. It can be argued that there are
stronger and weaker versions of distributed cognition. The ‘  ,or more radical, version
would take the position that cognition in general needs to be reappraised and approached as
principally distributed (see, for example, Cole and Engeström 1993; Pea 1993). The µproper
unit of psychological analysis should be ‘ (often, but not necessarily)   ‘ 
‘ ‘ in a cultural context¶ (Salomon 1993: xv). A   , or less radical, version would
hold that µsolo¶ and distributed cognitions are separate from one another, but should be taken
in µan interdependent dynamic interaction¶ (: xvi). Both ideas are often difficult to grasp
as the notion of individual cognition is very deeply ingrained in much that is written about the
area. As Salomon and Perkins (1998) put it, µwe do not ordinarily consider possession of an
artefact knowledge, yet possession of a database constitutes a kind of organizational
knowing. Patterns of division of labour within an organization are kinds of know-how that
have no easy individual analog¶.

In their review of individual and social aspects of learning, Salomon and Perkins comment:

If organizations can learn, this does not mean that they learn very well. A strong theme in the
literature on organizational learning is the weakness of the learning system involved. The
learning of the collective suffers from a startling range of limitations« Some of these are
equally characteristic of solo and collective learning entities. For instance, rare high-stakes
events²marriage decisions in an individual or major shifts of direction in a business²are
difficult learning targets because they do not occur often to disambiguate the lessons of
experience, and because by the time they occur again circumstances may have changed
substantially.
Other problems of learning are exacerbated by the specifically organizational character of the
learning. For example, different individuals and units within an organization may hold
somewhat different criteria of success. Also, advocates of a policy are likely to interpret any
difficulties with it as reflecting an insufficiently vigorous pursuit of the policy, while
opponents interpret the same data as signifying a bad policy. Feedback about the results of
organizational actions may be distorted or suppressed as people rush to protect their turf or to
maintain a positive climate«.

In summary, organizations, like individuals, can learn. Many of the fundamental phenomena
of learning are the same for organizations« However, organizational learning also has
distinctive characteristics with reference to what is learned, how it is learned, and the
adjustments called for to enhance learning. These derive from the fact that any organization
by definition is a collective, with individuals and larger units in different roles that involve
different perspectives and values, passing information through their own filters, and with
noisy and loss-prone information channels connecting them.

As a result, it seems likely that organizational as against individual learning has a number of
characteristic features. It will tend to be:

Situated and concerned with communities of practice.

More µinformal¶ and involve far less µteaching¶ than in the individual case

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Contradictory. µThe social entity can often be divided against itself, with different tacit
beliefs and concealed agendas harboured by different subgroups or individuals¶ (Salomon
and Perkins 1998).

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