Type III: Open Rational System Models
When the open system approach was introduced by Simon in the 1940's, it
quickly caught on and spurred the development of multiple theories built
on economical, psycholocial, and sociological backgrounds.
Social Psychological Level
Bounded Rationality
March and Simon (1958) note that there are cognitive limits to decision
making and that people often "satisfice" an acceptable alternative
than calculate the optimal one.
Agency Theory
Derived from economic theory, this focuses on the interaction between a
principal (person seeking assistance) and an agent (who carries out the
activity) -- for instance, supervisor-subordinate relations.
Structural Level
Contingency Theory
Both Lawrence and Lorsch and Thompson are open system theorists, and include
rational arguments in their structural arguments. Contingency thoerists
consider the problem:"Given that an organization is open to the uncertainties
of its environment, how can it function as a rational system?" (Scott
p. 106).
Comparative Structural Analysis
Researchers like Pugh et al (1969) and Udy (1959) analyzed and compared
the structures of large samples of organizations and explored the relationships
between size, technology and uncertainty. These theorists assume that organizations
are trying to rationally design their structures, striving for the most
effective or efficient ones (Scott p. 106).
Ecological Level
Transactions Cost Analysis
Williamson (1975) proposed looking at the costs of entering into transactions
as a focus of organizational research and an explanation of why organzations
are created and take certain forms.