ABSTRACT
This chapter introduces five basic theories of organizational behavior: organizational ecology theory, institutional theory, resource dependence theory, transaction cost economics, and organizational network analysis. It outlines their main concepts and principles, discussing their strengths and limitations for explaining macro level changes. The chapter illustrates applications to organizational phenomena. In general, a useful theory draws an investigator's attention to fundamental features and away from distracting and irrelevant aspects of organizational behavior. The precise location of any organization-environment boundary is susceptible to great fluctuations over time, arising from a wide range of social, political, and economic forces at play both inside and outside the organization. An institutionalized custom may exhibit ceremonial or mythical aspects that remain unconnected to organizational efficiency or effectiveness. Two major sources of external pressures pushing organizations toward conformity to a field's dominant institutions are the national state and peer organizations.
