Why does organizational theory matter?

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pohnpei397 eNotes educator| Certified Educator

Organizational theory matters for businesses because the vast majority of businesses are organizations.  Organizational theory seeks to understand how people work together in organizations to achieve the goals of those organizations.  Organization theory purports to be able to explain how organizations can function more efficiently and productively.  Clearly, any business would like to be able to do this.  The more efficiently a business can function, the more it can reduce its costs and boost its profits.

Organizational theory, then, promises to help businesses get their people to work together better.  It looks at the human beings who make up the business and it tries to help them function together more effectively.  This is of interest to the vast majority of businesses.