Importance of Path Dependence in Management Essay

Importance of Path Dependence in Management - Essay Example The strong implication is that actors in a particular process become locked-in mechanisms that are themselves a product of historical contingencies. This perspective holds that phenomena are complex, and, therefore, a result of mutually interacting variables which produce non-linear dynamics and feedback loops. The complexity of the discourse on organisational change and innovation has only increased. This is occasioned by two divergent views. The first view holds that new and more flexible or fluid organisational forms are on demand while the second view holds the belief in organisational inertia and the historical necessity of decision making (Garud, Arun, and Peter, 2009:760). These two views have confronted managers who have to balance between new ideas and customs of an organisation or an industry. This is mostly influenced in concepts such as entrepreneurial mindset where actors are more driven by the logic of control which drives them to effectively actualise complex processes. This has made path dependence essential to managers as they struggle to understand the basic factors underlying most organisational processes and past successes while linking them with the realities of the moment to improve sustenance of an organisational performance and effectiveness (Coombs and Hull, 1997:1 -26). In a case study of Toyota production system (TPS), the perspective of change as a path dependence phenomenon promotes the importance of this concept in management (Driel and Dolfsma, 2009:67). To begin with, TPS created lock-in mechanisms long before the development of a proper mechanism involving relative competition. The competitors were able to copy some of the TPS models with accuracy and create considerable competition. However, through application of its significant and reliable production techniques and marketing strategies, they maintained loyalty of a client base that believed in the products produced by Toyota (Driel and Dolfsma, 2009:67).