Organizational theory studies organizations to identify patterns and structures for how they solve problems, maximize efficiency and productivity, and meet the expectations of stakeholders. Organizational theory then uses these patterns to formulate normative theories for how organizations function best. Therefore, one can study Organizational Theory in order to learn the best ways to run an organization or identify organizations that are managed in such a way that they are likely to be successful.

One example of how development in an organization affects the modern era is through factory production. The concept of factory production amplified production as a whole and allowed for the organized division of labor to start. It centralized facets of the workforce and also began to define the rules of production and trade, which also led to specialization. Henry Ford implemented an innovative design by modifying factory production and creating the assembly line, which is still used throughout many factories in contemporary society. These developments make it easier for a company to produce, and thus incentivize firms to aggregate and utilize more efficient methods for running their companies.

Organizational development can also help identify malicious forms of corporate practice and use them to highlight future precautionary measures. The nuclear accident at Three Mile Island helped determine ways to ensure the prevention of similar incidents. In that example, developments in organizational theory led to stronger government regulations and stronger safety mandates placed on production.