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Truth, Beauty, and Justice in Models of Social Action
In this essay I advance two related theses. First, economic theory predicts that organizations will be a mess but not a mystery. Second, classic case studies conducted by organizational sociologists support this prediction. Fully articulating and defending these theses will require a book, so my goal here is simply to render them plausible. I begin by pointing toward the relevant economic theory and sociological evidence, but I devote the bulk of the essay to a particular example: I develop a formal economic model inspired by a passage from Michel Crozier's The Bureaucratic Phenomenon. I conclude by discussing the potential roles of formal economic modeling in organizational research.
“These times are riven with anxiety and uncertainty” asserts John O’Donohue. ¹ “In the hearts of people some natural ease has been broken. . . . Our trust in the future has lost its innocence. We know now that anything can happen. . . . The traditional structures of shelter are shaking, their foundations revealed to be no longer stone but sand. We are suddenly thrown back on ourselves. At first, it sounds completely naïve to suggest that now might be the time to invoke beauty. Yet this is exactly what . . . [we claim]. Why? Because there is nowhere else to turn and we are desperate; furthermore, it is because we have so disastrously neglected the Beautiful that we now find ourselves in such a terrible crisis.” ²
Twenty-first century society yearns for a leadership of possibility, a leadership based more on hope, aspiration, innovation, and beauty than on the replication of historical patterns of constrained pragmatism. Luckily, such a leadership is possible today. For the first time in history, leaders can work backward from their aspirations and imagination rather than forward from the past. ³ “The gap between what people can imagine and what they can accomplish has never been smaller.” ⁴
Responding to the challenges and yearnings of the twenty-first century demands anticipatory creativity. Designing options worthy of implementation calls for levels of inspiration, creativity, and a passionate commitment to beauty that, until recently, have been more the province of artists and artistic processes than the domain of most managers. The time is right for the artistic imagination of each of us to co-create the leadership that the world most needs and deserves.
Organized anarchies are organizations characterized by problematic preferences, unclear technology, and fluid participation. Recent studies of universities, a familiar form of organized anarchy, suggest that such organizations can be viewed for some purposes as collections of choices looking for problems, issues and feelings looking for decision situations in which they might be aired, solutions looking for issues to which they might be an answer, and decision makers looking for work. These ideas are translated into an explicit computer simulation model of a garbage can decision process. The general implications of such a model are described in terms of five major measures on the process. Possible applications of the model to more narrow predictions are illustrated by an examination of the model's predictions with respect to the effect of adversity on university decision making.
Every day, we make decisions on topics ranging from personal investments to schools for our children to the meals we eat to the causes we champion. Unfortunately, we often choose poorly. The reason, the authors explain, is that, being human, we all are susceptible to various biases that can lead us to blunder. Our mistakes make us poorer and less healthy; we often make bad decisions involving education, personal finance, health care, mortgages and credit cards, the family, and even the planet itself. Thaler and Sunstein invite us to enter an alternative world, one that takes our humanness as a given. They show that by knowing how people think, we can design choice environments that make it easier for people to choose what is best for themselves, their families, and their society. Using colorful examples from the most important aspects of life, Thaler and Sunstein demonstrate how thoughtful "choice architecture" can be established to nudge us in beneficial directions without restricting freedom of choice. Nudge offers a unique new take-from neither the left nor the right-on many hot-button issues, for individuals and governments alike. This is one of the most engaging and provocative books to come along in many years. © 2008 by Richard H. Thaler and Cass R. Sunstein. All rights reserved.
The strategy field has generally been viewed as somewhat fragmented with the primary ‘fault line’ stemming from the divide between economic and behavioral approaches. It is argued here that this is a false divide as any but the most trivial problems require a behavioral act of representation prior to invoking a deductive, ‘rational’ approach. In this sense, all approaches are behavioral. Once we recognize rationality as a process, then the pragmatic question becomes which among the imperfect mechanisms to guide choice and behavior may be more or less preferred. Such a viewpoint not only serves to help span the chasm of behavioral and economic approaches, but it may also connect the applied normative frameworks and approaches within the field to more theoretically grounded approaches. Copyright © 2011 John Wiley & Sons, Ltd.
Actors engaged in learning from rare events must trade off between two different criteria for effective learning: validity—the extent to which learning can be used for understanding, prediction, and control—and reliability—the extent to which understandings of experience are public, stable, and shared. Existing models of learning from rare events have elided conflict and politics by assuming that individuals and organizations always seek new valid knowledge that then becomes public, stable, and shared across actors. Here we examine the politics of learning in a historical analysis of population-level learning by four different actors following the 1994 sinking of the ferry Estonia. We show how politics shaped the trade-off between reliability and validity and, in turn, shaped the nature of the learning. Whereas the new knowledge was sometimes both valid and reliable, the more common outcome was knowledge that was only partly valid and reliable. Rather than treat these outcomes as substandard, we show how they are important to the dynamics of learning, as different population-level actors take into account different aspects of experience. The result is a model that makes conflict and contestation—and hence politics—essential to effective learning.
I was a student of Jim March’s in 1983, meaning that I took a mandatory 10-week doctoral class on organization theory from him that changed my life. And I have been a student of Jim’s ever since, meaning that I have tried to keep learning from Jim’s ideas—about organizations and about life. During the course and for over a decade afterwards, most of my academic learning from Jim was about how disciplines other than economics think about organizations. More recently, I have tried to discern how the roots of my own field, organizational economics, often involve Jim. This note focuses on the latter, especially informed by precious summer discussions from 2013 to 2018.1
For some, the world is becoming increasingly complicated in that there are ever greater responsibilities, from selecting health insurance to figuring out how much to save for retirement. Ten years ago, my friend (and Harvard law professor) Cass Sunstein and I published a book called Nudge: Improving Decisions About Health, Wealth, and Happiness that offered a simple idea. By improving the environment in which people choose—what we call the “choice architecture”—they can make wiser choices without restricting any options. The Global Positioning System (GPS) technology on smartphones is an example. You decide where you want to go, the app offers possible routes, and you are free to decline the advice if you decide to take a detour. Sunstein and I stressed that the goal of a conscientious choice architect is to help people make better choices “as judged by themselves.” But what about activities that are essentially nudging for evil? This “sludge” just mucks things up and makes wise decision-making and prosocial activity more difficult.
Preface PART 1: TWO NATURAL KINDS 1. Approaching the Literary 2. Two Modes of Thought 3. Possible Castles PART 2: LANGUAGE AND REALITY 4. The Transactional Self 5. The Inspiration of Vygotsky 6. Psychological Reality 7. Nelson Goodman's Worlds 8. Thought and Emotion PART 3: ACTING IN CONSTRUCTED WORLDS 9. The Language of Education 10. Developmental Theory as Culture Afterword Appendix: A Reader's Retelling of "Clay" by James Joyce Notes Credits Index
One of the misfortunes of aging is the way in which the polite willingness of others to tolerate superannuated homilies reinforces a proclivity to pontificate. As one ages, one moves from writing papers that have something to say to writing papers that have nothing to say but say it with great seriousness. Unfortunately, awareness of the self-indulgence of age does not ordinarily inhibit it, as this essay, for which Olivier Germain (and possibly Milan Kundera) must take some responsibility, clearly demonstrates. I have read the contributions of my friends and colleagues to the M@n@gement discourse with great interest but with an overpowering awareness of my own irrelevance to many of them. The issues they explore are grand and important: How does management theory contribute to the well-being of business, society, the poor, peace, and justice? What are the fundamental epistemological, ethical, and moral premises of management research? What is and should be the relationship between management theory and the prejudices of the intellectual, business, political, and social
Drawing from theory and research on interpersonal attraction, as well as interviews with 42 directors of large U.S. industrial and service firms, we identified a set of social influence tactics that are less likely to be interpreted by the influence target as manipulative or political in intent and are therefore more likely to engender social influence. We consider who among top managers and directors of large firms is most likely to exercise such tactics and how their use affects the likelihood of garnering board appointments at other firms. An analysis of survey data on interpersonal influence behavior from a large sample of managers and chief executive officers (CEOs) at Forbes 500 companies strongly supports our theoretical arguments: managers' and directors' ingratiatory behavior toward colleagues is more likely to yield board appointments at other firms to the extent that it comprises relatively subtle forms of flattery and opinion conformity, which our theory suggests are less likely to elicit cynical attributions of motive. Supplementary analyses also indicate that these relationships are mediated by an increased likelihood of receiving a colleague's recommendation for the appointment. Moreover, we theorize and find that managers and directors who have a background in politics, law, or sales, or an upper-class background, are more sophisticated and successful in their ingratiatory behavior.
Individuals and social systems are often portrayed as risk averse and resistant to change. Such propensities are characteristically attributed to individual, organizational, and cultural traits such as risk aversion, uncertainty-avoidance, discounting, and an unwillingness to change. This paper explores an alternative interpretation of such phenomena. We show how the reproduction of successful actions inherent in adaptive processes, such as learning and competitive selection and reproduction, results in a bias against alternatives that initially may appear to be worse than they actually are. In particular, learning and selection are biased against both risky and novel alternatives. Because the biases are products of the tendency to reproduce success that is inherent in the sequential sampling of adaptation, they are reduced whenever the reproduction of success is attenuated. In particular, when adaptation is slowed, made imprecise, or recalled less reliably, the propensity to engage in risky and new activities is increased. These protections against the error of rejecting potentially good alternatives on inadequate experiential evidence are costly, however. They increase the likelihood of persisting with alternatives that are poor in the long run as well as in the short run.
The main task of scholars is to help good ideas forged by their predecessors find a new life in the imaginations of their successors. In this essay, we consider some aspects of this process from our experience with garbage can ideas of organizational decision making. We record our memories of initial encounters with them, impressions of their current condition, and some thoughts on convolutions they may experience in the years ahead.
James G. March, Ph.D. (Yale, 1953) associate professor of industrial administration at Carnegie Institute of Technology, has contributed numerous articles to professional journals on the theory of political structure and influence.
Examines the correlation between the exploration of new possibilities and the exploitation of old certainties in organizational learning. Also discusses the difficulty in balancing resource management between gaining new information about alternatives to improve future returns (i.e., exploration) and using information currently available to improve present returns (i.e., exploitation). Two models which evaluate the formation and use of knowledge in organizations are developed. The first is a model of mutual learning in a closed system having fixed organizational membership and stability. The second is a model which considers the ways in which competitive advantage is affected by knowledge accumulation. The analysis indicates that the choice to rapidly develop exploitation over exploration might be effective in the short term, but is potentially detrimental to the firm in the long term. (SFL)
In An Engine, Not a Camera, Donald MacKenzie argues that the emergence of modern economic theories of finance affected financial markets in fundamental ways. These new, Nobel Prize-winning theories, based on elegant mathematical models of markets, were not simply external analyses but intrinsic parts of economic processes. Paraphrasing Milton Friedman, MacKenzie says that economic models are an engine of inquiry rather than a camera to reproduce empirical facts. More than that, the emergence of an authoritative theory of financial markets altered those markets fundamentally. For example, in 1970, there was almost no trading in financial derivatives such as "futures." By June of 2004, derivatives contracts totaling $273 trillion were outstanding worldwide. MacKenzie suggests that this growth could never have happened without the development of theories that gave derivatives legitimacy and explained their complexities. MacKenzie examines the role played by finance theory in the two most serious crises to hit the world's financial markets in recent years: the stock market crash of 1987 and the market turmoil that engulfed the hedge fund Long-Term Capital Management in 1998. He also looks at finance theory that is somewhat beyond the mainstream—chaos theorist Benoit Mandelbrot's model of "wild" randomness. MacKenzie's pioneering work in the social studies of finance will interest anyone who wants to understand how America’s financial markets have grown into their current form.
Organizations learn from experience. Sometimes, however, history is not generous with experience. We explore how organizations convert infrequent events into interpretations of history, and how they balance the need to achieve agreement on interpretations with the need to interpret history correctly. We ask what methods are used, what problems are involved, and what improvements might be made. Although the methods we observe are not guaranteed to lead to consistent agreement on interpretations, valid knowledge, improved organizational performance, or organizational survival, they provide possible insights into the possibilities for and problems of learning from fragments of history.
This essay attempts to articulate and advance a long-term agenda for organizational economics. The essay begins with a general discussion of four specific items on this agenda, and then moves to a more specific discussion of decision-making in organizations--beginning with two polar-opposite conceptions (team theory and garbage cans) and then describing several recent economic models. Part of the rationale for writing this essay is that this agenda has both substantive and methodological commonalities with the work of James March. Copyright 2003, Oxford University Press.
The analysis of decision making under uncertainty has again become a major focus of interest. This volume presents contributions from leading specialists in different fields and provides a summary and synthesis of work in this area. It is based on a conference held at the Harvard Business School. The book brings together the different approaches to decision making - normative, descriptive, and prescriptive - which largely correspond to different disciplinary interests. Mathematicians have concentrated on rational procedures for decision making - how people should make decisions. Psychologists have examined how poeple do make decisions, and how far their behaviour is compatible with any rational model. Operations researchers study the application of decision models to actual problems. Throughout, the aim is to present the current state of research and its application and also to show how the different disciplinary approaches can inform one another and thus lay the foundations for the integrated analysis of decision making. The book will be of interest to researchers, teachers - for use as background reading for a decision theory course - students, and consultants and others involved in the practical application of the analysis of decision making. It will be of interest to specialists and students in statistics, mathematics, economics, psychology and the behavioural sciences, operations research, and management science.
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