Extendable Rationality (eBook)

Understanding Decision Making in Organizations

Davide Secchi (Autor)

eBook Download: PDF

2010 | 2011
XIX, 161 Seiten
Springer New York (Verlag)
978-1-4419-7542-3 (ISBN)

Infos

'How do people make decisions in organizations?' is the question at the core of this book. Do people act rationally? Under what conditions can information and knowledge be shared to improve decision making? Davide Secchi applies concepts and theories from cognitive science, organizational behavior, and social psychology to explore the dynamics of decision making. In particular, he integrates 'bounded rationality' (people are only partly rational; they have (a) limited computational capabilities and (b) limited access to information) and 'distributed cognition' (knowledge is not confined to an individual, but is distributed across the members of a group) to build upon the pioneering work of Herbert Simon (1916-2001) on rational decision making and contribute fresh insights. This book is divided into two parts. The first part (Chapters 2 to 5) explores how recent studies on biases, prospect theory, heuristics, and emotions provide the so-called 'map' of bounded rationality. The second part (Chapter 6 to 8) presents the idea of extendable rationality. In this section, Secchi identifies the limitations of bounded rationality and focuses more heavily on socially-based decision processes and the role of 'docility' in teaching, managing, and executing decisions in organizations. The practical implications extend broadly to issues relating to change and innovation, as organizations adapt to evolving market conditions, implementing new systems, and effectively managing limited resources. The final chapter outlines an agenda for future research to help understand the decision making characteristics and capabilities of an organization.

Davide Secchi, PhD, is an Assistant Professor of Organizational Behavior at the University of Wisconsin-La Crosse. His research interests include 'distributed cognition' and its implications for management; human cognition and decision making; and social responsibility. He received his masters degrees (in venture finance and international finance) and his doctorate from the University of Pavia in Italy, and holds a BS from the University of Cagliari. He presents frequently at conferences and has published widely in scholarly journals and edited volumes, including the Journal of Business Ethics (Springer).

---

"e;How do people make decisions in organizations?"e; is the question at the core of this book. Do people act rationally? Under what conditions can information and knowledge be shared to improve decision making? Davide Secchi applies concepts and theories from cognitive science, organizational behavior, and social psychology to explore the dynamics of decision making. In particular, he integrates "e;bounded rationality"e; (people are only partly rational; they have (a) limited computational capabilities and (b) limited access to information) and "e;distributed cognition"e; (knowledge is not confined to an individual, but is distributed across the members of a group) to build upon the pioneering work of Herbert Simon (1916-2001) on rational decision making and contribute fresh insights. This book is divided into two parts. The first part (Chapters 2 to 5) explores how recent studies on biases, prospect theory, heuristics, and emotions provide the so-called map of bounded rationality. The second part (Chapter 6 to 8) presents the idea of extendable rationality. In this section, Secchi identifies the limitations of bounded rationality and focuses more heavily on socially-based decision processes and the role of docility in teaching, managing, and executing decisions in organizations. The practical implications extend broadly to issues relating to change and innovation, as organizations adapt to evolving market conditions, implementing new systems, and effectively managing limited resources. The final chapter outlines an agenda for future research to help understand the decision making characteristics and capabilities of an organization.

Inhalt

Preface 6
Acknowledgments 10
Contents 13
List of Figures 15
List of Tables 16
1 Introduction 17
What to Expect 18
Book Structure 21
Notes 22
Part I The Limited Cognition 23
2 Rationalization and Rationality 24
Kinds of Decisions 24
Mechanical Decisions 24
Decisions that Imply a Choice 25
Creative Decisions 27
Epistemological Corner 27
The Legacy of Herbert Simon 28
Rationalization 29
Rationality 31
Summary 32
Notes 32
3 Bounded Rationality 34
What Is Bounded Rationality 34
Substantive and Procedural Rationality 35
External and Internal Limitations 37
Satisficing 37
Bounds or Limits? 38
Summary 39
Notes 39
4 Maps of Bounded Rationality (I) 41
Prospect Theory 41
The Certainty Effect 41
The Possibility Violation 43
The Reflection Effect 44
The Point on Bounded Rationality 45
This Is a Biased World 45
The Endowment Effect 45
The Status Quo Bias 46
Anchor Bias 47
Bandwagon Effect 48
Prejudices 49
Errors 50
Summary 52
Notes 52
5 Maps of Bounded Rationality (II) 54
Heuristics 54
The Fast and the !Frugal! 55
Organizational Heuristics 57
Emotionally Bounded 59
Accessibility, Representation, and Framing 61
Epistemological Corner 62
Two Logics 64
The Logic of Consequence 65
The Logic of Appropriateness 66
Implications of Using One or More Maps 67
The Biases Paradigm 67
The Toolbox Paradigm 68
Final Remarks 68
Summary 69
Notes 69
Part II The Extended Brain 73
6 Simons Error 74
Distributing Cognition 75
An Irreverent Hypothesis on Cognition 76
Boundaries of the Mind: The Through Doing Logic 79
Externalizing and Reprojecting 81
The Extended Mind 84
How Bounded Is Rationality? 85
Cognition and Rationality 85
Problem Solving 85
Moving Bounds 86
What Error? 87
Summary 88
Notes 88
7 Stretching the Bounds (I) 91
Through Doing Decision Making 92
Emotions and Decision Making 93
Morality 95
A Third Logic: The Logic of Adaptiveness 97
The Rationality of Change 99
Innovative High Technology 99
The Process of Change 101
Summary 103
Notes 103
8 Stretching the Bounds (II) 106
The Others 106
Advice Taking 107
The Judge-Advisor System 108
Variables Affecting Advice Taking 110
Information Richness 111
Information Richness and Advice Taking: A Proposal 113
Perspectives on Advice Taking 116
Passive Advice Taking xx 117
Summary 119
Notes 119
9 The Docile Organization 121
The Docile Individual 121
Fitness 123
From Evolution to Social Relations 124
Active and Passive 126
Levels of Docility 127
The Prerequisites of Docility 127
Docility in Organizations 129
Understanding Docility 131
Bandwagon Versus Docility 131
Individual Social Responsibility xxxii 134
A Theoretical Framework for Advice Giving and Taking 136
What Is a Docile Organization? 137
Summary 139
Notes 139
10 Conclusions 142
The Point on Rationality 142
What Are We Mapping? 144
The Individual and the Group 145
A Methodological Note 148
Extendable Rationality 150
Notes 151
Afterword 153
References 154
Index 164

Produkt-Details

• Erscheint lt. Verlag: 20.10.2010
• Reihe/Serie: Organizational Change and Innovation
• Reihe/Serie: Organizational Change and Innovation
• Zusatzinfo: XIX, 161 p.
• Verlagsort: New York
• Sprache: englisch
• Themenwelt: Geisteswissenschaften ► Psychologie ► Arbeits- und Organisationspsychologie
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Planung / Organisation
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Unternehmensführung / Management
• Schlagworte: behavioral science • Bounded Rationality • cognitive science • Decision Making • distributed cognition • Docility • Organizational Behavior • Organizational Sociology • Performance Management • Rationality • Social Psychology
• ISBN-10: 1-4419-7542-X / 144197542X
• ISBN-13: 978-1-4419-7542-3 / 9781441975423