1 / 33

THREE ERAS IN THEORIES OF CHOICE: A FEW MINOR RUMINATIONS OF AN ANCIENT MARINER

THREE ERAS IN THEORIES OF CHOICE: A FEW MINOR RUMINATIONS OF AN ANCIENT MARINER. James G. March (Stanford University) August 11, 2008 MOC Academy of Management Anaheim, California, U.S.A. A FEW PRELIMINARIES.

jered
Download Presentation

THREE ERAS IN THEORIES OF CHOICE: A FEW MINOR RUMINATIONS OF AN ANCIENT MARINER

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. THREE ERAS IN THEORIES OF CHOICE:A FEW MINOR RUMINATIONSOF AN ANCIENT MARINER James G. March (Stanford University) August 11, 2008 MOC Academy of Management Anaheim, California, U.S.A.

  2. A FEW PRELIMINARIES

  3. SMALL SKETCH OF A MINOR HISTORY: THE POST WORLD WAR II STUDY OF ORGANIZATIONAL CHOICE • Personal • Parochial (North American) • Annual Review of Psychology 2008 piece on “Cognition in Organizations” by Gerard Hodgkinson and Mark Healey • The Oxford Handbook of Organizational Decision Making, 2008, edited by Gerard Hodgkinson and William Starbuck • Incomplete • Enthusiastic

  4. BACKGROUND:ALTERNATIVE CONCEPTIONS OF ADAPTIVE INTELLIGENCE • Rationality: Choosing among alternatives on the basis of expected consequences and preferences • Learning: Modifying propensities for particular actions on the basis of experience with them • Imitation: Copying the enduring behaviors of others • Selection: Modifying the mix of rules through differential birth and elimination

  5. BACKGROUND:EXPERIENCE AS A BASIS FOR INTELLIGENT ACTION • The search for a frame • Looking for something that might describe reality • Looking for something that might guide improvement • Different conceptions of the basic process • Developing an understanding of the processes of history through experience • Using experience to improving the estimations of probable consequences • Replicating the successes of experience

  6. BACKGROUND: ECONOMICS IN THE STUDY OF ORGANIZATIONAL CHOICE • Institutional • The migration of organization studies to business schools • The dominant role of economic theory in business schools • Intellectual • The framing of studies of information and choice by decision theory and micro-economics • Strong in theory, weak in experimental data

  7. BACKGROUND: COGNITIVE SCIENCE IN THE STUDY OF ORGANIZATIONAL CHOICE • Institutional • Merger of psychology, computer science, and neural biology after World War II • Connected to the development of a decision making- based, business school-based effort to create an “organization theory” • Intellectual • Focus on experiments, micro phenomena • Strong in experimental data, weak in theory

  8. BACKGROUND: MANAGERIAL AND ORGANIZATIONAL COGNITION • Two sets of parents: Economics and psychology • Different traditions and methods • Different aspirations and power • Location in business schools as part of organizational studies • The pursuit of respectability • What problems are interesting? • Where do you publish? • Part of a discipline (which?) or a new discipline?

  9. BACKGROUND: THE INSTITUTIONAL AND INTELLECTUAL CONTEXT • The context of particular times • Cycles in resources, standing, and optimism • North American prominence • The context of particular ideas • Shifting enthusiasms • Geographic and disciplinary enthusiasms • Big ideas and little ideas • The context of particular institutions • Business schools

  10. THE CONTEXT OF THREE ERAS IN MODERN SOCIAL SCIENCE • 1945-1965: An era of optimism, science, and interdisciplinary flirtations • 1965-1985: An era of pessimism, postmodernism, and disciplinary monasticism • 1985-2005: An era of professionalism and the triumph of individualism, consequentialism, and objectivism

  11. 1945-1965POST WORLD WAR II TRANSFORMATION • Growth of North American academic research institutions • Hopes for social science • Commitments • Science • Mathematics • Interdisciplinary, behavioral social science • Social science applied to improve life

  12. 1945-1965THE SPIRIT OF THE TIME • Recognized few boundaries on the possibilities for knowledge • Saw much scientific knowledge as necessarily interdisciplinary • Saw progress in knowledge as produced by an elite cadre of rigorously trained and deeply motivated scholars who would create an understanding of human behavior that would eclipse all previous understandings.

  13. 1945-1965THE ETHOS OF THE TIME • Unquestionably naive • Unequivocally positivist • Uncompromisingly protestant • Intolerant of multiple-mindedness • Intolerant of incompetence • Intolerant of sloth • Unyieldingly confident in the triumph of science and truth over ignorance

  14. 1945-1965AN “OPEN” ECONOMICS ELITE • Enthusiasm for mathematics and for interdisciplinary contacts • The courtship of psychology • Briefly pursued: Social psychology • Mostly foregone: Cognitive psychology • Cowles Commission, RAND Corporation, Center for Advanced Study in the Behavioral Sciences

  15. 1945-1965THE REFORM OF NORTH AMERICAN BUSINESS SCHOOLS • Business schools before the Second World War • Substantial changes in students, faculty, research, and academic standing • Prelude to a counter-revolution, 1980s & 1990s • Relevance here • Business schools became significant sites for research on choice and organizations • Accentuated importance of economics as frame

  16. 1945-1965THE “REVOLUTION” OF THE TIME • Enormously expanded the scale (in terms of personnel and resources) of the research community in social science • Transformed the nature of social science to make it significantly more committed to the norms of science • Established basic frameworks for theoretical work that have continued to frame much subsequent work • Created the conditions for a counter-revolution

  17. 1965-1985AN ERA OF DISCONTENT • The end of unlimited resources • The deconstruction of social science • Foucault, Derrida, Heidegger, Habermas • Marx, Vietnam, and feminist challenges • The revolt against the post-war North American establishment and ethos • The rediscovery of qualitative methods • The wounding of sociology • The differentiation of economics, psychology

  18. 1965-1985THE DRIFT OF INTELLECTUAL FASHION • Economics • More mathematical • Less empirical • Less interdisciplinary • More highly regarded as a science • Sociology • Less mathematical • Less positivist • Less interdisciplinary • Less highly regarded as a science

  19. 1965-1985THE DRIFT OF INTELLECTUAL FASHION (continued) • The recovery of European social science • Growth of universities and resources • Flowering of social construction • Partial differentiation from North America • The case of post-modernism and related ideas • Conspicuous basis for conflict • More obvious penetration of anthropology and sociology than of economics and psychology • Greater penetration of Europe than North America

  20. 1965-1985THREE ENDURING MARKS OF AN ERA • Reduced optimism • About the prospects for scientific understanding of human behavior and institutions • About using social science to improve life • About the romance of research and teaching as a noble calling • The isolation and purification of disciplines • The sanctification of economic theories of choice and their export to other fields

  21. 1985-2005AN ERA OF MARKETS AND THE GLORIFICATION OF ENTREPRENEURSHIP • The collapse of the Soviet Union and the triumph of markets and entrepreneurship • The counter revolution in business schools and the quest for relevance • The counter revolution in social science and the quest for a reconciliation of theories, stories, and data • The apparent stagnation of economic theory • Minor lemmas • Few striking new ideas

  22. 1985-2005THE ENNOBLING OF A SMALL CORNER OF COGNITIVE SCIENCE • The burgeoning of behavioral decision studies • The tension between economic simplicity and psychological reality • Tversky and Kahneman as prophets and symbols • Science paper, Econometrics paper • Nobel Prize

  23. 1985-2005A SUCCESS STORY: ECONOMICS • Endowed intendedly rational actor with somewhat more realistic properties in some domains • A small connection to cognitive studies • Legitimizing behavioral finance • Legitimizing the behavioral foundations of bounded rationality • Legitimizing neural economics

  24. 1985-2005A SUCCESS STORY: COGNITIVE SCIENCE • Clarified many important aspects of individual behavior in economies and organizations • Reestablished individual psychology as a primary basis for understanding choice behavior modeled as the estimation of consequences • Laid the groundwork for further work, including extensions into neural biology.

  25. 1985-2005ECONOMICS: A THEORY OF AUTONOMOUS INDIVIDUALS • The firm in economic theory • Classic: The individual rational owner / manager • Modern: Principals and agents • The firm in evolutionary economics • Classic: Individual firm selected upon • Modern: Routines and forms selected upon • Neither takes the organization very seriously

  26. 1985-2005PSYCHOLOGY: A THEORY OF AUTONOMOUS INDIVIDUALS • The individual as a coherent, autonomous organism • Coordinated by a central nervous systems • Explicable without reference to history, institutions, or social context except as those are reflected in current organism • Social context treated as exogenous and passive • The embedding of individuals in organizations and other social institutions largely ignored

  27. CONTEMPORARY BLINDERS 1: INDIVIDUALISM • A focus on individual choice not organizations • Experiments on individual choice • Applications to individuals in organizations • The notion that the fundamental building block of social science is the autonomous individual • Relation to human conceits • Relation to economics • Relation to reductionism (and therefore to disaggregating to smaller elements of organisms)

  28. CONTEMPORARY BLINDERS 2: CONSEQUENTIALISM • A focus on consequentialism not rule-following • Investigating estimations of consequences • Investigating risk preferences • Economic theories of choice and their extension to other disciplines • Overlooks rules (heuristics) and identities • Overlooks emotions

  29. CONTEMPORARY BLINDERS 3: OBJECTIVISM • A focus on objectivism not social construction • The notion that human cognition is to be understood by relating it to a measure of objective correctness. • Two visions of the convergence of adaptation • Convergence to an objectively correct answer • Convergence to a socially shared answer • Need to understand the processes and potential failures of social consensus

  30. TAKING ORGANIZATIONS SERIOUSLY: ECONOMIC THEORIES OF THE FIRM • Boundedly rational choice in organizations • Distributed knowledge and memory • Distributed expectations • Distributed preferences and evaluations • Identities in organizations • Rules, routines, appropriateness • Creation, recognition, and retrieval • Rediscovery of institutions • The social construction of success and failure • The role of imitation • The role of emotions

  31. TAKING ORGANIZATIONS SERIOUSLY: PSYCHOLOGICAL THEORIES OF THE INDIVIDUAL • Theories of organizations are better foundations for theories of individuals than theories of individuals are for theories of organizations • In particular, need to bring to more prominence in psychology • Problems of coherence, coordination, conflict • The development and use of identities and routines • Preference and identity ambiguity and conflict

  32. IN SUM: • An impressive success story • A delicate combination of disciplinary rigidity and interdisciplinary tenacity • An unfinished story • A role for students of organizations

  33. THE END

More Related