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# So what would a boundedly rational model look like? What's the choice process there?

There an actors uncertain about consequences and costs. More, moreover the ordering of preferences isn't so clear. Herbert Simon was an economist who related a theory of satisficing as a potential alternative we, can use. It's an alternative that may offer a more accurate description of how we usually make decisions as boundedly rational persons. Instead of calculating all the alternatives, we start with one that is most near us. Not bringing an umbrella or not asking like we always do, And then we see if that option has a satisfactory consequence. For example, I wouldn't calculate on every day the same kind of equation, right, Nor would I go through every particular option of people today.. So I kind of think about a threshold or some kind of habit of decision and I stick with that. So, we probably say that choices are good enough and stop somewhere along our sequential search, but if we don't need a threshold we move on to the next option down the list to the next course as one. So, search is stimulated by a failure to achieve a goal and continues exploring alternatives until it's good enough to satisfy. So if you look here in the model below. Let's look at the dating example again. Right? And we have to choose from ten different people. And we have to consider the expected utility of asking them all and then saying yes. And we decide as soon as we reach some, some person above some expected utility threshold of say a three, Right? That I'm not gonna be able to ask out everybody and nor will you. So, we start going through an order of choices going downward through this list, Right? From A to J. And, as soon as we hit that three, the, the vertical line out there that says threshold, we have our point of choice. So once we reach D after we go through A, wasn't close enough, B and C seem really difficult too. We hit D and it's good

enough we stop. That's considered a satisficing kinda move. Of course, Because we've done that, we don't optimize. We have not considered every option. And as you see, our H and J, our two individuals who we could have selected if we had considered them and possibly found a more optimal choice, particularly J. Okay? So that's an example of, of how boundedly rational models can be done using satisficing in a logic of consequence way. So far, we've discussed the logic of consequence, or rational actor models, but. There's a second class on models or the second class of decision making that Jim March relates. He calls it the Logic of Appropriateness. Most of the time in organizations, people follow rules, even if it's not obviously in their self-interest to do so. For example, when soldiers follow orders in war and march out to their death, it seems hard to see any utility in that. So they're obviously following some kind of form of duty or rule. And yet. A lot of behavior seems to follow that kind of logic, Right? Especially in organizations, we accomplish specified tasks, we perform routines, we need professional standards norms, and we do standard operating procedures. All is part of our function of being in an organization. When a problem or issue confronts the organization it often becomes a question of finding the appropriate rule to follow, instead of valuing alternatives in terms of their consequences, we're following matches, situations, and identities. So., Let's take a moment to think about what this involves. Three factors are involved in rule following, kind of Logic of Appropriateness. First, situations are classified in the categories associated with rules and identity. We ask, what kind of problem is this? Who usually addresses it? How has it been addressed in the past? Second, Decision makers have official identities

and roles that are evoked in particular situations. Who usually addresses this kind of stuff? Who's the appropriate person? Decision makers also match rules to what they see is appropriate to their role in the classified situation. They match rules and identities to kinds of situations. They say, this is an x situation for y people to manage. And this akin to inference pattern of matching that, that Graham Allison talks about. But it's so it's like the organizational process model that you will see in, in those readings, but it's not identical of course. So, one notices rule-following in the Logic of Appropriateness being used in organizational decisions whenever people follow traditions, hunches, cultural norms, advise of others, pre-existent rules, standard operating procedures or heuristics. They're everywhere and they are clearly a second class of decision making that's no less intentional, but less concerned with consequences than actually matching rules and identities for a situation. Decision making by rules, is as ambiguous as decision making by means and calculation. Here, there's no ambiguity or lack of clarity concerning consequences and preferences, rather, there's a lack of clarity and ambiguity, And agreements, what we agree upon in our experiences that we've share or not. An imitation, whether I imitate you the way that you actually behaved, As well as change. In addition, decision here is less conscience while intentional and rational. We do it for a reason, right? It's often taken for granted. Its intended action we don't reflect upon. This leads us to sense-making and issues about whether decision-making is really about meaning-making. So here we have illusions to interpretive methods and organizational culture that people follow beliefs as opposed to means and rational calculation. The primary product of decision-making maybe less the decision outcome than the decision process establishing the individuals and their social meanings. So one can say here the decision process or theory explaining organizational

dynamics, suggests they don't arise for reasons of improving consequences, but more for, engaging in a meaningful process to make sense of their organizational world and to, to maneuver it. Jim March, also alludes to the fact that both logics of consequence and appropriateness, could further complicated when one considers that most organizations are composed of multiple actors. And multiple actors with inconsistent and often, conflicting preferences and identities. Here, a theory of coalition, so Coalition Theory comes into play, as does the negotiation and bargaining process across actors of disparate viewpoints. This is akin to Allison's Bureaucratic Politics model that you read this week. Mark suggests a two-stage decision model often depicted and inaccurately so, that Stage one is a process of bargaining and coming to consensus and Stage two is the decision when understandings are executed. Unfortunately, these stages aren't really discrete. There, there are many compounding decision moments and consensus waxes and wanes in the process. The setup of a system and its implementation are intertwined. Hence the world of alliances and coalitions is not one of precision and formalit, but one of informal, loose understanding and expectations. Last it is inference as referenced to temporal orderings Jim Marches evoking the theory of organized anarchy or what's colloquial called Garbage Can T And it's a depiction of decision making in an organized chaos, Then just remarking in this theory in passing, decisions and coalitions and organized anarchyies but we are going to cover them in, in, in the next few weeks. So next week becomes coalitions theory and the week thereafter becomes organized anarchies. And I'm just remarking on them now, so that in the readings you just went through, you have some sense of what's to come, and how to situate the current reading from Jim March in terms of the next few weeks.