Rationality beyond irrationality and action Based on The Irrationality of Action and Action Rationality: Decisions, Ideologies and Organizational Actions (1982) by Nils Brunsson Team 8 Judith Mondragon Thomas Taussi Emmanuel Reneaume

Summary Failure of the rational decision-making model Effective decision processes are irrational Ideologies to reconcile decision and action 1 2 3

Decision-makers do not only decide, they must also induce action The rolling out of the action must be included in the decision process Failure of the rational decision-making model Predominant rational decision-making model Empirical failure Failure has been explained by human contingencies Another explanation is the lack of action perspective Action rationality model What is an effective decision process?

Search for Alternatives Estimating Consequences Evaluating Consequences Choosing Effective decision processes are irrational

Allow decisional shortcuts Can reinforce motivation and commitment Ideologies can reconcile decision and action Ideologies Effective ideologies need to be: – Shared – Clear – Narrow – Able to shift rapidly Else, ideologies might generate social deadlocks The solution is to use decision rationality to mold ideologies

Criticism Article Generally Theoretical background of rationality Split between decisions and action Ideologies as heuristics or rational plans?

Generally Poor definitions and examples of the key concepts – Rationality – Ideology Lack of evidence and academic background – Example: Analyzing uncertainty should decrease motivation – What kind of evidence does Brunsson provide? The article did have many references, but without functions  Name dropping?

Theoretical background of rationality Rationality is an old concept that has long traditions in economics – Ignored in the article Brunsson’s discussion on rationality is quite unfamiliar with the following economic foundations – Subjective value – Scarce resources – Uncertain future Unrealistic assumptions vs. boundaries of reality  you never can tell if “rational procedures” will be rational choices after all (e.g. in terms of expected returns)

Split between decisions and action Dividing decision making and action seems artificial and traditional - Top-down: leaders  subordinates  Are borders of decision making and action so clear? - Implies bureaucratic organization structures and hierarchy  Incompatible with emerging strategies and matrix structures -Isn’t decision making and planning also action that requires motivation and commitment?  Quality of decisions -Example: Target costing -Chances of success mostly determined in the planning phase -Very little flexibility for making the difference in production

Ideologies as heuristics or rational plans? The function of ideologies were described as a shortcut – Heuristics? – Economic rationality wasn’t justified in the text Contents and practice of ideologies weren’t discussed sufficiently – Nothing technical, but difficult to examine and impose to others – Can they eventually be elaborated rationally if they tend to arise from external causes?

Conclusions Even though the article is relatively old, it could have had better connection to pre-existing paradigms of economic and social sciences Split between decision and action rationality may not carry far in modern research either “Rational” procedures such as collecting and processing information may be irrational already in the terms of economics Brunsson offered interesting views with at least some useful thinking tools Questions? Thank you!