Extendable Rationality: Understanding Decision Making in Organizations / Edition 1

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"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 external resources) 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 (Chapters 6 to 9) 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 decision making characteristics and capabilities of an organization.

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Product Details

  • ISBN-13: 9781441975416
  • Publisher: Springer New York
  • Publication date: 10/28/2010
  • Series: Organizational Change and Innovation Series , #1
  • Edition description: 2011
  • Edition number: 1
  • Pages: 161
  • Product dimensions: 0.50 (w) x 9.21 (h) x 6.14 (d)

Meet the Author

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).

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Table of Contents

1 Introduction 1

What to Expect 2

Book Structure 5

Notes 6

Part I The Limited Cognition

2 Rationalization and Rationality 9

Kinds of Decisions 9

The Legacy of Herbert Simon 13

Summary 17

Notes 17

3 Bounded Rationality 19

What Is Bounded Rationality 19

Summary 24

Notes 24

4 Maps of Bounded Rationality (I) 27

Prospect Theory 27

This Is a Biased World! 31

Summary 38

Notes 38

5 Maps of Bounded Rationality (II) 41

Heuristics 41

Accessibility, Representation, and Framing 48

Two Logics 51

Implications of Using One or More Maps 54

Summary 56

Notes 56

Part II The Extended Brain

6 Simon's Error 63

Distributing Cognition 64

How Bounded is Rationality? 74

Summary 77

Notes 77

7 Stretching the Bounds (I) 81

Through Doing Decision Making 82

The Rationality of Change 89

Summary 93

Notes 93

8 Stretching the Bounds (II) 97

The Others 97

Advice Taking 98

Passive Advice Taking 108

Summary 110

Notes 110

9 The "Docile" Organization 113

The "Docile" Individual 113

Levels of Docility 119

Understanding Docility 123

What Is a Docile Organization? 129

Summary 131

Notes 131

10 Conclusions 135

The Point on Rationality 135

What Are We Mapping? 137

The Individual and the Group 138

A Methodological Note 141

Extendable Rationality 143

Notes 144

Afterword 147

References 149

Index 159

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