Behavioral decision theory

from Wikipedia, the free encyclopedia

The behavioral decision theory was largely shaped by Chester I. Barnard , Herbert A. Simon , James March and Richard Cyert at the end of the 1930s. It focuses on decisions and understands decisions as "decision-making processes [and] not as decision-making logic". The question at the center of behavioral decision theory is how the survival of organizations can be ensured by adapting to complex and changing environments . It is based on two premises :

  • Humans only have "limited information processing capacity"
  • People have to be motivated to participate in organizations (see XY theory ).

Limited rationality

Behavioral decision theory assumes a limited rationality of individuals in their decision-making behavior . It distinguishes between three different dimensions of limitation. First, she emphasizes the incompleteness of knowledge regarding the consequences of decision alternatives, since comprehending them is beyond people's cognitive abilities. In addition, they would have difficulty in anticipating all the consequences of future events and their evaluation. An example of this is the classic gap between anticipation and the feelings then felt when the situation occurs. Thirdly, the number of perceived decision alternatives is always limited and can never encompass all possibilities. For example, a young professional cannot know and find out about all available professions and training courses.

From these three limitations, the behavioral decision theory concludes that an individual does not primarily look for the objectively optimal solution , but rather chooses the first satisfactory solution that meets his own level of demands. This phenomenon, known as “satisficing”, arises from the fact that individuals use a simplified and subjective definition of the situation and habitual behavior also influences their decisions. B. by habit . As soon as the claim is satisfied and the decision-making process is thus concluded for the time being, the potential for a shift in the level of claim for the next decision arises . The level of aspiration of an individual thus changes with experience in relation to past decisions.

Rationality expansion through organization

One consequence of the limited rationality is that the organization still has to find ways and means to keep uncertainty and complexity low. Various mechanisms are important for this, which simplify decision-making situations:

  • Division of labor creates a division of problems into sub-problems and makes them easier to work on. Furthermore, different organizational goals can be better achieved in this way, for example by dividing the production and sales process .
  • Standardization and formalization of work processes create a template for the execution of tasks and the creation of solutions, as they already exist and can be easily applied.
  • Introduction of hierarchical structures that limit the members' options for action depending on the hierarchy level.
  • Communication enables work and task-specific supply and distribution of information.
  • Indoctrination for the purpose of deferring the individual goals of the members in order to serve the purpose of the organization.

These mechanisms reduce the complexity to a certain extent and form the basis for decision-making by members of the organization. However, they never completely eliminate complexity.

Membership in an organization (incentive contribution theory)

Organizations are fundamentally understood as systems of action with prescribed limits. These limits create an understanding of contributions in the sense of the organization, with action in the sense of the organization being understood as a contribution that is made after weighing the perceived alternatives of the agent. At this point, behavioral decision theory conceptualizes a balance between contributions and incentives. This balance consists of incentives from the organization and contributions from members. The organization must create enough incentives to motivate members. Contrary to classical economics, this is not limited to purely material incentives, but also non-material incentives ( human relations approach ).

Organizations, however, also make further demands on their members, which cannot be broken down solely to incentive and contribution. The connection between membership and acceptance of rule and exercise of power is central here . According to the theory, this leads to impersonal behavior within the organization. Due to the broad concept of organization, these dominant relationships only apply internally, i.e. within the organization, and not externally.

Organizational learning

The goal of organizational learning is to improve organizational behavior through the gradual adjustment of goals, adaptation to the environment and the search for new solutions. The adaptive rational system of the organization is seen as a demarcation from classical perspectives, which view the organization as comprehensively rational. The earlier assumption of behavioral decision theory was revised or critically questioned, which led to the conditions through which organizations can learn:

  1. Employees must be able to perceive the "right" problems (see sensemaking )
  2. They have to translate these into individual actions
  3. This is followed by implementation in actions of the organization
  4. Finally, proper conclusions have on the effectiveness of the change are drawn

This learning is a cyclical process that knows no end, as the organization never stops learning and has to constantly adapt to the environment and its changes . A prerequisite to improve the response to the environment is that the organization patience must have, which means that if one performs in organizations changes, you should not be deterred by individual defeats, but while remaining and patient long-term consequences of Should wait for changes. Two further prerequisites are firstly the willingness to take risks and secondly the willingness to continue the experiment with alternative paths, even if the first experiences are negative. The following problems result from these assumptions of behavioral decision theory (limited rationality, incomplete information and satisficing):

Decision-making processes can turn out very differently depending on the context and point in time, as the members invest different amounts of time and attention in it and do not strive for a rational solution, but a satisfactory solution and also have to convince other participants.

Individual evidence

  1. ↑ Ulrike Berger, Isolde Bernhard-Mehlich: The behavioral decision theory . In: Alfred Kieser, Mark Ebers (Ed.): Organization theories . 6th edition. W. Kohlhammer, Stuttgart 2006, ISBN 3-17-019281-7 , pp. 169 .
  2. ↑ Ulrike Berger, Isolde Bernhard-Mehlich: The behavioral decision theory . In: Kieser, Alfred; Ebers, Mark (Ed.): Organizational Theories . 6th edition. W. Kohlhammer, Stuttgart 2006, ISBN 3-17-019281-7 , pp. 169 .
  3. ↑ Andrew M. Colman: Dictionary of Psychology. Oxford University Press, 2001
  4. ^ Giuseppe Bonazzi: History of organizational thinking. Ed .: Veronica Tacke. 2nd Edition. Wiesbaden 2008, ISBN 978-3-658-02506-9 , pp. 316 f .
  5. ↑ Ulrike Berger, Isolde Bernhard-Mehlich: The behavioral decision theory . In: Kieser, Alfred; Ebers, Mark (Ed.): Organizational Theories . 6th edition. W. Kohlhammer, Stuttgart 2006, ISBN 3-17-019281-7 , pp. 177-183 .
  6. ↑ a b Ulrike Berger, Isolde Bernhard-Mehlich: The behavioral decision theory . In: Kieser, Alfred; Ebers, Mark (Ed.): Organizational Theories . 6th edition. W. Kohlhammer, Stuttgart 2006, ISBN 3-17-019281-7 , pp. 179-182 .
  7. ↑ Ulrike Berger, Isolde Bernhard-Mehlich: The behavioral decision theory . Ed .: Kieser, Alfred; Ebers, Mark. 6th edition. W. Kohlhammer, Stuttgart 2006, ISBN 3-17-019281-7 .
  8. ↑ Ulrike Berger, Isolde Bernhard-Mehlich: The behavioral decision theory . In: Kieser, Alfred; Ebers, Mark (Ed.): Organizational Theories . 6th edition. W. Kohlhammer, Stuttgart 2006, ISBN 3-17-019281-7 , pp. 148-160 .