Rule Dynamics: A Journey into Organizational Intelligence Exploring the tension between performance and accountability.

Rule Dynamics: A Journey into Organizational Intelligence

Exploring the tension between performance and accountability

Overview

Motivation for the research topic Description of key concepts Some literature Model that guides the research Research Implications for future research

Motivation for the research topic The pressures that individuals—

specially managers—in organizations face to generate results (performance) are increased by the pressures to do it in a responsible way that can be traceable and clear (accountability) to protect all constituencies interested in the results of the organization.

Description of key concepts Intelligence: In a general way, intelligence

refers the the ability to achieve outcomes that fulfill desires as much as possible (March, 1999, p.1)

An intelligent organization is one that adopts procedures that consistently do well (in the organization’s own terms) in the face of constraints imposed by such things as scarce resources and competition.

This is hard to do

Ignorance

Conflict

Ambiguity

Uncertainty

Collaboration

Evaluative basis

Some literature Argyris, C. and D. A. Schön (1996). Organizational Learning

II: Theory, Method, and Practice. New York, Addison-Wesley Publishing Company.

March, J. G. (1999). The Pursuit of Organizational Intelligence. Malden, Massachusetts, Blackwell Publishers Ltd.

March, J. G., M. Schulz and X. Zhou (2000). The Dynamics of Rules. Stanford, California, Stanford University Press.

McCaffrey, D. P. and D. W. Hart (1998). Wall Street Policies Itself: How Securities Firms Manage the Legal Hazards of Competitive Pressures. New York, Oxford University Press.

Stone, D. A. (1997). Policy paradox : the art of political decision making. New York, W.W. Norton.

A theory

Mental Models/Policies/Rules/Best Practices

A theory

Mental Models/Policies/Rules/Best Practices

Planned Action

A theory

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

ActionPlanned Action

A theory

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

Action

Perception of Behavior/Problems/Environment/Effectiveness of Actions

Planned Action

BehavioralSingle-loop learning

Filtering, Assesing,Selecting Information

A theory

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

Action

Perception of Behavior/Problems/Environment/Effectiveness of Actions

Planned Action

BehavioralSingle-loop learning

BehavioralDouble-loop learning

Filtering, Assesing,Selecting Information

Reflection, Adaptation,Innovation, Deep Change

A theory

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

Action

AutonomousPressures

UnplannedAction

Perception of Behavior/Problems/Environment/Effectiveness of Actions

Planned Action

BehavioralSingle-loop learning

BehavioralDouble-loop learning

PerformanceParadox

Cycle

Filtering, Assesing,Selecting Information

Reflection, Adaptation,Innovation, Deep Change

A theory

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

Action

AutonomousPressures

UnplannedAction

Perception of Behavior/Problems/Environment/Effectiveness of Actions

Planned Action

BehavioralSingle-loop learning

BehavioralDouble-loop learning

PerformanceParadox

Cycle

Filtering, Assesing,Selecting Information

Reflection, Adaptation,Innovation, Deep Change

A theory

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

Action

AutonomousPressures

UnplannedAction

Perception of Behavior/Problems/Environment/Effectiveness of Actions

Planned Action

BehavioralSingle-loop learning

BehavioralDouble-loop learning

PerformanceParadoxCycle

Perception of Structure/FeedbackMechanisms/Compensating Effects

Filtering, Assesing,Selecting Information

Reflection, Adaptation,Innovation, Deep Change

Filtering, Assesing,Selecting Information

StructuralSingle-loop learning

A theory

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

Action

AutonomousPressures

UnplannedAction

Perception of Behavior/Problems/Environment/Effectiveness of Actions

Planned Action

BehavioralSingle-loop learning

BehavioralDouble-loop learning

x

StructuralDouble-loop learning

PerformanceParadox

Cycle

Perception of Structure/FeedbackMechanisms/Compensating Effects

Filtering, Assesing,Selecting Information

Reflection, Adaptation,Innovation, Deep Change

Reflection, Adaptation,Innovation, Deep Change Filtering, Assesing,

Selecting Information

StructuralSingle-loop learning

A theory

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

Action

AutonomousPressures

UnplannedAction

Perception of Behavior/Problems/Environment/Effectiveness of Actions

Planned Action

BehavioralSingle-loop learning

BehavioralDouble-loop learning

StructuralDouble-loop learning

PerformanceParadoxCycle

Perception of Structure/FeedbackMechanisms/Compensating Effects

Filtering, Assesing,Selecting Information

Reflection, Adaptation,Innovation, Deep Change

Reflection, Adaptation,Innovation, Deep Change Filtering, Assesing,

Selecting Information

StructuralSingle-loop learning

Env

iron

men

t

Env

iron

men

t

Images of Rules Rules as rational efforts to organize

Rules in teams Rules in systems involving conflicts of

interest Rules as proliferating organisms Rules as constructions of meaning

Artifacts, transitional objects Rules as codings of history

Depositories of knowledge (org memory ) Written rules and unwritten rules

Elements to Explore Adaptation, selection, filtering: The

dynamics involved in translating results (history) into rules.

Implementation.- The dynamics involved in translating rules into action.

Understanding: The complications involved in understanding the dynamics between actions and results.

Adaptation/Selection/Filtering

Search for efficiency vs. search for homogeneity.(March, Schulz, and Zhou, 2000)

Adaptation/Selection/Filtering

Rules are: Actors: Basic assumption about rules:

Economics Solutions to metagames

Self-interested

Rules are discovered and become dominant as a result of the pursuit of efficiency

Sociology Given Competitive

Rules spread to create pockets of homogeneous institutions, independent of any technical imperative

Implementation

The rules found in any collection of rules are numerous, ambiguous, and conflicting. As a result, action depends on what rules are evoked, what meaning is given to them, and how conflicts among them are noticed, interpreted, and acted upon. (March, Schulz, and Zhou, 2000, p. 23)

Understanding

Individuals in organizations develop stories of history to interpret their experiences, particularly the relation between their actions and the outcomes they realize. This process exhibit biases (March, 1994).

Research Adaptation, selection, filtering Evolution of a Dynamic Theory of Regulation:

Modeling the Emergence of ‘Self-regulation’ Mechanisms in Financial Markets

Understanding Exploring the Effectiveness and Efficiency

Paradox: The Role of Compensating Feedback Effects on Overall Performance: Modeling the ORMA Case—Office of Regulatory and Management Assistance in New York State

Implications for future research

Mental Models/Policies/Rules/Best Practices

Actual Results(Real World)

Action

AutonomousPressures

UnplannedAction

Perception of Behavior/Problems/Environment/Effectiveness of Actions

Planned Action

BehavioralSingle-loop learning

BehavioralDouble-loop learning

StructuralDouble-loop learning

PerformanceParadoxCycle

Perception of Structure/FeedbackMechanisms/Compensating Effects

Filtering, Assesing,Selecting Information

Reflection, Adaptation,Innovation, Deep Change

Reflection, Adaptation,Innovation, Deep Change Filtering, Assesing,

Selecting Information

StructuralSingle-loop learning

Env

iron

men

t

Env

iron

men

t

Feedback