Rule Dynamics:
A Journey into Organizational Intelligence
Exploring the tension between
performance and accountability
Overview
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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
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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
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Intelligence: In a general way, intelligence
refers the the ability to achieve outcomes that
fulfill desires as much as possible (March, 1999,
p.1)
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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
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Ignorance
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Uncertainty
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Conflict
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Collaboration
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Ambiguity
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Evaluative basis
Some literature
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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
Planned Action
Action
Actual Results
(Real World)
A theory
Perception of Behavior/Problems/
Environment/Effectiveness of Actions
Filtering, Assesing,
Selecting Information
Behavioral
Single-loop learning
Mental Models/
Policies/Rules/
Best Practices
Planned Action
Action
Actual Results
(Real World)
A theory
Reflection, Adaptation,
Innovation, Deep Change
Perception of Behavior/Problems/
Environment/Effectiveness of Actions
Behavioral
Double-loop learning
Mental Models/
Policies/Rules/
Best Practices
Filtering, Assesing,
Selecting Information
Behavioral
Single-loop learning
Planned Action
Action
Actual Results
(Real World)
A theory
Reflection, Adaptation,
Innovation, Deep Change
Perception of Behavior/Problems/
Environment/Effectiveness of Actions
Behavioral
Double-loop learning
Mental Models/
Policies/Rules/
Best Practices
Filtering, Assesing,
Selecting Information
Behavioral
Single-loop learning
Planned Action
Action
Unplanned
Action
Actual Results
(Real World)
Performance
Paradox
Cycle
Autonomous
Pressures
A theory
Reflection, Adaptation,
Innovation, Deep Change
Perception of Behavior/Problems/
Environment/Effectiveness of Actions
Behavioral
Double-loop learning
Mental Models/
Policies/Rules/
Best Practices
Filtering, Assesing,
Selecting Information
Behavioral
Single-loop learning
Planned Action
Action
Unplanned
Action
Actual Results
(Real World)
Performance
Paradox
Cycle
Autonomous
Pressures
A theory
Reflection, Adaptation,
Innovation, Deep Change
Perception of Behavior/Problems/
Environment/Effectiveness of Actions
Behavioral
Double-loop learning
Mental Models/
Policies/Rules/
Best Practices
Filtering, Assesing,
Selecting Information
Behavioral
Single-loop learning
Planned Action
Structural
Single-loop learning
Perception of Structure/Feedback
Mechanisms/Compensating Effects
Action
Unplanned
Action
Actual Results
(Real World)
Performance
Paradox
Cycle
Autonomous
Pressures
Filtering, Assesing,
Selecting Information
A theory
Perception of Behavior/Problems/
Environment/Effectiveness of Actions
Reflection, Adaptation,
Innovation, Deep Change
Behavioral
Double-loop learning
Mental Models/
Policies/Rules/
Best Practices
Reflection, Adaptation,
Innovation, Deep Change
Behavioral
Single-loop learning
Planned Action
Structural
Double-loop learning
Filtering, Assesing,
Selecting Information
Action
Structural
Single-loop learning
Perception of Structure/Feedback
Mechanisms/Compensating Effects
x
Unplanned
Action
Actual Results
(Real World)
Performance
Paradox
Cycle
Autonomous
Pressures
Filtering, Assesing,
Selecting Information
A theory
Perception of Behavior/Problems/
Environment/Effectiveness of Actions
Behavioral
Double-loop learning
Mental Models/
Policies/Rules/
Best Practices
Reflection, Adaptation,
Innovation, Deep Change
Behavioral
Single-loop learning
Planned Action
Structural
Double-loop learning
Filtering, Assesing,
Selecting Information
Structural
Single-loop learning
Perception of Structure/Feedback
Mechanisms/Compensating Effects
Action
Unplanned
Action
Actual Results
(Real World)
Performance
Paradox
Cycle
Autonomous
Pressures
Filtering, Assesing,
Selecting Information
Environment
Environment
Reflection, Adaptation,
Innovation, Deep Change
Images of Rules
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Rules as rational efforts to organize
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Rules as proliferating organisms
Rules as constructions of meaning
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Rules in teams
Rules in systems involving conflicts of interest
Artifacts, transitional objects
Rules as codings of history
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Depositories of knowledge (org memory ) Written
rules and unwritten rules
Elements to Explore
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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
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Search for efficiency vs. search for
homogeneity.(March, Schulz, and Zhou, 2000)
Adaptation/Selection/Filtering
Rules are:
Actors:
Economics
Solutions to Selfmetagames interested
Sociology
Given
Basic assumption about
rules:
Rules are discovered and
become dominant as a
result of the pursuit of
efficiency
Competitive Rules spread to create
pockets of homogeneous
institutions, independent
of any technical
imperative
Implementation
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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
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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
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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
Perception of Behavior/Problems/
Environment/Effectiveness of Actions
Behavioral
Double-loop learning
Mental Models/
Policies/Rules/
Best Practices
Reflection, Adaptation,
Innovation, Deep Change
Behavioral
Single-loop learning
Planned Action
Structural
Double-loop learning
Filtering, Assesing,
Selecting Information
Structural
Single-loop learning
Perception of Structure/Feedback
Mechanisms/Compensating Effects
Action
Unplanned
Action
Actual Results
(Real World)
Performance
Paradox
Cycle
Autonomous
Pressures
Filtering, Assesing,
Selecting Information
Environment
Environment
Reflection, Adaptation,
Innovation, Deep Change
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