Rule Dynamics: A Journey into Organizational Intelligence

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

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

3. 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.

4. 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.

5. Ignorance Conflict Ambiguity Uncertainty Collaboration Evaluative basis This is hard to do

6. 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.

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17. 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

18. 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.

19. Adaptation/Selection/Filtering • Search for efficiency vs. search for homogeneity.(March, Schulz, and Zhou, 2000)

20. Adaptation/Selection/Filtering

21. 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)

22. 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).

23. 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

24. Implications for future research

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