Journal of Business & Economic Policy

Transformations of organization in uncertain and complex world “beyond” linear rationality for a circular model of decision making. Learning by bias and errors: a conceptual framework
Luciano Pilotti, Augusto Carena

Abstract
That work propose a conceptual framework to redefine the role of rationality in complex organization starting from emergent transformation of last century distinguishing between linear and circular logic in economic behavior following the transition between hard rationality, bounded rationality and post-rationality also reinterpreting Adam Smith. From a managerial point of view, the sustainable development of management means simultaneously overseeing and reconciling social, environmental and economic dimensions. We can say – consequently - to open up a substantive stakeholdership as well as to a strategy of social responsibility within a multi-objective function over maximization of utility. In this way it is possible to allocate the advantages among the stakeholders according to ethical criteria of commutative and distributive equity of circular rationality. The “emergent juxtaposition" between strategy and organization has seen in the last few decades a weakening of the former, while observing an increasing complexity and management of change as a modus operandi that has evolved the latter also to compensate for those weaknesses. And yet also (but not only) as a substitute for an increasingly weaker concept of strategy and an alternative question to avoid being swallowed up by the logic of pure calculation of consequences (deterministic rationalism) or simple reactivity - more or less pavlovian - (bound by external resources), or enclosed in the narrow spaces of a contingent intuitionism of the bergsonian type (subjectivism and dependence on the constraints of internal resources). Which brings us back to the seminal contribution of Warren Weaver (1948) “Complexity and Science”, in which it deals with “problems of disorganized and organized complexity”, claiming that the latter ones, “are all problems which involve dealing simultaneously with a sizable number of black factors interrelated into an organic whole”. More recently Kahneman, Sibony and Sustein underline the nature of error in decision-making with a cognitive differentiation between bias, noise and error. A differentiation that influences the non-linear connection, distance and priority between decision and action in organization and strategy as in case of our brain functioning able to learn by experience in condition of hyper-innovation with high level of substitution of different area of specialization as an emergent ability of the neurons of the cortex to manage any type of input data. One of the main reason why our modern organization needs of advanced trajectories of participation model as an integrated platform of mind of an organic community brain towards resilience between bias and error.

Full Text: PDF