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Sub-theme 33: Heuristics: Novel Insights into Organizing and Organizations

Convenors:
Wolfgang H. Güttel
Johannes Kepler University Linz, Austria
Moritz Loock
University of St. Gallen, Switzerland
Madeleine Rauch
European University Viadrina, Germany

Call for Papers

One surprise in and around organizations is that individuals, teams and organizations often process only little information yet human organization is relatively effective. This surprise is fundamental to the scientific community: early reference has been made throughout the work of Herbert Simon on decision-making as well as by other widely recognized Nobel price laureates (Daniel Kahneman in his work on human judgement and decision-making under uncertainty, and Vernon Smith´s work on alternative market mechanisms). As such, heuristics have taken on a central role in research on strategy, organization and innovation (e.g. Bingham & Eisenhardt, 2011; see also for an overview Loock & Hinnen, 2015).
 
Within this, heuristics, as a micro-model of individual cognition and the organization-specific processes of sharing heuristics across individuals and levels, have been explored. Heuristics specify how individuals search, stop searching and how they decide to act. Often such specification is linked to features of the organization (e.g. formal processes, social norms, learning). Thus, heuristics may be linked to cognition in and around organization (Eggers & Kaplan, 2013), organizational dynamics such as for instance cross-understanding (Huber & Lewis, 2010), or the simple rules that organizations utilize (Sull & Eisenhardt, 2015). While interesting contributions have been made on the individual-level and heuristics are foundations of adaptive individual behavior (Gigerenzer et al., 2011), we are especially interested in work on heuristics that link to the specific surprises in and around organization and management. In the managerial domain, a wide array of research looks at heuristics, such as in regard to simplification (Schwenk, 1988), biases in managerial behavior (e.g. Amit & Schoemaker, 1993), as an important element of adaptive managerial behavior (Bingham & Eisenhardt, 2011; Helfat & Peteraf, 2015) or business modeling (Loock & Hacklin, 2015). We are interested in work that builds on these ideas and further links it to organization studies.
 
There is now a wide-spread recognition that heuristics have a profound influence on strategy, organization and innovation. Some examples are:

  • Heuristics can effectively negotiate among diverse requirements. For instance, they can respond to different interests or friction forces that need to be accommodated in organizational decisions (Schoemaker, 1990), and they can be well understood and shared even in diverse social settings. Heuristics can also balance efficiency and flexibility in dynamic environments (Eisenhardt et al., 2010).
  • Heuristics can offer a strategic rationale and develop iteratively from the particular context in which they emerge and are embedded. Research, for instance, has started to illuminate the learning of heuristics (Bingham & Eisenhardt, 2011; Bingham & Haleblian, 2012), or how well heuristics perform in comparison with non-heuristic models of cognition (e.g. Wuebben & Wangenheim, 2008).
  • Given the complexity and dynamic nature of organizational environments, heuristics seem to be especially beneficial for intractable organizational decision problems (Bettis, 2016).

Research opportunities and unanswered questions: Given the proliferation of interest in understanding the nature and impact of heuristics across and beyond management disciplines, this sub-theme seeks to push forward the literature along questions such as:
  • How do heuristics shape cognition and behavior at different levels such as individual, group, organization and inter-organizationally? An important difference to heuristics at the individual level is that heuristics in organizations are shared by many individuals. Heuristics are also shared across many organizational levels. How does this organizational sharing of heuristics work? What are the specifics of sharing across different organizational levels? How do heuristics interact or ‘aggregate’ across different levels? Different units in an organization or different stakeholders might operate different heuristics. How does the integration, interaction or aggregation work in such scenarios?
  • How do heuristics develop and evolve over time? How and why do some heuristics co-emerge or fit to each other and others not? Heuristics are not static but develop and evolve over time. This dynamic aspect to heuristics is relatively little explored. How to processes of heuristic development and evolution look like and unfold? What kind of changes in heuristics can be observed over time? To what extent do heuristics change over time or are relatively stable?
  • How do heuristics interplay with their environment? It is of interest to further develop our understanding of the distinct mechanisms by which the environment shapes heuristics (and vice-versa). It is of interest to consider novel combinations of many mechanisms, but also to provide novel insights into the distinct role the single or simple combinations of such mechanisms play in shaping the development of heuristics. – We invite and encourage contributions on a theoretical-conceptual and an empirical basis that try to uncover strategic decision making by using heuristics in general and/or open the black box associated with them. We further encourage contributions on the interactions to other topics and discussions such as routines, aspiration levels, cognition, dynamic capabilities, learning, ambidexterity, and related concepts and fields. All kinds of empirical settings, e.g. longitudinal studies, process studies, secondary data analyses, case studies, surveys, experiments, actor-centered measurements etc. are more than appreciated. We also encourage a multi-level analysis of the topic at hand and encourage novel methods to study heuristics. We want to provide a home and create a platform for scholars who engage in this core field of organization research.
  • How are organizational heuristics linked to neighboring fields, such as alternative dynamics and processes of managerial and organizational cognition, simple rules, routines or artificial intelligence? What kind of problems in management and organizations lead to the emergence and evolution of heuristics? How are heuristics in management and organization different to heuristics in other domains? How can a distinct organizational view on heuristics, and how can specific studies of exemplar organizational heuristics advance our broader understanding of organizations on the one hand, and heuristics and cognition in the social, organizational world on the other hand?

 

References

  • Amit, R., & Schoemaker, P.J.H. (1993): “Strategic assets and organizational rent.” Strategic Management Journal, 14 (1), 33–46.
  • Bettis, R. (2016): “Organizationally intractable decision problems and the intellectual virtues of heuristics.” Journal of Management, forthcoming.
  • Bingham, C.B., & Eisenhardt, K.M. (2011): “Rational heuristics: the ‘simple rules’ that strategists learn from process experience.” Strategic Management Journal, 32 (13), 1437–1464.
  • Bingham, C.B., & Haleblian, J.J. (2012): “How firms learn heuristics: Uncovering missing components of organizational learning.” Strategic Entrepreneurship Journal, 6 (2), 152–177.
  • Eggers, J.P., & Kaplan, S. (2013): “Cognition and Capabilities: A Multi-Level Perspective.” The Academy of Management Annals, 7 (1), 295–340.
  • Eisenhardt, K.M., Furr, N.R., & Bingham, C.B. (2010): “Microfoundations of Performance: Balancing Efficiency and Flexibility in Dynamic Environments.” Organization Science, 21 (6), 1263–1273.
  • Gigerenzer, G., Hertwig, R., & Pachur, T. (2011): Heuristics: The Foundations of Adaptive Behavior. New York: Oxford University Press.
  • Helfat, C.E., & Peteraf, M.A. (2015): “Managerial cognitive capabilities and the microfoundations of dynamic capabilities.” Strategic Management Journal, 36, 831–850.
  • Huber, G.P., & Lewis, K. (2010): “Cross-understanding: Implications for group cognition and performance.” Academy of Management Review, 35 (1), 6–26.
  • Loock, M., & Hacklin, F. (2015): “Business Modeling as Configuring Heuristics.” Advances in Strategic Management, 33, 187–205.
  • Loock, M., & Hinnen, G. (2015): “Heuristics in organizations: A review and a research agenda.” Journal of Business Research, 68 (9), 2027–2036.
  • Schoemaker, P.J. (1990): “Strategy, complexity, and economic rent.” Management science, 36 (10), 1178–1192.
  • Schwenk, C.R. (1988): “The cognitive perspective on strategic decision making.” Journal of Management Studies, 25 (1), 41–55.
  • Sull, D., & Eisenhardt, K.M. (2015): Simple Rules: How to Thrive in a Complex World. Boston: Houghton Mifflin Harcourt.
  • Wuebben, M., & Wangenheim, F. (2008): “Instant customer base analysis: Managerial heuristics often ‘get it right’.” Journal of Marketing, 72 (3), 82–93.

 

Wolfgang H. Güttel is Full Professor of Human Resource and Change Management at the Johannes Kepler University Linz, Austria. Previously, he was Professor at the Universities of Kassel and Hamburg, Germany, and Research Fellow at the Universities of Liverpool, UK, Padua, Italy; and Assistant Professor at the WU Vienna, Austria. His main research interests are decision-making patterns –routines, rules, and heuristics – that influence firm development in dynamically evolving environments.
Moritz Loock is an Assistant Professor of Energy and Sustainability Management at the University of St Gallen, Switzerland. In addition to his academic duties he serves his family´s business in different ways, which leaves him to encounter a diverse set of organizational heuristics. He has a research interest in heuristics on the individual and organizational level, and studies heuristics in an energy industry and sustainability context and in the context of a specific group of SMEs.
Madeleine Rauch is a post-doctoral researcher at the Chair of Management and Organization at the European University Viadrina, Germany, and member of the research program in dynamic capabilities and relationships. She received her PhD from European University Viadrina on heuristics in discontinuously evolving environments. Her current research interests include heuristics, disruptive innovation and strategy process.