https://www.sfu.ca/~wainwrig/Econ400/jensen-meckling.pdf

Theory of the firm: Managerial behavior, agency costs and ownership structure

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

/pdf/the-iron-cage-revisited-institutional-isomorphism-and-xas5qn5nhy.pdf

The iron cage revisited institutional isomorphism and collective rationality in organizational fields

Scholars in various disciplines have considered the causes, nature, and effects of trust. Prior approaches to studying trust are considered, including characteristics of the trustor, the trustee, and the role of risk. A definition of trust and a model of its antecedents and outcomes are presented, which integrate research from multiple disciplines and differentiate trust from similar constructs. Several research propositions based on the model are presented.

/pdf/an-integrative-model-of-organizational-trust-2xzw1trbi7.pdf

An Integrative Model Of Organizational Trust

This paper considers the relation between the exploration of new possibilities and the exploitation of old certainties in organizational learning. It examines some complications in allocating resources between the two, particularly those introduced by the distribution of costs and benefits across time and space, and the effects of ecological interaction. Two general situations involving the development and use of knowledge in organizations are modeled. The first is the case of mutual learning between members of an organization and an organizational code. The second is the case of learning and competitive advantage in competition for primacy. The paper develops an argument that adaptive processes, by refining exploitation more rapidly than exploration, are likely to become effective in the short run but self-destructive in the long run. The possibility that certain common organizational practices ameliorate that tendency is assessed.

http://strategy.sjsu.edu/www.stable/pdf/March,%20J.%20G.%20%281991%29.%20Organization%20Science%202%281%29%2071-87.pdf

Exploration and Exploitation in Organizational Learning

This article synthesizes the large but diverse literature on organizational legitimacy, highlighting similarities and disparities among the leading strategic and institutional approaches. The analysis identifies three primary forms of legitimacy: pragmatic, based on audience self-interest; moral, based on normative approval: and cognitive, based on comprehensibility and taken-for-grantedness. The article then examines strategies for gaining, maintaining, and repairing legitimacy of each type, suggesting both the promises and the pitfalls of such instrumental manipulations.

https://www.jstor.org/stable/pdf/258788.pdf

Managing Legitimacy: Strategic and Institutional Approaches

Introduction, 44. — I. Motivational assumptions, 46. — II. The planning process, 49. — III. Organizational slack, 53. — IV. Empirical relevance, 55. — V. Theoretical relevance, 58. — VI. Summary, 62.

Organizational Factors in the Theory of Oligopoly

An Analysis of Cooperation and Learning in a Duopoly Context

The study of corporate strategy within graduate schools of business has been under way for many years. With the growing complexity of the world and with the increased size of business firms, the need for planning and the development of a corporate strategy has become recognized in the business firm. While many areas of management have been subjected to scientific analysis, the strategy area continues to be characterized by a commonsensical, judgmental approach. This paper is an attempt to impose structure upon the various problems inherent in the process of formulating, implementing, and monitoring corporate strategy in modern business firms. We begin by identifying the relevant considerations in the strategic planning process and then discussing the manner in which formal models can prove useful to executives in dealing with various subproblems. The paucity of valid, normative propositions in the corporate strategy literature indicates the need for a more scientific approach to this important field. The nine major steps that constitute the strategic planning process are as follows: (1) formulation of goals; (2) analysis of the environment; (3) assigning quantitative values to the goals; (4) the microprocess of strategy formulation; (5) the gap analysis; (6) strategic search; (7) selecting the portfolio of strategic alternatives; (8) implementation of the strategic program; (9) measurement, feedback, and control.' This paper will review these nine steps and present selected ideas that demonstrate how the strategic planning process could be improved through use of analytical procedures. The nine steps should not be viewed as a once-and-for-all process of strategic planning, but, rather, as a continuous, ongoing process.2 The whole procedure is a dynamic

Strategy: Formulation, Implementation, and Monitoring

From an extended sequence of observations of decision making in three firms, four examples of how management uses expectations in making internal investment decisions are analyzed. The analysis suggests that although expectational data are an important element, they do not enter into the decisions in quite the way anticipated by standard theories of business behavior. In particular, four characteristics of these decisions are discussed: the extent to which resource allocation reflects comparisons of marginal advantages of alternatives; the extent to which search activity is viewed as one of the competitors for internal resources and the nature of search activity in a business organization; the type of computations about alternatives that are made and used in a decision; and the interaction between expectations and personal and subunit preferences.1 R. M. Cyert, W. R. Dill, and J. G. March are faculty members in the Graduate School of Industrial Administration, Carnegie Institute of Technology.

https://www.jstor.org/stable/pdfplus/2390716.pdf

The Role of Expectations in Business Decision Making

Introduction, 112. — Theory construction (model building), 113. — General characteristics of computer models, 115. — Comparison of computer models with operations research simulations and econometric models, 117. — Methodological problems of computer models, 119. — Review of the literature, 121. — Future of computer models, 126.

Richard M. Cyert

Papers

Organizational Factors in the Theory of Oligopoly

An Analysis of Cooperation and Learning in a Duopoly Context

Strategy: Formulation, Implementation, and Monitoring

The Role of Expectations in Business Decision Making

Computer Models in Dynamic Economics