A Behavioral Theory of the Firm.
About: This article is published in Journal of the American Statistical Association.The article was published on 1965-03-01. It has received 8224 citations till now. The article focuses on the topics: Behavioral economics.
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TL;DR: In this paper, the authors consider the relation between the exploration of new possibilities and the exploitation of old certainties in organizational learning and examine some complications in allocating resources between the two, particularly those introduced by the distribution of costs and benefits across time and space.
Abstract: 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.
16,377 citations
TL;DR: In this article, the authors review agency theory, its contributions to organization theory, and the extant empirical work and develop testable propositions and conclude that agency theory offers unique insight into information systems, outcome uncertainty, incentives, and risk.
Abstract: Agency theory is an important, yet controversial, theory. This paper reviews agency theory, its contributions to organization theory, and the extant empirical work and develops testable propositions. The conclusions are that agency theory (a) offers unique insight into information systems, outcome uncertainty, incentives, and risk and (b) is an empirically valid perspective, particularly when coupled with complementary perspectives. The principal recommendation is to incorporate an agency perspective in studies of the many problems having a cooperative structure.
11,338 citations
TL;DR: In this article, the authors synthesize these previously fragmented literatures around a more general "upper echelons perspective" and claim that organizational outcomes (strategic choices and performance levels) are partially predicted by managerial background characteristics.
Abstract: Theorists in various fields have discussed characteristics of top managers. This paper attempts to synthesize these previously fragmented literatures around a more general “upper echelons perspective.” The theory states that organizational outcomes—strategic choices and performance levels—are partially predicted by managerial background characteristics. Propositions and methodological suggestions are included.
11,022 citations
Cites background from "A Behavioral Theory of the Firm."
...An entire team-say, the firm's officers-aligns well with Cyert and March's (1963) appealing, but little-studied, concept of the dominant coalition....
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TL;DR: A model is developed based on the concept of an evolutionarily stable strategy in the context of the Prisoner's Dilemma game to show how cooperation based on reciprocity can get started in an asocial world, can thrive while interacting with a wide range of other strategies, and can resist invasion once fully established.
Abstract: Cooperation in organisms, whether bacteria or primates, has been a difficulty for evolutionary theory since Darwin. On the assumption that interactions between pairs of individuals occur on a probabilistic basis, a model is developed based on the concept of an evolutionarily stable strategy in the context of the Prisoner's Dilemma game. Deductions from the model, and the results of a computer tournament show how cooperation based on reciprocity can get started in an asocial world, can thrive while interacting with a wide range of other strategies, and can resist invasion once fully established. Potential applications include specific aspects of territoriality, mating, and disease.
10,675 citations
TL;DR: In this paper, a theory of stakeholder identification and saliency based on stakeholders possessing one or more of three relationship attributes (power, legitimacy, and urgency) is proposed, and a typology of stakeholders, propositions concerning their saliency to managers of the firm, and research and management implications.
Abstract: Stakeholder theory has been a popular heuristic for describing the management environment for years, but it has not attained full theoretical status. Our aim in this article is to contribute to a theory of stakeholder identification and salience based on stakeholders possessing one or more of three relationship attributes: power, legitimacy, and urgency. By combining these attributes, we generate a typology of stakeholders, propositions concerning their salience to managers of the firm, and research and management implications.
10,630 citations