Heuristics in organizations: A review and a research agenda

Loock, Moritz; Hinnen, Gieri

doi:10.1016/j.jbusres.2015.02.016

Cited by 100 publications

(90 citation statements)

References 100 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Cognitive limits are no longer an untested assumption. Rather, we urge researchers to be more specific, and to both draw more fully on M&S's rich development of this issue and to build on the later arguments and extensive evidence from management, psychology, and behavioral economics that have enhanced our understanding of how people are boundedly rational in their behavior, and how routines, programs, and heuristics help people and organizations to overcome the limitations of bounded rationality (e.g., Artinger, Petersen, Gigerenzer, and Weibler, 2015;Bettis, 2017;Katsikopoulos and Gigerenzer, 2013;Loock and Hinnen, 2015;Luan, Reb, and Gigerenzer, 2019;Menon, 2017).…”

Section: Implications and Future Researchmentioning

confidence: 99%

An Empirical Assessment of the Influence of March and Simon’s Organizations: The Realized Contribution and Unfulfilled Promise of a Masterpiece

Anderson

Lemken

2019

J Management Studies

View full text Add to dashboard Cite

March and Simon’s Organizations is a seminal work in management studies. We assess the contribution Organizations has made to management studies through a citation context analysis of 1,400 articles from top management journals. By categorizing the content from Organizations cited in subsequent works, we find that two related categories associated with cognitive limits and routines or programs account for half (50.5%) of all citation contexts since 1990. We also investigate whether citations to Organizations have been peripheral or substantial to the citing authors’ claims, how cited content has changed over time, and the extent to which citing works have provided empirical evidence to test March and Simon’s propositions or have been critical of their assertions. Our investigation reveals disturbingly few attempts to empirically validate the assertions made in Organizations. Overall, we provide a critical reflection on how well subsequent scholarship fulfils the aims and promise heralded by this masterpiece.

show abstract

Section: Implications and Future Researchmentioning

confidence: 99%

An Empirical Assessment of the Influence of March and Simon’s Organizations: The Realized Contribution and Unfulfilled Promise of a Masterpiece

Anderson

Lemken

2019

J Management Studies

View full text Add to dashboard Cite

show abstract

“…The broader emergent literature on microfoundations in management has contributed to our understanding of the role of the individual decision maker (e.g., Felin et al, ; Foss, ) and the underlying cognitive processes, such as heuristics, that influence strategic decision‐making (Maitland & Sammartino, ; Molina‐Azorin, ). Bingham, Eisenhardt, and Furr (), p. 31) conceptualize heuristics as “cognitive structures that categorize stimuli.” These have been researched under two dominant perspectives: the heuristics‐and‐biases paradigm and the fast‐and‐frugal paradigm (Loock & Hinnen, ). The first stream focuses on bounded rationality and the associated biases and simplification processes, that is, the limitations of heuristics in decision‐making whereas the latter emphasizes the positive sides of heuristics (Loock & Hinnen, ).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…Bingham, Eisenhardt, and Furr (2007), p. 31) conceptualize heuristics as "cognitive structures that categorize stimuli." These have been researched under two dominant perspectives: the heuristics-and-biases paradigm and the fast-andfrugal paradigm (Loock & Hinnen, 2015). The first stream focuses on bounded rationality and the associated biases and simplification processes, that is, the limitations of heuristics in decision-making whereas the latter emphasizes the positive sides of heuristics (Loock & Hinnen, 2015).…”

Section: Heuristics For Location Decisionsmentioning

confidence: 99%

How does de‐globalization affect location decisions? A study of managerial perceptions of risk and return

Ambos

Cesinger

Eggers

et al. 2019

Global Strategy Journal

View full text Add to dashboard Cite

Research Summary Our understanding of how managers take international location decisions is still scarce. Building on the microfoundations view, we explore managers' perceptions of risk and return in a discrete choice experiment with 2,618 decisions in 2013 (a globalizing world) and 2017 (a de‐globalizing world). While managerial perceptions vary over time due to economic and political changes, such as the current de‐globalization trend, decision heuristics remain remarkably stable: locations perceived as least risky offer the highest expected returns. We also find that distance is a good proxy for managerial perceptions. Investigating the microfoundations of decision‐making we show that international experience, risk‐taking propensity, and shareholder status affect heuristics. In sum, our study provides novel insights into the microfoundations of location decisions and extends the behavioral perspective on internationalization. Managerial Summary While many researchers in the field of international business and global strategy have studied internationalization, surprisingly few of them put the actual decision maker in the spotlight. This study investigates the decision heuristics of managers who are confronted with international location decisions. We show that their perceptions of risk and return in the context of a globalizing world (in 2013) and in the context of a de‐globalizing world (in 2017) vary. However, the underlying heuristic—locations that are perceived as least risky offer the highest expected returns—remains stable. Our study also indicates that distance is a good proxy for managerial decisions and that managers' international experience, risk‐taking propensity, and shareholder status affect their decision‐making patterns.

show abstract

“…Human decision making is characterized by deviations from the normative standards of the rational choice model, so-called cognitive biases, challenging the assumption that rational choice theory serves not only as a normative benchmark, but also as a descriptive model of individual decision making. Biases can be the result of time-limited information processing (Hilbert, 2012), heuristic decision making (Simon, 1956), or emotional influences (e.g., wishful thinking, Babad and Katz, 1991;Loewenstein and Lerner, 2003). Bounded rationality theory assumes that human decision making is constrained by the cognitive capabilities of the agents in addition to the constraints imposed by the environment and the available information about it (Simon, 1956(Simon, , 1997.…”

Section: Bounded Rationality and Heuristic Decision Makingmentioning

confidence: 99%

“…So far, heuristics have been used to describe decisions, for instance in consumer choice (Hauser et al, 2009), voter behavior (Lau and Redlawsk, 2006), and organizational behavior (Loock and Hinnen, 2015;Simon, 1997). However, fast and frugal decision heuristics are not yet commonly applied in dynamic modeling of human-nature interactions.…”

Section: Bounded Rationality and Heuristic Decision Makingmentioning

confidence: 99%

Towards representing human behavior and decision making in Earth system models – an overview of techniques and approaches

et al. 2017

View full text Add to dashboard Cite

Abstract. Today, humans have a critical impact on the Earth system and vice versa, which can generate complex feedback processes between social and ecological dynamics. Integrating human behavior into formal Earth system models (ESMs), however, requires crucial modeling assumptions about actors and their goals, behavioral options, and decision rules, as well as modeling decisions regarding human social interactions and the aggregation of individuals' behavior. Here, we review existing modeling approaches and techniques from various disciplines and schools of thought dealing with human behavior at different levels of decision making. We demonstrate modelers' often vast degrees of freedom but also seek to make modelers aware of the often crucial consequences of seemingly innocent modeling assumptions.After discussing which socioeconomic units are potentially important for ESMs, we compare models of individual decision making that correspond to alternative behavioral theories and that make diverse modeling assumptions about individuals' preferences, beliefs, decision rules, and foresight. We review approaches to model social interaction, covering game theoretic frameworks, models of social influence, and network models. Finally, we discuss approaches to studying how the behavior of individuals, groups, and organizations can aggregate to complex collective phenomena, discussing agent-based, statistical, and representative-agent modeling and economic macro-dynamics. We illustrate the main ingredients of modeling techniques with examples from land-use dynamics as one of the main drivers of environmental change bridging local to global scales.

show abstract

Heuristics in organizations: A review and a research agenda

Cited by 100 publications

References 100 publications

An Empirical Assessment of the Influence of March and Simon’s Organizations: The Realized Contribution and Unfulfilled Promise of a Masterpiece

An Empirical Assessment of the Influence of March and Simon’s Organizations: The Realized Contribution and Unfulfilled Promise of a Masterpiece

How does de‐globalization affect location decisions? A study of managerial perceptions of risk and return

Towards representing human behavior and decision making in Earth system models – an overview of techniques and approaches

Contact Info

Product

Resources

About