Opaque decision-making in organizations

Abstract

Purpose Many decision rules are rational but opaque, and many others are irrational but transparent. This paper aims to propose a theoretical framework to operationalize opacity in decision-making – the degree to which a decision rule is intelligible to the decision maker. Design/methodology/approach The authors operationalize opacity and discuss the implication of opaque decision-making in organizational settings through a typology, where decision rules can be rational or irrational and opaque or transparent. Findings The authors show that opacity is asymmetric as different organizational actors possess different degrees of knowledge about how the decision rules work. Organizational actors often opacify the decision rules to increase their power (based on asymmetric knowledge). Opacity also presents a significant impact on organizational accountability, as transparent organizations are more reputable. Originality/value This contribution represents the first theoretical and methodological articulation of opacity in decision-making, within a bounded and ecological rationality framework; it also sheds new light on the role of cognitive biases in organizational settings.

Guest editorial: Beyond rationality in organizations’ choices: exploring the dark and the bright sides of non-rational decision-making

“…Moreover, thinking beyond the traditional boundaries of rationality can be crucial to surviving in the post-COVID-19 pandemic business scenario because confident managers whose decision-making is guided by meaningful coincidences can find themselves one step ahead of the competition. Mastrogiorgio and Lattanzi (2023), in their paper "Opaque decision-making in organizations," take on the challenging task of operationalizing decision opacity. The notion of opacity denotes the extent to which a decision rule is intelligible to the decision-maker.…”

“…Another avenue for future research is exploring the relationship between managerial adaptability and decisionmaking outcomes, particularly in crisis periods. In addition, incorporating the perspectives The study by Mastrogiorgio and Lattanzi (2023) highlights the constructed nature of decision-making preferences during the decision-making process. Building upon this insight, future research can explore how preference construction processes affect decision opacity.…”

“…The study by Mastrogiorgio and Lattanzi (2023) highlights the constructed nature of decision-making preferences during the decision-making process. Building upon this insight, future research can explore how preference construction processes affect decision opacity.…”

“…Mastrogiorgio and Lattanzi (2023), in their paper “Opaque decision-making in organizations,” take on the challenging task of operationalizing decision opacity. The notion of opacity denotes the extent to which a decision rule is intelligible to the decision-maker.…”