“Organization theory,” a term that appeared in the middle of the twentieth century, has multiple meanings. When it first emerged, the term expressed … - William H. Starbuck

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“Organization theory,” a term that appeared in the middle of the twentieth century, has multiple meanings. When it first emerged, the term expressed faith in scientific research as a way to gain understanding of human beings and their interactions. Although scientific research had been occurring for several centuries, the idea that scientific research might enhance understanding of human behavior was considerably newer and rather few people appreciated it. Simon (1950, 1952-3, 1952) was a leading proponent for the creation of “organization theory”, which he imagined as including scientific management, industrial engineering, industrial psychology, the psychology of small groups, human-resources management, and strategy. The term “organization theory” also indicated an aspiration to state generalized, abstract propositions about a category of social systems called “organizations,” which was a very new concept. Before and during the 1800s, people had regarded armies, schools, churches, government agencies, and social clubs as belonging to distinct categories, and they had no name for the union of these categories. During the 1920s, some people began to perceive that diverse kinds of medium-sized social systems might share enough similarities to form a single, unified category. They adopted the term “organization” for this unified category.

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About William H. Starbuck

William Haynes Starbuck (born Sept. 20, 1934) is an American organizational theorist, and Emeritus Professor of Management at New York University. He contributed to the concepts of self-designing organizations, organizational design, environmental niches, organizational equilibriums made of antithetical processes, relativity through time of levels of aspiration as well as to behavioral research methods and epistemological status

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Alternative Names: William Haynes Starbuck
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Most of the time, organizations generate actions unreflectively and non-adaptively. To justify their actions, organizations create problems, successes, threats and opportunities. These are ideological molecules that mix values, goals, expectations, perceptions, theories, plans, and symbols. The molecules form while people are result watching, guided by the beliefs that they should judge results good or bad, look for the causes of results, and propose needs for action. Because organizations modify their behavior programs mainly in small increments that make sense to top managers, they change too little and inappropriately, and nearly all organizations disappear within a few years.

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In recent years there has been increased interest in the effects of internal communication on decision processes. A number of hypotheses relating the bias in information to the final decision have been proposed. In this paper we discuss two laboratory experiments which were designed to test two such hypotheses. The first experiment tests the hypothesis that cost and sales estimations are made with the implicit assumption that a biased pay-off structure exists. The second experiment tests explicitly the effects of biased and unbiased pay-off structures on estimation within an organization. An analysis of the data for the two experiments is made and some implications for further research are drawn from the results.

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