In recent years there has been increased interest in the effects of internal communication on decision processes. A number of hypotheses relating the… - James G. March

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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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About James G. March

James Gardner March (January 15, 1928 – September 27, 2018) was an American business theorist and professor emeritus in management, sociology, political science, and education at Stanford University. Widely recognized as a pioneer of organization and management theory, March coauthored the classic books Organizations (1958) and A Behavioral Theory of the Firm (1959).

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Birth Name: James Gardner March
Alternative Names: James March
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If a manager asks an academic consultant what to do and that consultant answers, then the consultant should be fired. No academic has the experience to know the context of a managerial problem well enough to give specific advice about a specific situation.

Unfortunately, the gains for imagination are not free. The protections for imagination are indiscriminate. They shield bad ideas as well as good ones—and there are many more of the former than the latter. Most fantasies lead us astray, and most of the consequences of imagination for individuals and individual organizations are disastrous. Most deviants end up on the scrap pile of failed mutations, not as heroes of organizational transformation... There is, as a result, much that can be viewed as unjust in a system that induces imagination among individuals and individual organizations in order to allow a larger system to choose among alternative experiments. By glorifying imagination, we entice the innocent into unwitting self-destruction (or if you prefer, altruism)

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Social, political and economic institutions have become larger, considerably more complex and resourceful, and prima facie more important to collective life. Many of the major actors in modern economic and political systems are formal organizations, and the institutions of law and bureaucracy occupy a dominant role in contemporary life.

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