Study of organization without strategy: structural rationality

Shabnam Mousavi and Shyam Sunder

Chapter 12 in Elgar Companion to Herbert Simon, 2024, pp 250-274 from Edward Elgar Publishing

Abstract: Deliberate human action receives the first priority in researchers’ attempts to understand social phenomena. Organization theory and strategy literature are no exceptions. Strategy as a purposive plan of action or path towards intended ends has been studied in the context of agents’ cognition and rationality, subject to conditions in the implementation environment and interactions with its structures. Turning the focus from construction of strategy towards organization structures allows for the possibility that (1) aggregate-level outcomes with specific properties may emerge from structures through complex micro-level interactions among even non-strategic agents, and (2) these properties may exhibit some robustness to variations in individual behavior. Extending on the counterintuitively efficient performance of ‘zero intelligence’ agents in certain markets, we explore the implications of supplementing the well-established framework of substantive and procedural rationality with structural rationality. In its minimalist spirit, structural rationality uses neither intent nor deliberate formation of strategy to arrive at the outcomes, and thus allows for differentiation among organizational outcomes arising from strategies and from structures.

Keywords: Business and Management; Economics and Finance; Politics and Public Policy (search for similar items in EconPapers)
Date: 2024
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