EUnderstanding existing practices
In order to change working practices
managers need first to understand existing
methods, if only to provide a benchmark for improvement. Four key ways which largely
determine existing working practices are
described below with a brief critique of how
standard economic analysis fails managers in decision making.
Optimisation
One of the key ways in which managers can
fully understand the role and influence of an
employee is to ask over what areas of their work do they exercise choice. At this point,
standard economic/business analysis of
assuming that individuals act rationally or optimally are an inadequate representation
of reality. The main difficulty with
describing ``optimal'' or efficient behaviour is
that it does not adequately characterise the human dimension when choice is exercised. Thus, for example, the question of choice for
optimising individuals boils down to
following a pre-determined path based on
fixed preferences (Buchanan, 1969; Loasby,
1976) and, hence, the acceptance of choice is
(largely) inconsistent with optimising
behaviour. It seems self evident that we
exercise choice daily and that this should
form a central part of any description of organisational behaviour. The process of choice is thus one which can be usefully described by habits and rules, and not by rational optimisers.