Organizational Theory

"If (...) we accept the proposition that both the knowledge and the computational power of the decision maker are severely limited, then we must distinguish between the real world and the actor’s perception of it and reasoning about it."

"In Administrative Behavior, bounded rationality is largely characterized as a residual category — rationality is bounded when it falls short of omniscience. And the failures of omniscience are largely failures of knowing all the alternatives, uncertainty about relevant exogenous events, and inability to calculate consequences. There was needed a more positive and formal characterization of the mechanisms of choice under conditions of bounded rationality... Two concepts are central to the characterization: search and satisficing."

"The first consequence of the principle of bounded rationality is that the intended rationality of an actor requires him to construct a simplified model of the real situation in order to deal with it. He behaves rationally with respect to this model, and such behavior is not even approximately optimal with respect to the real world. To predict his behavior we must understand the way in which this simplified model is constructed, and its construction will certainly be related to his psychological properties as a perceiving, thinking, and learning animal."

"A comparative examination of the models of adaptive behavior employed in psychology (e.g., learning theories), and of the models of rational behavior employed in economics, shows that in almost all respects the latter postulate a much greater complexity in the choice mechanisms, and a much larger capacity in the organism for obtaining information and performing computations, than do the former. Moreover, in the limited range of situations where the predictions of the two theories have been compared (...), the learning theories appear to account for the observed behavior rather better than do the theories of rational behavior."

"Both from these scanty data and from an examination of the postulates of the economic models it appears probable that, however adaptive the behavior of organisms in learning and choice situations, this adaptiveness falls far short of the ideal of ‘maximizing’ postulated in economic theory. Evidently, organisms adapt well enough to‘satisfice’; theydo not, in general, ‘optimize’."

"The problem can be approached initially either by inquiring into the properties of the choosing organism, or by inquiring into the environment of choice."

"… I shall assume that the concept of ‘economic man’(...) is in need of fairly drastic revision, and shall put forth some suggestions as to the direction the revision might take."

"Broadly stated, the task is to replace the global rationality of economic man with a kind of rational behavior that is compatible with the access to information and the computational capacities that are actually possessed by organisms, including man, in the kinds of environments in which such organisms exist."

"The principle of bounded rationality [is] the capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solution is required for objectively rational behavior in the real world — or even for a reasonable approximation to such objective rationality."

"Around 1958, I became aware of H.A. Simon's seminal papers on bounded rationality and was immediately convinced by his arguments. I tried to construct a theory of boundedly rational multi-goal decision making. Together with Heinz Sauermann, I worked out an "aspiration adaptation theory of the firm" which was published as a journal article in 1962... More and more I came to the conclusion that purely speculative approaches like that of our paper of 1962 are of limited value. The structure of boundedly rational economic behavior cannot be invented in the armchair, it must be explored experimentally."

"In a fundamental sense, Alchian's theory of economic organizations is different from those of Coase or Simon. He disavows an explicit model of individual choice... and... offers a system-level explanation of organizational emergence, structure, and survival that is largely independent of decision making at the micro level... Yet it is precisely this independence of a distinct model of choice that ultimately renders it compatible with the individualistic theories of both Coase and Simon...."

"Bounded rationality means that people make quite reasonable decisions based on the information they have. But they don't have perfect information, especially about more distant parts of the system. [...] We don't even interpret perfectly the imperfect information that we do have, say behavioral scientists. [...] Which is to say, we don't even make decisions that optimize our own individual good, much less the good of the system as a whole."

"Simon’s conventionalism leads to a decision paradigm, according to which understanding problems of coordination is impossible without taking into consideration individual cognitive limits and social representations of reality."

"It would be foolish to describe the logistics hub as merely ugly, for it has the horrifying, soulless, immaculate beauty characteristic of many of the workplaces of the modern world."

"Hannibal excelled as a tactician. No battle in history is a finer sample of tactics than Cannae. But he was yet greater in logistics and strategy. No captain ever marched to and fro among so many armies of troops superior to his own numbers and material as fearlessly and skillfully as he. No man ever held his own so long or so ably against such odds. Constantly overmatched by better soldiers, led by generals always respectable, often of great ability, he yet defied all their efforts to drive him from Italy, for half a generation. … As a soldier, in the countenance he presented to the stoutest of foes and in the constancy he exhibited under the bitterest adversity, Hannibal stands alone and unequaled. As a man, no character in history exhibits a purer life or nobler patriotism."

"On my orders, coalition forces have begun striking selected targets of military importance to undermine Saddam Hussein's ability to wage war. These are opening stages of what will be a broad and concerted campaign. More than 35 countries are giving crucial support -- from the use of naval and air bases, to help with intelligence and logistics, to the deployment of combat units. Every nation in this coalition has chosen to bear the duty and share the honor of serving in our common defense."

"An army marches on its stomach."

"That total war would ultimately be decided by material rather than moral factors was not lost on the Germans. 'The first essential condition for an army to be able to stand the strain of battle', wrote Rommel, 'is an adequate stock of weapons, petrol and ammunition. In fact, the battle is fought and decided by the quartermasters before the shooting begins. The bravest men can do nothing without guns, the guns nothing without plenty of ammunition; and neither guns nor ammunition are of much use in mobile warfare unless there are vehicles with sufficient petrol to haul them around.' By the final year of the war, an active US army division was consuming around 650 tons of supplies a day. Because a single army truck could carry just five tons, this posed a formidable logistical challenge. Indeed, as supply lines were stretched from 200 to 400 miles in the months after D-Day, deliveries to the advancing armies slumped from 19,000 tons a day to 7,000 tons - hence the slackening of the pace of the Allied advance in the second half of 1944 and one defect of Montgomery's grab for Arnhem. The last phase of the war revealed the importance (consistently underrated by both the Germans and the Japanese) of assigning ample numbers of men to the task of supply rather than combat. The ratio of combatants to non-combatants in the German army was two to one; but the equivalent American ratio in the European theatre was one to two. In the Pacific, the Japanese ratio was one to one; the Americans had eighteen non-combatants for every man at the front. As the war came to an end, the United States had nearly as many men under arms as the Soviet Union (around twelve million in each case) but only a minority of Americans were actually engaged in combat."

"Decision theory can be pursued not only for the purposes of building foundations for political economy, or of understanding and explaining phenomena that are in themselves intrinsically interesting, but also for the purpose of offering direct advice to business and governmental decision makers. For reasons not clear to me, this territory was very sparsely settled prior to World War II. Such inhabitants as it had were mainly industrial engineers, students of public administration, and specialists in business functions, none of whom especially identified themselves with the economic sciences. Prominent pioneers included the mathematician, Charles Babbage, inventor of the digital computer, the engineer, Frederick Taylor and the administrator, Henri Fayol. During World War II, this territory, almost abandoned, was rediscovered by scientists, mathematicians, and statisticians concerned with military management and logistics, and was renamed “operations research” or “operations analysis.” So remote were the operations researchers from the social science community that economists wishing to enter the territory had to establish their own colony, which they called “management science”."

"Experience has shown that the mass-armies of “democratic” states fight with greater zeal when they are animated by hatred and supported by a hate-crazed populace that fancies it is fighting a holy war. Lies have therefore become military equipment, a kind of mental logistics; but it is the essence of such propaganda that its spuriousness is known only to the persons who manufacture it. The model of such operations is the famous lie-factory managed by Lord Bryce during the First World War, in which a corps of expert technicians forged photographs, while expert liars, including Arnold Toynbee, concocted stories, of “atrocities,” to inspire the emotionally overwrought British with a fanatical hatred of the incredibly bestial Germans and with a noble Christian ardor to kill them."

"It struck me as I waited that all great enterprises are about logistics. Not genius or inspiration or flights of imagination, skill or cunning, but logistics. Building pyramids or landing spacecraft on Jupiter or invading whole continents or painting divine scenes over the roofs of chapels: logistics."

"Logistics is the ball and chain of armored warfare."

"Ill husbandry braggeth To go with the best: Good husbandry baggeth Up gold in his chest."

"Centuries of husbandry, decades of diligent culling, the work of numerous hearts and hands, have gone into the hackling, sorting, and spinning of this tightly twisted yarn. Furthermore, we have not even to risk the adventure alone; for the heroes of all time have gone before us; the labyrinth is thoroughly known; we have only to follow the thread of the hero-path. And where we had thought to find an abomination, we shall find a god; where we had thought to slay another, we shall slay ourselves; where we had thought to travel outward, we shall come to the center of our own existence; and where we had thought to be alone, we shall be with all the world."

"To any thinking person, it must be obvious that there is something badly wrong in relations between human beings and the animals that human beings rely on for food; and that in the past 100 or 150 years whatever is wrong has become wrong on a huge scale, as traditional animal husbandry has been turned into an industry using industrial methods of production. [...] It would be a mistake to idealise traditional animal husbandry as the standard by which the animal-products industry falls short: traditional animal husbandry is brutal enough, just on a smaller scale. A better standard by which to judge both practices would be the simple standard of humanity: is this truly the best that human beings are capable of?"

"To the art of mechanics is owing all sorts of instruments to work with, all engines of war, ships, bridges, mills, curious roofs and arches, stately theatres, columns, pendent galleries, and all other grand works in building. Also clocks, watches, jacks, chariots, carts and carriages, and even the wheel-barrow. Architecture, navigation, husbandry, and military affairs, owe their invention and use to this art."

"When you have decided to purchase a farm, be careful not to buy rashly; do not spare your visits and be not content with a single tour of inspection. The more you go, the more will the place please you, if it be worth your attention. Give heed to the appearance of the neighbourhood, - a flourishing country should show its prosperity. "When you go in, look about, so that, when needs be, you can find your way out.""

"An housbande can not well thryue by his come without he haue other cattell, nor by his cattell without come. For els he shall be a byer, a borrower or a beggar."

"If the national husbandry of this commonwealth be improved, we may hope, through god's blessing, to see better days, and be able to bear necessary and public burdens to more ease to ourselves, and benefit to human society, than hitherto we could attain to."

"Let him sensibly perceive, that the kindness he shews to others, is no ill husbandry for himself; but that it brings a return in kindness both from those that receive it, and those who look on. Make this a contest among children, who shall out-do one another in this way: and by this means, by a constant practise, children having made it easy to themselves to part with what they have, good nature may be settled in them into a habit, and they may take pleasure, and pique themselves in being kind, liberal and civil, to others."

"In the time of Cato the Censor, the author of The Husbandry of the Ancients observed, though the operations of agriculture were generally performed by servants, yet the great men among the Roman continued to give particular attention to it, studied its improvement, and were very careful and exact in the management of nil their country affairs. This appears from the directions given them by this most attentive farmer. Those great men had both houses in town, and villas in the country; and, as they resided frequently in town, the management of their country affairs was committed to a or overseer. Now their attention to the culture of their land and to every other branch of husbandry, appears, from the directions given them how to behave upon their arrival from the city at their villas."

"Gustav Aschenbach was the writer who spoke for all those who work on the brink of exhaustion, who labor and are heavy-laden, who are worn out already but still stand upright, all those moralists of achievement who are slight of stature and scanty of resources, but who yet, by some ecstasy of the will and by wise husbandry, manage at least for a time to force their work into a semblance of greatness."

"When the land is cultivated entirely by the spade, and no horses are kept, a cow is kept for every three acres of land."

"What eie doth not pitty to see the great weaknes and decay of our ancient and common mother the earth, which now is grown so aged and stricken in yeares, and so wounded at the hart with the ploughman's goad, that she beginneth to faint under the husbandman's hand, and groaneth for the decay of her natural balsam. For whose good health and recovery, and for the better comfort of sundry simple and needy farmers of this land, I have partly undertaken these strange labours, altogether abhorring from my profession, that they might both know and practise some farther secrets in their husbandry, for the better manuring of their leane and barren groundes with some new sorts of marie not yet knowne, or not sufficiently regarded by the best experienced men of our daies.""

"Perfection is a costly flower and is cultured only by an uncompromising, strict husbandry."

"Let us suppose that, without forge or anvil, the instruments of husbandry had dropped from the heavens into the hands of savages, that these men had got the better of that mortal aversion they all have for constant labour; that they had learned to foretell their wants at so great a distance of time; that they had guessed exactly how they were to break the earth, commit their seed to it, and plant trees; that they had found out the art of grinding their corn, and improving by fermentation the juice of their grapes; all operations which we must allow them to have learned from the gods, since we cannot conceive how they should make such discoveries of themselves; after all these fine presents, what man would be mad enough to cultivate a field, that may be robbed by the first comer, man or beast, who takes a fancy to the produce of it. And would any man consent to spend his day in labour and fatigue, when the rewards of his labour and fatigue became more and more precarious in proportion to his want of them? In a word, how could this situation engage men to cultivate the earth, as long as it was not parcelled out among them, that is, as long as a state of nature subsisted."

"But, poor old man, thou prunest a rotten tree, That cannot so much as a blossom yield In lieu of all thy pains and husbandry."

"Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry. This above all: to thine ownself be true."

"Now 'tis the spring, and weeds are shallow-rooted; Suffer them now, and they'll o'ergrow the garden And choke the herbs for want of husbandry."

"There's husbandry in heaven; Their candles are all out."

"Facts are stubborn things."

"Thaer's Principles of Agriculture, 2 vols. 4to. an excellent work. The author, though he never was in England, wrote on English husbandry so exactly that the board of agriculture in England sent him, by Mr. Sinclair, a patent as associate member of the Agricultural Society. He is a physician, but has now established a practical academy of husbandry near Berlin."

"Ancient poetry and mythology suggest, at least, that husbandry was once a sacred art; but it is pursued with irreverent haste and heedlessness by us, our object being to have large farms and large crops merely. We have no festival, nor procession, nor ceremony, not excepting our cattle-shows and so-called Thanksgivings, by which the farmer expresses a sense of the sacredness of his calling, or is reminded of its sacred origin. It is the premium and the feast which tempt him. He sacrifices not to Ceres and the Terrestrial Jove, but to the infernal Plutus rather. By avarice and selfishness, and a grovelling habit, from which none of us is free, of regarding the soil as property, or the means of acquiring property chiefly, the landscape is deformed, husbandry is degraded with us, and the farmer leads the meanest of lives. He knows Nature but as a robber"

"February, fill the dyke With what thou dost like."

"Ill husbandry lieth In prison for debt: Good husbandry spieth Where profit to get."

"Is it practicable, on the soil and in the climate of Massachusetts, to pursue a succession of crops? I cannot question it; and I have entire confidence in the improvements to our husbandry, and the other great advantages, which would accrue from judicious rotation of products. The capacities of the soil of Massachusetts are undoubted. One hundred bushels of corn to an acre have been repeatedly produced, and other crops in like abundance. But this will not effect the proper ends of a judicious and profitable agriculture, unless we can so manage our husbandry that, by a judicious and proper succession of the crops, land will not only be restored after an exhausting crop, but gradually enriched by cultivation."

"I was an apprentice to a linnen-draper when this king was born, and continued at the trade some years, but the shop being too narrow and short for my large mind, I took leave of my master, but said nothing. Then I lived a country-life for some years; and in the late wars I was a soldier, and sometimes had the honour and misfortune to lodg and dislodg an army. In the year 1G52, I entred upon iron works, and pli'd them several years, and in them times I made it my business to survey the three great rivers of England, and some small ones; and made two navigable, and a third almost compleated. I next studied the great weakness of the rye-lands, and the surfeit it was then under by reason of their long tillage. I did by practick and theorick find out the reason of its defection, as also of its recovery, and applyed the remedy in putting out two books, which were so fitted to the country-man's capacity, that he fell on pell-mell; and I hope, and partly know, that great part of Worcestershire, Glocestershire, Herefordshire, Shropshire, and Staffordshire, have doubled the value of the land by the husbandry discovered to them; see my two books printed by Mr Sawbridg on Ludgate Hill, entitled, Yarranton's Improvement ly Clover, and there thou mayest be further satisfied.* I also for many years served the countreys with the seed, and at last gave them the knowledg of getting it with ease and small trouble; and what I have been doing since, my book tells you at large."

"But if capitalism had built up science as a productive force, the very character of the new mode of production was serving to make capitalism itself unnecessary."

"It makes unavoidably necessary an entirely new organization of society in which production is no longer directed by mutually competing individual industrialists but rather by the whole society operating according to a definite plan and taking account of the needs of all."

"Industry controlled by society as a whole, and operated according to a plan, presupposes well-rounded human beings, their in balanced fashion, able to see the system of production in its entirety."