Behavioral Decision-Making and Network Dynamics: A Political Perspective

Abstract

The blurring of organizational boundaries and the adoption of networks as a prominent form of governance have largely contributed to reinforcing interdependence between internal and external organizational networks as well as between formal and informal ties. This chapter tries to broaden existing theoretical models in order to explain the behavioral decision-making process of the firm and how it is shaped by the complex and interactive dynamics of these networks. The theoretical perspective employed in the chapter suggests that a firm’s behavior is influenced by organizational politics. Although this actually does not constitute a fresh perspective within organizational and management studies, in this chapter it is revamped and widened in light of the mentioned changes within and across firms’ organizational boundaries. The starting point of our discussion is March’s seminal work (March in Journal of Politics 24(4):662–678, 1962) and his model of “the business firm as a political coalition”. Subsequently, drawing also on later organizational politics literature we show the limits and opportunities of adopting such an imagery not only for the traditional business firm but also for the contemporary network organization: through it we can improve our understanding of how organizational boundaries are defined today, why company leaders choose the strategies they choose, and how and why those strategies are (or are not) implemented. In order to explain patterns of organizational behavior in a world of blurred-but existent firm boundaries we finally draw on a more recent sociological literature on social movements that also highlights for “patterns of mobilization distinct from both lines of formal authority and the personal ties of informal organization” (Clemens, Where Do We Stand? Common Mechanisms in Organizations and Social Movements Research, in Davis G, McAdam D, Scott WR, Zald M (eds) Social movements and organization theory. Cambridge University Press, Cambridge, p. 356, 2005). Indeed, such a literature recognized the central role of networks, their evolutionary dynamics, and interactions between the internal and the external and between the formal and the informal.