Opaque decision-making in organizations

Abstract

PurposeMany decision rules are rational but opaque, and many others are irrational but transparent. This paper aims to propose a theoretical framework to operationalize opacity in decision-making – the degree to which a decision rule is intelligible to the decision maker.Design/methodology/approachThe authors operationalize opacity and discuss the implication of opaque decision-making in organizational settings through a typology, where decision rules can be rational or irrational and opaque or transparent.FindingsThe authors show that opacity is asymmetric as different organizational actors possess different degrees of knowledge about how the decision rules work. Organizational actors often opacify the decision rules to increase their power (based on asymmetric knowledge). Opacity also presents a significant impact on organizational accountability, as transparent organizations are more reputable.Originality/valueThis contribution represents the first theoretical and methodological articulation of opacity in decision-making, within a bounded and ecological rationality framework; it also sheds new light on the role of cognitive biases in organizational settings.