Procedural Rationality Research Articles

Analysis on The Procedural Rationality through The Social Policy Making Process

Analysis on The Procedural Rationality through The Social Policy Making Process

Procedural Rationality: Giving Teeth to the Proportionality Analysis

Human rights protection – Proportionality – Deference – Procedural rationality – Process-review – Interplay national courts and Strasbourg court

Inflation targeting in a learning economy: An ABM perspective

This paper investigates the performances of an inflation targeting regime in a learning economy framed as an Agent-Based Model (ABM). We keep our ABM as close as possible to the original New Keynesian (NK) model, but we model the individual behaviour of the agents under procedural rationality à la Simon. Accordingly, we assume that their behaviour is guided by simple rules of thumb – or heuristics – while a continuous learning process governs the evolution of those rules. Under these assumptions that also allow the emergence of agents heterogeneity, we analyze the dynamics of the economy without assuming rational expectations, and study the role that a central bank, implementing an inflation targeting regime via a monetary policy rule, can play in the orientation of these dynamics. Consequently, our main goal is to analyse the interplay between the learning mechanisms operating at the individual level and the features and performances of the inflation targeting regime. Our results point to the prime importance of the credibility of central bank's inflation target regarding macroeconomic stabilisation, as well as the beneficial role played by that target as an anchoring device for private inflation expectations. We also establish the potential welfare cost of imperfect public information and contribute to the current debate on optimal monetary policy rules under imperfect common knowledge and uncertainty.

Becoming Aware of the Unknown: Decision Making During the Implementation of a Strategic Initiative

This qualitative study analyzes the decision-making process involved in adapting preconceived courses of action during the implementation of a strategic initiative. We observe that the type of decision-making process hinges on the nature of managers' emerging awareness of future events. When managers become aware of new uncertainty, the process involves selectiveness, deliberateness, and diligence. By contrast, when managers become aware of new certainty, the process conforms to the problem-solving adhocracy and decision-making messiness emphasized in prior literature. We summarize our findings in a framework, proposing that decision-level differences in awareness and uncertainty can explain the observed variation in strategic decision-making processes during implementation. We also discuss implications for theory on procedural rationality and analytical comprehensiveness.

Symbolic Benefits of Procedural Rationality: How Firms Switch Focus of Corporate Governance Policies

We consider how firms develop internal corporate governance policies based on external nation-wide standards. This firm-level interpretation of national standards provides opportunities for “means-...

집단적 근로조건 결정시스템의 새로운 패러다임의 모색 : 노사위원회제도 도입방안을 중심으로

This study begins from the awareness that the collective determination system for working conditions is in "the crisis of representation" due to the structural change of employment and labor environment. Not only declining union density, but also the disproportion of it by firm size and employment types have diminished the scope and coverage of the collective bargaining system. As a result, most of the SME workers and non-standard employees do not have the representative body to convey their "collective voice". This crisis has partly come from the unions" practice to anchor along the vested interests frame, but fundamental background has originated in the structural change of economy and labor environment from the industrial society to the post-industrial society. Since the individuality and flexibility of employment has been increased, and the complexity and diversity of labor issues has been intensified, the union system based upon the homogeneity of interests and the principle of solidarity has faced a fundamental limiting line and is falling into the crisis. On the other hand, new theoretical approach has been suggested that rigid and uniform rule to each and all enterprises" complex and diverse problems is no longer effective, therefore open involvement and procedural rationality is more appropriate to the post-industrial society. BR In this context, the role of the employee representation system should be widen and strengthened to represent each and every workers of the enterprise indifferent to the type of employment and so on. However, the current labor-management consultation committee and the workers" representative scheme has many defects due to the obscure legal status, functional duplication and lack of requisites as the collective determination system for working conditions. Hereupon, this study reviews the realities of the environmental changes in the labor market and the issues regarding the current trade union and employee representation system, and then presents some basic directions and concrete legislation model for restructuring current systems, in the viewpoints of open participation and procedural rationality.

Boardroom Strategic Decision‐Making Style: Understanding the Antecedents

AbstractManuscript TypeEmpiricalResearch IssueThe purpose of this study is to develop an understanding of the antecedents that lead to boards embracing either procedural rationality or political behaviors as a particular style of strategic decision making.Research FindingsSemi‐structured interviews with 29 directors and officers of eight publicly‐tradedUScompanies were conducted. Of the eight boards analyzed, there were clear differences in the predominant style of decision making operationalized by each. More importantly, however, the variance between boards that tended towards procedural rationality versus political behaviors as the predominant style of strategic decision making was explained by three primary factors. These included: (1) shared mental models; (2) balanced power relationships between the board members andCEO, as well as amongst individual board members; and (3) board chair leadership skills. Our data allow us to identify important antecedents of these factors.Theoretical ImplicationsWe add to the work seeking to understand the processes associated with board level strategic decision making. We augment decision‐making theories relating to procedural rationality and political behaviors with board‐specific factors and their characteristics.Practitioner ImplicationsWe isolate a number of antecedents relating to the conduct of boards and the environment of board decision making. We also highlight the roles of the board chair and theCEOfor creating a boardroom environment conducive to engaging in quality decision‐making processes.

Inflation Targeting in a Learning Economy: An ABM Perspective

This paper investigates the performances of an inflation targeting regime in a learning economy whose functioning is tackled via an Agent-Based Model (ABM). While the structure of our ABM has features in common with those of the New Keynesian canonical modelling framework, we model the individual behaviour of the agents under procedural rationality in the sense of Simon (1971) [Simon, H., The Theory of Problem Solving, in 'IFIP Congress (1)', 1971, pp. 261-277]. Instead of assuming that households and firms fully optimize on an intertemporal basis beforehand, and make use of rational expectations in that respect, we assume that their behaviour is guided by simple rules of thumb – or heuristics – while a continuous learning process governs the evolution of those rules. Departures from the rational expectations equilibrium endogenously arise from that learning behaviour. Finally, the central bank implements an inflation targeting regime via a monetary policy rule. Our aim is then to analyse the interplay between the learning mechanisms operating at the individual level and the features and performances of the inflation targeting regime. In such a setting, we show the prime importance of the credibility of central bank’s announcements regarding macroeconomic stabilization outcomes, as well as the beneficial role played by the inflation target as an anchoring device for private inflation expectations. We also demonstrate the potential welfare cost of imperfect public information and contribute to the debate on optimal monetary policy rule under imperfect common knowledge and uncertainty.

Reducing uncertainty in supplier selection decisions: Antecedents and outcomes of procedural rationality

Supplier selection decisions are characterized by a high degree of uncertainty. We draw upon the behavioral operations management and decision-making literatures to examine factors that lead to the adoption of procedural rationality as a decision strategy. In addition, we emphasize the effect of procedural rationality on decision-makers’ perceived uncertainty and subsequent supplier decision performance. Our structural equation model with cross-country survey data from 461 respondents in the United States and China reveals that (i) organizational, situational, and personal antecedents significantly influence the use of procedural rationality, (ii) procedural rationality is effective in reducing uncertainty in supplier selection decisions, and (iii) the reduction in decision uncertainty improves supplier decision performance. We also emphasize contextual idiosyncrasies between China and the United States.

Virtual screening of imidazole analogs as potential hepatitis C virus NS5B polymerase inhibitors

AbstractHepatitis C virus (HCV) infection is a global health threat and current therapies warrant the need for novel HCV therapies. Several synthetic analogs targeting HCV serine protease and RNA-dependent RNA polymerase have entered clinical development. To investigate the novel HCV NS5B RdRp polymerase inhibitor, screening of a designed data set consisting of benzimidazole analogs by the FlexX docking approach was performed. Binding interactions at the active sites (PDB ID: 2DXS) were evaluated leading to the rationalization of further synthesis and evaluation procedures.

Excess covariance and dynamic instability in a multi-asset model

The presence of excess covariance in financial price returns is an accepted empirical fact: the price dynamics of financial assets tend to be more correlated than their fundamentals would justify. We advance an explanation of this fact based on an intertemporal equilibrium multi-assets model of financial markets with an explicit and endogenous price dynamics. The market is driven by an exogenous stochastic process of dividend yields paid by the assets that we identify as market fundamentals. The model is rather flexible and allows for the coexistence of different trading strategies. The evolution of assets price and traders' wealth is described by a high-dimensional stochastic dynamical system. We identify the equilibria of the model consistent with a baseline assumption of procedural rationality. We show that these equilibria are characterized by excess covariance in prices with respect to the dividend process. Moreover, we show that in equilibrium there is a positive expected marginal profit in choosing more risky portfolios. As a consequence, the evolutionary pressure generates a trend towards more remunerative strategies, which, in turn, increase the variance of prices and the dynamic instability of the system.

Rationality in supplier selection decisions: The effect of the buyer's national task environment

Our study sheds light on two fundamental questions in supply management: First, does adherence to highly rational decision processes help buyers make better supplier selection decisions? Second, is the influence of procedural rationality on decision effectiveness moderated by buyers’ (differently dynamic) task environments? We empirically test these questions using a sample of 150 supplier selection decisions taken in China and 150 decisions taken in Germany, countries that expose buyers to dynamic decision environments and stable decision environments, respectively. Our findings suggest that the influence of decision process rationality is stable across decision makers’ task environments. Both in China and in Germany, such process rationality is positively related with higher decision quality, and no significant differences in relationship strengths emerge between the two country samples.

The Nigeriana Civil Service and Promotion of Sustainable Human Development : A Critical Analysis

The concept of human development in a developing country like Nigeria has consistently posed serious challenges since 1960 to date. The quest for procedural rationality as a basis for organizing and executing government activities has been consistently articulated with respect to the pursuit of public administration in a democratic dispensation. This paper examines the extent to which the Nigerian civil service has promoted sustainable human development over the years. This entails focusing on the theoretical examination of sustainable human development as well as the challenges of governance and bureaucracy. Methodologically, this paper is based on documentary analysis of relevant records. The need for the bureaucracy to be effective in promoting sustainable human development is underscored in the paper.

Logic in a Social Setting

AbstractTaking Backward Induction as its running example, this paper explores avenues for a logic of information-driven social action. We use recent results on limit phenomena in knowledge updating and belief revision, procedural rationality, and a ‘Theory of Play’ analyzing how games are played by different agents.

The Self and the Other: Liberalism and Gandhi

This paper makes an attempt to philosophically re-construct what I have termed as a fundamental paradox at the heart of deontological liberalism. It is argued that liberalism attempts to create the possibilities of rational consensus and of bringing people together socially and politically by developing methodologies which overcome the divisive nature of essentially parochial substantive conceptions of the good. Such methodologies relying on the supposed universally valid dictates of reason and notions of procedural rationality proceed by disengaging men from the divisive particularities of their plural value contexts. That disengagement is sought to be achieved by conceptualizing the individual as self sufficient in her moral and epistemic being thereby conceptually isolating individual man from the other. The liberal effort to create rational consensus which can bring people together then gets off the ground by isolating the individual from the other. This I have termed as the paradox of the self and the other or alternatively the paradox of social atomism and universalism. As a possible philosophical alternative this paper makes an attempt to re-construct Gandhi’s conceptualization of the relationship between swaraj as self rule and Satyagraha as non-violent resistance. This Gandhian connection, it is argued, has the potential to transform the moral psychology of our response to the other, thereby posing a challenge to the modern, predominantly liberal, conceptualization of such a response.

Antecedents and Consequences of Reflexivity in New Product Idea Screening*

Pre‐development activities, such as new product idea screening, are considered to play an important role in innovation success. At the screening stage, a management team evaluates new product and service ideas and makes a first go/no‐go decision under high levels of uncertainty and ambiguity. Paying more attention to the decision‐making process in the screening stage appears important because too rigorous a use of rigid evaluation criteria and inflexible methods have been shown to have an adverse effect on market performance of novel products. The present study proposes and tests a model of team‐level antecedents and consequences of reflexivity—the explicit evaluation and discussion of working methods, tools, and criteria within a team. Recently, researchers have proposed that cognitive style and leadership style are major antecedents of decision‐making performance. This study posits that reflexivity offers an explanation of how transformational leadership and cognitive style can eventually affect decision‐making performance in the context of new product idea screening. Results of a survey among 126 top managers from large international firms show that the positive effects of transformational leadership and procedural rationality on the effectiveness and efficiency of screening decision making are largely mediated by reflexivity at the team level. This suggests that screening teams can improve their decision making in the following ways: committee chairs are advised to stimulate openness, develop a stop‐and‐think attitude among screening committee members, and support argument‐based discussion in order to adapt available decision tools, models, and checklists whenever needed. The paper concludes with implications, limitations of the study, and suggestions for further research.

International Economic Institutions, Institutional Complementarities and Institutionalized Linkages. The International Trade Case

This paper analyses the forces at the base of the formation processes of international economic institutions following the fundamental New Institutional Economics (NIE) approach. In particular, the paper assumes that new international economic institutions respond to a principle of procedural rationality. This principle indicates that the formation of institutions takes place in an environment dominated by the bounded rationality of agents that produce institutions based on procedural knowledge accumulated over time. Particular attention is dedicated to the relationship between institutional innovation and economic growth. Specialized institutions stem from this relation, on par with the real economy, and generate more and more complex institutional systems. Within the institutionalist approach to the formation of institutions, the paper highlights Aoki's concepts on "institutionalized linkages" and "institutional complementarity"; these concepts are then correlated to Schelling's "strategy decomposition" concept; subsequently the forces that lead to institutional changes (Aoki and North) are analyzed. Specifically, in light of North's approach, conditions are analyzed that determine changes in institutions governing international trade relations deriving from changes in some structural dimensions such as relative price systems. These changes are possible since governments can renegotiate original agreements giving rise to compensations.

On the decennium of penal order procedure in Serbia

In this paper, the author defines the notion and explains the penal order procedure and its general characteristics. It is one of the special simplified criminal proceedings, which has got special basis and special structure. This procedural form is ultimately aimed at the rationalization of the criminal procedure. It is achieved by avoiding the main hearing in the trial proceeding. The author presents the evolution of the penal order in Serbia from 2001 to 2011. He points to some legal innovations in this field during that decennium. He compares old and new legal provisions about penal order and finds some differences. There is a constant tendency to expanding the area of criminal offences which can be judged in this procedural form. New legal provisions are, in general, better than previous. However, the practice has shown that application of penal order is too small. The previous practice does not live up to expectations of theory and legislator.

Innovation as an Emerging System Property: An Agent Based Simulation Model

The paper elaborates the notion of innovation as an emerging property of complex system dynamics and presents an agent-based simulation model (ABM) of an economy where systemic knowledge interactions among heterogeneous agents are crucial for the recombinant generation of new technological knowledge and the introduction of innovations. In this approach the organization of the system plays a crucial role in assessing the chances of individual firms to actually introduce innovations because it qualifies the access to external knowledge, an indispensable input, together with internal learning and research activities, into the recombinant generation of new knowledge. The introduction of innovations is analyzed as the result of systemic knowledge interactions among myopic agents that are credited with an extended procedural rationality that includes forms of creative reaction. The creative reaction of agents may lead to the introduction of productivity enhancing innovations. This takes place only when the structural, organizational and institutional characteristics of the system are such that agents, reacting to out-of-equilibrium conditions, can actually take advantage of external knowledge available within the innovation system into which they are embedded to generate new technological knowledge. The ABM enables one to explore effects of alternative organizational features of the systems, namely different configurations of the intellectual property right regimes and different architectural configurations of the regional structure into which knowledge interactions take place, on the rates of introduction of technological innovations. The results of the ABM suggest that the dissemination of knowledge favors the emergence of creative reactions and hence faster rates of introduction of technological innovations.

Perceived procedural rationality and political behaviours in strategic decision making process and organizational commitment triangle

Effectiveness of a strategic decision is characterized with the strategic decision making process behind it. To follow a rational process; looking for and analyzing relevant information extensively; giving adequate importance to analytic techniques and focusing on crucial information rather than irrelevant ones should be realized. To protect the process from political behaviours; decision makers should primarily be concerned with organizational goals and open with each other about their interests and preferences; make negotiation among group members and should not effect the decision with their own power and influence. Today's universities are not only expected to research and teach; but also make their own strategic plans for future. With these expectations, considering the fact that strategic decision making process determine not only the final decisions; but also effect the people for whom decisions are; a relation between perceived procedural rationality, political behaviours and organizational commitment were hypothesized. The study was conducted with 150 academicians and data were analyzed with regression analyze.