A Behavioral Theory of the Firm

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Summary: Selected quotations
Review: We start with the simple conception that an organizational decision is the execution of a choice made in terms of objectives from among a set of alternatives on the basis of available information. This leads to the examination of how orgnizational objectives are formed, how strategies are evolved, and how decisions are reached within those strategies." (Pg 19)

Major subtheories for a behavioral theory of the firm: theories of organizational goals, org expectations, org choice and org. control.

Conception of organization: "It is a coalition of individuals, some of them organized into subcoalitions."... " any theory of organizational goals must deal succesfully with the obvious potential for internal goal conflict inherent in a colalition of diverse individuals and groups" (Pg 27)

The goal formation process for a coalition:
1.- bargaining process by which the composition and general terms of the coalition are fixed
2.- the internal organizational proceses of control by which objectives are stabilized and elaborated
3.- the proecess of adjustement to esperience by which coalition agreements are altered in responseto environmental changes.

" We have argued that the goals of a business firm are a series of more or less independent constraints imposed on the organization through a process of bargaining among potential coalition members and elaborated over time in response to short time pressures. Goals arise in such a form because the firm is, in fact, a coalition of participants with disparate demands, changing foci of attention, and limited ability to attend to all organization problems simultaneously" (pg 43)