I study how organizations work, and how to make them work better. One would think a robust theory of human behavior would be a key element of my theoretical toolkit. Unfortunately, I don’t think I have one yet.

One candidate for such a theory that has enjoyed unwarranted longevity is the so called “rational choice” model – in which goals are exogenous and constant, representations are unbiased even when inaccurate, and choice processes involve maximization. Beginning with Herbert Simon, researchers in the fields of management, economics and psychology have by today accumulated an enormous body of empirical evidence that points to the gross inaccuracies of the rational choice model. So why is it still taught so widely in graduate programs in the social sciences (including management departments)?

The answer is that we do not yet know what to replace it with. There is one clearly specified rational choice model. There are many ways people actually deviate from it. Which one (if indeed there is one) alternative should replace it is unclear. There are just too many degrees of freedom. Every proposed alternative to rational choice can immediately be (and usually is) criticized as being ad hoc.

Evolutionary psychology can help answer that most basic of questions in the social sciences- what goals do we pursue and where do they come from?

This is where evolutionary psychology can come to our rescue. It restricts the space of what is possible in terms of the kinds of goals, belief structures and choice processes that humans have. Not to one each, as the rational choice approach does- but to a plausible (and hopefully, tractable) few. Most importantly, it can also explain why we have these properties.

As a working alternative to the rational choice model, many of us either implicitly or explicitly adopt some variant of the following model (I certainly do): individuals make choices that, in their 
representations, increase the possibility of attaining goals that are currently salient to them. This formulation does not assume constancy of goals, accuracy of representation, or maximization of choice, which makes it seem under-defined. But from evolutionary psychology, we can learn about the set of possible goals, how and when they become salient, and the way we represent the path to their attainment. I routinely include Cosmides and Tooby’s paper1 in my graduate seminars now to help make this point.

Broader influences of evolutionary thinking on the organizational sciences exist as well. Ideas about variation, selection and retention in the domain of business competition have been developed extensively by Michael Hannan and John Freeman, Richard Nelson and Sidney Winter, and Daniel Levinthal. Methodologies, in particular computational agent based modeling and behavioral experiments are another bridge between the fields. I choose to highlight the link that I felt has been somewhat overlooked. I am hopeful that evolutionary psychology can help answer that most basic of questions in the social sciences- what goals do we pursue and where do they come from?

To get your free copy of “This View of Business” [click here]! 

Phanish Puranam

Phanish Puranam

Phanish Puranam is the Roland Berger Professor of Strategy & Organization Design at INSEAD. He obtained his PhD at Penn (Wharton), and was previously professor at London Business School.

Leave a Reply