Analysis in support of strategic policy making

Policy making involves choice between alternatives in situations that are usually very complex. The process of choice in such situations is not such that a straightforward analytical procedure can be prescribed yielding a uniquely rational solution. However, decision problems arising in policy making situations can be investigated using methods based on recent developments in game and metagame theory. This methodology can form the basis of a rational decision structure of the type envisaged by Diesing that can be incorporated in the day-to-day work of most organizations.     

Voices and values: Linking values with participation in OR/MS in public policy making

It is now widely accepted that public policy development requires both an appreciation of public values and an ability to involve insights from local people. Operational research (OR) has made some contributions to public policy development, and there has been a call to use problem-structuring methods (PSM) in this environment. This growing need for greater use of OR/management science (MS) in policy making is due to its ability to work with insights that are sometimes hard to pin down. This paper presents some research about values and local people's voices in public policy making, which the authors believe present a challenge to OR/MS and to the use of PSM. The paper will describe a framework for understanding values and exploring insights into including local voices in policy making using PSMs. Key to the framework is in the emphasis on differences, rather than similarities, in value priorities. A case study in which local people as well as decisions makers and politicians were engaged in a process to decide the future of a local hospital will be described.     

Multiple criteria decision making for maritime investment policy in the developing countries

This model for multiple criteria decision making enables one to select an optimal investment policy for developing the marine industry in developing countries. The model is composed of: the mathematical model of national economy (LP model) for optimizing an investment scheme under economic and technological constraints; the model of I-O analysis for estimating the change of industrial structures induced by the investment; and the decision making model to which the results of the preceding models are fed back so as to enable the policy planner to select a feasible policy based on his own multiple criteria such as the value of GDP growth rate, international payments, unemployment rate, etc. Due consideration is paid in this study to the role of the marine industries, e.g. shipping and ports, which can be said to be the pivot of economic development in a developing country in connection with its foreign trade policy. A case study is carried out to verify this hypothesis.     

National policy making in a global economy: The case for U.S. economic planning

In 1980 the Joint Economic Committee completed the Special Study on Economic Change. This 20 volume, 3-year project, was premised on the fact that: ‘fundamental economic, social, political, international and technical conditions have changed, and are still changing markedly’. This suggests that conventional wisdom and established economic tools may not be equal to meeting the challenge of making sound policies in the economic sphere. The so-called laws of economics have not been repealed, but all guiding principles presuppose a certain environment of conditions, customs and practices—and when these change, the implementation of new policies and the modes of adjustment have to change also. This paper examines the problem of devising policy instruments for economic management, identifying the facts of the changing economic environment and the main difficulties facing world economic development.     

Two heads are safer than one: Changes in CEO duality and venture failure

We study the dynamics of a major design choice in the governance of ventures: whether to distribute power at the top of the venture between a separate CEO and board chair. We propose that ventures are more likely to combine (separate) their CEO and chair positions when operational performance is poor (strong), demonstrating behavior in line with the threat rigidity thesis. Paradoxically, however, ventures would most benefit from a separate CEO and board chair when operational performance is poor. Empirical analysis of data from the Australian mining industry offers general support for our theory, with some interesting nuances. We discuss the implications of our findings for emerging conversations in the literatures on venture boards, boards of directors, and entrepreneurship.     

Use of risk assessment and life cycle assessment in decision making: a common policy research agenda.

Quantitative risk assessment (RA) and life cycle assessment (LCA) are both analytical tools used to support decision making in environmental management. They have been developed and used by largely separate groups of specialists, and it is worth considering whether there is a common research agenda that may increase the relevance of these tools in decision-making processes. The validity of drawing comparisons between use of the tools is established through examining key aspects of the two approaches for their similarities and differences, including the nature of each approach and contextual and methodological aspects. Six case studies involving use of each approach in public decision making are described and used to draw out concerns about using RA and LCA in this context. The following categories of concern can be distinguished: philosophical approach of the tools; quantitative versus qualitative assessment; stakeholder participation; the nature of the results; and the usefulness of the results in relation to time and financial resource requirements. These can be distilled into a common policy research agenda focusing on: the legitimacy of using tools built on a particular perspective in decision making; recognition and role of value judgments in RA and LCA; treatment of uncertainty and variability; the influence of analytical tools in focusing attention on particular aspects of a decision-making situation; and understandability of the results for nonspecialists. It is concluded that it is time to bring together the experiences of RA and LCA specialists and benefit from cross-fertilization of ideas.     

A marketing plan: like it or not, you already have one

A physician executive dives into the world of marketing and discovers that just coming up with a marketing plan for a group practice can be very pricey.     

Risk and Rationality: Uncovering Heterogeneity in Probability Distortion

It has long been recognized that there is considerable heterogeneity in individual risk taking behavior, but little is known about the distribution of risk taking types. We present a parsimonious characterization of risk taking behavior by estimating a finite mixture model for three different experimental data sets, two Swiss and one Chinese, over a large number of real gains and losses. We find two major types of individuals: In all three data sets, the choices of roughly 80% of the subjects exhibit significant deviations from linear probability weighting of varying strength, consistent with prospect theory. Twenty percent of the subjects weight probabilities near linearly and behave essentially as expected value maximizers. Moreover, individuals are cleanly assigned to one type with probabilities close to unity. The reliability and robustness of our classification suggest using a mix of preference theories in applied economic modeling.     

Book Reviews: The Other Side of Rationality: Desire in the Social System

Public Organization Review -     

RBRVS: old concepts, bad press

As health care finance has changed from a system of cash from patients to third-party reimbursement, a variety of mechanisms have been devised to bring equity to the payment process. The latest payment mechanism for this purpose is the resource-based relative value scale system implemented by Medicare, which is now being adopted by other third-party payers. However, too many payers are pushing for discounts from providers at the point of adoption of the system, thus foiling the equity aspect of the system.     

How (not) to motivate online workers: Two controlled field experiments on leadership in the gig economy

An increasing number of workers participate in online labor markets. In contrast to traditional employment relationships within firms, the interaction between online workers and their employers are short and impersonal, which makes motivating online workers more challenging. We present results from two large-scale controlled field experiments on Amazon Mechanical Turk investigating the effects of monetary rewards and soft leadership techniques on output quantity and quality. In the first study, we investigate the effects of monetary rewards and simple upfront messages (praise or reference points). Monetary rewards increase quantity significantly. Sending simple messages, however, can have a significantly negative effect on quantity. The second study concentrates on the effects of communication based on charismatic leadership techniques. Charismatic communication techniques can also backfire if only a subset of them is used, whereas using a broad set including quantitative goals increases output quantity significantly. Neither intervention had a significant effect on the quality of work.     

Institutional Theory: Employing the Other Side of Rationality in Non-profit Organizations1

The non-profit sector has become increasingly important in diverse economic, political and social environments. It is not clear that we have effectively communicated, to colleagues, students and decision makers, theoretical developments useful for understanding and managing non-profit organizations. This paper discusses the potential implications of institutional theory to the management of one type of non-profit organization, the publicly supported non-profit organization with input-output relationships that are not well understood. We review institutional theory and discuss the implications of institutional theory to the management and evaluation of publicly supported non-profit organizations.     

Informed decision making: the new paradigm

Health care cannot survive in its present form. It is becoming unaffordable for a large share of the country's population. Its quality and effectiveness inexplicably vary between communities and across time. With all these problems, the process of health care can be understood. All that are needed are good, basic data; its access, management, and analysis; and then presentation of facts and observations. Together, these functions describe the translation of data into information--the field of medical informatics. Information about such management concerns as clinical efficiency (which largely is related to appropriateness and cost-effectiveness) and about the realities of day-to-day medical practice can be used to improve the value of health care. Informed decision making is based solely on confidence that, given the right information and understanding, we can all make the right decisions. The right decisions mean better patient acceptance and satisfaction, a sense of value enhancement by payers, and support of the Hippocratic tradition.     

Ethical decision making: A cross-cultural comparison

The purpose of this study is to compare the ethical decision making of respondents from two different cultures. Perceived organizational support for ethical decision making was also compared. The samples include residents of South Florida, United States of America and Jamaica, West Indies. Respondents were employed full time. Results indicate that for the majority of business dilemmas presented, no significant differences were found. Implications for these findings are discussed.     

Information processing in managerial decision making: A preliminary study

This paper reports the preliminary findings of an exploratory investigation into information processing in a managerial context. The vehicle for testing several research objectives was a laboratory decision-making experiment in which subjects purchased information items and evaluated a set of organizational goals. The methodology included multidimensional statistical methods that hold promise for dealing with the complexity of problems in implementing managerial decision models. Within a specific information-decision scenario, the statistical evidence favorably supports the existence of individual differences in information perception and information selection, and the use of goal preference hierarchies as predictors of information preferences.