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The Theory of the Business, Falsification and Avoiding Managerial Unawareness

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Author Info
Doron Faran () (Department of Industrial Engineering and Management Ort Braude Academic College of Engineering, Karmiel, Israel)
Abstract

Organizational strategy is based, too often implicitly, on a theory about the organization's environment. Although the falsity of this theory puts the entire strategy at risk, managers are usually unaware of both the theory and the peril. The issue of theory falsification is mostly associated with the philosopher Karl Popper, but unfortunately the management literature identifies with his rival, Thomas Kuhn. The wish to apply Popper's doctrine in the managerial context faces another difficulty – the formation of the theory. Whilst Popper sketches a hierarchical structure of a theoretic system, managers hold a one-tier theory-of-action that harms falsification. An adaptation of the Popperian method for the managerial context is suggested and examined through Action Research. The findings indicate that a careful extraction of an upper-level theory from the theory-of-action and its testing through derivable scenarios enables early falsification, namely before the actions are taken.

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Publisher Info
Article provided by Faculty of Economics in Osijek, Croatia in its journal Interdisciplinary Management Research.

Volume (Year): 5 (2009)
Issue (Month): ()
Pages: 89-101
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Handle: RePEc:osi:journl:v:5:y:2009:p:89-101

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Related research
Keywords: Organizational learning; Philosophy of science; Strategy; Theory-of-action; Unawareness;

Find related papers by JEL classification:
D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General

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  1. David Dequech, 2000. "Fundamental Uncertainty and Ambiguity," Eastern Economic Journal, Eastern Economic Association, vol. 26(1), pages 41-60, Winter. [Downloadable!]
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This page was last updated on 2009-11-19.


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