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Decision design and re-ordering preferences: the case of an exploration project in a large firm

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  • Mario Le Glatin

    (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Pascal Le Masson

    (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Benoit Weil

    (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

Abstract

Decision theory has been long applied to project management for risk and uncertainty reduction. Among the foundations, the manager is considered following axioms describing his rationality the most prominent ones being transitivity and independence. The order in preferences is not supposed be reversed yet unknowns events of nature, seen as exogenous, may perturb our understanding of the given situation and may require designing new decisions going against decision theories, hence increasing uncertainty. In this paper we show that in an innovation project management, traditional decision making is not able to grasp expansion and generativity phenomena as a manager senses the unknown and endogenises it. To highlight this phenomenon we use Bayesian Nets with Wald's foundations to sense the reordering preferences in an industrial case and the benefits of designing one's playground and being intransitive. The purpose to contribute to the idea theories studying generative processes (design theory) by opposition to optimisation (decision theory) can help extend the underlying logics of innovation management and untangle the tipping point, the necessity to explore/exploit.

Suggested Citation

  • Mario Le Glatin & Pascal Le Masson & Benoit Weil, 2017. "Decision design and re-ordering preferences: the case of an exploration project in a large firm," Post-Print hal-01529620, HAL.
    • Handle: RePEc:hal:journl:hal-01529620
    Note: View the original document on HAL open archive server: https://hal.science/hal-01529620v2
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    References listed on IDEAS

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    1. Armand Hatchuel, 2001. "Towards Design Theory and Expandable Rationality: The Unfinished Program of Herbert Simon," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 5(3), pages 260-273, September.
    2. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
    3. Armand Hatchuel & Yoram Reich & Pascal Le Masson & Benoit Weil & Akin Kazakçi, 2013. "Beyond Models and Decisions: Situating Design through generative functions," Post-Print hal-01485144, HAL.
    4. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    5. Olga Kokshagina & Pascal Le Masson & Benoit Weil & Patrick Cogez, 2012. "Risk Management strategies in a highly uncertain environment: undesrtanding the role of common unknown," Post-Print hal-00734100, HAL.
    6. Nicola GIOCOLI, 2005. "Modeling Rational Agents The Consistency View Of Rationality And The Changing Image Of Neoclassical Economics," Cahiers d’économie politique / Papers in Political Economy, L'Harmattan, issue 49, pages 177-208.
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    Cited by:

    1. Pierrick Bouffaron & Benoit Weil & Pascal Le Masson & Cédric Denis-Rémis, 2019. "Re-inventing corporate innovation through incubation. The VINCI Leonard case study," Post-Print hal-02321451, HAL.

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    Keywords

    Design Decisions; Design theory; Decision making; Project management; Design management; Théorie de la conception; Décision Bayésienne;
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