A Suggested Behavioral Approach to Cost-Benefit Analysis

Whenever problems arise from differences of opinion, there probably exists a lack of understanding of the behavioral situations that contributed to the problems. In his interaction with others, man passes from a level of ignorance to one of awareness and seldom reaches a level of understanding. Without that understanding, however, there is no common premise for resolving problems either with regard to methods or results. Today's executive faces issues that deal not only with the familiar technical business decisions but, more significantly, with related labor, social and environmental responsibilities, and political implications both at home and abroad. Consequently, he must be equipped with the essential tools for analysis of complex behavioral interactions as a requisite to effective application of quantitative techniques. The objective here is to develop a systems approach to behavior by building a common analytical premise. This is done (1) by showing consistency between internal need and environmental resources as determinants of behavior, (2) by establishing values as explanations of these initiating forces, and (3) by then letting these values serve as standards of conduct for man's individual and group personality patterns as end-products of behavior. The basic hypothesis is that a triadic paradigm of unique combinations of need-resource qualities generates corresponding actions and interactions among individuals which are observable in the personalities defined by psychoanalysts. The relationship permits a theoretical classification of behavior patterns for identification, prediction, and resolution of problems within the specific contexts of need and environment that govern man's actions. Through this approach, the manager gains a systematic tool for behavioral analysis on an integrated basis, somewhat like the economic concept of pure competition serving as a reference parameter against which reality becomes a measurable entity. Many salient features had to be condensed in this paper, permitting only a symbolic application of the behavioral theory to cost-benefit analysis of the war in Vietnam. However, present working papers using nonmetric multi-dimensional scaling, factor analyses, and clustering techniques already indicate the applicability of such a behavioral framework.