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Rational Choice Theory

Rational Choice Theory

One main stream of organisational science is the Rational Choice Theory (D. C. North). It assumes that human actors in organisations make decisions which rest upon firm alternatives. Furthermore, the assumption is that these actors have a clear picture about what consequences their decisions will probably have, and that the actors will principally decide for that alternative, which promises them the greatest benefit. It, therefore, contradicts, in practically every regard, the considerations on which this portal rests. Some of the criticisms are named here, though they have not been presented in a thoroughly argued way:

Neither can the approaching alternatives, which come into question, be determined (where does the information come from?), nor are the effects of decisions known (the future is unknown!),
nor do the actors know the benefits
nor do the actors know if the imagined benefits satisfy them
nor are actors homogenous and free of ambivalence.
In addition, it ignores that there are numerous circular causalities between the framework conditions of the decisions (of whatever kind they may be) and the actors and,
one makes a one-sided assumption of rationality as a basis for actors’ decisions and
neglects emotions and unconscious motivation.
The possibilities of irrational consequences of rational considerations are only taken into account peripherally.
Finally, the everyday experience contradicts the foundations of this theory (see the research regarding ’limited rationality’).