Doctoral dissertation (article) (G5)

Heuristics and biases in organizing : conceptual tools for examinations of cognitive biases in organizational routines

List of AuthorsPalmunen Lauri-Matti

PublisherUniversity of Turku. Turku School of Economics.


Publication year2019




Self-archived copy’s web address


rationality of judgment and decision-making processes has a long pedigree as a
central topic in organization studies. Traditionally, organization studies have
depicted human rationality as bounded and studied the relationship between boundedly
rational individuals and the internal organizational environment. However,
recent analyses of the bounded rationality concept suggest it is sometimes used
imprecisely, which undermines those organizational theories that build upon it.
Further, recent analyses propose the need for renewing the relationship between
an individual’s bounded rationality and the structure of the internal organizational
environment by using contemporary concepts such as heuristics, cognitive
biases, and organizational routines.

the main research objective of this dissertation is to identify potential entry
points of how to conceptually link heuristics and biases to such features of an
internal organizational environment as organizational routines. I seek to
achieve this main research objective by using a non-empirical research
strategy, which means that I choose to service and refine academic tools
instead of applying them in some empirical context. The main research objective
is achieved through a cumulative effort that is presented in two parts. Part I
introduces the academic tools that have helped me to create and achieve more
detailed research objectives, which are discussed in Part II in the form of
three essays.

three essays demonstrate the following findings. Essay 1 presents a taxonomy that
clarifies the conceptual ambiguity related to bounded rationality and its three
contemporary descendants: heuristics and biases (HB), natural decision making
(NDM), and fast and frugal (FF) theories. Essay 2 presents a categorization of
articles that demonstrates how the different antecedents of HB, NDM, and FF
theories affect both the discipline and the level in which a specific theory is
applied in management and organization studies. Essay 3 presents a model of the
microfoundational dynamics of organizational routines, which creates
possibilities for combining constructs related to HB theory with constructs
related to organizational routines.

three essays contribute to the main research objective in the following ways.
Essay 1 improves the construct clarity of bounded rationality and offers tools
that scholars can use to map and reflect their own conceptualizations of bounded
rationality. Essay 2 demonstrates specific mechanisms that link heuristics and
biases to organizational-level phenomena and provides an initial version of a
theory of organizational-level heuristics and biases. Essay 3 demonstrates how
various structures retain different amounts of endogenous variance in
organizational routines and provides a detailed analysis of the constructs that
relate to the microfoundational view on routines. In aggregate, the
contributions of Essays 1–3 demonstrate how the interaction between an
individual’s decisions and mental models and organizational routines can either
intensify or mitigate the effects of heuristics and biases.

Last updated on 2021-24-06 at 10:49