Premium
Learning to Cooperate: Applying Deming's New Economics and Denzau and North's New Institutional Economics to Improve Interorganizational Systems Thinking
Author(s) -
Denzau Arthur T.,
Minassians Henrik P.,
Roy Ravi K.
Publication year - 2016
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/kykl.12117
Subject(s) - operationalization , agency (philosophy) , interdependence , experiential learning , organizational learning , organizational analysis , institutional economics , organizational theory , economics , knowledge management , public relations , sociology , management , computer science , political science , neoclassical economics , social science , philosophy , pedagogy , epistemology
Summary Public administrators often go about their business blind to how their actions both affect, and are affected by, the activities and processes of agents operating outside their own organizations. In truth, no single agency or department operates in a vacuum or in isolation of other organizational entities. According to world‐renowned leadership and management expert, W. Edwards Deming, a given agency's ability to perform its duties effectively is the result of a myriad of interdependent processes and operations with other organizations. Consequently, effective leaders must develop an understanding of how the departments they oversee both influence, and are at the same time influenced by the outside agencies and organizations upon whom they mutually depend. 1) We draw jointly on W. Edwards Deming's System of Profound Knowledge (SoPK) framework and Arthur T. Denzau and Douglass C. North's (1994) New Institutional Economics (NIE) ‐ based work on Shared Mental Models (SMM) to explore why inter‐agency cooperation tends to be limited in ‘traditional’ organizational environments. 2) Drawing on Denzau and North's SMM, we then suggest how inter‐organizational communication and cooperation can be facilitated via two means of learning—training and experiential. 3) We then apply concepts from Denzau and North's SMM to suggest a modified model of the Nash equilibrium used in game theory. This model is then used to operationalize the learning path to Deming's approach to ‘systems thinking’ (SoPK.) 4) Finally, we provide a real‐world example to illustrate the modified model.