Behavioral Operational Research: Theory, Methodology and Practice

412 Pages·2017·9.806 MB·English

by  Martin Kunc, Jonathan Malpass, Leroy White (eds.)

EDITED BY MARTIN KUNC,
JONATHAN MALPASS
AND LEROY WHITE
BEHAVIORAL
OPERATIONAL
RESEARCH
Theory, Methodology
and Practice
Behavioral Operational Research

Martin K unc • Jonathan Malpass • Leroy White
Editors
Behavioral
Operational Research
Theory, Methodology and Practice
Editors
Martin Kunc Leroy White
Warwick Business School Warwick Business School
University of Warwick University of Warwick
Coventry , United Kingdom Coventry , United Kingdom
Jonathan Malpass
BT Technology, Service & Operations
Martlesham Heath , United Kingdom
ISBN 978-1-137-53549-8 ISBN 978-1-137-53551-1 (eBook)
DOI 10.1057/978-1-137-53551-1
Library of Congress Control Number: 2016936719
© Th e Editor(s) (if applicable) and Th e Author(s) 2016
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Introduction to the Book
S tudents in university courses on management often fi nd disciplinary
silos as tall and impregnable as the silos in many corporations. Most
operational research and management science (OR/MS) courses focus
on the ‘physics’ of factories and other systems and teach how to fi nd
optimal policies; people play little role in these models, and where
they appear they are usually assumed to be the perfectly rational, self-
interested maximizers central to economics. At the same time, courses
in organizational behavior, human resources, and leadership focus on
the foibles and failings of humans in social settings, where decisions
are imperfect and biased; learning is slow or absent; people are swayed
by social pressures; and values, norms and emotions play a central role.
In these courses, however, there is little role for the physics of complex
operations. Th e result is contradiction, confusion, and a self-reinforcing
pathology: How often have you been told, ‘Th at’s a marketing problem,’
‘Th at’s an operations problem,’ ‘Th at’s a human resources problem,’ and
‘Whatever you do, don’t bring your personal problems to work’? But we
don’t have marketing problems, operations problems, fi nancial problems
and people problems; we don’t have workplace issues, personal problems
and family problems. We just have problems. We create these boundaries
and impose these categories on the world to simplify its overwhelming
v
vi Introduction to the Book
complexity. Some boundaries are necessary and inevitable. But all too
often, the invisible boundaries in our minds cut off critical feedbacks,
deny us the insights of people with diff erent experience and perspec-
tives, and breed arrogance about our ability to control nature and other
people—and then our problems grow worse.
Fortunately, over the past few decades, scholars in fi elds including
operations management, economics, organizations psychology and oth-
ers have engaged in fruitful and often intense debate over core assump-
tions “such as rationality” and have begun to collaborate fruitfully. New
fi elds integrating these disciplines, such as behavioral economics, behav-
ioral fi nance and behavioral operations, have emerged, and their insights
are being applied by fi rms and governments at the highest levels. Interest
in understanding both human behavior in practice and how to capture it
in models and analysis is growing. Experiments and theory increasingly
recognize aspects of individual behavior such as decision-making heuris-
tics and biases, bounded rationality and misperceptions of feedback, as
well as the ways in which these attributes of human behavior both shape
and are shaped by the physical and institutional systems in which we are
embedded.
Behavioral issues in operations management and OR are especially rel-
evant today. Th e global economic crisis that began in 2007–8 revealed
important interactions among organizational failure, weak policy and
strategy, and our lack of understanding of the ways our organizational
processes and operational systems, from fi nancial markets to global sup-
ply chains, actually operate. Behaviorally realistic models have never been
more important.
Students and practitioners of OR need to understand the implications
of behavioral OR. How can organizations incorporate behavioral factors
to model the impact of an intervention? What are the implications for
models and management if the all-too-human people in organizations
use decision-making shortcuts and heuristics and suff er from biases?
What are the implications of behavioral issues for the OR toolkit and
training?
Th is book, B ehavioral Operational Research, is a timely look at behav-
ioral matters in organizational life. Th e book does not promote behav-
Introduction to the Book vii
ioral OR as a magic potion for today’s organizational ills. Instead,
the book surveys critical current issues that researchers, students and
practitioners are tackling as they break down the silos across disciplines
and integrate models of processes and systems with realistic assumptions
about the behavior of the people who work in, manage and design those
systems.
John Sterman
Jay W. Forrester Professor of Management,
MIT Sloan School of Management,
Massachusetts Institute of Technology,
Cambridge, MA, USA

Prefa ce
Th is book is a collection of articles on Behavioral Operational Research.
It arose from a number of events and conferences highlighting a resur-
gence of interest in Operational Research (OR) and the behavioral sci-
ences. It was clear from these events that behavior, its representation in
models and its eff ects on how users respond to models, is attracting the
attention of OR researchers and practitioners. Th is current growth in
interest, in our view, also stems from the long observed gap in behavioral
issues in a wide sense, coupled with the emergence of a set of methods
that promise the potential of being able to address behavioral concerns.
While the fi eld of OR has been aware of the relevance of behavioral issues
for a long time now, it might be said to have danced around them. So,
the interest in behavior is not new, nor does the resurgence of interest
represent a “revolution”. What may be novel is the emergence of a set of
ideas and methods from other areas, such as economics and psychology,
that may allow a more rigorous approach to addressing behavioral issues
within the OR fi eld, perhaps with more focus on the use of laboratory
and fi eld experiments of individual and team decision-making. In par-
ticular, based on related concerns in economics and psychology, we are
witnessing developments in the fi eld as being shaped through the integra-
tion of insights from psychological research into OR theory and meth-
ods, especially concerning human judgment and decision-making under
uncertainty and establishing more experimental approaches as a tool in
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