This alternative to a rational or consensus model springs from two very different fields. The first, ambiguity theory, centers on the disconnectedness of ends and means and assumes inherent ambiguity in the effort to make any choice. March and Olsen (1976) explain:
In a situation involving unknown or contradictory goals and technologies, as well as one in which individuals may differ in their levels of participation over time, according to March and Olsen, choice comes with difficulty because the actors seldom realize their preferences until they have made choices. Or, as Weick would put it (1980, p. 19), âHow can I know what I think until I see what I say?â
Social Construction Theory
A second source for this alternative comes from a field of thought that emphasizes the relativity of meaning, a field that focuses on the social construction of reality (Berger and Luckmann, 1966; Goffman, 1961, 1974). This field argues that every organization, being in essence a social assemblage somewhere between evanescence and permanence, embodies a set of shared views of the world that give meaning to what organization members do. These views, or âinterpretations of reality,â build and gain legitimacy through the individualsâ interaction with each other. Moreover, the existence of interpretations belies the notion that there exists an objective reality shared by all organizations.
The alternative idea we argue in this book holds that interpretation forces out ambiguity. That is, the greater the number of different, constructed realities, the greater the uncertainty that exists among and within organizations. For practical problems of management, the greater the uncertainty, the less likely management prescriptionsâprogram budgeting, accrual accounting, or legislative postauditingâhave any real applicability. Not agreeing about what a budget, accounting, or auditing system means or should do, financial managers employ procedures that are loosely coupled to any one view of reality (Weick, 1976).
As a result, the greater the compounding of differences among views in a group of individuals having some collective interest, such as an organization or a government, the greater the influence of randomnessâin terms of events and specific people shaping meaningâand the larger the amount of interpretation needed by members to make sense and to act in a concerted way (Weick, 1979). Thus, it is in the interest of a financial manager to find a role that makes for gate keeping within this randomness. In one organization, for example, the finance officer may be an umpire among competing advocates, in another the guardian of the public purse which is under great pressure, and in still another, the prime institutional memory for past decisions made.
Moreover, the members of different organizations may develop different meanings for instruments of financial management, such as the budget. Among them we might find the budget is an analytical exercise, a pointless ritual, or the satisfaction of a mandate created somewhere else. In all cases, the set of roles and shared meanings are contextual, and therefore unique, belonging as they do to the particular actors who negotiated or constructed them there.
As a tool for research, the importance of the alternative way of looking at government budgeting, finance, and financial management lies in the perspective it provides on the ways we think. Emerging paradigmsâambiguity or social constructionâcould describe reality or predict behavior in ways that contrast with either orthodox or prevailing approaches.
All other views of finance decision making depend for their explanatory power on relatively large amounts of consensus about organization goals and technologies. Many research journals have published many articles that counted phenomena that exist or probably exist. Many, if not all, of the counts rest on a survey of opinion, a construction. Even more important, the questionerâs construction probably differs from the respondentâs in many, if not all, of the surveys. This consensus condition may not exist in many organizations, particularly public or governmental ones, and this alternative approach asks why and how. This alternative approach to research also seeks the fundamental, intersubjectively determined premises that make collective action possible.
A second difference among consensus-assumed and interpretive concepts exists in the assumption each holds about intention. The orthodox study of government budgeting and finance has followed a fairly simple route; public finance, political economy, and budget execution have held to the notion of rational actor.
Ideas based on Simonâs notion of bounded rationality (1947), suggest the prevalence of uncertainty and the impossibility of an entirely rational actor. That is, individuals cannot know with certainty the consequences of given courses of action. Instead, courses of action are chosen when just enough information is available to predict consequences within reasonable tolerances. The rationality of management decision making is bounded by the costs and benefits of searches for satisfactory alternatives. Nevertheless, whether the rational effect of such decision making is more often than not produced, the intent purportedly exists.
âMaking people rationalâ as a basis for management is, moreover, an ideology, others argue (Pfeffer, 1981). Some would say the ideology misuses the individual. The effect of intended rationality is to imply agreement among members of an organization about important ways of acting. Even if it is instrumentally important to gain agreement, assuming that action requires agreement tends to trivialize the basis for organized lifeâto connect too neatly the concept of organization with organized relationships among individuals, effectively subjugating an individual to an abstract concept (McSwain, 1987, p. 37). Organizations, it has been argued (White and McSwain, 1983; Weick, 1979) depend on the building blocks of relationships and the unconscious meanings and interpretations that develop out of them. Re...
