Column by Dr YRK Reddy - HRD Newsletter


………… Now I understand
What you tried to say to me….
How you suffered for your sanity …..
They did not listen, they did not know how
Perhaps they’ll listen now….
Starry, starry night…..

(From the song “Vincent” by Don Maclean)

There are two reasons why Human Resource managers should study the complex subject of “rationality” and read Herbert Simon. One is the context of creative thinking and the other is of change management.

Wall Street Journal of June carried the interesting story of Dr. Umberto Meduri of University of Tennessee whose IQ was questioned in an international conference for canvassing a simplistic solution to a major problem. Dr. Umberto found, albeit by serendipity, that the problem of sepsis and the associated respiratory distress syndrome can be tackled by administering steroids which cost under $50 per dose than the known therapy costing $7000 a dose. In the US sepsis kills 215,000 people annually – more than the combined toll of cancers of the lung and colon. Dr. Umberto was derided and yet there is growing evidence that he may be right. This is all too familiar in history when people had to suffer for their rationality and being more sensible than the world was prepared to accept.

Anaxagorus was charged with impiety, convicted and imprisoned in Athens for teaching that Sun is a “red hot stone” and that the moon was made of earth. Meletus had to suffer for giving meteorological explanations to thunder and lightning rather than the anger of the Sun god, Zeus. Their guru, Socrates himself had to die for having “corrupted” the youth. He was an advocate of a rational vision of the universe and considered the intellectual component of human nature to be the most important, holding reason as the most powerful. He died by drinking hemlock - none of his disciples was prepared to do administer it - saying to the establishment “I would rather die having spoken of my manner, than speak in your manner and live”.

Mohammed Bin Tughlak, is a classic case of suffering from greater sanity, at least on occasions. He had contributed significantly to later years wisdom. He was the first to have enforced that all are equal before law and wouldn’t allow the judge to rise even before the emperor; he had brought even the emperor (himself) to be charged before a court and prosecuted. When he first evolved a “famine code”, it was a bit of a joke, which turned out to be so critical that the British copied it for India and is now extolled as the key historical differential between the devastating African famines and the softer nature of the Indian ones. He created new paths – proving the Spanish proverb that there are no roads; the path you traverse eventually becomes a road!

In public policy, choices are made by the bureaucracy and the politicians based mostly on expediency but with a contrived colour of rationality. The professional/objective approach of maximizing welfare may point to a different choice. But such an alternative is caricatured as impractical, if not more crudely, as irrational or insane. In time, yes-ministry overpowers what could have been more rational and robust – the yardstick of rationality in such a system becomes conformism and acceptability to the power structures than call of duty, professionalism or socio-economic welfare. As time passes, rationality/reason/logic becomes a foreign body as the irrational becomes conveniently rational. That is why irrational structures, activities, systems, procedures, processes continue to thrive. People wail, beat their chests and pull their hair but reforms will not happen.

In the corporate world too we have occasions galore when creative people had to face ignominy, derision and even separation from the services for being creative. With the result we face sunk costs for not pursuing the creative suggestions but doggedly adopting the appealing “quick-fix” solutions, only to come around and accept the creative suggestion, of course, from another more “credible” source.

Take the case of downsizing. For years, we have been saying that the cost-benefit analyses in many “VRS” projects are faulty and there are often better ways of achieving cost controls and greater effectiveness. Yet, some of these corporations have lunged for costly grenade-type VRS despite better alternatives suggested by some of the employees or the unions. Such alternative solutions have been termed as irrational only to be proved otherwise.

Look, also at the case of IT investment for HR, which appeared rational for many organizations. People, were criticized as obstructionists for pleading for a more iterative approach. There is increasing evidence now that the returns have been poor due to under integration of HR systems with the computer capabilities, which leads us to reiterate that HR reengineering must precede IT investments.

The challenge for HR managers, of course, is to know as to what is rational or otherwise. Henry Miller had said that confusion is an order that is not understood – irrationality, at times, can be just that. At the same time, all irrational suggestions would not obviously be shining stars. As some of the seemingly irrational solutions and suggestions can turn out to be rational, there must be a sieving process of debate, reasoning and dynamic logic. The HR function has a role to play in ensuring that the company has a culture of such egalitarianism in which irrationality is stoked at the idea stage before putting it through a sieving process to bring out workable ideas. Do incubation strategies combined with a culture of learning help, so that people know how to listen and not let creative geniuses suffer for their sanity and rationality? Does action learning with the help of “set-advisors” be of use? What do companies that thrive on creative ideas (like the 3M ) do to ensure that there is adequate dose of “irrationality”? Will greater openness to stakeholders, systems thinking and learning strategies help in being more rational?

Human Resources Management assumes that people are rational in their behaviour and construct strategies, systems, and policies on this premise. It has hardly been able to resolve the definitional issues and dynamics of rationality. Rationality is a complex subject and transcends philosophy, linguistics, psychology, anthropology, and in recent decades economics as well. For the practitioner it has a lot to do with change management, which is actually a fight against what is believed as more rational.

Rationality can never be objective as it is usually founded on an architecture of belief systems and entrenched interests. Often, the definition of rationality is limited by a state of self-fulfilling prophecies and self-interest. In the end, the architecture of belief systems feeding on entrenched interests construct a warped framework of rationality. Hence, rationality is indeed “bounded”, as Herbert Simon had written years ago. (Though Peter Senge did not argue the Fifth Discipline from the perspective of rationality, it is obvious he was referring to it when he talks of “mental models” and the need for meta-noia and systems thinking. The foundations of the bounded rationality are also in the argument of Kurt Godel`s Incompleteness Theorem of the 1930s.)

Herbert Simon has made tremendous contribution to the HR field and yet his pioneering work on bounded rationality seems to have bypassed the HR discipline. Herbert Simon, a political scientist to start with, had worked and written extensively in areas of municipality, public administration, personnel management, industrial relations, econometrics, microeconomics as well as psychology. In his wide range of work, the outstanding contribution for which he eventually received the Noble prize in economics in 1978, was on “bounded rationality”.

Herbert Simon wrote about this first in 1957 while debating the psychology of man, drawing upon earlier works by Anderson and others. Simons work has been influencing greatly studies of behaviors not only in organizations but also more importantly, in the capital markets.

The idea of bounded rationality was that not every individual is an open system of rationality but is bounded in several ways and limited in the framework of his construction of rationality. Consequently, when all individuals are so bounded by rationality, we have patterns emerging in all behaviors, which indeed are bundles of bounded rationality. Often, these may result in bundles of irrationality that might affect welfare at large.

With the IT technology taking charge of communications, perspectives, and persuasions we now have a prospect of individual boundaries of rationality getting expanded to make them more rational for a larger set of people. Yet the downside is that the same medium can influence definitions of rationality adversely by the very same entrenched interests that the society should be fighting against. This, indeed is the specter of Aldous Huxleys call for Habeas Mentum (freedom of the mind) in his Brave New World.

HR profession has to face the forces that influence and manage the constructs of rationality among the employees – this becomes critical for encouraging creativity as also managing change dynamically. However, some believe that rationality and HR managers are a world apart as HR managers thrive on manipulating perceptions, situations, and people and fight continuously against rationality. If this view is not actually cynicism, then HR managers must strive even harder to grasp the entirety of rationality. A study of rationality will ensure hopefully that the HR manager is saner than the rest to be able to manage the madness – Is this a sane assumption at all, I wonder?

July, 2002 Issue

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