Jukka Luoma

On the importance of behavioral operational research: The case of understanding and communicating about dynamic systems

We point out the need for Behavioral Operational Research (BOR) in advancing the practice of OR. So far, in OR behavioral phenomena have been acknowledged only in behavioral decision theory but behavioral issues are always present when supporting human problem solving by modeling. Behavioral effects can relate to the group interaction and communication when facilitating with OR models as well as to the possibility of procedural mistakes and cognitive biases. As an illustrative example we use well known system dynamics studies related to the understanding of accumulation. We show that one gets completely opposite results depending on the way the phenomenon is described and how the questions are phrased and graphs used. The results suggest that OR processes are highly sensitive to various behavioral effects. As a result, we need to pay attention to the way we communicate about models as they are being increasingly used in addressing important problems like climate change.

What Counts Versus What Can Be Counted: The Complex Interplay of Market Orientation and Marketing Performance Measurement

Market orientation (MO) and marketing performance measurement (MPM) are two of the most widespread strategic marketing concepts among practitioners. However, some have questioned the benefits of extensive investments in MO and MPM. More importantly, little is known about which combinations of MO and MPM are optimal in ensuring high business performance. To address this research gap, the authors analyze a unique data set of 628 firms with a novel method of configurational analysis: fuzzy-set qualitative comparative analysis. In line with prior research, the authors find that MO is an important determinant of business performance. However, to reap its benefits, managers need to complement it with appropriate MPM, the level and focus of which vary across firms. For example, whereas large firms and market leaders generally benefit from comprehensive MPM, small firms may benefit from measuring marketing performance only selectively or by focusing on particular dimensions of marketing performance. The study also finds that many of the highest-performing firms do not follow any of the particular best practices identified.

Acting with systems intelligence: integrating complex responsive processes with the systems perspective

The systems thinking literature assumes that the concept of a system is useful in management and organizational research. Ralph D. Stacey and his collaborators, however, have questioned this. They have presented the theory of complex responsive processes (CRP) as an alternative to systems thinking. We argue that systems thinking and the CRP perspective are complementary. The CRP illuminates many of the micro-behavioural, local interaction and creativity-related organizational phenomena whereas the systems perspective is useful for other purposes. CRP misses the mark in its criticism of systems thinking. The insights of CRP should and could be incorporated, not switched, with the systems perspective. The systems intelligence perspective, proposed by Hämäläinen and Saarinen, provides a framework to accomplish that. By integrating systems thinking and the CRP model we hope to provide a platform from which it is possible to appreciate the relative merits of the two apparently conflicting strands of thought.

Model-based organizational decision making: A behavioral lens

Operational research assumes that organizational decision-making processes can be improved by making them more rigorous and analytical through the application of quantitative and qualitative modeling. However, we have only a limited understanding of how modeling actually affects organizational decision-making behavior, positively or negatively. Drawing from the Carnegie Schools tradition of organizational research, this paper identifies two types of organizational decision-making activities where modeling can be applied: routine decision making and problem solving. These two types of decision-making activities have very different implications for model-based decision support, both in terms of the positive and negative behavioral impacts associated with modeling as well as the criteria used to evaluate models and modeling practices. Overall, the paper offers novel insights that help understand why modeling activities are successful (or not), explains why practitioners adopt some approaches more readily than others and points to new opportunities for empirical research and method development.

Mathematical modeling is more than fitting equations

Comments on the comments made by Brown et al. (see record 2013-24609-001). The article by Brown et al. regarding the Fredrickson and Losada (see record 2005-11834-001) article discussed the use of differential equations in science and repeated our earlier observation (Luoma, Hämäläinen, & Saarinen, 2008) that there is lack of justification for the use of the Lorenz equations in the latter article. In this comment we want to point out that Brown et al. presented a very narrow view on mathematical modeling in behavioral research. We describe how the conceptual use of mathematical models is essential in many fields.

The effect of environmental feedback mechanisms on competitive activity in emerging industries

The goal of this study is to fill the important gap of understanding when and why firms take competitive actions emerging industry contexts. We focus on how different environmental feedback mechanisms in combination trigger competitive actions, by studying the product launch activities of competing firms in the Finnish mutual fund industry during its emergence phase (1997- 2009). We use a configurational analysis method, which shows that the drivers of competitive interaction are different, and sometimes opposite than what competitive dynamics researchers have discovered in mature industries. Firms are likely to increase their competitive activity in response to rival firms’ competitive activity if its past performance is low and prospects of action are positive, but may also act irrespective of or even out-of-sync with rivals when demand-side cues provide sufficient motivation for action. As a whole, the study extends the theory and methodology of a configurational explanation of decision-making about co...