MANAGERIAL ACTION IN AN ORGANIZATIONAL CONTEXT: THE NEED FOR MULTI-CRITERIA DECISION-MAKING IN AN ORGANIZATIONAL CONTEXT

Managerial action in an organizational context: the need for multi-criteria decision-making in an organizational context In the last few years (or perhaps decades), there has been an overemphasis in management in the short-run, financial variables, often at the expense of other, non-quantitative and non-financial variables that affect the long run. This overemphasis is at the origin of most of the scandals we have had, mainly through incentive systems based on these quantitative variables, disregarding the others of a more qualitative nature except perhaps through crude measurements of such variables. Quarterly earnings have been only too often the main guide by the investors in the Stock Exchange to company valuation; and management accounting techniques like balanced scorecards have cooperated in the direction of obtaining tangible, measurable results in the short run. In essence, this has to do with the fact that economic theory has invaded the management camp and imposed its values and assumptions. Two basic assumptions of economic theory are particularly important: self interest (enlightened or not), and unbounded rationality. These assumptions, when applied to th