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2.4. Ideology and practice in business
Most fields of human activity are subject to opposing tensions, but business may be one of the most pregnant ones in this regard. This is visible already at the level of management science in general, in which the image of the rational human being, trying to maximize utility by rational, often mathematical tools of decision making, is presented as icon of the good entrepreneur, the one we should all aim for, at least when properly educated. There are few books in economics that do not start with that mantra, and then describe what to do exactly to reach that goal. The more complex the environment, the more complex the theory, sometimes literally, using complexity theory as model, rather than simple linear equations. This view on business-life, and human decision making in general we might say, has been shaken tremendously by the emergence, the last few decades, of something called 'behavioral economics’, or a way of looking at economic behavior froma more 'descriptive' standpoint, or trying to see what people actually do' rather than say what they should do, “prescriptive', and then find out that they don't do exactly what they say, or do not walk their talk. The factor that probably most contributed to this shift in perspective was the fact that a psychologist, namely Daniel Kahneman, was awarded the Nobel prize in economics in 2002, for his thorough research of human decision making, indicating that we use a lot of heuristics and biases in our understanding of the world, and by implication also in our decision making. Besides in many articles, most notably in one he wrote together with Tversky (e.g., Kahneman and Tversky, 1979), this has recently been written down in a persuasive book, called “Thinking fast and slow” (Kahneman, 2012), that even won several popular prizes. The fascinating thing, however, looking back at this shift from prescriptive to descriptive, is that economics actually started as what was called 'a moral science', or one that has to do with human affairs in all its aspects, not only mathematical modeling of rational decision making, but also ethics, politics, etc., and even religion. It is no coincidence that even the University at which this book will be presented started as a school in economics with the explicit purpose to educate managers for industry and public affairs in a Christian, mainly Catholic tradition, reason for which there was so much philosophy in the curriculum. This has changed over time, philosophy became replaced by mathematics, but is coming back in now via the route of behavioral economics. The dilemma of norms and practice was voiced very eloquently by one of the leading psychologists in the field of organizations, who recently died, the Harvard psychologist Chris Argyris (1987), who coined the term "espoused theory", and contrasted this with "theory in use", or the difference, even in science, between the ideological and the practical. This tension has even increased over time, mainly as a result of globalization, and the open door properties of social media. Over the years, various inspection panels, in banks, or major industries, even small industries, have sprouted like mushrooms, and have more than ever created a kind of transparency culture, not only critical for getting permission to stay in business', but also for reputation management in the unforgiving market. This is very nicely described in a recent dissertation, defended at Tilburg University, entitled “Policing the World: Accountability Mechanisms for Multilateral Financial Institutions and Private Financial Institutions” (van Putten, M., 2006). The author, Maartje van Putten, was for several years member of the European
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