Self‐ or rule‐based governance: analysis of choice‐making behaviour

Abstract

Purpose

This study seeks to propose self‐governance in organisations based on choice‐making behaviour.

Design/methodology/approach

The paper examines selected literature on the behaviour of choice, moving from the individual as the unit of analysis to the organisation, in order to draw lessons for proper governance. To do so, it refers to a series of three independent studies, namely, of luxury, leadership and the role of luxury in helping to cope with organisational pressure.

Findings

The paper reviews the need for choice (or human logic), exemplified by the Theta and Lambda worldviews, and the difficulties in its proper implementation. A study into luxury reveals the role of luxury in choice‐making behaviour and the language used for making these choices. These findings are applied to a study into leadership and followed by a third and ongoing study that provides empirical evidence that tension in organisations results, in numerous cases, from an imposed lack of choice because of improper governance. The paper concludes with recommendations for organisational governance.

Research limitations/implications

The claim that conflicts in organisations are based on differences between Theta and Lambda worldviews is based on some empirical evidence only. Criticising governance by rules, the paper does not look in detail into the reasons behind the drive for such a way of governance or how to help change an organisation's governance approach.

Originality/value

The paper introduces the concept of Theta and Lambda worldviews, provides a psychological definition of what luxury is and its importance to organisational life and questions the usefulness of enhanced governance.

Citation

Isaac Mostovicz, E., Kakabadse, N.K. and Kakabadse, A.P. (2010), "Self‐ or rule‐based governance: analysis of choice‐making behaviour", Corporate Governance, Vol. 10 No. 4, pp. 541-557. https://doi.org/10.1108/14720701011069740