Strategic Management: Formulation and Implementation

Cyert And March's Behavioural Theory

Cyert and March (1963) argue that the goals of an organization are a compromise between members of a coalition comprising the parties affecting an organization. Therefore, this theory is closely related to stakeholder theory. Cyert and March say that there are essentially five directional pulls to consider:

This theory stresses the perceived importance of the short term, as opposed to the long term, because issues are more tangible and because decisions have to be taken as situations change.

Developing these themes Herbert Simon (1964) makes an important distinction between objectives and constraints. He further contends that one of the main reasons for an organization's collapse is a failure to incorporate the important motivational concerns of key stakeholders.