ACTS Theory: Extending the Model of Bounded Rationality

Abstract

In this paper we propose an extension to the traditional model of bounded rationality and incorporate the extended model into a theory of organizational behavior. We argue that organizations are collections of tasks and intelligent agents engaged in performing those tasks, both situated within an organizational setting. Organizational behavior is an emergent property of such collections and is constrained by the agent, the task, and the situation. We propose that a unified theory of organizational behavior is possible, but only if agents, tasks, and situations are specified at a sufficient level of detail, and only if that specification embodies both the agents' mental models of the task and social-situation and the task and social-situation. Inattention to relevant details of the agent, task, or situation (and their interactions) may produce misleading results. We describe a candidate theory, ACTS theory, that integrates Agents who are Cognitively-restricted, Task-oriented, and Socially-situated in an interlinked set of representational systems. We suggest that the complexity of the theory warrants its realization and testing in a computational form, and that there exist candidate computational theories of cognitive agents and organizational situations. We illustrate the importance of attending to task and the benefits of multi-point focus on agent cognition, task, and situation using two computational models that take the ACTS perspective, yet are currently only partially sufficient as models that embody a full ACTS theory.

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