THE NEW BEHAVIORISM - A CRITIQUE OF ECONOMICS AND ORGANIZATION

This paper examines the ''new institutional economics'' approach to organizational analysis. Whilst acknowledging the benefits of the approach, especially in micro analysis, the paper discusses five areas of difficulty: the fundamental concepts of transaction and bounded rationality; the inadequate treatment of power relations; the over-simplified treatment of norms and values; the ahistorical treatment of organizational context; and the problematic status of functional explanations. The paper argues instead for an interest-interdependence approach, building upon the work of Blau and more recently Coleman.