Purpose – The problem we are concerned with in understanding modern developments are short-sighted managerial decisions. The question is: What kind of “knowledge” is necessary to support, improve and enable meaningful decisions in an organization? Why and when would it be essential to gain additional knowledge? How could it be provided or processed? Considering that the information society is trusting too much in computational techniques, we analyse the relation between algorithms and actions to be taken in a new way, and argue that we need an enhanced education of managers to improve their decision making towards ecologically sound innovation, and thus sustainability.
Design/methodology/approach – We propose to design a scientifically founded and justified method for a sound understanding of the relation(s) between justifying arguments (leading to decisions), and their relation to reality, i.e., the underlying (unconscious) classifications and categorizations, and the impact they have on handling a complex reality. This method, resting upon research in model theory and systems theory, can be turned into locally applicable heuristics to improve decision making, and impact evaluation. It is a sort of enhanced multidimensional semantics to settle the question: When and why is it impossible to reduce managerial decisions to simple information processing algorithms?
Originality/value – Our methodology puts in evidence that purely economic arguments, which are used to justify decisions, are definitely incomplete. Our approach can also explain how certain disadvantages in the organizational context come about, namely by misuse of algorithms, and suggest what can be done to solve this kind of problems. As a consequence, we argue that we need dynamical and open systems for developing and integrating knowledge, also to support innovation arising from cooperation across organizational boundaries.
Practical implications – The main result will be to show how our analysis of the relation between language, information/knowledge and reality can be applied to support the coming about of good decisions as a basis for ecologically sound and successful innovation, and thus sustainable development of an organization. The proposed new way both of “documenting” knowledge as well as “arguing” within an organization can help to reach not only better decisions but also new ways of understanding the coming about of, for example, economic success, and how to balance the local institutional logics of professionals and the proposed managerial decisions effectively.
Keywords – Ecology of decision-making, Innovation, Complexity, Knowledge management, Institutional logics