An Evolutionary and Institutional View of the Behavior of Public and Private Companies

Abstract

This paper reports on an extensive study designed to explain the variations both within and among three public and three private electric utilities in their impact on environmental quality. The more general purpose is to demonstrate the value of a disaggregated model of the behavior of an organization based on the intendedly rational, but imperfect, choices of its individual members. The analysis focuses on what determines the opportunity sets, objectives, and beliefs of those members and on how the organization aggregates their choices into corporate patterns of action. Internal features of the organization-such as how tasks and authority are divided, information processed, and individuals recruited and rewarded-are thus potentially important explanatory variables, provided (as is often the case) that external pressures and constraints are not perfectly coercive. This conceptual framework would appear to be applicable to a wide variety of public, private, and nonprofit organizations, while generating a number of the better known models of firm behavior as special cases. It is designed both to provide a framework for constructing explanations of particular past events and to give rise to testable generalizations about the behavior of organizations-particularly ones that might be useful for policy purposes. This necessarily brief paper presents only the general arguments and results, with illustrations from the case material. Since the case studies suggested much of the theoretical analysis, they do not provide strictly independent support for the propositions to be presented. (For a full account see Roberts 1975.)