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A Dynamic Model of Organizational Decision Making: Chemco Revisited Six Years After Bhopal

Author

Listed:
  • Howard Kunreuther

    (Center for Risk Management and Decision Processes, Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

  • Edward H. Bowman

    (Reginald H. Jones Center for Management Policy, Strategy and Organization, Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

Abstract

The authors develop a dynamic model of organization decision making that is motivated by the decision-making process at a multinational chemical firm, given the pseudonym Chemco, that they visited shortly after the Union Carbide explosion in Bhopal, India, and again six years later. Two major decisions were taken by Chemco that could be attributed in large part to the Bhopal disaster: the divestiture of one of its plants and the sale of a business. An analysis of those actions by Chemco underscores the importance of reference points and constraints in influencing organizational choices.

Suggested Citation

  • Howard Kunreuther & Edward H. Bowman, 1997. "A Dynamic Model of Organizational Decision Making: Chemco Revisited Six Years After Bhopal," Organization Science, INFORMS, vol. 8(4), pages 404-413, August.
  • Handle: RePEc:inm:ororsc:v:8:y:1997:i:4:p:404-413
    DOI: 10.1287/orsc.8.4.404
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    Cited by:

    1. Fathallah, Ramzi & Branzei, Oana & Schaan, Jean-Louis, 2018. "No place like home? How EMNCs from hyper turbulent contexts internationalize by sequentially arbitraging rents, values, and scales abroad," Journal of World Business, Elsevier, vol. 53(5), pages 620-631.
    2. Bruce Kogut & Howard Kunreuther, 2001. "Introduction to Focused Issue: Risk, Managers, and Options in Organizations," Organization Science, INFORMS, vol. 12(5), pages 579-581, October.
    3. David Maslach & Oana Branzei & Claus Rerup & Mark J. Zbaracki, 2018. "Noise as Signal in Learning from Rare Events," Organization Science, INFORMS, vol. 29(2), pages 225-246, April.
    4. Sheen S. Levine & Michael J. Prietula & Ann Majchrzak, 2022. "Advice in Crisis: Principles of Organizational and Entrepreneurial Resilience," Journal of Organization Design, Springer;Organizational Design Community, vol. 11(4), pages 145-168, December.

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