Rules are broadly adaptive, but there is no guarantee that they reflect optimal, or even acceptable, solutions when new problems arise (Altman, 1971; Watney, 1974). Some activities reflect professional standards or traditions rather than an organization’s specific work situation (Rohr, 1981). Sometimes a routine that has developed historically continues to be used even when more useful routines are known to exist (Baran et al., 1980). Sometimes a rule is insensitive to situational factors (Argote, 1981). Sometimes existing rules make risky or novel projects difficult (Chakrabarti and Rubenstein, 1976). Furthermore, appropriate rules are not always followed. Individuals do not always know their organization’s routines accurately (Sproull, 1981b), nor do they always observe them (Ellsberg, 1972; Britan, 1979; O’Reilly and Weitz, 1980; Sproull, 198 1b). Managers sometimes do not correctly perceive the environment, and thus select the wrong rule (Wohlstetter, 1962; Starbuck et al., 1978; Perrow, 1981), and they sometimes fail to set the goals required for rules to function (Mowery et al., 1980; Lowenthal, 1981).

Although rules and routines are stable in the short run, they change.4 When rules change, the change is likely to be local to the problem area (Cyert and March, 1963; Perrow, 1981) and not rationalized with the rest of the organization’s procedures (Hall, 1976).

The most obvious organizational rules are those associated with budgets, which represent plans and agreements. Organizations use budgets and rules about them to manage expenditures. They can be made somewhat flexible and somewhat contingent on uncertain future events, such as revenues, and they may be renegotiated to some degree, but budgets function as routines for delegating expenditure authority. They are rarely underspent, relatively rarely overspent by much.

Expenditures that can be fit into a current budget require less organizational consultation and approval than those that cannot. As a result, the real availability of funds for a project in an organization depends on such things as the stage of the budget cycle, the departmental location of the project, and the amount of slack in the budget. Many organizational investments relevant to energy consumption involve asking whether there is money in the budget for the project, rather than what its return on investment or payback period might be.

Other relevant rules for understanding organizational behavior with respect to energy efficiency are accounting rules and rules of architectural and engineering design. Decisions on capital investment, including investment in energy-efficient equipment, depend on an assessment of the relative value of alternative investment opportunities, and that assessment follows standard accounting procedures for determining and allocating costs and returns. For example, the relations among initial capital costs, costs of maintenance, and costs of operation in the accounting of project costs can be important to a decision. So-called life-cycle accounting, in

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