One obvious implication for energy decision making is that organizations will be attentive to issues of energy efficiency only after they have protected themselves as much as possible from energy dependence. For example, a study of major retail chains showed that chains were more likely to take energy management steps when they believed their energy futures were uncertain and when they lacked trust that government programs would help them (Mills, 1981). Organizations also will be more sensitive to the possibility of a supply cutoff than to price changes. A study of energy conservation among thirty-two firms found that firms in the New York City area, which had experienced acute shortages of natural gas, were significantly more likely to have made investments in energy conserving technologies than were similar firms in the Allentown, Pennsylvania area (Hsu, 1979).

Organizations are also sensitive to energy-related disruptions of business operations. Among retail chains, for example, firms that had experienced shortened hours, employee and customer inconveniences, and other disruptions as a result of energy conditions did more to manage energy in their operations than firms that had not experienced such disruptions (Mills, 1981). Organizations probably will be responsive to energy options that make their own supplies of energy relatively independent of others—for example, the cogeneration of heat and electricity—even if the options are not particularly good in terms of a cost-benefit analysis. As energy costs increase, managers will look for possible mergers or other forms of organizational arrangements that give them greater immediate control over their own supplies. If energy shortages seem likely, they will try to build their inventories and will probably build them to levels that are not justified by standard decision analysis.

Scarcity of Attention

Attention is as scarce a resource in organizations (Simon, 1971, 1973) as it is for individuals. An organization can be viewed as a collection of problems looking for solutions and a collection of solutions looking for problems to which they might be applied. Problems and solutions seek attention from decision makers. It is a commonplace observation that action is more likely in an organization if it can command the attention of high-level managers (Chakrabarti and Rubenstein, 1976; Hsu, 1979). But since decision makers have limited time and capacity for attention, not all alternatives are considered; not all information is gathered; not all available information is considered; not all values are made conscious. So, the process by which attention is allocated is a key part of any decision.

One way attention is allocated is by routines. For example, in developing budget decisions, routines lead organizations to focus on budget base and increment (Kamlet and Mowery, 1980), on estimated revenue (Larkey and



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement