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246

abductive reasoning, 124–27, 206–7Abramson, N. R., 180–81acceptable risk, 40–42. See also riskaccident theory system, 89–90accidents. See also organizational

learningdynamic perspective of, 173–74epistemic accidents, 218–19evolution of, 176–77investigation of, 186learning from, 162–63, 170–71normal accidents, 213, 218Normal Accidents Theory (NAT),

164accusatorial approach, 182active errors, 176. See also errorsactive failure pathway, 177adverse effects, common-pool

resources and, 51–52advocacy

devil’s, 86multiple, 86

affective processes, 102African bees, 1–2agency model organization, 134agenda setting, 131–32air defense system procedure, 18–20aircraft carrier, as HRO, 192al Qaeda

asymmetry with US defense system, 13

suicide mission, foreseeability of, 20–24

warnings about, 23–24alarms, code red, 211Allison, G., 95, 135–38Aloha Airlines accident, 218–19ambiguity, uncertainty and, 71–73ambiguity reduction, 209American Airlines (AA)

AA11, timeline of events, 14AA77, timeline of events, 14–17

amplification, of signs, 211analogical reasoning, 74–75analysis, organizational failures in, 116analytic rationality, 113–14analytical model, of organizational

myopia, 6–7anomalies, in space shuttle disasters,

42Ansoff, H. I., 203–4appropriateness, logic of, 113–14appropriators, common-pool resources

and, 51–52Argyris, C., 162–63arrogance. See organizational hubrisArthur Andersen, 78–79, 147, 149–50,

151–52. See also auditing fieldArthur Young & Co., 140Ashraf, N., 98assume the worst, 86auditing field

capacity of control, 140–41companies evaluated by, 155–56concentration of, 151–52control practices and, 142failure levels, 79–80 financial crisis and, 153–59financing activity, 148groups of actors in, 142impartiality and, 78–79independence, problem of, 151–53individual level failure, 142, 143–46,

158interorganizational level failure, 143,

150–54, 158legal disputes and, 151lobbying activity of, 141–42, 153non-auditing activities of, 141,

147–49

Index

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Index 247

organizational level failure, 143, 146–50, 158

public responsibility of, 140reform attempts, 152revenues of, 148role of, 138–40, 142self-discipline and, 151

automatic processes, 102aviation security, as collective good, 80

Bachelard, G., 161–62Bachmann, Ingeborg, 59Baltimore & Ohio (B &O) Railroad

Museum Roundhouse, 169banality of organizational life, 35, 39,

49, 213Barber, E. G., 60Bardach, E., 130Baron, R. M., 123–24Basel Committee on Banking

Supervision, 214Battle of Britain, 53–57Bazerman, M. H., 23, 78, 143, 166–67Bea, R., 196, 198–99, 200bees, African, 1–2behavior, in individual choice, 98–99benefits, overestimation of, 62–63Berger, Sandy, 27–28Betts, R. K., 26, 84–86Bhopal accident, 185bias. See confirmation bias; hindsight

bias; omission bias; self-serving bias

of auditors, 144–46in decision-making process, 146,

157in IBL, 180

The Big Five (auditing field), 78–79‘big picture,’ 29–30Bin Laden, Osama

CIA reports on, 21–22FBI reports on, 28

black swan metaphor, 6, 83, 89–90. See also ‘bolt from the blue’

blame culture, 177–84blame-free systems, 187–88blindness, of leaders, 167–68Bohmer, R. M. J., 209–10, 211Boin, A., 219Boisjoly, Roger, 33

‘bolt from the blue’ description of, 6false alarms and, 84–85military attacks and, 83–84vs. predictable surprises, 77–78

brain imaging experiments, 102Brazil/Brazilian government, 1–2British Petroleum oil spill, 7–8Burger, Warren, 140Burns, T., 68–69Busby, J. S., 163Bush, George W., 22–23

Cabbage, M., 43calculation, errors in, 62–63California Independent System

Operator (CAISO), 202–3Camerer, C. F., 98, 99, 101–2Carl Vinson (US Navy carrier),

190–91, 192case studies. See Challenger space

shuttle disaster; Chernobyl accident; Columbia space shuttle disaster; Easter Island; Enron financial misconduct; Karnaphuli paper mill; military strategy; 9/11 terrorist attack; Parmalat case; Three Mile Island nuclear plant accident; tragedy of the commons

Castro, Fidel, 135–36Central Intelligence Agency (CIA)

information sharing and, 129intelligence integration and, 27terrorist attack signals and, 21–22

centralized/decentralized control, 168–69

Challenger space shuttle disaster blame culture and, 184culture of production in, 42–46decision making in, 33–34, 37foresight myopia in, 8learning from weak signs, 204levels of failure in, 135as manageable event, 216normalization of deviance in, 39–42organizational myopia and, 2post-accident measures, 35pressures on NASA, 34–35safety standard violations, 34structural secrecy in, 46–48






Index248

system myopia in, 48–50technical cause of, 33

change, organizational learning and, 163

change blindness, 106Cheney, Dick, 19Chernobyl accident

foresight myopia in, 8as manageable event, 216organizational behavior in, 185violations in, 175

choice/choices. See also rational choice theory

individual, 98–99restricting flexibility of, 70subjective expected utility and, 97

Choularton, R., 163Christianson, M. K., 169Churchland, P.M., 101–2Ciborra, C., 76–77civic epistemology, 161Clancy, Tom, 206Clarke, L., 72–73Clarke, Richard

on Bin Laden, 22testimony on terrorist threats, 23–24Tom Clancy novels and, 206

Clarke, S., 214Clausewitz, Carl von, 57code red alarms, 211coercion, common-pool resources and,

52–53Coffee, J., 158–59cognitive dissonance, 109cognitive errors. See interpretation,

distortion incognitive frames, 25cognitive overload, 25cognitive path-dependency, 145cognitive processes, 102Cohen, M. D., 103collaboration, benefits from, 130collective goods, 80collective myopia, 12–13collective repression, 94Columbia Accident Investigation

Board (CAIB), 36–37, 43–44, 48Columbia space shuttle disaster

accident/technical cause, 35–36

bureaucratic conflicts and, 117–18CAIB investigation of, 36–37,

43–44, 48Challenger comparisons, 37culture of production in, 42–46failure of foresight in, 38–39framing effects in, 108 hierarchical structures and, 125labeling events, danger of, 112levels of failure in, 135as manageable event, 216normalization of deviance in, 39–42organizational myopia and, 2recovery window in, 209–10structural secrecy in, 46–48system/systemic myopia in, 7–8,

48–50command and control, 195–96commitment, escalation of, 145–46common resources, management of,

52–53common-pool resources, 50–53communication, inadequacy of,

118–19company control, modalities of,

148–49competition, underestimation of, 4–5complexity, organizational, 47–48component focus, 118–19confirmation bias, 104, 109.

See also sloping plane of confirmation

conflict of interest, 157confusion vs. ignorance, 71consequences, logic of, 113–14constraints/restrictions, as positive

myopia, 96consultancy activity, 146–47contingency planning, 75continuity, in strategy implementation,

57–59control

modalities of, 148–49organizational failures in, 120–21

Control Center Management (CCM), 18–20

control panic syndrome, 168–69controlled processes, 102convictions, fallacy of original, 57–59Cook, Michael, 148–49

Challenger space shuttle disaster (cont.)






Index 249

coordination failures in, 116–20models of, 133–34negative, 133organizational, 29problem of, 133–34

coordination neglect, 29, 118crisis, as stage of decline, 167–68cry-wolf phenomenon

devil’s advocacy and, 86at individual/cognitive level, 25–26

Cuban missile crisis, 135–38culture of production, 42–46customs and immigrations services, 27Czarniawska, B., 213–14

Daft, R. L., 70Damasio, A., 99–100danger, underestimation of, 174danger perception, 111–13Davidson, I., 64Day, G. S., 207–8decision making

agenda setting and, 131–32automatic/controlled behaviors in,

110–11bias in, 157Cuban missile crisis example,

135–38deference to expertise and, 199–200distorted interpretations in, 103–7failures in, 121–22forms of rationality in, 115framing in, 103, 107–11garbage can metaphor in, 103in-house rivalries/competition in,

130–31information sharing and, 131in military strategy, 57–59multiple rationalities in, 115neurosciences in, 101–3prospect theory of, 110realistic theory of, 97–98

decoy problem, 173Dekker, S. W. A., 181, 184Deloitte & Touche, 78–79, 148–49,

151–52. See also auditing fieldDelta Air Lines, 4deregulatory policies, 93Desai, V. M., 119

design, system, 202–3deterrence capacity, of legal disputes, 151deviance, normalization of, 39–42,

149–50devil’s advocacy, 86Diablo Canyon nuclear power plant,

190, 193–94Diamond, J., 52–53Dietz, T., 52diffusion of responsibilities, 120–21Digital, 4–5disaster incubation concept, 172disaster myopia, 94disasters

civic epistemology and, 161dynamic perspective of, 173–74response to, 132Turner’s theory of, 174

discounting the future, 105, 144dissolution, as stage of decline, 167–68distortion, in interpretation

change blindness, 106confirmation bias, 104, 109discounting the future, 105egocentrism, 105errors of omission, 107filtering, 104omission bias, 105–6positive illusion, 104, 106–7self-serving bias, 105unintentional blindness, 106wishful thinking, 104

dots, failure to connect, 26–32double-loop learning, 162–63Douglas, M., 68Douhet, Emilio, 54Drabeck, T., 183

Easter Island civilization decline, 12–13deforestation consequences, 10–11European discovery of, 10island location/size, 10stone statues of, 10–11

ecological level analysis, 95economic behavior, 101–2Edmondson, A. C., 165, 209–10, 211egocentrism, 105Electricité de France, 211Elster, J., 96, 98, 99






Index250

emotions, in rational choice, 98–99Enron financial misconduct

Arthur Andersen and, 149–50auditing field reform and, 152, 153as predictable surprise, 78–79systemic myopia and, 7–8

environment, analysis of, 213environment uncertainty, 69–70environmental degradation, 51–52epistemic accidents, 218–19ergodic systems, 64–65Ernst & Young, 78–79, 151–52.

See also auditing fielderrors. See also interpretation,

distortion in; organizational learning

in calculation, 62–63ethic of, 161–62of omission, 107as stage of decline, 167–68vs. violations, 175–76

escalation of commitment, 145–46ethic of errors, 161–62event classification scheme

manageability, 216–19predictability, 215–16

Ewald, F., 67–68exclusivity, organizational, 173executive failure, 6experimentations, 211expertise, deference to, 199–200extrapolation, 74

Fahey, L., 74failure myopia, 168failure of foresight concept, 3–4,

163–64, 174failure of intelligence concept, 163–64failure to connect dots, 26–32failure/failures. See also organizational

failures; organizational learningof imagination, 24–26, 40, 122–26learning from, 162–63preoccupation with, 196

fallacy of original convictions, 57–59fallacy of social redundancy, 121false alarms, 84–85, 116familiarity, pitfalls of, 144fancy, imagination vs., 206“fantasy documents,” 72

fast-and-frugal heuristics, 101fault lines, 93–94Federal Aviation Administration (FAA)

AA77 and, 14–17hijacking protocol of, 18–20as HRO, 190intelligence integration and, 27responsibilities/mission of, 13–14terrorist threat analysis and, 21, 130UA93 and, 17

Federal Bureau of Investigation (FBI) coordination problems of, 119–20failure of imagination in, 26information sharing and, 129intelligence integration and, 27–30Moussaoui memo, 24–25, 28, 31terrorist attack warning by, 22

Federal Emergency Management Agency (FEMA), 132

Federal Reserve System (FED), 88, 105Festinger, L., 109Feynman, Richard, 34Fidelity Investment, 211filtering, 104financial crisis. See also auditing field

black swan theory of, 89–90difficulty of learning from, 170economic theory/opinion on, 89Greenspan on, 88as grey swan, 94neo-institutional view, 90as predictable surprise, 90–94signals approach and, 205

financial risk management, 76–77financial sphere, ICT use in, 76–77Financial Stability Board, 214First World War, 59first-level problem solving, 165Fischhoff, B., 32, 81, 82–83Fitch (rating agency), 138, 140.

See also auditing fieldFligstein, N., 148–49foresight myopia, 8, 217foresightfulness/foresight logic, 76–77fragmentation, of organizational

structures, 117–18frames, information and, 26framing, importance of, 107–11framing effect, 46Freeh, Louis, 29






Index 251

free-ride problem, 51–52Frequentist concept, 66Freud, Sigmund, 183frontline operations, 198fundamental attribution error, 105, 180future

predictability of, 73–77typology of, 75

Galbraith, J. R., 68–69garbage can metaphor, 103Garret, T. A., 132gatekeepers, 139–40, 157.

See also auditing fieldGeneral Motors (GM), 4–5generative organization, 186–87German Strategic Command, in Battle

of Britain, 53–57Giddens, A., 73Gigerenzer, G., 99–100Gilovich, T., 170global housing boom, 90Goldin, Dan, 44Gore Commission

recommendations of, 21USA security threats identified by, 23

Göring, Hermann, 54–58Granovetter, M., 146Grant Thornton, 145–46.

See also auditing fieldGreenspan, Alan, 88Greve, H. R., 129–30grey swan, 94Groeneweg, J., 83group thinking, 121–22guilty actors, removal of, 181–82

Haas, Robert, 4–5, 58Hardin, Garrett, 51–52Hardy, George, 35Harwood, W., 43Heath, C., 29, 118heedful interrelating, 194–95, 199,

200–1Herald of Free Enterprise ferry, 175heuristics, effectiveness of, 100–1hiding hand, principle of, 59–63hierarchical chain, information

handling and, 31hierarchical structures, 125–26

High Reliability Organizations (HROs). See also organizational learning; reliability improvement; surprise prevention

collective mind in, 200–2constructive properties of, 191–92description of, 7examples of, 190–91, 192–94imagination, cultivation of, 205–7management modalities of, 59mindfulness of, 125nearly error-free performance in, 191system design and, 202–3term definition, 190weak signs, detection of, 203–5

High Reliability Theory (HRT), 164–65hijacking

protocol for, 18–20traditional concept of, 24

hindsight bias in black swan events, 6as cognitive mechanism, 4in IBL, 180predictable surprises and, 80–83prediction and, 32

Hirschman, A. O., 60–62, 63Hitler, Adolf, 57Hogarth, R. M., 74homeland defense

air defense system procedure, 18–20al Qaeda suicide mission and, 20–24failure of imagination in, 24–26failure to connect dots, 26–32organization hubris in, 22–23

House Committee on Government Oversight and Government Reform, 88

housing boom, 90hubris. See organizational hubrisThe Hubris Hypothesis of Corporate

Takeovers (Roll), 63human error, in organizational

function logic (OFL), 184–85Hutchins, E., 206–7Hutter, B. M., 181, 182, 189

IBM, 4–5Icarus paradox, 58ICT (Information and Communication

Technologies), 76–77






Index252

ignorance confusion vs., 71errors and, 62–63

imagination cultivation of, 205–7vs. fancy, 206

imagination, failure of at organizational level, 122–26in space shuttle disasters, 40in US defense system, 24–26

impartial spectator, role of, 98–99In Search of Excellence (Peters and

Waterman), 4inactivity, as stage of decline, 167–68inadequate communication, 118–19incubation period, in organizational

learning, 171–74independence, of auditors, 151–53Individual Blame Logic (IBL)

beliefs of, 178–80demonization of errors, 182description of, 7fear of sanctions/legal actions,

181–82organizational politics and, 180–81public opinion and, 184side effects of, 180

individual choice, emotions in, 98–99individual level myopia

accidents in, 176–77framing effects in, 107–11intentional mode, 96interpretation in, 103–7rational choice theory in, 97–103risk/danger perception in, 111–13unintentional mode, 96

in-family events, 40, 112, 135Information and Communication

Technologies (ICT), 76–77information handling, along

hierarchical chain, 31information jealousy, 29, 30–31information overload, 116informational difficulties, 173inquiry logics, 179–78inquisitorial system, 182institutional framework, establishment

of, 70integration, failures in, 116–20intelligence failure concept, 163–64

intelligence work, structural barriers to, 27–28

intentional mode of myopia, 96inter/intra-agency parochialism, 29internal/external realities, 98International Atomic Energy Agency,

214interorganizational field level of

myopia accidents in, 176–77agenda setting and, 131–32collaboration, benefits from, 130control, function of, 128–29Cuban missile crisis example,

135–38differentiation in, 127–28disaster response and, 132interdependence in, 128interpersonal orientation in, 128learning in, 129–30network characteristics, 126–27politics and, 130–31special interest groups, 132–33specialization/coordination

problems, 133–34time, orientation to, 128US defense system case, 129

interorganizational learning, 129–30interorganizational level, description

of, 26–27interpretation, distortion in

change blindness, 106confirmation bias, 104, 109discounting the future, 105egocentrism, 105errors of omission, 107filtering, 104omission bias, 105–6positive illusion, 104, 106–7self-serving bias, 105unintentional blindness, 106wishful thinking, 104

interpretive ambiguity, 25invisible hand, 60‘irrational exuberance,’ 88Italian High Command, 59

Janis, I., 121–22Jasanoff, Sheila, 161joint operations, absence of, 29






Index 253

Jonsson, E., 167–68just culture, 187–88

Kahneman, D., 100–1, 108–9, 110Kaminsky, G. L., 205Karnaphuli paper mill, 60–62Kelman, S., 31Kennedy, John F., 135–36Keohane, R. O., 114Kerr, Warwick, 1–2Keynes, J. M., 66–67“killer” bees, 1–2Kmart, 4Knight, F., 66knowledge, specialist bodies of,

118–19knowledge management, 29–30Kodak, 4KPMG, 78–79, 151–52.

See also auditing field

La Porte, Todd, 190Lægreid, P., 130–31, 133–34Lagadec, P., 20, 219Lampel, J., 170landscape amnesia, Easter Island

civilization and, 12–13languages, specific, 118–19‘large-scale failures of intelligence’

concept, 3–4latent factors, in OFL approaches,

184–85Latent Factors Theory (LFT), 175–77latent failure pathway, 177Lay, Kenneth, 153learning. See organizational learninglearning myopia, 94, 168legal action, fear of, 181–82legal disputes, deterrence capacity of,

151Levi Strauss & Company, 4–5Levinthal, D. A., 168Levitt, Arthur, 152–53Levitt, B., 160, 170Levitt, Theodore, 4–5Lewin, K., 139–40Libuser, C., 195–96limited rationality, 97–98Linate air disaster, 185Lindenberg, S., 110–11

Lizondo, J. S., 205‘lock-in,’ 145Loewenstein, G., 98, 143logic of appropriateness, 113–14logic of consequences, 113–14Lovallo, D., 99Luftwaffe, in Battle of Britain, 53–57Luhmann, N., 162–63

macro-inter-organization myopia, 6–7Madsen, P.M., 119Mahler, J. G., 163Mahler, M., 89–90Makridakis, S., 74Malthus, Thomas, 51manageability, in event classification,

216–19man-made disaster theory, 174Man-Made Disasters (Turner), 171March, J. G.

on ambiguity, 71decision-making mechanisms, 103,

115, 136forms of rationality, 115on learning myopia, 168logics of action, 113–14on networks of power, 133on organizational learning, 160on superstitious learning, 170

market efficiency hypothesis, 88Marketing Myopia (Levitt), 4–5Martin, J., 71Mason, R., 45Merck (pharmaceutical company), 4Merry, A., 180, 182Merton, R. K., 60meso-organizational myopia, 6–7meta-organizations, 214micro-individual level, of myopia, 6–7Milan Court, 145–46military strategy

in Battle of Britain, 53–57‘bolt from the blue’ and, 83–84errors in, 53of Italian High Command, 59strategic decision making in, 57–59

Mill, John Stuart, 83Miller, D. T., 58Milliken, F. J., 37, 69–70, 181mindfulness, restraints on, 124–25






Index254

mindless organizations, 125Mintzberg, H., 73Miranda (Bachmann), 59Misovich, S. J., 123–24Mizruchi, M., 144modality of decision making, 57–59Mohamedou, M. M. O., 22–23Montague, R., 101–2Moody’s (rating agency), 138, 140.

See also auditing fieldMorgan, K. P., 143Morgenstern, O., 97, 103Morrison, E. W., 181Morton Thiokol (manufacturer),

33–35motivational pressures, 111–13Moussaoui, Zacarias, 24–25, 28,

31multiple advocacy, 86mutual coercion, 52–53myopia. See also individual level

myopia; interorganizational field level of myopia; organizational level of myopia; organizational myopia

of learning, 94positive myopia, 59–63term definition, 3

myopic person, 3

Narayanan, V. K., 74National Aeronautics and Space

Administration (NASA). See Challenger space shuttle disaster; Columbia space shuttle disaster

National Commission on Terrorist Attacks (NCTA), 129

National Commission on the Causes of the Financial Crisis in the US (NCCFC), 91–92, 138

National Security Advisor (NSA), 27National Security Council (NSC), 22,

27negative coordination, 133negative events, absence of, 86network model organization, 134neurosciences/neuroeconomics,

101–39/11 Commission report, 20, 31–32,

122–23, 129, 205–6

9/11 terrorist attack agency rivalries and, 119–20air defense system procedure,

18–20asymmetry of forces, 13failure to forecast, 205–6foreseeability of, 20–24hijacking timelines, 18individual/cognitive factors in,

24–26, 32levels of failure in, 135organizational flaws and, 129positive illusions and, 106–7as predictable surprise, 23, 78prediction/prevention and, 130preventive/reactive myopia in, 8recovery window in, 210timeline of events, 14–18US defense organization

responsibility, 13–14Nixon, Richard, 44“noise,” 116non-ergodic systems

characteristics of, 64–65risk/uncertainty in, 65–70uncertainty/ambiguity in, 71–73

non-members, disregard of, 173normal accidents, 213, 218Normal Accidents Theory (NAT), 164normalization of deviance, 39–42,

149–50norms of rationality, abductive

reasoning and, 124North, D., 64, 97, 100North American Aerospace Defense

Command (NORAD), 13–14, 18–20

Northeast Air Defense Sector (NEADS), 13–17

nuclear power plant, as HRO, 193–94

Obstfeld, D., 191–92Olsen, J. P., 103, 133omission bias, 105–6On War (Clausewitz), 57operation integration, 208–9operations, sensitivity to, 197–98organizational attention, 204organizational complexity, 47–48organizational coordination, 29organizational exclusivity, 173






Index 255

organizational failures in analysis, 116in control, 120–21in coordination/integration, 116–20in deciding, 121–22of imagination, 24–26, 40, 122–26

Organizational Function Logic (OFL), 7, 178, 179–78

organizational hubris in homeland defense system, 22–23meaning of, 4–5in military strategy, 58positive myopia and, 63in space shuttle disasters, 45–46of US defense system, 31–32

organizational intelligence, 3–4, 163–64, 171

organizational learning. See also High Reliability Organizations (HROs)

blame shifting and, 170–71change and, 163civic epistemology and, 161as cognitive process, 160control panic syndrome, 168–69double-loop learning, 162–63ethic of errors and, 161–62event probability and, 170HRO approach, 164–65incubation period in, 171–74individual blame logic, 177–84interorganizational, 129–30latent factors in, 175–77learning disabilities, 167NAT approach, 164organizational decline, stages of,

167–68organizational function logic (OFL),

178, 184–88problems vs. errors in, 165–66from rare events, 169–71single-loop learning, 162–63as socially constructed process, 161superstitious learning, 170unlearning, 168

organizational level analysis, 26–27, 95

organizational level of myopia. See also organizational failures

accidents in, 176–77logics of action, 113–14multiple rationalities in, 114–15

routines in, 114organizational myopia.

See also individual level myopia; interorganizational field level of myopia

consequences of, 3–4in failures/disasters, 2levels of, 6–7meaning/mechanisms of, 3range of action, 4recommendations to reduce, 219–20types of, 7–8, 217

organizational planning, 72–73organizational routines, 114organizational theory, 95organizational triangulation, 204–5organizational/interorganizational

factors, 26–32organizations, realization of objectives

in, 114Organizations in Action (Thompson), 68original convictions, fallacy of, 57–59Ostrom, E., 52–53out-family events, 112, 135overestimation of benefits, 62–63overload of information, 116

Palmer, D., 89–90paper mill case study, 60–62Parker, C. F., 25, 32Parmalat case, 145–46, 150parochialism, 26–27, 29partition focus, 118–19passions, in individual choice, 98–99Peirce, Charles Sanders, 83perceived environmental uncertainty,

69–70perception, rigidity of, 173perception of risk, 111–13Perrow, C.

accident theory system of, 89–90on accidents, 170–71, 218on complex interactions, 193on complexity/coupling, 91on disaster responses, 86–87, 132,

213–14on hubris, 22–23on learning process, 164on organizational failures, 115–16on sloping plane of confirmation,

109–10






Index256

personal accountability, 187–88Peters, T. J., 4Pidgeon, N. F., 129, 163–64, 167, 183planning, rational, 72–73police jurisdictions, intelligence

integration and, 27political nature, of organizational life,

130–31Popper, K. R., 83, 161–62Porter, M. N., 76, 126positive illusion, 104, 106–7positive myopia, 59–63, 96Posner, R. A., 126Power, M., 67–68, 133, 142power grid, system design and, 202–3predictability, concept of, 215–16predictable surprise

vs. bolt from the blue, 77–78concept of, 6, 78–80financial crises as, 90–94hindsight bias problem in, 80–83myopia of learning and, 166–679/11 terrorist attack as, 23

prediction, activity of, 73predictive methods, 74–77President’s Daily Brief (PDB), 21–22preventive/reactive myopia, 8, 218PriceWaterhouse-Coopers, 78–79, 148,

151–52. See also auditing fieldprinciple of the hiding hand, 59–63private certification, 151–52privatisation, in common resources

management, 52probability, of events, 101, 170problem solving, 165–66problems, underestimation of, 62–63process auditing, 195–96production, culture of, 42–46prospect theory, 110psychological factors, in

decision-making process, 103–7Public Company Accounting

Oversight Board (PCAOB), 152. See also auditing field

public goods dilemma, 50–53public opinion, 184punishment/disciplinary sanctions,

180–81, 184

quality assurance, 195–96Quarantelli, E., 183

radical uncertainty, 140–41Rajan, Raghuram, 89, 90–94Rangel, A., 101–2Rapa Nui. See Easter Islandrare events, learning from, 169–71.

See also organizational learningratings agencies, 138, 140.

See also auditing fieldrational choice theory

criticisms of, 97definition of, 97emotions, relevance of, 98–99heuristics in, 100–1internal/external realities, 98neurosciences in, 101–3satisfaction level in, 97–98

rational markets theory/ideology, 88rational planning, 72–73rationality

limitations on, 97–98norms of, 124symbols of, 72

reactive myopia, 8, 218reality, internal/external connection, 98Reason, James, 175, 177, 186, 187receptivity fatigue, 25recommendations

for managers, 219–20nature of, 174

recovery windows, 5, 209–12regulation/regulations

of corporate risk, 214failure to comply with, 174resistance to, 133

Reinhart, C. M., 94, 170, 205reliability improvement. See also High

Reliability Organizations (HROs); organizational learning

expertise, deference to, 199–200failure, preoccupation with, 196management model for, 195–96operations, sensitivity to, 197–98resilience, commitment to, 198–99simplification and, 196–97

Rerup, C., 204–5resilience, commitment to, 198–99responsibilities, diffusion of, 120–21restrictions/constraints, as positive

myopia, 96reward system, 195–96Rice, Condoleezza, 22






Index 257

Risen, J., 170risk

acceptability/acceptance of, 40–42, 68

concept of, 65–66in contemporary society, 68 perception and, 66term meaning, 65vs. uncertainty, 66–67understanding/management of, 68

risk duality, 76–77risk incubation, 171–74risk management, 195–96risk perception, 111–13risk society, 67–68Roberto, M. A., 208, 209–10, 211Roberts, K. H., 119, 126, 190, 191,

195–96, 198–99, 200Rochlin, G. I., 181, 190, 191Roe, E., 202–3Roger, William, 33Roger’s Commission, 35Rogoff, K. S., 94, 170, 205Roll, Richard, 63routinization of tension, 25–26, 84–85Royal Air Force (RAF), in Battle of

Britain, 53–57rules, uncertainty and, 70

sabotage, 175–76safe areas, in HROs, 165safety issues, organizational learning

and, 167safety theory, 174Samuelson, I. A., 64sanctions, fear of, 181–82Sarbanes-Oxley Act (SOA), 152, 154,

157satisfaction, rationality and, 97–98scapegoat concept, 170–71scenario-based learning, 75–76Schoemaker, P. J. H., 207–8Schön, D., 162–63Schulman, P. R., 165, 193, 202–3Schwartz, P., 214Schwinn (bicycle manufacturer), 4second-level problem solving, 165secrecy, structural, 46–48Securities and Exchange Commission

(SEC) auditing field and, 78–79

consultancy activity growth and, 146–47

legal disputes and, 151reform attempts by, 152

selective attention, 116selective interpretation.

See interpretation, distortion inself-discipline, in auditing field, 151selfish-actor myopia, 51self-serving bias, 105, 144sensemaking, 26, 58, 71, 178, 219Senyshyn, Y., 180–81September 11th attacks. See 9/11

terrorist attackserendipity, concept of, 60Serigstad, S., 130–31, 133–34Shamsie, J., 170Shapira, Z., 170shareability constraint, 123–24Shepherd, J., 76short-term preference myopia, 53signals approach, 205signal-to-noise problem, 25Sikka, P., 148silos of knowledge, 118Simon, H. A., 97–98, 101, 111–14,

136, 160, 213simplification, process of, 196–97single-loop learning, 162–63sloping plane of confirmation, 109–10Slovic, P., 101Smith, Adam, 60, 98–99, 180, 182Snook, S.A., 58, 95, 118Sobel, R. S., 132social amplification concept, 111–12social redundancy, fallacy of, 121socio-psychological level analysis, 95Sovereign Wealth Funds (SWFs),

140–41Soviet Union, 135–37‘space between,’ 119spatial myopia, 168special interest groups, 132–33specialist bodies of knowledge, 118–19specialization, problem of, 133–34Stalker, G. M., 68–69Standard & Poor’s, 138, 140.

See also auditing fieldStarbuck, W. H., 37status quo maintenance, 105–6, 107,

132






Index258

Staudenmayer, N., 29, 118Stearns, L., 144Stech, F. J., 205Stern, E. K., 25, 32Stern, P. C., 52Stevens, M., 146–47strangers, involvement of, 173–74strategic planning, 73strategy, continuity in implementation

of, 57–59structural secrecy

information deficits and, 163organizational specialization and,

150–51in space shuttle disasters, 46–48

subjective expected utility theory, 97suicide missions

failure to imagine, 24–26US defense systems and, 18–20

superstitious learning, 170surprise prevention

ambiguity reduction, 209operation integration, 208–9recovery window extension, 209–12unexpected events, 207–8

sustainable exploitation, 52Sutcliffe, K. M., 191–92, 195–96, 198,

199systematic distortion, 101systemic myopia, 7–8, 216–17systemic risk management, 76–77systems of representation, 67–68

tail risks, 91Taleb, Nassim Nicholas, 83, 94teamwork, under pressure, 211temporal myopia, 168temporal pressures, 111–13Tenet, George, 21–22terrorism, information sharing and,

131terrorist attacks, 2. See also 9/11

terrorist attackThe Theory of Moral Sentiments

(Smith), 98–99This time is different syndrome, 170This Time its Different (Reinhart and

Rogoff), 94Thompson, J. D., 44–45, 68, 69threat identification process, 84–85

Three Mile Island nuclear plant accident, 8

time pressures, 112Titanic Effect, 213Tonna, Fausto, 145–46top-down organization, 133–34Totem and Taboo (Freud), 183tragedy of the commons, 50–53truth, theory of, 161–62Tsoukas, H., 76Tucker, A. L., 165Turner, B. A., 3–4, 129, 163–64, 167,

171, 174, 183Tversky, A., 100–1, 110TWA800 explosion (July 1996), 21Twin Towers, organizational myopia

and, 2

US defense systems. See also 9/11 terrorist attack

al Qaeda and, 13, 20–24failure of imagination in, 24–26information sharing and, 126intelligence integration and, 279/11 terrorist attack and, 18–20,

135organizational hubris of, 22–23,

31–32organizational responsibility, 13–14suicide missions and, 18–20

UA175, timeline of events, 14unavoidable myopia, 8, 217–18uncertainty

auditing field and, 140–41risk and, 65–70

underestimation of problems, 62–63unexpected events, management of,

207–8unintentional bias, 143unintentional blindness, 106unintentional myopia, 96United Airlines (UA)

UA93, timeline of events, 17UA175, timeline of events, 14

unlearning, 168. See also organizational learning

utility, rational choice theory and, 97

Vaughan, Diane on assignment of responsibility, 184






Index 259

on benefit of explanations, 182–83on learning from weak signs, 204on levels of analysis, 95on normalization of deviance, 39–42on organizational flaws, 35, 129on safety standards, 37–38on structural secrecy, 46–47

veto players, 132–33violations, vs. errors, 175–76Vioxx (painkiller), 4vision, lack of, 29–30Volcker, Paul, 157Von Braun, Werner, 44Von Neumann, J., 97, 103

Wagenaar, W. A., 83Waterman, R. H., 4Watkins, M., 23, 78, 166–67Waxman, Henry, 88weak signs, detection of, 203–5Weick, K. E.

on cognitive processes, 191–92on environment interpretation, 70expertise, concept of, 199on frontline operations, 198on individualism, 201–2

on organizational reliability, 195–96

on organizing, 193on reportable events, 40on shareability constraint, 123–24

Weitzel, W., 167–68white swan, financial crises as, 90–94Whitehead, Alfred North, 73Wilensky, H. L., 3–4, 117–18, 163–64wishful thinking, 99, 104, 144Wohlstetter, Roberta, 32, 80–81World Health Organization, 214World Trade Center (WTC)

AA11 collision with, 14UA175 collision with, 14

World War I, 59worst cases, as unthinkable, 214Wright, P., 111–13

Xenophanes, 161–62Xerox, 4

Zakay, D., 111–13Zegart, A. B., 30–31Zelikow, P., 95, 135–38Zollo, M., 170






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