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December 15, 2018 

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LIMITED RESOURCES: Finite quantities of labor, capital, land, and entrepreneurship available to an economy for the production of goods and services. This is one half of the fundamental problem of scarcity that has plagued humanity since the beginning of time. The other half of the scarcity problem is unlimited wants and needs.

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MANAGERIAL BEHAVIOR:

A preference for maintaining the status quo over changing it based on relatively greater satisfaction generated by redundant information over novel information. Managerial behavior is well suited for keeping an existing business and complex organizations running smoothly and efficiently. This behavior is inclined to manage, to administer, and to apply existing rules and procedures. An alternative is entrepreneurial behavior, which is a preference for changing the status quo over maintaining it.
Managerial behavioral is one of two behavioral alternatives underlying the desire to undertake innovations and to change the status quo. The other is entrepreneurial behavior. Managerial behavior rejects innovation, is motivated to keep the status quo, draws satisfaction from maintaining existing institutions. In contrast, entrepreneurial behavior is a preference for changing the status quo.

The underlying source of managerial behavior is a relative preference for redundant information over novel information. Both types of information are important to the fight or flight response to a threat. Novel information reveals potential threats that results in automatic physiological responses, which is more satisfying to some than it is to others.

Managerial behavior is a preference for maintaining the status quo over changing it. Managerial types resist innovation. A change in institutions does not generate satisfaction for managerial types. On the contrary, satisfaction is best achieved from keeping things structured and orderly. While managerial types are not absolutely opposed to change, the change needs to be orderly and within the rules.

While managerial behavior is not conducive to creating an invention or launching an innovation throughout society, once the innovation has taken hold and becomes part of the fabric of society, it takes hold. It promotes the now "old" innovation, getting the most benefit possible. Those who are managerial inclined might not favor product innovations (new products), but process innovations (new ways of making existing products) are acceptable.

Fight or Flight

An understanding of managerial behavior requires a look at the fundamental, physiological response to potential threat, what is called fight or flight. The human body automatically prepares itself to fight off a potential threat to flee away from it. Respiration increases. Pupils dilate. Brain wave activity increases. Adrenalin is pumped through the body. Heart rate increases. The human body is primed and ready to recognize the threat and to respond.

The key to this automatic response is achieved by distinguishing between what's new and different and what's old and familiar. The old and familiar is less threatening that the new and different. The human brain sorts between two different types of information that comes through the five senses (sight, hearing, touch, taste, and smell), attempting to discern the potential for danger -- novel information and redundant information.

  • Novel: This is new information. An unusual sight. A strange sound. An unexpected touch. A bizarre taste. An uncommon smell. The human brain takes immediate note of this information. Because it is unfamiliar, it might be threatening. This is information that needs to be identified quickly. It needs to stand out from the ordinary and familiar. A self-preservation reaction (fight or flight) might be needed.

  • Redundant: This is familiar information. A common sight. A routine sound. A ordinary touch. A recognized taste. An everyday smell. The human brain is wired to largely ignore this information. Because it is familiar, it is not threatening. It is the background canvas upon which novel information is displayed.
Redundant and novel information are both intrinsically satisfying. A little bit of excitement is satisfying (think a roller coaster ride). But so too is a little bit of piece and quiet (think resting after a hectic vacation). However, nothing but redundant information is incredibly boring and not particularly satisfying. And nothing but novel information is anxiety inducing, and also not very satisfying. Too much of one or the other is not a pleasant situation. A combination of the two is most enjoyable. It can maximize satisfaction.

However, different people have different preferences over the proper mix of novel and redundant information. Some prefer relatively more new and less old. Others prefer relatively more old and less new.

These individual differences give rise to entrepreneurial and managerial behavior. Those who prefer relatively more redundant information and relatively less novel information tend to pursue managerial behavior. Others who prefer relatively more novel information and relatively less redundant information tend to pursue entrepreneurial (and innovative) behavior.

A Preference for the Status Quo

Managerial behavior is a preference for maintaining the status quo over changing it. Managerial types embrace structure and order. Keeping institution in place generates satisfaction for the managerially inclined. Change is not nearly as satisfying. Managerial behavior has a relative preference for redundant information over novel information.

Managerial behavior surfaces in a number of ways throughout society:

  • Corporate Management: At the top of the list of managerial behavior are those who manage corporations -- the larger, the better. Making sure that inputs flow in and outputs reach markets, epitomizes maintaining the status quo. Change is not conducive to keeping business operations operating.

  • Government Bureaucrats: Managerial behavior is also reflected in government employees who are assigned the task of carrying out the rules and policies of political leaders. Those who work within these bureaucracies must ensure that the i's are dotted and the t's are crossed, that each official form is filled out correctly and completely. Once elected leaders, voters, and policy makers have decided on a course of action, it is up to the workers to merely follow through. Changing the status quo is not an appropriate frame of mind at this point in the process.

  • Scientific Investigation: The day to day application of the scientific method also requires managerial behavior. While the occasional development of a new scientific theory is largely entrepreneurial behavior, the tedious task of testing a theory, over and over again, is most definitely managerial in nature. Experimental testing must be followed with methodical precision. There is no room for creativity in the hypothesis verification process.

  • Life: The mundane task of life is rampant with managerial behavior. Getting up every day, going to work, earning the income needed to pay the bills, paying the bills, doing the same thing day in and day out, over and over again. It might boring to some, enjoyed but others, but managerial behavior through and through.

The Entrepreneurial Alternative

The alternative to entrepreneurial behavior is entrepreneurial behavior. Entrepreneurial behavior is a preference for changing the status quo over maintaining it. Entrepreneurial types embrace innovation. A change in institutions generates satisfaction for the entrepreneurially inclined. Keeping things structured and orderly is not nearly as satisfying. Entrepreneurial behavior has a relative preference for novel information over redundant information.

This behavior alternative surfaces throughout society. The most noted is entrepreneurship, which launches a new business and undertakes the risk of organizing production. Another common example of entrepreneurial behavior is a consumer who likes to buy the newest and latest products, fashions, or electronic equipment. The desire to take a new route to work or school periodically is also an example. At the extreme are those who rebel against existing social orders, including political revolutionaries.

Entrepreneurial behavior is reflected in those who invent new products, ideas, technologies, and organizations. The desire to create something new is fundamental to entrepreneurial types. It is also reflect in those who seek to innovate, to apply and make use of the new products, ideas, technologies, and organizations. This behavior also affects those most willing to adopt the innovations developed by others.

However, once the newness wears off of an innovation, once the "new" innovation becomes the status quo, once it is institutionalized, then entrepreneurial types want little further involvement. The excitement of the new and different has passed.

A Continuum

Like much of life, the inclination toward managerial or entrepreneurial behavior is seldom one or the other. Most people have a combination of each and few exhibit either in the extreme or in all aspects of their lives. One person might be entrepreneurial in business, but managerial at home. Another person might be just the opposite. Each might fulfill the desire for in one activity, then be satisfy with the status quo in other activities.

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Recommended Citation:

MANAGERIAL BEHAVIOR, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: December 15, 2018].


Check Out These Related Terms...

     | behavioral alternatives | entrepreneurial behavior | innovation | novel information | redundant information | institution | innovation profit | technology | process innovation | product innovation |


Or For A Little Background...

     | entrepreneurship | risk | scarce resources | rational behavior | scientific method | government bureaucracies |


And For Further Study...

     | economics of information | economics of uncertainty | risk preferences | alternative business cycles | creative destruction | good types | public goods | innovation and entrepreneurship | political views |


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