Nudge: Manager as Choice Architect

34 Pages Posted: 14 Nov 2014 Last revised: 18 Feb 2017

See all articles by Teppo Felin

Teppo Felin

University of Oxford - Said Business School

Date Written: November 13, 2014

Abstract

In this paper I discuss the role of manager as choice architect. The notion of nudging and choice architecture has received significant interest in law, economics and public policy. But the behavioral insights from this literature also have important implications for managers, HR professionals and organizations. In essence, employees are consumers of choice and are constantly confronted with a large array and interface of options, and this interface can be designed so as to maximize individual welfare and organizational outcomes.

I first discuss the theoretical foundations of the nudge idea and then highlight how managers can design effective choice architectures for the management of human capital. By way of illustration, I specifically focus on four practical areas: 1) nudge hiring, 2) nudge training and development, 3) nudge human capital and organization, and 4) nudge strategy and innovation. Throughout the paper I also point out comparative differences in decision making between contexts (e.g., consumer choice versus decision making in organizations), including implied debates, and also highlight novel opportunities for future research in management and strategy. I particularly focus on the possibilities associated with nudges and choice architectures at the nexus of organizations, crowds and aggregate decision making.

Keywords: decision making, nudge, human capital, strategy, management

JEL Classification: M50, D70, D80

Suggested Citation

Felin, Teppo, Nudge: Manager as Choice Architect (November 13, 2014). Saïd Business School WP 2014-13. Available at SSRN: https://ssrn.com/abstract=2523922 or http://dx.doi.org/10.2139/ssrn.2523922

Teppo Felin (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

HOME PAGE: http://sites.google.com/site/teppofelin2/

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