• Building on Merton's (1936) classic distinction between intended and unanticipated consequences of purposive action, this paper explores two consequences of organizational restructuring that we argue are unanticipated by managers. At the cognitive level of analysis, we propose that organizational restructuring has the unanticipated consequence of producing cognitive order for top executives. At the environmental level of analysis, organizational restructuring has the unanticipated consequence of contributing to long-term environmental turbulence. Both these unanticipated consequences feed back to promote further organizational restructuring, giving restructuring the character of a self-reinforcing loop. We derive formal propositions from this theoretical framework, discuss issues in testing the propositions, and specify implications for future theory-building and management practice.
  • "Adapting to upcoming regulatory reform will be a challenge for the industry. But it's the unintended consequences that can be the most costly, says Howard Mills, chief adviser for Deloitte's national insurance group."
  • The administration also is inflicting unintended consequences by imposing a six-month moratorium on deep-water drilling, resulting in the loss of tens of thousands of jobs. Unintended consequences go hand in hand with clumsy government "solutions."
  • Marc Faber the Swiss fund manager and Gloom Boom & Doom editor said governments have intervened too much in free markets since the crisis started, to the point that they are affecting the health of the world economy. Speaking to CNBC in a live interview Thursday, Faber said: "I think that governments have become like a cancer, they have expanded in the financial system," Faber said. "I think the biggest problem is too much intervention. Whatever the government touches is usually done worse than in the private sector…. I think any government intervention has unintended consequences and is negative," he said. When there is intervention, "eventually the market will break the intervention and things will blow out."
  • In an interview with The Washington Times, the Credit Union National Association's top lobbyist, John Magill, explained how congressional meddling with the fees would create unintended consequences that would harm credit union members. "We'll have to charge hefty fees on checking accounts or some other service to make up for this loss," Mr. Magill said.
  • We got so scared after Three Mile Island that we made our power industry entirely dependent on fossil fuels. Maybe if we hadn't done that, we wouldn't have had to drill so deep in the Gulf. You see, there are always unintended consequences. You turn away from one risk, and take another without even realizing you're taking it.
  • As I mentioned in Mitigating the privilege escalation threat, I ran across a vulnerability in MS Windows NT domains where a file that needed to be world-writable could be used to “trick” the task scheduler into giving elevated privileges to arbitrary user accounts. The key to that vulnerability, as with many such things in the MS Windows world, is complexity. Because of the focus in Microsoft development on constantly adding more features of various descriptions, unintended consequences often arise in the interactions between various features.
  • "So many times we focus on trying to forecast more accurately. Wouldn’t our efforts be better spent on becoming more adaptable?"
  • Steve Player of Beyond Budgeting fame recently blogged about moving from forecasting to adapting. Idea being, rather than focusing solely on increasing forecast accuracy (and building ever more complex — and fragile! — models), why not get better at adapting to evolving circumstances?

    I really like this notion. It fits nicely with the tenets of collective intelligence and social business intelligence approaches to decision making. In order to be able to adapt, a business has to be able to have an accurate and up-to-date read on what’s really going on, which is exactly the insight such applications deliver.

    Thing is, forecasting is still vital. General Patton’s famous quote comes to mind: “A good plan, violently executed now is better than a perfect plan next week.”

    (tags: planning)

  • "Instead of celebrating the possible end of the SUV boom, it would be more constructive for" environmentalists "to consider the origins of the boom, in which they played an important role. Because what "people were thinking," when they bought SUVs was partly the result of the unintended consequences of fuel economy standards supported by the environmentalists. In the 1970s, the U.S. began enacting corporate average fuel economy (CAFE) standards for new vehicles…. The standards made certain cars, such as the station wagon, uneconomic to produce within the constraints of the standards. But many people still wanted large vehicles. So they bought vans or light trucks which were subject to looser fuel standards. Those choices led to the development of environmentalist nightmares: the minivan and the SUV. Because they were required to be very big to qualify as light trucks, the new minivans and SUVs generally had substantially worse mileage than the station wagons they replaced."

  • "The new Apple (AAPL) iPhone 4 has a marvelously clear display, whether or not it’s technically a “retinal display,” as CEO Steve Jobs claimed. It’s a great feature, but one that has unintended consequences. Increased resolution means programmers and designers must rethink how they prepare graphics and photos for virtual use — and how much storage space the images will require. That’s going to be a pain to gaming companies, publishers, and other businesses that develop graphics-heavy applications."

  • "According to Rob Norton, former economics editor of Fortune magazine, the Law of Unintended Consequences is ‘often cited but rarely defined’. It means actions that have unforeseen or negative effects. Norton says that economists and social scientists heed that law; politicians and popular opinion ignore it.

    He cites Scottish moral philosopher Adam Smith's Wealth of Nations: ‘It is not from the benevolence of the butcher or the baker that we expect our dinner, but from regard to their own self-interest’. This is the basis of the economic system, a benign unintended consequence of motive.

    However, he believes that perverse, unanticipated consequences are more frequently the outcome of well-intended laws. In 1692, the English philosopher John Locke argued against a Parliamentary bill designed to cut maximum interest rate from 6% to 4%, on the grounds that some would avoid the rule and there’d be less credit for poor people."

  • "The Law of Unintended Consequences is an adage that warns that an intervention into a complex system invariably creates unanticipated and often undesirable outcomes…. I had a lengthy conversation with another San Diego activist who was concerned that the proposed legislation says that Secretary of Defense Gates, Chairman of the Joint Chiefs of Staff Mullen and the President must sign a joint letter for the repeal of DADT to take place…. The unintended consequence is now it could become a legislative requirement that Gates and Mullen agree."

  • Investors like themes, they like to operate and think according to the major themes that dictate new developments. I think one of the biggest themes in this current investment environment and in the next few years will be the dominance of unintended consequences – an environment where the unintended consequences of actions will speak much louder than the intended actions themselves.