Self-fulfilling prophecies – Part 1

The fact that theories can be self-fulfilling has been long discussed in philosophy and psychology literature. Academy of Management Review awarded the 2006 Best Paper Award to Ferraro, Pfeffer and Sutton’s paper ‘Economics language and assumptions: How theories can become self-fulfilling’. This paper explores the operational consequences of scientific theories and findings. That is, in contrast to the discussions of what is reality (ontology) and knowledge (epistemology), Ferraro and colleagues focus on how theories are operationalized to affect the world that we observe.

The self-fulfilment takes place when describing or predicting a situation where a theory evokes a behaviour, which makes its original conceptualisations true. In other words, people begin to see the world through the lenses of the theory. Social actors determine their disposition towards theory, borrow its categories and then perceive the world with their help.

Ferraro et al. points out three mechanisms through which the theories become self-fulfilling: institutional design, social norms and language. These mechanisms are not mutually exclusive but they work together to support each other.

  • Institutional design refers to systems that support the existing social order, e.g. reward systems, performance measurements and selection practices. The authors illustrate this mechanism with the research in work ethics. Other examples from behavioural economics, sociology and social psychology could further substantiate the argument. Scholars have observed that the system of reinforcements changes employees’ motivation. As a result a social institution begins to create the conditions under which its conception of human motivation and human nature is true.
  • Social norms are prescriptions or proscriptions for modes of behaviour in specific situations. When theories become accepted as common truths, they define social norms and, thus, govern social behaviour. “People act and speak as though the theory were true” (p.9). Ferraro et al. analyses how an assumption that self-interest is the main driver of economic behaviour became a norm for the valuation of behaviour and justification of actions.
  • Finally, “language affects what people see, how they see it and the social categories and descriptors they use to interpret their reality” (p.9). People use language to organise reality and to categorize what is important and not. Lingual constructs define what we notice or ignore.

The implications for businesses and research organisations are vast. “When theories produce self-fulfilling beliefs, societies, organizations, leaders can become trapped in unproductive or harmful cycles of behavior  that are almost impossible to change” (p.21).

The article discusses how such mechanisms operate, particularly in management and economics. It addresses possible ways for detecting and counter-acting their influence. I will focus on this theme in the second part.

Source: Fabrizio Ferrano, Jeffrey Pfeffer, Robert I. Sutton, 2005: Economics Language and assumptions: How theories can become self-fulfilling. Academy of Management Review, Vol. 30, Issue 1, pp. 9-24.

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