March (1976) argued that organizations need a “technology of foolishness’’ to counteract the prevailing standard mode of operation that involves an over-reliance on what he called “the technology of rationality.” While appreciating the undeniable benefits of organizational rationality, March identified its limitations and argued that organizations in certain situations need to supplement this rationality with foolishness. A technology of foolishness allows organizations to suspend organizational objectives, exposing themselves to new experiences, and different perspectives which enables organizational members to experiment and discover. However, this sensible foolishness requires the explicit permission to behave less consistently and less goal oriented.
According to March (1976), the technology of rationality is based on the primacy of rationality, that the appropriateness of action is determined by to what extent the action relates to pre-determined organizational objectives. A technology of rationality presupposes purpose for action, that action is directed by preexisting goals. This rational approach maintains that organizational actions should be a result of a preexisting set organizational objectives, and should be derived from a solid understanding and consideration of expected outcomes and future consequences. Acting rationally, organizations do not take action based on intuition, revelation or emotion or with ambiguous goals and unknown outcomes. Rational action begins with clear goals based on existing preferences and values, and a preexisting understanding of the world. These assumed static goals guide data collection and insight, on which actions based on the expected results are then chosen.
In contrast, the technology of foolishness accepts that, rather than being predetermined, purpose can also be of a transitional nature and emerge from action. Sometimes actions need to precede purpose. The technology of foolishness encourages ambiguity and fluidity of action; as opposed to insisting on consistency and prediction. The technology of foolishness also allows organizations to relax the primacy of functional rationality, to temporarily suspend logic, reason, and intentionality, and promote an openness to new actions, objectives and understandings.
March (1976) argued that society heavily rewards consistent rationality. Influential members of society such as organizational leaders therefore have a powerful overlearning of rationality. This emphasis of rationality inhibits development. To overcome this position, organizations need to encourage experimentation and the experience of doing things for which there is no rational reason. Asking how organizations might escape the logic of reason, March proposed playfulness as a feasible alternative. Outlining play as a temporary, but deliberate relaxation of rules, it allows for exploration of behavior and knowledge that does not fit the standard rational mode of operation. Play relaxes the ordinarily strict insistence on purpose and predefined outcomes, and enables organizational members to act irrationally in order to explore alternatives. He argued that playfulness is an instrument of organizational intelligence which is grossly overlooked by organizational leaders.
In a later article building on the previous ideas, March (1991) explained that organizations need to balance exploitation with exploration (which includes organizational play):
Exploration includes things captured by terms such as search, variation, risk taking, experimentation, play, flexibility, discovery, innovation. Exploitation includes such things as refinement, choice, production, efficiency, selection, implementation, execution. Adaptive systems that engage in exploration to the exclusion of exploitation are likely to find that they suffer the costs of experimentation without gaining many of its benefits. They exhibit too many undeveloped new ideas and too little distinctive competence. Conversely, systems that engage in exploitation to the exclusion of exploration are likely to find themselves trapped in suboptimal stable equilibria. As a result, maintaining an appropriate balance between exploration and exploitation is a primary factor in system survival and prosperity. (March, 1991, p 71)
Many, especially large bureaucratic organizations lack the technology of foolishness (and its playfulness) and when it does exist they find it difficult to manage (Sarasvathy & Dew, 2005). The concepts of exploration and technologies of foolishness offer a useful theoretical framework to both understand the importance of organizational play and how it may be assimilated into organizational theory.