Action Situation

The Working Parts of an Action Situation

Whenever two or more individuals are faced with a set of potential actions that jointly produce outcomes affecting themselves, and potentially others, these individuals can be said to be "in" an action situation. Typical action situations include:

buyers and sellers exchanging goods.

legislators reviewing a proposed bill within a committee.

bureau chiefs and officials bargaining over the budget to be allocated to the bureau and the level and type of output to be produced.

superiors and subordinates in a bureaucratic structure bargaining over the distribution of work assignments and rewards to be allocated.

a group of neighbors constructing a playground on a vacant lot.

citizens voting in an election

Scholars in diverse fields have similarly attempted to identify a focal kernel of human interaction that exists in many different types of settings. John R. Commons (1957) identified the "transaction" as a fundamental unit of analysis involving five persons (two buyers, two sellers, and a judge). Alan Newell and Herbert Simon (1972) chose the term "task environment" to describe the structure of the situation in which they studied individuals as information processing entities. Both of these concepts are similar in their intent to the term "action situation" that we use in our framework. Other similar concepts include that of a "collective structure" (Allport, 1962); a "double interact" (Weick, 1969); a "practice" (Rawls, 1968); the "logic of the situation" (Popper, 1967); a "well-defined social episode" (Harre, 1974); and an "action scheme" (Kochen and Levy, 1956)

An action situation is an analytical construct. It is a way of looking at the world used by an analyst to isolate key variables thought to affect individual behavior. The world being examined is always much richer than can be represented: By picking the most relevant aspects of "real world" action situations, however, an analyst should be able to isolate the key factors affecting the choice of actions and the cumulative effects on outcomes. The concept of an action situation is no more analytical and less real than the concept of an "Organization" or, any of the other terms used by social scientists to place conceptual bounds on complex patterns of human behavior.

We presume that we need to learn how to analyze relatively simple forms of human organization using the same types of variables to analyze many different forms that universally appear in all societies. One finds exchange arrangements, work teams, committee or council deliberations, reciprocity arrangements, and superior-subordinate command relationships in all societies. Each of these types of arrangements can be analyzed in terms of:

1. The number and type of participants.

2. The number and type of positions which participants hold.

3. The set of actions available to participants in positions at various stages of a process.

4. The level of control that participants have over the action to be selected at a particular stage of a process.

5. The potential outcomes to be affected and how they are linked to actions.

6. The information that participants have available about the structure of the situation.

7. The benefits and costs that are likely to be assigned to actions and outcomes.

These seven types of variables are necessary and sufficient to describe the structure of most simple but interesting actions situations. The number of participants and positions may vary, but there must always be participants in positions to have any structure to analyze. Similarly, there must be sets of potential actions that actors are authorized to take. Information about the situation may vary, but all participants must share some information about the situation before an analyst can even state that the participants are in an action situation. The costs and benefits assigned actions and outcomes can be thought of as the external incentives and deterrents in a situation. How these affect actions, and thus, results depends also on the resources and valuation patterns of participants.

Not only can action situations be characterized by these variables, but a change in any of these variables produces a different action situation. Three participants trying to decide whether to go to the opera, a football game, or a movie is a different situation than two persons deciding as among the same options. In a three-person situation, coalitions of one subgroup against another are possible while no coalitions are possible in a two-person situation. Changing the set of alternative actions or the information conditions also fundamentally alters the structure of the situation. Using these seven types of variables, an analyst can build a wide variety of models of elementary human interactions. An exchange arrangement and a command arrangement can be constructed from the same types of variables by changing the values of some of the variables.

Complex social arrangements -- including national markets, large corporations, national governments, industries, and many other complex units -- are composed of many types of action situations which are linked together in both simultaneous and sequential fashion. One of the important lessons to be learned from the recent literature on the way firms are organized in Japan is that the overall performance of a large corporation is strongly affected by the way the more elementary teams of workers are organized and how they are linked together. The recent work of Oliver Williamson (1975) on "M-Form" versus "U-Form" types of organizations also attempts to examine various ways of linking elemental work units together to examine the effects that different linkage mechanisms make.

When explaining strategies and cumulated results within a focal level of analysis, these working parts are the "givens" with which one works to describe the structure of the situation. One assumes that the individuals within a situation cannot change the structure of the situation in the short run. While the structure of the situation remains constant, participants attempt to act in light of the opportunities and constraints of that situation and their resources and values.

⇒ A Model of the Individual

Elinor Ostrom, “Formulating the Elements of Institutional Analysis,” in Studies in Institutional Analysis and Development (Conference on Institutional Analysis and Development, Washington, DC, 1985), 24, https://dlc.dlib.indiana.edu/dlc/handle/10535/2145.