PublicOrgTheory favorite Joshua Pollack gets it right on nuclear deterrence, the financial crisis, and, inadvertently, organizational diagnosis:
What the idea of efficient markets has to do with the non-use of nuclear weapons is actually pretty straightforward, since deterrence is traditionally modeled on bargaining and risk-taking. And indeed, back in 1974, Alexander George and Richard Smoke detected a similar problem in deterrence theory. The theory, they warned, was primarily “abstract-deductive” in origin, based upon ideas about what states ought to do rather than evidence about what states actually have done.
Organizational diagnosis is likely to be most comprehensive when it draws on theories that are both normative-predictive and historical-explanatory. In practice, it’s usually one or the other–if that–with many practical interventions carried out in ignorance of which type of theory is informing the practice.
In theory, history ought to provide some insight about both patterns and variance. In practice, we often treat organizations as fungible. That’s a mistake we too often make, and according to Pollack, we are in good company.