What is Surrogation In Behavioral Economics?

What is Surrogation?

Surrogation is a psychological bias where an individual or an organization substitutes a strategy or a goal with a metric that was initially designed to measure the success of the said strategy or goal. The process involves replacing the original complex, multi-faceted goal with a simpler, quantifiable measure that was initially intended as a means to gauge progress. It essentially transforms the means into an end, which often leads to distorted decision-making.

Background and Examples

  • Origins of the Concept

    The concept of surrogation in psychology was born out of the need to understand common organizational and decision-making errors. The term “surrogation” was popularized in the managerial literature and behavioral science to explain why organizations often fall into the trap of over-relying on quantifiable metrics at the expense of broader strategic objectives.

  • Case Studies

    Surrogation can be observed in a variety of organizational contexts. For instance, a business may set a strategic goal to improve customer satisfaction. To measure progress, they may use a metric like customer reviews or survey scores. However, over time, the organization may start focusing more on improving the scores rather than the actual customer satisfaction, leading to practices such as urging customers to provide high ratings or neglecting aspects of the customer experience not captured in the survey. This is a classic example of surrogation, where the metric has taken the place of the actual goal.

Relevance and Impact

  • Influence on Decision-Making

    Surrogation significantly influences decision-making processes, as it can lead individuals and organizations to focus on simplified metrics rather than complex, but crucial, objectives. This misplaced focus can result in distorted strategies, where activities are tailored more towards enhancing the surrogate measure rather than achieving the original goal.

  • Implications in Organizational Contexts

    Within organizations, surrogation can lead to a multitude of issues, including myopic management practices, suboptimal performance, and even ethical dilemmas. If unchecked, it can undermine the organizational strategy and potentially lead to failures in achieving long-term goals.

  • Prevention and Mitigation

    Preventing surrogation involves a keen awareness of the bias and a commitment to continually refocus on the original strategic objectives. Organizations can also try to use a balanced set of metrics to prevent over-reliance on a single measure. Transparent communication, robust leadership, and regular revisiting of the organization’s goals and strategies can also mitigate the risks associated with surrogation.

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