Rationality and Routines as Dynamic Capabilities? The Case of Property Investors

Abstract

In their decision-making, companies often follow a particular mix of old and new routines. The global commercial property industry exemplifies the combination of long-standing with novel routines. Recently, investors have turned their attention to new, far-away and still opaque market regions. In contrast to traditional property investors these new, more professional investors seek a ‘rational’ foundation for their decisions based on methodologically confident, systematically calculable procedures. The application of ‘rational’, ‘scientific’ models means that actors use algebraic models and procedures based on models of rational choice, which have emerged from neoclassical economic science. We discuss rationality and routines with a specific focus on evolutionary approaches and concentrate on routines, including the concept of dynamic capabilities.

Keywords

• decision-making process
• novel routines
• rational models
• evolutionary economic geography