Herbert Simon on Decision Making.

Herbert Simon’s most valued contribution to administrative thought is his focus on decision making. He proposed a new concept of administration which is based upon purely factual statements in Administrative science. That is why he calls traditional concept of Administration as proverbs & myths. His concept of decision making becomes the core of administrative action.

Decision making is synonymous with management. He calls decision making as the heart of the organization. ‘Decision making is the’ Vocabulary of administrative theory which should be derived from logic & psychology of human choice.

According to Simon, an organization is a structure created for decision making. Decisions are made at all the levels of organization. Every decision may affect less or more members within the organization. Each decision is based upon number of premises. The task of ‘deciding’ pervades the entire administrative organization, quite as much as does the task of ‘doing’ - indeed, it is integrally tied up with the latter.

Three stages in the decision making process:

Simon divides the decision making process into three phases –

i)                    The first phase, he calls, intelligence activity. The head of the organization tries to understand organizational environment in which decisions have to be taken. Intelligence activity is finding occasions to take decisions.

ii)                  The second phase, he calls, is design activity. A head of the organization tries to identify all possible options before making a final decision. This involves time & energy of the head to think over the best possible alternative.

iii)                The third phase, he calls, is choice activity. Finally a head chooses one of the selected options, which becomes a decision.

Though these three stages are described by Simon, he says that these phases may appear to be simple & one precedes the other, in practice, the sequence is more complex, than what it appears to be. These three phases are wheels within wheels. These three phases are closely related to the problem solving - what is the problem, what are the alternatives & which alternative is the best?

Decision making is thus, a choice between alternative plans of action & choice in turn, involves facts & values. To him, every decision consists of a logical combination of fact & value propositions. A fact is a statement of reality indicating the existing deed or action. Whereas a value is an expression of preference. He insists upon making analysis of ethical & factual statements that remain present in a ‘decision’. Every decision thus is a mixture of fact & value.

On the basis of this premises, Simon views organization as a ‘hierarchy of decisions’ - ‘a complex network of decision processes.’ Every decision involves the selection of a goal & a behavior relevant to it, till the final aim is reached. Thus decision making involves close interrelationship between facts & values.

In order to achieve a balance between facts & values, Simon proposes that every decision has to have rationality. Every decision must be rational.