Conclusion / Let us Sum up

Inspire of all the points of criticism, against Simon’s decision making theory, one understands the importance of decision making, in every walk of life. Simon’s idea of rationality in decision making shows his deep insight of establishing close relationship between facts & values. His is a major contribution in the evolution of administrative theory. His administrative man & organizational behavior, has more concern are tested. No administrative thinker on Public Administration has written so widely on decision making as by Herbert Simon.

While Summing up, keep the following points in mind

i)                    Herbert Simon was a great administrative thinker & a Nobel Prize winner. He wrote extensively on Public Administration, Administrative theory & decision making processes.

ii)                  He suggested valid principles of organization & focused his attention on decision making.

iii)                He brought empirical approach to the science of Administration. He combined facts & values in his theory of Administration.

iv)                Simon calls decision making as the heart of an organization. In fact an organization is hierarchically structured to take decisions. Every decision, more or less, affects everybody in the organization.

v)                  Simon divides decision making activity into three phases -

a) Decision making is an intelligent activity; the decisions have to be taken in anticipation, which is an intellectual exercise.

b) Decision making is a design activity, in which, a head has to visualize all the possible options/alternatives, before reaching a final decision.

c) Decision making is a choice activity, where a final decision is made.

vi)                These three may appear to be simple, they are not very simple, but are complex, closely related to problem solving - what are the problems, what are the alternatives & which alternative is best?

vii)              Simon also discusses rationality in decision making, which involves facts & values.

viii)            Simon defines rationality, ‘appropriateness for the accomplishment of specific goals of organization. ‘A head has to take into consideration all the possible consequences before taking any decision’

ix)                Simon is also aware that even reaching rationality is a difficult process. He gives different types of rationality. He also knew the limitations of rationality.

x)                  On the basis of rationality, Simon reaches to his idea of an ‘administrative man’ & administrative behavior. The internal & external factors determine the behavior of administrative man.

xi)                Simon was very much influenced by the use of computers for administrative work. He distinguished between programmed & non programmed activities & found that computers can bring revolutionary changes in the working of organizations. A head can relieve him / her from the monotonous & mechanical work by relying on computers.

xii)              Simon also described some fundamental principles of organization.

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Appraisal & Criticism of Simon’s idea of decision making

Appraisal:

Simon focuses attention on the dynamics of decision-making processes & its role in organizations. His study provides a deep insight into administrative behavior & the interaction between decision making processes & administrative behavior found in organization. He viewed organizational decisions, into three phases. Rationality in decision making is a combination of facts & value is a unique contribution of Simon. His administrative man & administrative behavior focus upon administrative system.

Criticism:

Simon’s idea of decision making mainly concerns with business administration rather than public administration. His decision making theory is also criticized on the ground that though decision making process is an important variable in the organization, it is not the only factor. Decision making process involves many other factors, especially emotional, which Simon ignores. Simon’s decision making theory is too general.

Simon is also criticized on his idea of administrative man and administrative behavior. These dimensions differ from person to person & situation to situation. From this viewpoint, Administration cannot totally be regarded as value free science. Similarly, administrative systems do not bring similar role & similar consequences.

Rationality in decision making is also subject to criticism. Rationality, to Simon, meant a decision of ‘Status quo’, it is not dynamic.

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Herbert Simon on Administrative Behavior:

While dilating on the process of decision - making, Simon rejected rational, economic man & replaced him by a more realistic, administrative man. He proposed an idea of administrative man. The behavior of the administrative man, in the organization, is conditioned by organizational culture. The administrator is conditioned by organizational culture. The administrator has to comply with established rules & regulations & follow prescribed course of action. Such a man is called ‘organizational man’ Herbert Simon’s administrative man tries to rationalize man.

The behavior of organizational man is subject to two types of influences - internal & external. Internal influence involves attitudes, habits & temperaments, which leads him to reach the desired decisions. Internal factors also include loyalty, concern with efficiency & training. External factors involve authority, advisory & informational services.

Programmed & non-programmed activities in an organization Simon is fascinated by the advent of electronic computers. He makes a distinction between programmed & non-programmed decisions. The electronic computer is making available to mankind new decision - making techniques which bring changes in white collar, executive & professional work making them ‘as monotonous as those, the introduction of machinery has brought to manual jobs.’

Simon feels that the computer has the potential of revolutionizing organizational decision making. According to him repetitive & routine type of decisions can be programmed to the computers. Operations research, system analysis, quantitative data processing etc. can be given to the computers.

The non-programmed decisions help the higher level authorities to devote their time for taking more efficient decisions, innovative ability, acquiring higher skills. The use of computers may increase rationality. In fact, Simon believes in the unlimited confidence in computer & management information systems. Computers command revolutionary capacity in the process of gathering & organizing information public administration enables, to cope with the ever- increasing complexity of public policies & programmes. Simon thus suggests maximum use of computers for rational decisions.

Principles of Administration

Logically, Simon cites some of the administrative principles:

a) Administrative efficiency is increased by a specialization of the task among the group.

b) Administrative efficiency is increased by arranging the members of the group in a determinate hierarchy, of authority

c) Administrative efficiency is increased by limiting the span of control at any point in the hierarchy to a small number.

d) Administrative efficiency is increased by grouping the workers, for purposes of control, according to (a) purpose (b) process (c) cliental (d) place.

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Rationality in Decision Making, Herbert Simon

Simon spoke on the dynamics of decision on a different plane – the plane of rationality. He emphasizes upon being rational in decision making. Rationality is defined in terms of ‘appropriateness for the accomplishment of specific goals.’ He focused on the rational part of decision. Every decision is a combination of reason (rationality) & emotion. Simon gives importance to reason rather than emotion. A head faces number of constraints while making decision. It is because, while taking a decision, a head has to think, of all possible consequences, affecting political culture & values of society. He explains rationality in terms of means - end construct. ‘If appropriate means are adopted to reach desired ends, the decision is rational.’ In brief, rationality is making ‘an administrative man.’

Simon is aware that, reaching rationality itself is a difficult process, due to number of factors involved in it. So he has suggested different types of rationality. A Decision may be –

a) Objectively rational, where preference is given to values.

b) Subjectively rational, where decision maximizes attainment relative to knowledge of the subject.

c) Consciously rational where adjustment between means & end is made.

d) Deliberately rational where adjustment is deliberately made.

e) Organizationally rational where it reaches organizational goals.

f) Personally rational, where decision reaches individual goals.

Simon never agreed to the concept of total rationality. It is because no individual behavior can be totally rational or totally irrational. Simon therefore, described human behavior in an organization as, ‘intendedly rational’ Complete or total rationality is not possible because of –

a) Incomplete knowledge of the problem, alternatives & consequences. Simon called it as ‘bounded rationality’

b) Individuals cannot be completely standardized, having, as they do, multiple, even unranked, preferences.

So Simon calls rationality in terms of satisfying which involves the choice of course of action which is ‘satisfactory’ or at least good enough.

Simon was also aware about the limitations of the concept of rationality. The following features stand in the way of rational decision making –

i) Multiplicity of problems, goals & policy commitments.

ii) Inadequate information about the variety of acceptable goals.

iii) The personal limitation of a decision maker, in capacity, commitment & goals.

iv) Structural difficulties within organization.

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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.

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Herbert Simon’s writings & his contribution in the areas of administrative behavior & Decision Making.

Simon wrote a number of books, few are:

Administrative behavior (1945), Public Administration (1950) Models of Man (1957), organizations (1958) Human Problem - Solving (1472), Models of Thought (2 volumes-1979 & 1989), Models of Bounded Rationality (2 volumes - 1982) Reason in Human Affairs (1991)

Simon equates administration with decision making. He insisted upon how decisions are made, & how they be made more rationally & effectively. He suggested valid principles of Administration & now - how to apply these. He suggested empirical approach to the study of science of Administration. He proposed a new concept of Administration, based on theories & methodology.

Simon’s decision making theory is the core of administrative action. His rationalistic Theory of Administration includes the concept of ‘bounded rationality’. His book ‘Administrative Behavior’ gained not only worldwide recognition, but it was also translated into twelve languages. In 1988, he again revised this book.

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WORKING OF BUREAUCRACY, Herbert Simon

OBJECTIVES

As Public Administration has gained importance in the modern times, so has been the case of behavior of administrators. Main contribution of Herbert Simon is that his views over administrative behaviour have gained worldwide recognition. His contribution is noteworthy in developing rationalistic theory of decision making. He focused on the decision making capacity in Administration by pointing out three steps in decision making process. Simon insisted upon ‘rationality’ in the decision making process. Herbert Simon was awarded the Nobel Prize for Economics in 1978.

Max Weber & Herbert Simon had valuable contribution in the field of Administration / Bureaucracy. Max Weber had described the anatomy of organization & Herbert Simon had described its physiology.

INTRODUCTION

Herbert Simon was an American, a Noble prize winner, who had contributed to the decision making theory. His writings on – the decision making process & rationality in the decision making – are still considered as the pillars for private & public Administration. Herbert Simon’s writings are mainly concerned with private organizations rather than public / Government sectors.

Besides his contribution to decision making, Simon knew the wide use of computers, helpful to the head / executive, in modern times. Today, uses of computers largely help the private as well as public sectors. In this chapter, an attempt is made to understand Simon’s views on decision making theory.

A Brief Life sketch of Herbert Simon

Herbert Simon was born in 1916, in USA. He became an eminent American political & social Scientist. He did his Ph. D. in political science. He started his career in municipal government & then worked in various companies & organizations as an academician & as a consultant.

Simon was very much influenced by Follett’s ideas on group dynamics in organization, the human relations approach performed by Elton Mayo & others & by Barnard.

Though Simon was awarded Nobel Prize in Economics, he was not an economist. His work is mainly drawn from Administrative Behavior, the study of decision making, bounded rationality & organization as a human enterprise seeking internal & external equilibrium.

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