Herbert Simon on Decision Making

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 organisation. ‘Decision making is the’ Vocabulary of administrative theory which should be derived from logic & psychology of human choice.
According to Simon, an organisation is a structure created for decision making. Decisions are made at all the levels of
organisation. Every decision may affect less or more members within the organisation. Each decision, is based upon number of premises. The task of ‘deciding’ pervades the entire administrative organisation, 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 organisation tries to understand organisational 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 organisation 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. Fianlly a head chooses one of the selected options, which becomes adecision.
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 atternatives & 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 organisation as a ‘hierarchy of decisions’ – ‘a complex network of decision processes.’ Every decision involves the selection of a goal & a behaviour 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.

Rationality in Decision Making

Simon spoke on the dynamics of decision on a different plane – the plane of rationality. He emphasises upon being rational in decision making. Rationality is defined in terms of ‘appropriateness for the accomplishment of specific goals.’ He focussed 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 maximises 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) Organisationally rational where it reaches organisational goals.
f) Personally rational, where decision reaches individual goals.
Simon never agreed to the concept of total rationalty. It is because no individual behaviour can be totally rational or totally irrational.
Simon therefore, described human behaviour in an organisation 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 standardised, 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 organisation.