Discuss Simon’s Theory of Decision Making.

Herbert Simon, an American political and social scientist, was greatly influenced by the writings of Barnard, who was a pioneer of decision-Making approach. Simon’s early works, Administrative Behavior and Public Administration were greatly influenced by Barnard. In the field of administrative studies, Simon has been a pioneering behavioral scientist. Simon’s contribution has been particularly significant in the field of decision-making.

Decision-making is an approach to understand the functioning of an organization, or the behavioural aspects of administration. He is highly critical of the principles of administration formulated by L.F. Urwick and Luther Gullick, particularly he was opposed to the principles relating to unity of command, span of control, line and staff, hierarchy and departmentalization by functions. He ridicules these principles as “proverbs” and “myths”. He opines that for each of the classical principles there is an opposite and equally valid principle.

Some equates administration with decision-making. His central interest lies in the decision-making process which is the core of all administrative activities. To him all administrative action is decision-making. In his book “Administrative Behavior” he argued that, the task of deciding pervades the entire administrative organization quite as much as the task of doing indeed it is integrally tied up with the later. A general theory of administration must include principles, of organization that will insure correct decision-making, just as it must include principles that will insure effective action.

According to Simon, there are three important steps in the decision-making process:

• The Intelligence Activity: It means finding occasions calling for a decision.
• The Design Activity: It means inventory, developing and analyzing possible courses of action.
• The Choice Activity: It refers to selecting a particular course of action from those available.

The first point which Simon makes in his book “Administrative Behaviour” is that every decision consists of a logical combination of facts and value propositions. A fact is a expression of preferences. To bring out the difference between fact and value, the means-ends distinction is sometimes used. Simon’s system of analysis makes it clear that in administration both value and factual premises are intertwined in involvement.

The second point which Simon explain in his decision-making theory is the necessity of being rational in making choice. He explain rationality in terms of means-ends construct. If appropriate means are chosen to reach desired ends, the decision is rational. But he disputes the concept of total rationality in administrative behavior and holds that decisions have bounded by rationality. He rejects the theory of total rationality. To him rationality is limited because of incompleteness of knowledge, lack of perfect anticipation and other psychological reasons.

According to Simon due to various organizational and personal factors, an administrator cannot choose a best alternative, but has to be content with “satisfactory”, “good enough” alternatives. The third point used by Simon in his theory is the term “satisfactory” which involves the choice of a course of action which is satisfactory or at least good enough. Most of the decisions whether individual or organizational is concerned with the satisfactory alternatives.

The fourth point suggested by Simon is the principle of “Bounded Rationality” to explain the decision-making behavior in real life. His model of administrative man is a descriptive model of decision-making behavior.

This model recognize the force that due to several constraints administrators are unable to make perfectly rational decision. He suggests the utilization of computers to increase rationality. Simon’s Administrative Man opposed the Economic Man of classical theorist, who selects the rationality determined best course from among all those available to him in order to maximize his returns.

On the other hand Simon’s administrative man, because of limits of rationality, looks for a course of action that is satisfactory to get adequate profits. His administrative man is rational and maximizing, but it is bounded.

The fifth point of Simon’s decision-making theory distinction between programmed and unprogrammed decision. He says that programmed decisions are repetitive and routine or a definite procedure has been worked out to deal with them, whereas unprogrammed decisions are unstructured, there is no cut and dried method for handling a problem.

Habit, knowledge, skills and informal channels are the techniques to deal with programmed decisions. Selection and training of executives possessing higher skills, innovative ability, etc. are the techniques to deal with non-programmed decisions. But recently, as Simon has argued a complete revolution has taken place in the techniques of non-programmed decision-making.

The revolution has been due to the development and application of techniques such as mathematical analysis, operation research, electronic data processing and computer machines and as such techniques will reduce the dependency on the middle level administration personnel and lead to centralization in decision-making.