Discuss the Simon’s views on classical theory of decision making.

According to Simon’s view the classical theory, decision-making involves a series of steps like:

•  Formulation of the problem and of the goals and objectives.
• Conceptualization of alternatives and collection of relevant pieces of information.
• Choosing the best course of action or the alternative that would bring the best return.
• Implementing the decision.
• Evaluating the effectiveness of the decision.

The classical theory assumes that all these steps are strictly followed, that all these decisions are made in complete rationality with a view to achieve maximum reward: But according to Simon in actual practice, there is lack of complete information, or new unforeseen factors crop up and above all the goals of maximum reward, often involves high costs and even negative consequences.

Simon’s view of decision-making is based on the principles of bounded rationality or the limitations of human capacity in formulating and solving complex problems. Such limitation arise from internal or psychological fact of stress or motivations on the one hand or external, environmental factors on the other hand. Therefore, the behavioural approach states that decisions may best be made within constraints of the circumstances. Accordingly, Herbert Simon talks of satisfying” rather than maximizing the outcome of a decision.

Herbert Simon strictly opposed the principles of administration developed by the classical theory, he considered it as a “proverb” . He says classical theory or administrative theory is fatal defect of the current principles of administration that, like proverbs, they occurs in pairs. For almost every principle one can find an equally acceptable contradictory principle. Although the two principles of the pair will lead to exactly opposite organizational recommendations, there is nothing in the theory to indicate which the proper one to apply.

For example, principle of span of control means a superior can control effectively only a limited number of subordinates, if it exceeds the number will lead to ineffectiveness. The classical scholars are of the opinion that a narrow span of control create a tall hierarchical organization which conflict with the principles of minimum number of supervisory levels, implying a flat hierarchy.

Another principle, the unity . of command means that in an organization the employee receive order from only one superior but it opposed another principle that is the principle of specialization. The present organizations are highly complex and due to the reason of specialization. The specialist would receive orders from technical as well as general supervisors. Simon criticized Administrative Theory as it is not scientifically valid and do not have universal relevance.

According to Simon every administrative activity involves both deciding (decision) and doing (action). To Simon decision-making process is that which concerned both the process of decision and the process of action. It is a process which is universally valid.