Decision-making is a multi-step process which is considered the most significant activity of the organization.
basic and central function of management at all levels.
The word “decision” is derived from the Latin word “decido”, which means settlement, a fixed intention bringing to a conclusive result and decision-making means concluding a solution to a problem.
Koontz and O’Donnell, “Decision-making is the actual selection from among alternatives of a course of action.”
HERBERT SIMON
-
Nobel Prize-winning economist Herbert Simon’s (1916-2001) most celebrated work is Administrative Behaviour (1947)
-
organization (1958)
**Human Problem Solving (1972)** -
Administrative Behaviour’ Simon mentioned that “decision-making is the central concern for understanding the organization and its working.
-
And, to understand the organization better, one needs to analyze human Behaviour and its ethical and values preferences in the whole decision-making process.
-
Herbert Simon criticized the scientific and structural approaches to public administration because he believed they were too simple and unrealistic.
-
He argued that these approaches made the discipline inconsistent and not universally applicable. Simon questioned the idea that decision-making could always be rational and challenged its universal truth.
Rational decision-making theory by Herbert Simon
NEO-CLASSICAL THEORY
an approach to making decisions based on logic, reason, and systematic processes developed by Herbert Simon it focuses on identifying the best possible solution out of the available options.
Simon’s decision making theory is based on the basic idea that rational administrator or a rational decision maker possesses perfect and complete knowledge about understating the problem.
FEATURES OF RATIONAL DECISION-MAKING
value fact dichotomy
Means-ends logic
programmed & non-programmed
TYPES OF DECISION- MAKING
-
Programmed & non- programmed
-
Organizational & personal
-
policy & operative
-
Programmed & non- programmed
Stages of decision-making
Intelligence activity stage (scanning, sensing, finding problems)
Problems of an organization are identified & analyzed to proceed to a resolution
Design activity stage (generating, identifying alternatives)
to look for suitable course strategies or alternatives to the solution of the problem & identify the merits & demerits of each.
Choice activity stage (choosing the least cost & maximum benefit alternatives)
Evaluation of different consequences of all alternatives, available & a decision is taken after examining the alternatives & the most suitable course of action is selected.
it requires skills such as Judgment, creativity, quantitative analysis & experience in the decision-making process.
VALUE & FACTS
Simon opined that each decision has 2 components
- VALUE
- FACTS
VALUE
It can’t be qualified (honesty, kindness, good or bad can’t be verified as true or false)
FACTS
It can be verified as true or false. Science is also based on facts acc. to Simon.
The decision should be taken based on facts rather than values.
CRITIQUE OF RATIONAL DECISION MAKING MODEL
model assumes that all information is available pertaining the problem.
first, it is tough to get all information about any problem, there are some limitations to how much information we can gather.
Secondly, pile of information can lead to ‘information analysis paralysis’
individual rationality has its own boundaries to see through the data and figure out alternatives out of that. There are cognitive, infrastructural, ecological restraints to it.
BOUNDED RATIONALITY
Simon disputes the concept of total rationality and administrative behavior. It is also known as limited rationality
He observes that human behavior needs to be rational or non-rational it involves what he calls bounded rationality.
Bounded rationality acknowledges that decision-makers have cognitive limitations, such as limited information processing abilities, time constraints, and cognitive biases.
A principle according to which practical decision-makers make satisficing decisions rather than maximizing.
satisficing consists of satisfy+ suffice
some basic factors that lead to satisficing decisions based on bounded rationality. These are:
Dynamic and Complex nature of reality and administrative objectives.
Limited ability of decision makers to foresee the alternatives and outcomes.
Lack of information and lack of cognitive and computational ability to process the information.
Organizational pressure and other external factors in the environment.
Personal interests, preferences, and biases are bound to influence the decisions.
Simon developed a more realistic workable model of decision-making. Whereas the classical theory product ‘the economic man’ maximizes
Simon’s ‘administrative man’ satisfices. The administrative man simplifies the situation by considering fewer for deciding which he thinks as crucial.
Critique of Simon’s Bounded Rationality Model
is an acclaimed theory of decision-making but many researchers claim that this theory despite its difference still comes under the school of rational decision-making model.
Scholars like Huber, Das, and Teng stated that there is no clear-cut distinction between perfect and bounded rationality.
neglected the role of political, social, cultural and economic factors and how they influence administrative behavior
Critics like Norton E. Ling and P. Selznick commented that the dichotomy of fact and value in Simon’s theory is a revision in a new way to the discredited dichotomy of politics administration.
undermined the role of bureaucracy in administrative studies and limited it to a neutral agent which is not true in the real sense.
Bureaucracy is the most important agency in administrative studies and without understanding the bureaucracy, the study of administrative behaviour will always remain flawed and narrow in its approach
it is unattainable and idealistic to get fit into real public administration and real world
You must be logged in to post a comment.