Lesson 4, Topic 7
In Progress

2.7 SIMON’S DECISION MAKING THEORY

Lesson Progress
0% Complete

Decision-Making School Of Thought

  • Herbert Simon was an American social scientist who began his career in local government.
  • His early interest is evaluating the efficiency of different methods of local administration led him to the new field of `operations research’.
  • He was Director of the Social Science Research Council and Nuclear Science and Engineering Corporation.
  • He was later Professor of Psychology and Computer Science at Carnegie Mellon University.
  • Herbert Simon’s first work on administration was completed when he was a young political scientist. At the age of 22 he wrote a booklet in co-authorship, with Clarence Ridley.
  • The book, `Measuring Municipal Activity’, is still recognised as a minor classic in municipal administration.
  • Later, he published several studies concerning ideal social workers, fire insurance risk and on metropolitan administration.
  • This he did while he was working in California’s Institute of Public Administration.
  • Herbert Simon was immensely influenced by the writings of Chester Barnard and by Barnard himself as a person.
  • It is thus not surprising that many of Barnard’s ideas are found in Simon’s early works, viz., ‘Administrative Behaviour’ (1947) and `Public Administration’ (1951), which he wrote in collaboration with Donald Smithburg and Victor Thompson.
  • Later, Simon was engaged in fundamental research into the process of decision making, using computers to simulate human thinking.
  • He deliberately turned away from other aspects of administrative and organisational behaviour.
  • He became one of the world’s outstanding pioneers in psychological research.

Attack on ‘proverbs’ of Administration

  • In 1946, Herbert Simon attacked the orthodox principles of administration, formulated by classical theorists, as mere proverbs.
  • Simon pointed out that in these principles it was assumed that administrative efficiency would increase if-
  •  
  • Specialisation was increased;
  • Members in an organisation were arranged in a hierarchy which presented unity of command;
  • Limit was imposed on the number of subordinates reporting to an administrator;
  • Workers were grouped according to the classification of purpose, place, people and process.
  • In Simon’s view, these assumptions were not ‘principles’ at all, since there was a wide gap between the principles prescribed and their effective practice.
  • A brief, reference is made here to some of Simon’s objections in this context

Specialisation

  • Administrative efficiency is supposed to increase with an increase in specialisation.
  • But, according to Simon, specialisation is not a condition of efficient administration. It is a characteristic of most group effort.
  • Specialisation merely means that different people are doing different things.
  • The real problem of administration is not specialisation, but specialising in a particular manner and direction that may lead to administrative efficiency.

Unity of Command

  • According to Simon, there is a notable contradiction between specialisation and unity of command.
  • It is physically impossible for a man to obey two contradictory commands as presumed by Gullick in his principle.
  • The main limitation to this principle is that it is in compatible with the principle of specialisation.
  • Subordinates accept orders not only from their formal superiors but also from different specialists. in such a situation unity of command does not exist.
  • The principle of unity of command is more defensible when narrowed down to the following — “In case two authoritative commands conflict, there should be a single determinate person whom the subordinate is expected to obey; and the sanction of authority should be applied against the subordinate only to enforce his obedience to that one person”.
  • Even in this limited form the principle of unity of command solves for problems.
  • It leaves unsettled the very important question of non-authority should be zoned in a particular organisation and through what channels it should be exercised.

Span of Control

  • Simon has subjected the concept of ‘Span of Control’ to further evaluation.
  • He observes that limiting the number of subordinates reporting directly to one superior can, in a large organisation, cause excessive red tape.
  • This is mainly because for each contact between organisation members, the locus-of decision must be carried upward until a command superior is found.
  • But if an organisation ‘ is large this will involve a cumbersome and time consuming process.
  • Conversely, by increasing the span of control of the administrator, his control over subordinates may be weakened.
  • Thus both the increase and decrease in span of control have undesirableconsequences, which leads to no agreement as to the number of subordinates who should work under an administrator.

The basis of Organisation Groupings

  • It is supposed under the classical theory that administrative efficiency increases by grouping workers according to purpose, process, place and people.
  • But Simon holds that these principles set forth by Gulick are internally inconsistent with the principle of specialisation.
  • A closer study of the situation shows that there are fundamental ambiguities in the meanings of the, terms `purpose’, ‘process’, ‘person’ and ‘place’.
  • Purpose and process have very little difference between themselves.
  • Purpose may be roughly defined as the objective achieved through an activity known as process.
  • So purpose and process cannot be strictly separated.
  • Similarly person and place are not separate from purpose. They are a part of it Simon further observes that objectives of an administrative organisation are phrased in terms of a service to be provided and an area for which it is provided. When one basis of Organisation is selected, the other three are sacrificed.
  • Thus there is no way to determine which method of organisation is most appropriate in a given situation.

Behavioural Approach

  • In the field of administrative studies, Herbert Simon has been the most pioneering of behavioural scientist.
  • However, he has agreed that administrative behaviour is only a part of the behavioural science movement, and it differs only in subject matter, from other behavioural sciences such as Sociology, Anthropology, Psychology and Political behaviour.
  • In administrative studies, the behavioural approach is distinguished from the traditional structural approach is distinguished from the traditional structural approach in the following areas —
  •  
  • The behavioural literature is descriptive;
  • It stresses adopting operational definitions of terms and use of empirical studies based on rigorous methods such as field observation, controlled field experiments and laboratory studies of organisation — like groups;
  • Generally the behavioural studies employ the tools of mathematisation and quantification and are concerned with the exercise of theory building;
  • They are interdisciplinary in character and make ample use of models and methodology of other social sciences.
  • In the field of administrative behaviour, major studies have pertained to bureaucracy, human relations, motivation and decision making.
  • In the case of the last two, Simon’s contribution has been outstanding.

Focus on Decision Making

  • Simon’s central interest lay in the decision-making process, which, to him, is the core of all administrative activity.
  • The task of deciding pervades the entire administrative organisation and a general theory of administration must include principles of organisation so that correct decisions may be ensured.
  • To Simon ‘ the rational decision-making process in an ideal organisation consists of many non-traditional factors.
  • The decisions which the organisation makes for an individual generally include specifying his functions, allocating authority and setting limits to his choice.
  • This is done in order to coordinate the activities of individuals working in an organisation. But the process of decision does not come to an end by simply determining the general purpose of an organisation.
  • In fact, decision-making involves the execution of decisions in which even a person working at the lowest level of the hierarchy has an essential role to play in the accomplishment of the organisation’s objectives.
  • Considering the crucial significance of the decision making process, Simon has rightly termed decision-making as the ‘heart’ of the administration. .

Distinction between facts and values

  • According to Simon, any rational decision may be viewed as a conclusion reached from certain premises. These premises are of two different kinds — values and facts. The behaviour of a rational person can be controlled if the value and factual premises upon which he bases his decision are specified for him.
  • This control over the person can be complete or partial. It is complete if all the premises are specified and partial if some are left to his discretion.
  • Simon ‘further says that there is one important difference between permitting a discretion based on value premises and a discretion based of factual premises.
  • The latter can always be evaluated as correct or incorrect in an objective are empirical sense, whereas the objectives ‘correct’ and ‘incorrect’ cannot be applied to a value premises.
  • If only factual premises are left to a subordinates p `correctness’ of his decision will depend upon the value premises he selects, and there is no universally accepted criterion of right or wrong which can be applied to his selection.
  • The administrators decision cannot be evaluated by scientific means alone, since factual as well as ethical propositions are present in it.
  • The values involved in administrative decisions are seldom final values in the psychological and philosophical sense, since most objectives and activities derive their value from the means and relationship which connect them with objectives or activities that are valued in themselves.
  • The process of decision-making can be sub-divided into two major parts
  •  
  • The first involves the development of a system of values and then appraising their relative merits and demerits; and
  • The second consist in a comparison of the possible lines of action in terms of the value system.
  • The first part involves both the ethical and the factual considerations, while the second is restricted only to factual problems.
  • The, distinction between factual and value premises has an obvious bearing on the question of non discretion can be reconciled with responsibility and accountability and what the line of division is to be between policy and administration.
  • For a science of administration the two must be rigorously separated and according to Simon, a science of administration can only be based on facts.

Stages in Decision-making process

  • Simon’s major interest has been in analysing how decisions are made and how they could be made more effective. He describes three stages in the process of making a decision
  •  
  • The Intelligence Activity
  • This means identifying occasions calling for a decision. Executives spend a good part of their time surveying the economic, technical, political and social environment to identify new conditions that lead to new action.
  •  
  • The Design Activity
  • This involves inventing, developing and analysing possible courses of action.
  •  
  • The Choice Activity
  • This involves selecting particular course of action from the available choices. For this, an executive does not obviously require much time.
  • The execution of decision is also regarded as a decision-making process since an executive faces a new set of problems in carrying out a particular decision.
  • For Simon, the whole managerial action is included in the process of decision-making. In the traditional theory of economic man, decision-making was designed to maximize the return but since this model is divorced from reality, it cannot be applied to administrative situations.
  • There is a non-rational, emotional and unconscious element in man’s thinking and behaviour. It becomes the task of an administrator to be as close as possible to rationality in his administrative decisions.

Satisfying versus Maximising and Optimising

  • While dealing with the ‘decision-making’ process, Simon attacked the traditional game theory and statistical decision-making theory.
  • These theories tend to get divorced from reality, for they are founded on assumption which are unrealistic. Simon assists that any theory based on such assumptions is `undamentally wrong’.
  • He maintains that there is a large non-rational, emotional and unconscious element in man’s thinking and behaviour, and so the concern of administrative theory is with the boundary between the rational and non-rational aspects of human and social behaviour. This limit to rationality is not state but depends on the environment of organisation in which the individual decision takes place.
  • Programmed decisions are repetitive and routine and a definite procedure has been evolved to deal with these. These decisions may often be automated with the help of an electronic computer. Thus they do not have to be considered afresh when familiar situations emerge.
  • Non-programmed decisions on the other hand, are those which are novel — and unstructured and there exists no known method of handling them in an ‘optimum’ manner. This may be because a similar case has not occurred before, or because it may be a particularly difficult case. The traditional techniques of dealing with non programmed decisions include selection and training of executives who possess judgment, intuition and creativity.
  • Herbert Simon has been personally active in developing computer programmes for non-programmed problem solving. He maintains that the same process can be applied to the sphere of administrative decision-making.

Significance of Administrative Efficiency

  • According to Herbert Simon , the fundamental criteria of an administrative decision must be `efficiency’.
  • The criterion of efficiency is easily understood in the context of commercial organisations that are largely governed by a profit objective. In administration, this criterion dictates that choice of alternatives which produces the largest result for the given application of resources. Although all decisions are made in terms of alternatives, yet the problem still remains of comparing the   values of different alternatives.
  • The efficiency criterion has been considerably criticised but Herbert Simon has defended it from those who object to it, on the ground that it leads to a mechanical conception or who assert that the criterion of efficiency leads to an incorrect relationship.
  • In `Public Administration’, Simon and his colleagues have limited the use of efficiency criterion by two conditions
  •  
  • The first condition of its use is that the human and material resources that an administrator proposes to employ must be scarce, i.e. the resources available for one programme will not be available for another. This is known as opportunity cost.
  • The second condition is that the administrator must be neutral in the use of resources so long as he achieves greatest result, but any bias towards certain ways of doing things as contrasted to others will interfere with the efficiency criterion.
  • Herbert Simon and his colleagues have also recognised other criteria that compete with efficiency. These are rationality and responsibility.
  • However, in the second edition of ‘Administrative Behaviour’, Simon has categorised efficiency as an operational criterion for decision-making. Herbert Simon finds the efficiency criterion applicable largely to low level decisions.

The Mechanism of Influence

  • Simon maintains that people in an organisation are decision-making mechanisms, and administrators influence them by determining the factual or value premises on which decisions are based.
  • The first decision that an employee participant makes is whether to participate or not in an organisation.
  • Herbert Simon also differentiates between the decision to participate and decision to produce. In deciding to participate, a participant is guided by personal considerations and once this decision is made, personal goals, to some degree, become subordinate to the goals of the organisation. High morale develops whenever influence creates such an atmosphere in which employees are willing to participate in a timely active way and are ready to devote their full energies to the tasks of the organisation.
  • Herbert Simon also distinguishes between ‘internal’ and ‘external’ influences on a decision-maker. Internal influence identifies the individual with the organisation, although this identification is limited by an individual’s background and outside influences. The other is external influence. In this category comes authority which Herbert Simon defines as the power to make a decisions which guide the actions of others. Thus, authority is a relationship existing between two individuals. It involves behaviour on the part of both the superior and the subordinate.
  • This shows that authority is neither legalistic in a strict sense nor is it based on formal sanctions alone. Essentially, authority is based on the willingness of the receiver of a command to achieve the purpose of the organisation, or to follow a leader, or to follow the social sanctions imposed by the group to which he belongs.
  • Herbert Simon also warns against the conflicting influences because in administration, they pace an important problem and these problems can only be solved by establishing determinate hierarchy of authority,

The Process of Communication

  • Communication according to Herbert Simon , may be defined as any process whereby decisional premises are transmitted from one member of an organisation to another.
  • Communication is an inevitable process in any organisation. It is a two way process, i.e. the decisional centre is formed by the individual vested with responsibility for making particular decision of orders, information and advice and then the decision reached at this centre are transmitted to other parts of the organisation.
  • It is a process that takes place upward, downward, and throughout the organisation.
  • There are two media of organisational communication:
  •  
  • Formal; and
  • Informal
  • Formal communication is through spoken words, memoranda and letters,
  • whereas the informal communication system is built around the social relationships of the members of the organisation.
  • Herbert Simon has also briefly discussed the barriers in the communication process. He observes that serious blockades may occur at any of the three levels of communication process:
  •  
  • Initiation
  • Transmission
  • Reception

CONCLUSION

  • It can be rightly claimed that in the whole movement of taking the field of positive administration near to the goal of constructing a ‘science of administration’.
  • Herbert Simon’s contribution has been the most significant.
  • His criticism for the classical school for laying too much emphasis on ‘principles’ of administration jolted the scholars of public administration and compelled them to look afresh at their conceptual constructs.
  • Simon’s stress on the use of behavioural approach with particular emphasis on the decision-making scheme has paved the way for a new learning process in public administration. His analysis of human rationality and its limitations in administrative behaviour has encouraged a number of new studies in the field of organisational psychology.
  • In this sphere, Herbert Simon’s theory of motivation still enjoys a distinguished place.
  • However, in the debate on facts and values that Herbert Simon had with Dwight Waldo it become clear that Herbert Simon ‘s idea of a “fact-based” administration, than public administration.
  • It is unfortunate indeed that since the early sixties, Herbert Simon has not written much on public administrative systems.
  • Of course, the contribution that he has already made should be enough to keep his distinctive place secure in the annuals of public administration
0 Shares
Share
WhatsApp
Telegram
Print