Simon’s Decision-Making Theory | Public Administration Optional for UPSC (Notes) PDF Download

Introduction

Herbert Simon, a notable contributor to administrative theory, is recognized as the first behaviorist in the field. In his book "Administrative Behavior," Simon emphasized the importance of studying decision-making processes and task performance in administration. He argued that decision-making is essentially the process of choosing between alternative courses of action or inaction. Simon's theory of bounded rationality acknowledges the limitations of human capacity in solving complex problems and suggests that administrators make decisions based on satisficing, finding satisfactory solutions rather than seeking the optimal choice.

Stages in Decision Making

Simon outlined three stages in the decision-making process. 

1. The intelligence activity stage involves problem identification and the analysis of the organizational environment. 
2. In the design activity stage, the administrator searches for suitable courses of action, considering their pros and cons. 
3. Finally, in the choice activity stage, the administrator critically evaluates the consequences of the alternatives and selects the most suitable course of action based on judgment, creativity, quantitative analysis, and experience.

Values and Facts in Decision Making - Simon

Simon identified two components associated with decision making: the value component and the fact component. 

1. The value component reflects the decision maker's preferences and ethical considerations.
2. The fact component pertains to verifiable premises that can be evaluated for their truthfulness.
3. Simon suggests that factual judgments should prevail in decision making, while values should be minimized.
4. However, he acknowledges that values can be incorporated when setting end goals, while factual judgments should guide the implementation of those goals.

Programmed and Non-Programmed Decision Making:

Simon distinguishes between programmed decisions, which involve repetitive components and rely on established examples, and non-programmed decisions, which are unique and require problem-solving in new environments. Simon recommends delegating programmed decisions to sub-units while retaining non-programmed decisions with upper-level strategic management.

Rational Decision Making - Simon

Simon proposed several tools to enhance rationality in organizational decision making.
These include 

• promoting specialization,
• utilizing scientific tools in the decision-making process
• employing market mechanisms for operations
• understanding political institutions, and 
• fostering a broad knowledge base to improve problem-solving rationality.

Criticism

Simon's distinction between facts and values has drawn criticism from those who emphasize the presence of values in decisions for the betterment of society. Some argue that his notion of efficiency is insufficient to fully explain the purpose of organizations. Additionally, his conceptual framework has been criticized for neglecting the influence of the social setting, society, and the environment on workers and administrators, focusing solely on decision making within organizations.

Relevance

Despite criticism, Herbert Simon's contributions remain significant. He shifted the focus to the human mind and its decision-making processes. His theory prompted exploration of unanswered questions in organizational decision making and offered solutions to complex problems in modern industries. Simon's work was recognized with a Nobel Prize, highlighting its enduring relevance in the field of administration.

Conclusion

Herbert Simon's theory of decision making, with its emphasis on bounded rationality and the importance of understanding human limitations, has had a lasting impact on administrative theory. By highlighting the stages of decision making, the role of values and facts, and the distinction between programmed and non-programmed decisions, Simon provided valuable insights into organizational decision-making processes. While his work has faced criticism, it remains highly relevant and has paved the way for further research and understanding in the field.