Place Of Decision Making In Administration
To Herbert Simon, the administration is the art of “getting the things done”. “He emphasizes the processes and methods that ensure action. He says that in administrative analysis sufficient attention has not been paid to the choice which precedes action. According to him, all administrative thinkers concentrated only on the study of doing’ rather than what to do’. Determination of what to do rather than doing actually’ did not receive proper attention. Simon points out without an adequate understanding of this dimension, which is rooted in the behaviour of man in the organisation, the study of administration would remain largely inadequate.
In the Behavioural approach, the question is to be understood as the process that precedes action. This is popularly known as the decision-making process. The need for taking decisions arises when there are several alternatives or courses of action open to an individual. But one has to choose only one alternative by a process of elimination. Therefore, decision-making is defined as a process of reducing the alternatives to one. The rationality of human beings lies in selecting such an alternative that can produce maximum positive results and minimum negative results. The efficiency of any group effort depends on the existence of principles that would ensure correct decision-making which in turn determines the effectiveness of doing the job.
In an organisation, people above the operative level are considered important, as they are entrusted with more crucial functions of decision-making. They have a very important role to play in realising organisational goals. They have a greater role in influencing the behaviour of the operative staff. For example, in a war, the soldiers fight on the battlefield. They make many decisions at their own levels. But the overall strategy that is formulated by the Generals, who are not engaged in the actual battle would determine the outcome of the battle. Similarly, in the automobile industry, the car is produced by the mechanics on the assembly line and not by the engineer nor the executive. Yet the latter occupied a crucial place. Again, the fire is extinguished by a team of firemen and not by the fire chief. In administration operative staff are important. The success of an organisation depends on them. The men above the operative level are equally important. They have an essential role to play in achieving organisational goals. The supervising staff have a greater influence upon the outcome of an organisational effort than the decision taken at the lower levels. These supervisory staffs have a greater influence on the operative staff. They decide, plan and direct the operative staff. In smaller organisations, the influence of the supervisory staff is direct, while the influence is indirect in big and complex organisations. Simon, therefore, says that effective organisation involves setting up of operative staff and above it. a superimposing staff capable of influencing the operative staff toward a coordinated and effective behaviour. He also says that the working of organisations depends on how the decisions and behaviour of employees are influenced. It is for these reasons that the behavioural approach emphasises that “insight into the structure and function of an organisation can get me gained by analysing how the decision and the behaviour of such employees influenced within and by the organisation.
Models Of Decision Making According To Simon
According to Simon, there are two models of Decision-making: The Rational Economic Model and the Administrative Model.
1. Rational Economic Model
The term “rationality’ implies ‘a consistent and value-maximizing choice within certain limits. It means that the decision-maker as an economic being tries to select the best alternative for achieving the optimum solution to a problem. According to this model, the decision-maker is assumed to make decisions that would maximize his or her advantage by searching and evaluating all possible alternatives. Thus, the economic man takes maximising decisions. The decision-making process, followed by an economic man to reach his maximising decisions is based on certain assumptions. They are :
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Decision-making is a Goal-Oriented Process
According to the rational economic model, the decision-maker has a clear, well-defined goal that he is trying to maximize. Before formulating the goal, the decision-maker can identify the symptoms of a problem and clearly specify one best way to solve the same. com
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All Choices are Known
It is assumed that in a given decision situation, all choices available to the decision-maker are known or given and the consequences or outcomes of all actions are also known. The decision-maker can list i) all the relevant criteria, ii) all feasible alternatives, and iii) the consequences for each alternative.
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Order of Preference
It is assumed that the decision-maker can rank all consequences according to preference and select the alternative which has the preferred consequences. In other words, the decision-maker knows how to relate consequences to goals. He knows which consequence is best (optimality-criterion).
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Maximum Advantage
The decision-maker has the freedom to choose the alternative that best optimizes the decision. In other words, he would select that alternative that would maximize his satisfaction. The decision-maker has complete knowledge and is a logical systematic maximizer in economic-technical terms. The above assumptions indicate that the rational-economic model is an idealist construct. The model is prescriptive and normative; it explains how decision-makers ought to behave. Total rationality is ideal and can be rarely achieved in an organization. Many factors hinder the achievement of total rationality in practice.
Factors Inhibiting Total Rationality
The factors that inhibit the achievement of total rationality in an organisation are :
Defining the problem accurately
It is often impossible to reduce organizational problems to accurate levels. An accurate, precise and comprehensive definition of the problems, as assumed under the model, may not be possible. Moreover, relevant goals may not be fully understood or may conflict with each other. Striking a balance between goals such as growth, profitability, social responsibility, ethics, survival, etc., may be difficult and as such, the assumption that the decision-maker has a single, well-defined goal in an organizational setting appears to be unfortunate,
Lack of awareness of problems
Frequently, the manager does not know that he has a problem. If the organization is successful and is flourishing, managers may not be in a position to steal their valuable time for searching for future problems. As rightly commented by Weber, “if current performance is satisfactory, few of us use the present time to search for future problems”.
Imperfect knowledge
It is too simplistic to assume that the decision-maker has perfect knowledge regarding all alternatives, the probabilities of their occurrence, and their consequences. Indeed managers rarely, if any, have access to perfect information,
Limited time and resources
Most of the managers work under tremendous pressure to meet the challenges posed by internal as external factors. They have to operate underdo or die’ situations and investing more time than necessary would mean lost opportunities and consequently business. This pressure to act pushes the decision-makers to act quickly. Moreover, obtaining full information would be too costly. If resources are limited, the decisions should be taken in such a manner as to achieve efficiency and effectiveness. Less effective solutions may be accepted if substantial savings are made in the use of resources. Working under severe time and cost constraints, managers may settle down for less optimal decisions rather than wasting time and effort in finding out an “ideal solution. Thus time limits rationality.
Cognitive limits
Most of the decision-makers may not be gifted with supernatural powers · to turn out a high-quality decision every time they sit through a problem. They may not be able to process large amounts of environmental information, highly technical information, large amounts of competitive information thoroughly and relate them successfully to confusing organizational objectives. When managers are invaded with so many details regarding various fields they try to simplify the decision-making process by reducing the number of considerations (alternatives) to a manageable number. When the thinking capacity is overloaded, rational decisions give way to bounded decisions. Instead of considering 8 to 10 alternatives, managers may deal with only three or four to avoid overloading and confusion. They simplify the complex fabric of the environment’ into workable conceptions of their decision problems.
Politics
The normative model, unfortunately, ignores the influence of powerful individuals and groups on the decision-making process. Many studies have revealed decision making to be political in nature accommodating the dissimilar and sometimes conflicting interests of different groups (labour unions, consumer councils, government agencies, local community). To satisfy these groups, the decision-maker may have to give weightage to less optimal solutions at the expense of organizational efficiency).
Thus, the rational economic model is based on defective logic and reasoning. It is an idealistic, perhaps even naive, model of decision making which works only when all the underlying assumptions prevail. The complexities of the real world force us to reject the traditional concepts of rationality and explicit computational problem-solving techniques and consider a more realistic theory that receives inputs from both the quantifiable and non-quantifiable variables; a theory that focusses on human involvement in the various steps of the (decision-making) process and allows for the impact of numerous environmental factors.
2. Administrative Model
The objective of the administrative model, proposed by Herbert A. Simon and refined by Richard Cyert and James March is to explain the decision-making behaviour of individuals and organizations. The decision-maker in the administrative model is called the *Administrative man’.
The ‘Administrative man’ is very close to his counterpart the ‘Economic man’. Like the economic man, he also looks for the best alternative. To quote Simon, “A fundamental principle of administration ….. is that among several alternatives involving the same expenditure the one should always be selected which leads to the greatest accomplishment of administrative objectives; and among several alternatives that lead to the same accomplishment the one should be selected which involves the least expenditure. Since this “principle of efficiency’ is characteristic of any activity that attempts rationally to maximise the attainment of certain ends with the use of scarce means, it is as characteristic of economic theory as it is of administrative theory. The administrative man’ takes his place alongside the classical economic man'”.
However, the decision-making process followed by the administrative man’ differs from the process followed by: economic man’. He understands that he cannot attain completely rationality due to the following reasons :
- He does not have full information about the problems.
- He does not possess knowledge of all the possible alternative solutions to the problems and their consequences.
- He does not have the ability to process competitive environmental and technical information.
- He does not have sufficient time and resources to conduct an exhaustive search for alternative solutions to the problems.
Thus, the administrative man realises that human and organizational limitations make it impossible for people to make perfectly rational decisions. Hence he takes the best decisions that are possible, given the above constraints. Thus he recognises that there are ‘boundaries to rationality’ in organizations. The concept of bounded rationality implies that the decision-maker is concerned with the discovery and selection of satisfactory alternatives and only in exceptional circumstances he is concerned: with the discovery and selection of optimal alternatives.
To quote Simon, “most decisions are concerned with not with searching for the sharpest needle in the haystack but with searching for a needle-sharp enough to sew with. Thus the administrative man looks for “adequate profit” not “maximum profit”, “fair price” not “optimum price”. Thus the administrative man instead of maximising exhibits satisficing (a term coined by Simon to denote satisfaction and sufficiency) behaviour.
Given the above constraints faced by the administrative man Simon says “It is the task of administration to design the environment in such a way that the decision-maker will approach as close as practicable to rationality (judged in terms of the organisations’ goals) in his decisions”.
Criticism Of Herbert’s Models Of Administration
Herbert Simon’s, Rational man Organisation theory is criticised on the following grounds:
1. Ignores environmental factors
Simon’s study provides a deep insight into administrative behaviour and the interaction between the decision making processes and administrative behaviour found in organisations. However, Prasad and Prasad feel that while 3 concentrating on processes and the role of decision-making Simon has relegated social, political, economic and cultural factors to the background although their role is no less significant in the analysis of administrative behaviour.
2. Too much importance to decision-making
The critics of Simon mainly contend that although the decision-making process is an important variable in the organisational situation, it alone is not adequate to explain the totality of the organisational picture. To them, decision-making is a process involving the dimensions of emotional or expressive as Newestional or instrumental.
3. Administration dichotomy
This according to some thinkers has revived the discarded politics administration dichotomy in a new guise.
4. Ethno Centric
Simon’s analysis that administration plays a similar role in all societies. But it is observed from experience that administrative systems in developing countries do not have similar role orientation as their counterparts in developed countries. Therefore, developing a theory purely based on the American experience, cannot be universally valid.
5. Supports status quo
Chris Argyris considers that Simon’s, reliance on the descriptive empirical approach and the concept of “satisficing man” postulated in his theory would support the status quo in organisational life. Simon’s theory in Argyris’s view excludes variables, viz., interpersonal relations, the need for self-actualisation etc. which are central obits to organisation behaviour.
6. Adequate assumptions about motivation
Simon’s reliance on mechanisms of al organisational influence as an important source of motivation would be tantamount to the view just that an can be motivated by the authority system. On the contrary, Argyris asserts, that man is basically proactive with a potential for self-actualisation. Simon’s theory of organisation would, thus, have no place for self-actualising individuals.
7. Lacks empirical validity
Peters and Waterman in their study of well-managed companies have proved that most of the well-managed companies do not follow the rational model as postulated by Simon.
8. Fosters anti-experimentation
Peters and Waterman feel that some versions of rationality did not value experimentation and crackdown on those who make a mistake or fail. They support their argument based on their empirical observation of certain well-managed companies’ which proceeded `irrationally’ and `chaotically’ and introduced more new products each, during the same period.
Chris Argyris’s Critique Of Simon
Herbert Simon’s “rational man organization theory” has been criticized by Argyris on several grounds. Argyris considers that Simon’s reliance on the descriptive-empirical approach and the concept of satisfying man’ postulated in the theory would support the status quo in organisational life. Simon’s theory, in Argyris’ view, excludes variables–interpersonal relations, the need for self-actualization, etc.–that are central to organisational behaviour. Further, Simon’s reliance on mechanisms of organisational influence as an important source of motivation would be tantamount to the view that man can be motivated by the authority system. On the contrary, Argyris asserts. man is basically proactive with potential for self-actualization. Simon’s theory of organisation would have no place for self-actualizing individuals, Argyris elaborates :
The consequence of intendedly rational man concept, in short, is to focus on the consistent programmable organized, thinking activities of man; to give primacy to behaviour that is related to goals; to assume purpose without asking how it has developed, Man, as a person who feels experiences chaos; manifests spontaneity; becomes turned-on without planning it or being able to explain it in terms of consistency of conscious purpose; thinks divergently… is not the primary concern of the intendedly-rational-man organisation theorists,
Argyris goes to the extent of bracketing Simon along with the traditional administrative theorists for emphasizing the importance of authority structures, for paying insufficient attention to the emotional side of the man and for ignoring the hostility, anger and negative feelings of a typical employee toward the organisation and its goals.