Herbert Simon Organizational Theory 1950–1960 Decision Models

Organization Theory (1950–1960) — Herbert Simon

The Administrative Man — 1946

The Administrative Man (1946): Simon began to investigate change in the structure and functioning of government using more realistic, more human models. He shifted the emphasis toward how decisions are actually made and how cognitive limits affect choice.

1. Administrative Man: Focus on rational and cognitive development. Change the focus to how decisions are made; analyze decision functions and decision-making processes.
2. Holistic Approach: Consider the whole system, not only technical aspects, but also checking results. Analyze delegation and then control.
3. Equilibrium Model: Organizations are like a dynamic balance between members' contributions and the recognition they receive. When the balance is broken the organization enters conflict and loses efficiency.
4. Conflict Model: Well-managed conflict can permit growth.

Organizational Theory — 1956: Decision as an Interacting Process

Organizational theory (1956) proposes that decision making should be seen as an interacting process in which the decision maker (the person who makes the decision) interacts with the person who must execute it. It is a process that applies across decision fields. In the intellectual field, the person interacts with the context (the here and now). Simon argues that this process occurs when three critical elements are at play:

1 — Power

Power is not infinite; it is limited and takes different forms. The theory distinguishes types of power and how they affect decisions:

• Absolute Power: Authority that can be used to impose orders and instructions. Subordinates may comply technically but not internalize the command (not fully committed). The original text refers to ADEPT in this context.
• Limited Power: Recognized authority that must be earned. Influence matters here; subordinates who accept authority tend to be adherent, meaning they are more committed to the order given.

The real model combines these two forms of authority: power is inferred in the decision process, and the more powerful party will influence the decision more strongly.

2 — Time

Time determines the quality of the decision that can be made. Often there is a deadline imposed by the decision context. Consider the real time available: how long do I have to make the decision? Whenever possible, buy time to improve the quality of the decision.

3 — Information

Differentiate between given data and useful information. Organizations are generally saturated with data but not with information. Decision making requires information, not raw data (Simon). There are no unique or perfect decisions — only possible or satisficing decisions.

Key Points

• Decisions are bounded by cognition: Rationality is limited by human cognitive capacity and the available information.
• Process orientation: Decision making should be treated as an interactive, contextual process involving multiple actors.
• Balance of forces: Power, time and information jointly shape choices and outcomes.

References and Concepts

Concepts referenced in this document include Administrative Man, the Equilibrium Model, the Conflict Model, and the importance of Power, Time and Information in organizational decision processes as discussed by Herbert Simon between 1950 and 1960.