Editing Herbert A. Simon (section)

===Decision-making===
{{Main|Administrative Behavior}}
[[File:Simons 3 stages in Decision Making.gif|thumb|320px|alt=Simon's 3 stages in Rational Decision Making: Intelligence, Design, Choice (IDC)|Simon's three stages in Rational Decision Making: Intelligence, Design, Choice (IDC)]]

''Administrative Behavior'',<ref name="BarnardSimon1947">C. Barnard and H. A. Simon. (1947). ''Administrative Behavior: A Study of Decision-making Processes in Administrative Organization''. Macmillan, New York.</ref> first published in 1947 and updated across the years, was based on Simon's doctoral dissertation.<ref name="Simon1976">{{Harvnb|Simon|1976}}</ref> It served as the foundation for his life's work. The centerpiece of this book is the behavioral and cognitive processes of humans making rational decisions. By his definition, an operational administrative decision should be correct, efficient, and practical to implement with a set of coordinated means.<ref name="Simon1976"/>

Simon recognized that a theory of administration is largely a theory of human decision making, and as such must be based on both economics and on psychology. He states:

{{Blockquote|text=[If] there were no limits to human rationality administrative theory would be barren. It would consist of the single precept: Always select that alternative, among those available, which will lead to the most complete achievement of your goals.<ref name="Simon1976"/> (p xxviii)}}

Contrary to the "[[homo economicus]]" model, Simon argued that alternatives and consequences may be partly known, and means and ends imperfectly differentiated, incompletely related, or poorly detailed.<ref name="Simon1976"/>

Simon defined the task of rational decision making as selecting the alternative that results in the more preferred set of all the possible consequences. Correctness of administrative decisions was thus measured by:
* Adequacy of achieving the desired objective
* Efficiency with which the result was obtained

The task of choice was divided into three required steps:<ref>{{Harvnb|Simon|1976|p=67}}</ref>

* Identifying and listing all the alternatives
* Determining all consequences resulting from each of the alternatives;
* Comparing the accuracy and efficiency of each of these sets of consequences

Any given individual or organization attempting to implement this model in a real situation would be unable to comply with the three requirements. Simon argued that knowledge of all alternatives, or all consequences that follow from each alternative is impossible in many realistic cases.<ref name="BarnardSimon1947"/>

Simon attempted to determine the techniques or behavioral processes that a person or organization could bring to bear to achieve approximately the best result given limits on rational decision making.<ref name=Simon1976/> Simon writes:

{{blockquote|text=The human being striving for rationality and restricted within the limits of his knowledge has developed some working procedures that partially overcome these difficulties. These procedures consist in assuming that he can isolate from the rest of the world a closed system containing a limited number of variables and a limited range of consequences.<ref>{{Harvnb|Simon|1976|p=82}}</ref>}}

Therefore, Simon describes work in terms of an economic framework, conditioned on human cognitive limitations: ''Economic man'' and ''Administrative man''.

''Administrative Behavior'' addresses a wide range of human behaviors, cognitive abilities, management techniques, personnel policies, training goals and procedures, specialized roles, criteria for evaluation of accuracy and efficiency, and all of the ramifications of communication processes. Simon is particularly interested in how these factors influence the making of decisions, both directly and indirectly.<ref name="BarnardSimon1947" />

Simon argued that the two outcomes of a choice require monitoring and that many members of the organization would be expected to focus on adequacy, but that administrative management must pay particular attention to the efficiency with which the desired result was obtained.<ref name="BarnardSimon1947" /> <sup>36-49</sup>

Simon followed [[Chester Barnard]], who stated "the decisions that an individual makes as a member of an organization are quite distinct from his personal decisions".<ref>{{Harvnb|Barnard|1938|p=77}} cited by {{Harvnb|Simon|1976|pp= 202–203}}</ref> Personal choices may be determined whether an individual joins a particular organization and continue to be made in his or her extra–organizational private life. As a member of an organization, however, that individual makes decisions not in relationship to personal needs and results, but in an impersonal sense as part of the organizational intent, purpose, and effect. Organizational inducements, rewards, and sanctions are all designed to form, strengthen, and maintain this identification.<ref name="BarnardSimon1947" /><sup>212</sup>

Simon<ref name="Simon1976"/> saw two universal elements of human social behavior as key to creating the possibility of organizational behavior in human individuals: Authority (addressed in Chapter VII—The Role of Authority) and in Loyalties and Identification (Addressed in Chapter X: Loyalties, and Organizational Identification).

Authority is a well-studied, primary mark of organizational behavior, straightforwardly defined in the organizational context as the ability and right of an individual of higher rank to guide the decisions of an individual of lower rank. The actions, attitudes, and relationships of the dominant and subordinate individuals constitute components of role behavior that may vary widely in form, style, and content, but do not vary in the expectation of obedience by the one of superior status, and willingness to obey from the subordinate.<ref>{{Cite book |last=Simon |first=Herbert A. |url=https://books.google.com/books?id=_obn42iD3mYC&pg=PA179 |title=Administrative Behavior, 4th Edition |date=February 5, 2013 |publisher=Simon and Schuster |isbn=978-1-4391-3606-5 |language=en}}</ref>

Loyalty was defined by Simon as the "process whereby the individual substitutes organizational objectives (service objectives or conservation objectives) for his own aims as the value-indices which determine his organizational decisions".<ref>{{Harvnb|Simon|1976|pp= 218}}</ref> This entailed evaluating alternative choices in terms of their consequences for the group rather than only for oneself or one's family.<ref>{{Harvnb|Simon|1976|pp= 206}}</ref>

Decisions can be complex admixtures of facts and values. Information about facts, especially empirically proven facts or facts derived from specialized experience, are more easily transmitted in the exercise of authority than are the expressions of values. Simon is primarily interested in seeking identification of the individual employee with the organizational goals and values. Following [[Lasswell]],<ref>{{Harvnb|Lasswell|1935|pp=29–51}} cited by {{Harvnb|Simon|1976|pp=205}}</ref> he states that "a person identifies himself with a group when, in making a decision, he evaluates the several alternatives of choice in terms of their consequences for the specified group".<ref>{{Harvnb|Simon|1976|p=205}}</ref>

Simon has been critical of traditional economics' elementary understanding of decision-making, and argues it "is too quick to build an idealistic, unrealistic picture of the decision-making process and then prescribe on the basis of such unrealistic picture".<ref>Simon, Herbert. https://www.ubs.com/microsites/nobel-perspectives/en/laureates/herbert-simon.html</ref>

Herbert Simon rediscovered path diagrams, which were originally invented by Sewall Wright around 1920.<ref>{{Cite book|last1=Pearl|first1=Judea|title=The Book of Why: The New Science of Cause and Effect|last2=Mackenzie|first2=Dana|publisher=Basic Books|year=2018|isbn=978-0465097609|location=046509760X|pages=79}}</ref>