Simon's Theory of Administrative Behavior

Simon (1976) clarified the processes by which goal specificity and formalization contribute to rational behavior in organizations (Scott p. 45). He criticized Fayol's platitudes and Taylor's "economic man" assumptions, proposing the "administrative man" who pursues his self-interests but often doesn't know what they are, is aware of only some of the possible decision alternatives, and is willing to settle for an adequate solution than continue looking for an optimal one (p. 45).

Simon distinquishes between the decisions a person makes to enter or leave an organization and the decisions they make as a participant. Organizations simplify decisions and support participants in the decisions they need to make.

Organizations simplify decisions by restricting the ends toward which activity is directed. Goals supply the value premises that underly decisions. Value premises (assumptions of desirable ends ) are combined with factual premises to make decisions. The more precise the value premises, the greater effect they have on decisions.

Participants in high positions make decisions with a higher value component, people in lower positions make decisions with a higher factual component. The top makes "what" decisions, the bottom "how" decisions. Choice of ends can only be validated by fiat or consensus, choice of means empirically.

While goals are often vauge, they can serve as the starting point for a series of mean-ends chains where one develops a set of means for the overall goal, redefines each mean as a sub-goal, and then develops means for the sub-goal, branching until the means are activities.

Each goal in the means-end hierarchy is an end to things below it and a mean to those above it. Activities can only be evaluated against the goals above it. Goals can be delegated to different units which simplifies the decision making process for participants. Scott notes that "from this perspective, an organization's hierarchy can be viewed as a congealed set of means-ends chains promoting consistency of decisions and activities throughout the organization". p. 46

According to Perrow (1986), Simon's model stresses unobtrusive control of participants through training, information, standard operating procedures, etc. -- channeling of attention and information.

Simon also notes the cognitive limitations of decision makers through his and March's concept of bounded rationality (March and Simon, 1958).

Overall, Simon helps us understand how the decisions of hundreds or thousands of individuals in an organization can be directed toward ultimate orgnizational goals.