Simon’s concept of Bounded Rationality
Herbert Simon’s work on “Administrative Behaviour” is the seminal work in the field of decision making.
He believed that the rationality model in decision making is non-realistic and its principles are unattainable.
His idea of organisation is a real one and not an ideal one. He emphasised that all Decision Making should be based on rational choices.
According to him, rationality is “concerned with the selection of preferred behaviour alternatives in terms of some system of values whereby the consequences of behavior can be evaluated”.
This requires that firstly, the decision-maker should have knowledge about all available alternatives.
Secondly, the decision-maker should also be able to anticipate the consequences of each of the alternatives. He has classified rationality into various types in which the decision should be:
1 Objectively Rational: It is correct behaviour for maximising given values in a given situation.
2 Subjectively Rational: The decision maximises attainment relative to knowledge of the subject.
3 Consciously Rational: Adjustment of means to ends is a conscious process.
4 Deliberately Rational: Adjustment of means to ends has been deliberately brought about.
5 Organisationally Rational: Oriented to the organisational goals.
6 Personally Rational: Directed at the individual goals.
Simon rejected the concept of total rationality as it is based on totally unrealistic assumptions.
To put it in simple terms, an individual cannot have complete knowledge on all aspects of an issue in order to know every alternative to arrive at a decision.
On the contrary, total rationality is based on the belief that decision makers are omniscient (all knowing) and have knowledge about all available alternatives as well as their consequences.
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