What is Rational decision making according to Simon’s?

Rational decision making:

According to Simon, in the decision-making process, the administration has perfect knowledge about the courses of action and their consequences. But in the real field it is not possible as administration faced a number of limitations in the decision-making activities.

Those limitation are:
  • His information is inadequate.
  • Lack of knowledge about future events.
  • The decision-maker rarely knows the full range of possible solutions to the defined problems.
  • Organizational factors such as rules and procedures of formal organization is another limitation of decision-maker.
  • Decision-maker’s habits, personal belief and intellectual capacity.
  • The influence, conventions and behavioural norms of informal groups.
  • Lack of sufficient time to examine each alternative and its consequence.
  • Limited knowledge about the consequences of each possible alternative.

Simon emphasizes rational decision-making. It means all decision-making should be based on rational choice.

But 100 per cent rational choice is impossible. Because a particular choice may be good today, it may not be the same good tomorrow and even bad the day after. In the simpler situation, a better and rational decision is possible. But in the complex situation, where a large network of decision is in different phases, rationality in the decision-making is bound to suffer. In order to get rational decision-making, the decision-maker should have knowledge about all available alternatives. The decision-maker should also be able to anticipate the consequence of each of the alternatives.

According to Simon, rationality are of six types subjective, objective, conscious, deliberate, personal or organizational. There are some difference between these different types of rationality:

  • A decision is subjectively rational if the decision maximizes attainment relative to knowledge of the subject.
  • A decision is objectively rational where it is correct behaviour for maximizing given values in a given situation.
  • A decision is consciously rational where adjustment of means to ends is a conscious process.
  • A decision is deliberately rational to the degree that the adjustment of means to ends has been deliberately sought.
  • A decision is personally rational if the decision is directed to the individual’s goals.
  • A decision is organizationally rational to the extent that it is aimed at the organisation’s goals.
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