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Decision Making Theory

Decision-making theory, introduced by Herbert A. Simon in 1948, emphasizes the importance of a structured process involving problem recognition, information search, alternative definition, and selection. The theory outlines four models of decision-making: Rational Actor, Incremental, Bureaucratic Organization, and Belief System, each with distinct approaches to policy formulation and implementation. Despite critiques regarding the feasibility of rationality in real-world applications, the theory remains essential for effective organizational and state administration.

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26 views

Decision Making Theory

Decision-making theory, introduced by Herbert A. Simon in 1948, emphasizes the importance of a structured process involving problem recognition, information search, alternative definition, and selection. The theory outlines four models of decision-making: Rational Actor, Incremental, Bureaucratic Organization, and Belief System, each with distinct approaches to policy formulation and implementation. Despite critiques regarding the feasibility of rationality in real-world applications, the theory remains essential for effective organizational and state administration.

Uploaded by

Shibla
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Decision Making Theory: Process, Models and Stages

Decision-making theory was first brought in to existence by Herbert A. Simon in his work on
Administrative Behaviour through his book ‘A Study of Decision-Making Process in Administrative
Organisation’ in the year 1948. Decision-making process consists of two parts – the actual making of
a decision and the other is the process of action or implementation. Herbert Simon says that
decision making is very important for an organisation. Decisions need to be taken properly and in a
timely manner in order to avoid the objective of the organisation going vain. Both parts of the
decision-making process are equally important.

“Decision making is usually defined as a process or sequence of activities involving stages of problem
recognition, search for information, the definition of alternatives and the selection of an actor of one
from two or more alternatives consistent with the ranked preferences,” this is one of the definitions
of decision making. There are many others as the decision-making process is used in different fields
and each field has its own convenient way of defining it. The epitome of all the definitions is –
Decision making means the adoption and application of rational choice for the management of the
private, business, or governmental organisation in an efficient manner.

Nature of Decision Making Process

According to Simon, the process of decision making is like making compromises. This is because
when you are making a decision; you choose from many alternatives and make a compromise on a
few of them. While making decisions one must make sure not to cause a conflict between the
authority and policy. Hence, policymakers have to make compromises and modifications of
approaches while making decisions or policies. Decision-makers should make a rational and
informed choice. They need to consider the elements of entering the process, implications of
implementation, and feasibility of the policy.

The decision is never the product of a single person. Decisions should be taken collectively in order
to arrive at the best alternative. Having a collective decision allows better assessment of the pros
and cons of the decision and also maximum feasibility can be attained. Having many brains giving
their inputs will the policy or decision more inclusive of the diversity and hence more acceptable by
the populace. While taking a decision, the decision wouldn’t be of just one issue but a number of
issues. This way the time consuming and lengthy process of decision making can be made easier.
Also, to have a substantial decision, it is better to take a number of issues.

Irrationality is unavoidable. Be it a democratic or a non-democratic, somewhere there is a chance to


have some kind of bias or the need to be irrational. If a certain section of the society needs some
allowance, despite it being irrational, for the peace of all, the decision would be taken in favour of
the need for the section.

The dichotomisation between rationality and irrationality may be irrelevant but this needs to be
addressed. Not always a rational decision would satisfy society. If maximum benefit and utility were
the only criteria while making a decision, it would have been difficult to have a welfare state. If
rationality is given the top priority, it may jeopardize the prospect of the welfare principle.

Models of Decision-Making Process

The concept of Decision-Making is a relatively contemporary idea that has been especially studied by
Richard Synder, Chester Bernard and Herbert Simon. The former has worked extensively on decision
making in domestic and international politics while the latter two have worked on decision making in
the public administration sector. With time the decision making theories of the 1950s have turned in
to policy analysis in the 1960s and 1970s.

There are four models of the decision-making process and they are as follows –

1. Rational Actor Model

This model solely believes in rational methods of decision making. This is based on Economic Theory
and utilitarianism. It is believed that an ‘Economic Man’ works rationally and looks at the maximum
utility while making a decision. This model can be said to be the best form for business organisations
that seek maximum benefit.

2. Incremental Model

In this method, it is said that the policies should be formulated in such a manner that there is a
scope for review and revise whenever required. Policy formulation should be made flexible in order
to avoid major mistakes and miscarriages

3. Bureaucratic Organization Model

This was devised in the backdrop of the Cuban Missile crisis in 1962. Bureaucrats play the most
important role in both the formulation and implementation of the decisions. In this process, it is said
that there are certain ideal inclinations and long cherished values which impact the process of
decision making. This impact is unavoidable at times.

4. Belief System Model

In the belief system model, the decisions are taken within


the decision-makers or the states’ ideological and deep-
rooted beliefs. For example, a communist country cannot
make a decision that is against the welfare of its citizens.
No matter how rational a decision is, it is made by keeping
the deep values incorporated by the decision-makers.

Stages of Decision Making


There are again four stages of decision making,
namely – Policy initiation, Formulation of the
decision, Implementation of Policy and
Evaluation. The process of policymaking is initiated at the
background of an existing problem. The process should
commence at the time right time and with the right details
in handy. This is to ensure that the problem is addressed
timely and properly. The time lag between the emergence
of problems and the taking of a decision is inevitable but
can be reduced considerably by the speedy response. The
process of formulation of the decision is rather the tough
part having involved various personals and detailing that it
requires. This is the most important stage of decision
making as the more accurate the solution to the problem
is, the earliest would the problem be solved.
Implementation of the policy is also a vital stage. It is not
only enough to make a decision but this decision has to
reach the subjects; that is when it is successful. In order to
have a successful policy or decision, it is most important to
implement the needful as prescribed in the policy. The
process of implementation should also be checked in a
time-bound manner. Evaluation is simply the result of the
decision or policy. It tells how successful the policy or
decision is and its pros and cons. This would be helpful to
review and revise the problem in a needful manner. It is
also necessary to evaluate because of the complex and
dynamic. What is needed today might not be a
requirement for tomorrow. Hence it is important to
evaluate the decision.
Critiques
It is said by a few scholars that though there is a great emphasis on rationality, it is difficult to apply
in reality. Rationality might seem like the most feasible and unbiased way of making a decision but it
has its own set of disadvantages especially when dealing with a state. If a state takes a rational
decision on every problem that incurs it jeopardize the lives of many citizens. The other critique is
that not always can one achieve to gather impartial facts and information, normative facts of social
beliefs and faiths. One other critique is that it is almost inevitable to avoid personal bias while
making decisions. This can be seen during the Cold War when countries like Cuba and Egypt were
treated by Washington while they sought the Russian way.

Conclusion: Decision-making theory is one of the contemporary theories that have been built during
the mid-20th century. This theory has brought into the picture of how important the process of
decision making is in order to have a systematic and sustainable lifestyle. Though it has its own set of
drawbacks, it is still an important part of state administration and various other organisational
administrations.

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