This presentation includes the various aspects of decision making , a short view of rational model of decision making and bounded rationality model by Herbert Simon.

1. Decision Making
This Session Covers...
(i) Definition
(ii) Importance of Decision Making
(iii) Phases/Steps in decision making.
(iv) Factors Affecting Decision Making
(v) Hindrances to Decision Making
(vi) Types of Decision
(vii) Conceptual Approaches to Decision Making
(viii) Rational Model of Decision Making
(ix) Limitations of Rational Model
(x) Bounded Rationality Model
(xi) Criticism of Bounded Rationality Model
(xii) Contribution of Herbert Simon in Decision Making
(xiii) Difference between two Models

2. Definition
Irvin D Bross, “Decision making is the process of
selecting one action from a number of alternative
courses.”
Robert Tannenbaum, “involves a conscious choice or
selection of one behaviour alternative from among a
group of two or more behviour alternatives.”

3. Importance of Decision Making
 In Public Administration wrong and delayed decisions can
bring disasters and innumerable human sufferings and
result in a lot of waste.
 Right and timely decisions are essential for running an
organization on sound lines.
 Through decision making one can understand what is
happening in organization.
 Decision making has been described as the heart of
administration.
 Herbert Simon, “Every aspect of administration revolves
around decision making.”

4. Phases/Stages in decision making
a. Recognizing problem.
b. Analyzing problem.
c. Listing alternatives.
d. Deciding the best.
e. Implementing the decision.
According to Herbert Simon
Intelligence- Includes a & b
Design- Includes c
Choice- Includes d & e.

5. Factors affecting decision making
 Decision maker’s access to relevant data.
 Nature of policy goals.
 Legal and budgetary limitations.
 Hierarchical facts and procedures.
 Actual situation.
 Personal beliefs.
 Political consideration.
 Pressure of organized group(trade unions).

6. Hindrances to decision making
 Administrator is a busy person.
 Many issues arise together.
 The question of what is right.
 Eliminiation of bias.
 Red tapism

7. Types of Decision
 Programmed decisions are standing decisions for
which programmes are worked out. Guides in highly
repititive and routine decisions. Ex: Objectives,
standards, procedures, methods and policies.
 Non- Programmed decisions are those for handling
which no cut-and-dried methods or rules or
precedents are available.
 Participatory decision making means involving people
in making decisions that affect them.

8. Conceptual approaches to decision
making
 Rational Comprehensive Approach.
 Incremental Approach
 Mixed Scanning Approach

9. Rational Decision Making Model
 Classical economic theory.
 Administrative man operates like economic man.
 Choose best alternative from same expenditure.
 Has perfect knowledge of full range of solutions.

10. Limitations of Rational Model
 Rarely knows the full range of solution.
 Has limited knowledge of the consequences.
 Lack of perfect information and enough time.
 Lack of knowledge about the future.
 Personal factors(beliefs, values, education,intellectual
capacity)
 Responding on the preconvinced notions and habitual
patterns.
 Organizational factors(rules, structure).
 Informal group behaviour and external pressure.

11. Bounded Rationality Model
 Proposed by Herbert Simon. It is also called “satisficing model”.
 Because of the limitations of rational decision making model a
practical administrator has “not the wits to maximize” rather
they “satisfices”(combined of satisfy and suffice).” Economic
man “maximizes” whereas administrative man “satisfices”.
 Administrator looks for a satisfactory solution than searching all
the solutions.
 Considers only those factors which he is aware, understands and
regards as relevant, minimally satisfactory.
 A satisfactory decision is one that allows a problem solver to
achieve his or her main goals.
 Satisficing describes decision making behaviour.

12. Criticisms of Bounded Rationality
 Much importance to the role of decision making and
relegates social, political and cultural factors. Not able to
draw the total picture of organization.
 Fails to recognize the role of intution, tradition and faith.
 Extremely general, no details guidance.
 Fact-value dichotomy is criticized because of neglecting
ethical values bringing traditional politcs - administration
dichotomy of classical theory.
 More relevant to business administration than public
administration.
 Steps not followed always.

13. Contribution of Herbert Simon in
Decision Making
 Behavioural revolution began.
 Classical theory principles rejected as contradictory
proverbs.
 Development of a new science of administration.
 Fact-value dichotomy.
 Decision making synonymous to managing
 Three stages
 Administrative man, satisficing, bounded rationality
concepts.
 Distinguishing programmed and non programmed
decisions.

14. Difference between Two Models
Assumption Rational Economic
Model
Bounded Rationality
Rationality of decision
maker
Perfect ratioanlity Bounded rationality
Information available Complete access Limited access
Selection of alternatives Optional choice Satisfying choice
Type of model Prescriptive(normative) Descriptive

16. References
1. Public Administration – S. Polinaido
2. Behaviour in Organization: Understanding and Managing the Human
Behaviour – Jerald Greenbug & Robert A. Baron

17. Prepared By: Md. Mahtab Uddin, Department of Public
Administration, University of Chittagong. Session: 2016-17
Contact: mahtabsajib7@gmail.com