Simon’s Decision-Making Theory: Bounded Rationality, Satisficing, Fact-Value, Critique

Administrative Thought: Scientific Management and Scientific Management movement; Classical Theory; Weber’s bureaucratic model – its critique and post-Weberian Developments; Dynamic Administration (Mary Parker Follett); Human Relations School (Elton Mayo and others); Functions of the Executive (C.I. Barnard); Simon’s decision-making theory; Participative Management (R. Likert, C. Argyris, D. McGregor).

This article: Simon’s life and works; his attack on the principles of administration; decision-making as the heart of administration; the stages of decision; facts and values; the means–ends hierarchy; types of rationality; bounded rationality, satisficing and administrative man; programmed and non-programmed decisions; organisational influence, authority and the zone of acceptance; efficiency; computers and decisions; critique; the behavioural approach and its shifts; contribution to public administration.

Official Syllabus: Paper I · Unit 1-02 Administrative Thought

Herbert Alexander Simon (1916–2001) changed the question that administrative theory asked. The classical writers asked how to structure an organisation; Mayo asked how people feel in it. Simon asked how people in organisations decide. In Administrative Behavior (1947) he argued that decision-making is the heart of administration, that the classical principles were contradictory proverbs, and that real decision-makers are boundedly rational: they do not maximise, they satisfice.

• His method: a behavioural, empirical science of administration built on logical positivism: separate facts (testable) from values (preferences), and study the factual side scientifically.
• His standing: Nobel Prize in Economics (1978) “for his pioneering research into the decision-making process within economic organisations”; a founder of artificial intelligence, cognitive psychology and organisation theory.

1. Life, Works and Influences

• Life: born on 15 June 1916 in Milwaukee; studied political science at the University of Chicago; early work on municipal government (measuring city services); spent most of his career at Carnegie Mellon University, Pittsburgh; died on 9 February 2001.
• Major works:

Work	Year	Theme
“The Proverbs of Administration” (Public Administration Review)	1946	Attack on the classical principles
Administrative Behavior	1947	Decision-making; facts and values; rationality; organisational influence
Public Administration (with Smithburg and Thompson)	1950	A behavioural textbook of public administration
Models of Man	1957	Bounded rationality; satisficing
Organizations (with James March)	1958	Inducements–contributions; programmed behaviour; Gresham’s law of planning
The New Science of Management Decision	1960	Intelligence–design–choice; programmed and non-programmed decisions
The Sciences of the Artificial	1969	Design science; complex systems
Human Problem Solving (with Allen Newell)	1972	Information-processing theory of thinking

• Influences: Chester Barnard above all (organisation as a system of decisions; acceptance of authority; inducements and contributions); the logical positivism of the Vienna Circle; Mayo’s human relations work; and his own studies of municipal budgeting.
• Recognition: Nobel Prize in Economic Sciences (1978); A.M. Turing Award (1975, with Allen Newell) for contributions to artificial intelligence.

2. The Attack on the Principles of Administration

• “Proverbs of administration” (1946): most propositions of administrative theory “share this defect of proverbs. For almost every principle one can find an equally plausible and acceptable contradictory principle.” The theory gives no guidance on which to apply.
• His examples:
  • Specialisation versus unity of command: specialisation implies that a specialist should take technical orders from experts, but unity of command insists on one superior.
  • Span of control versus few levels: a narrow span (so that a superior can control subordinates) multiplies hierarchical levels, contradicting the principle that “administrative efficiency is enhanced by keeping at a minimum the number of organisational levels through which a matter must pass before it is acted upon”.
  • Departmentalisation by purpose, process, clientele or place: the four bases conflict, and the principles do not say which to prefer.
• Diagnosis: the principles rest on inadequate analysis of administrative situations, loosely defined terms and no empirical research; at best they are “criteria for describing and diagnosing administrative situations”.
• His remedy: build a science of administration on the study of decisions and their premises, through careful definitions and empirical research.

(For the full debate on whether Simon was justified, see the article on Classical Theory.)

3. Decision-Making as the Heart of Administration

3.1 Deciding and doing

• Every administrative activity involves both deciding and doing; theory had attended to doing (POSDCORB) and neglected deciding. “The task of ‘deciding’ pervades the entire administrative organisation quite as much as does the task of ‘doing’.”
• Decisions at every level: the operative employees (soldier, mechanic, fireman) do the physical work; the non-operative staff influence it by influencing the operatives’ decisions. The general, the engineer and the fire chief matter because they shape the decisions of those who act. Hence administration is best understood by analysing how the decisions and behaviour of employees are influenced within and by the organisation.
• Administration = decision-making: Simon equated administration with decision-making; hierarchical levels correspond to different kinds of decisions (broader purposes at the top, specific means lower down).

3.2 Stages of decision-making

In The New Science of Management Decision (1960), Simon described three principal phases:

Phase	Name taken from	What happens
Intelligence activity	Military “intelligence”	Searching the environment for conditions that call for a decision; identifying and defining the problem
Design activity	Design	Inventing, developing and analysing possible courses of action
Choice activity	Choice	Selecting a particular course of action from those available

• A fourth phase: Simon later added review (assessing past choices), making the process cyclical.
• Time spent: executives spend most of their time on intelligence and design; choice is a small, final part of the process.
• Each phase is itself a decision process: intelligence and design involve their own sub-decisions.
• Skills required: judgement, creativity, quantitative analysis and experience.

3.3 Critical examination of the Simonian model

• Strengths: clear, general, applicable to all levels; shifts attention from structure to process; links to information systems and policy analysis; recognises that most effort lies before the choice.
• Weaknesses:
  • it is a rational, linear model; real decisions loop back, skip phases and are shaped by politics, bargaining and chance (Lindblom’s incrementalism; the “garbage can” model of Cohen, March and Olsen, 1972);
  • it treats problems as given to be found, while in public affairs problems are contested and framed by power;
  • it under-describes implementation and feedback;
  • it neglects intuition, tradition and faith (Argyris’s criticism);
  • in practice, elaborate search may be impossible because decisions are urgent.

4. Facts, Values and the Means–Ends Hierarchy

4.1 Fact and value premises

• Every decision has two kinds of premises:
  • factual premises: statements about the observable world that can be tested as true or false (this road can carry 10,000 vehicles a day);
  • value premises: expressions of preference (“ought” statements) that cannot be proved true or false by science (roads are more important than parks).
• Logical positivism: following the Vienna Circle, Simon held that only factual propositions are empirically meaningful; values can only be asserted. A science of administration must therefore concern itself with the factual elements of decisions.
• Facts, values, means and ends: in general, ends involve values and means involve facts; but the relation is relative, because today’s means are tomorrow’s ends.

4.2 The means–ends chain and the hierarchy of decisions

• Simon’s walker: a man contracts his leg muscles to take a step; he takes a step to proceed towards his destination; he goes to the destination (a post box) to post a letter; he posts the letter to transmit information to another person; and so on, until a relatively final aim is reached.
• Hierarchy of decisions: each decision selects a goal and the behaviour relevant to it; that goal is a means to a more distant goal. Organisational behaviour is purposive when guided by goals, and rational when it selects alternatives that lead to previously selected goals.
• Decisions leading to final goals are “value judgements“; decisions implementing goals are “factual judgements“. Higher levels deal more with values (policy); lower levels more with facts (implementation).
• Example: a municipal council’s choice between roads and parks is a value judgement; once it chooses roads, the length, route and type of road are factual judgements.
• Imperfect integration: real organisations pursue several goals at once (a recreation department seeks children’s health, good use of leisure and prevention of delinquency), so the hierarchy of goals is never perfectly integrated.

4.3 Facts and values between political and permanent executives

• Simon’s division of labour: in a democracy, legislators and ministers should decide the value premises (ends, priorities), and administrators should supply the factual premises (expert analysis of means and consequences). He saw this as a way to reconcile expertise with democratic control.
• Why separation at the operational level is the basic question: if ministers intrude into factual judgements (which contractor, which site, which officer), administration becomes politicised; if officials smuggle values into “technical” advice, democratic control is weakened.
• Why perfect separation is impossible:
  • facts and values are intertwined in almost every real decision; the choice of which facts to collect reflects values;
  • discretion at the field level necessarily involves value choices (who gets a house first);
  • critics (Waldo, Dahl) argued that the fact–value dichotomy revives the politics–administration dichotomy in a new form.
• Indian context: the Rules of Business and Article 77 assign decisions to ministers; civil servants are expected to tender frank, evidence-based advice and record it on file. The Supreme Court in T.S.R. Subramanian (2013) stressed written orders and civil services boards to protect this division. In practice, the line is negotiated, not fixed.

5. Rationality, Bounded Rationality and Satisficing

5.1 Rationality and its types

• Definition: rationality is “concerned with the selection of preferred behaviour alternatives in terms of some system of values whereby the consequences of behaviour can be evaluated”.
• Six types (Simon distinguished them by adverbs): a decision may be
  • objectively rational: correct behaviour for maximising given values in a given situation;
  • subjectively rational: maximises attainment relative to the actual knowledge of the subject;
  • consciously rational: adjustment of means to ends is a conscious process;
  • deliberately rational: adjustment of means to ends has been deliberately brought about;
  • organisationally rational: oriented to the organisation’s goals;
  • personally rational: oriented to the individual’s goals.

5.2 Why complete rationality is impossible

• The classical model of rational choice requires the decision-maker to (1) list all alternatives, (2) determine all consequences of each, and (3) compare these sets of consequences. No real person or organisation can do this.
• Limits on rationality:
  • knowledge of alternatives and consequences is always fragmentary;
  • consequences lie in the future, so they must be imagined, and imagination is imperfect;
  • only a few of all possible alternatives come to mind;
  • time and resources are limited;
  • the decision-maker’s habits, values, beliefs and intellectual capacity limit what he sees and how he reasons;
  • organisational factors (rules, communication channels, informal norms) and external pressures constrain choice.

5.3 Bounded rationality and satisficing

• Bounded rationality: human behaviour is “intendedly rational, but only limitedly so”. It is neither wholly rational nor wholly irrational.
• Satisficing (a blend of “satisfy” and “suffice”): instead of searching for the best alternative, the decision-maker sets an aspiration level and accepts the first alternative that meets it. Business examples of satisficing criteria are “share of the market”, “adequate profit” and “fair price”.
• Simplified models: the decision-maker isolates from the world a closed system with a limited number of variables and consequences, and uses rules of thumb that do not make impossible demands on his capacity for thought.
• Three features of the original view of bounded rationality:
  • search for alternatives: alternatives are not given; they must be searched for, sequentially, at a cost;
  • satisficing: search stops when an alternative meets the aspiration level;
  • aspiration adaptation: the aspiration level is not fixed; it rises when satisfactory alternatives are easy to find and falls when they are hard to find. This makes satisficing a dynamic, learning process.

5.4 Administrative man

Basis	Economic man	Administrative man
Goal	Maximises: selects the best alternative	Satisfices: selects a good-enough alternative
World	Deals with the “real world” in all its complexity	Deals with a simplified model of it
Information	Complete knowledge of alternatives and consequences	Limited knowledge; uses rules of thumb
Search	Exhaustive	Sequential, stops at the first satisfactory option
Rationality	Omniscient	Bounded

• Bridging psychological man and rational man: Simon complained that the social sciences suffered from “schizophrenia” in treating rationality. Economics assumed an omniscient, perfectly rational economic man; parts of psychology (especially those influenced by Freud) reduced behaviour to emotion and the unconscious (psychological man). Administrative man stands between: he intends to be rational and pursues goals, but his rationality is bounded by cognitive limits, emotions, habits and social influences. He is rational enough to be studied as a decision-maker, human enough to be studied psychologically.
• Satisficing as a bridge between rational and non-rational perspectives: satisficing keeps the goal-directed core of rational models (search, evaluation, choice) while admitting non-rational elements (habit, limited attention, aspiration levels shaped by experience and group norms). It thereby connects the economists’ and engineers’ rational models with the psychologists’ and sociologists’ accounts of behaviour.
• Difference between maximising and satisficing is relative: under some conditions satisficing approaches maximising (when search is cheap and aspirations high); under others the two are far apart.

6. Programmed and Non-Programmed Decisions

6.1 The two types

• Programmed decisions: repetitive and routine; a definite procedure has been worked out, so each case need not be treated afresh. The term “programme” was borrowed from computers. Examples: sanctioning leave, processing a pension, awarding a tender under set rules, salary administration.
• Non-programmed decisions: novel, unstructured and consequential; there is no cut-and-dried method, because the problem has not arisen before, or its structure is elusive, or it is so important that it deserves custom treatment. Examples: launching a new mission, crisis response, restructuring a ministry.
• A continuum: decisions are not neatly one or the other; they lie along a spectrum from highly programmed to highly non-programmed.

6.2 The two-dimensional taxonomy

Simon cross-classified types of decision with decision-making techniques:

Types of decision	Traditional techniques	Modern techniques
Programmed (routine, repetitive; standard procedures)	Habit; clerical routine and standard operating procedures; organisation structure (common expectations, sub-goals, well-defined information channels)	Operations research (mathematical analysis, models, computer simulation); electronic data processing
Non-programmed (one-shot, ill-structured, novel)	Judgement, intuition and creativity; rules of thumb; selection and training of executives	Heuristic problem-solving techniques applied to (a) training human decision-makers and (b) constructing heuristic computer programs

• Why two dimensions: the first dimension (programmed–non-programmed) describes the decision; the second (traditional–modern) describes the technique used to make it. The taxonomy showed how computers and management science were turning many once-judgemental decisions into programmed ones and, through heuristic programming, beginning to assist even non-programmed decisions.
• Gresham’s law of planning: March and Simon noted that “daily routine drives out planning“: just as bad money drives out good, programmed activity tends to drive out non-programmed activity. When a person faces both routine and highly unprogrammed tasks, the routine ones get attention first, and planning is postponed. Remedies include creating separate planning units and protecting time for strategic work.

7. Organisational Influence on the Individual

7.1 Decisions are made by individuals as members of organisations

• “Decisions are not made by ‘organisations’, but by ‘human beings’ behaving as members of organisations.” The organisation influences the premises of individual decisions; it does not replace the individual.
• Two kinds of influence:
  • internal: establishing in the employee attitudes, habits and a state of mind that lead him to reach decisions advantageous to the organisation (loyalty, concern for efficiency, training);
  • external: imposing on the employee decisions reached elsewhere (authority, advice and information).

7.2 Modes of organisational influence

Mode	How it shapes decisions
Authority	The power to make decisions that guide the actions of another; accepted within a zone of acceptance
Communication (advice and information)	Supplies factual premises; formal and informal channels
Training	Equips members to decide as the organisation would, reducing the need for constant authority
The criterion of efficiency	“Be efficient”: choose the alternative that yields the greatest result for given resources
Organisational identification (loyalty)	Members take the organisation’s values as their own and decide in its interest

7.3 Authority and the zone of acceptance

• Authority is the power to make decisions that guide the actions of another. A subordinate accepts authority when he allows his behaviour to be guided by the decision of a superior without independently examining its merits.
• Zone of acceptance: like Barnard’s zone of indifference, the range within which a subordinate accepts orders. Beyond it, disobedience follows. Its size depends on the sanctions available to authority, interpreted broadly: social sanctions (approval of the group), psychological acceptance, purpose (belief in the organisation’s goals), habit, and leadership, as well as formal sanctions of reward and punishment.
• Simon versus Barnard: both base authority on acceptance, but Simon gives more weight to sanctions, habit and institutionalised obedience; in practice, authority is liberally mixed with suggestion and persuasion. Simon recognises two levels of acceptance: of the plan of collective action, and of the authority of the manager.
• Functions of authority: it enforces responsibility (conformity to group norms), secures expertise in decisions, and permits coordination.

7.4 Specialisation and coordination

• Vertical specialisation: dividing decision-making functions among levels of a hierarchy. Simon gave three reasons:
  • coordination: a common plan requires central decisions;
  • expertise: decisions are allocated to those with the skills to make them;
  • responsibility: operatives can be held accountable through the hierarchy to the board or legislature.
• Coordination may be procedural (specifying relationships and lines of authority: the organisation chart) or substantive (specifying the content of work: the blueprint of the engine).

7.5 Identification and the criterion of efficiency

• Identification: members identify with the organisation and judge alternatives by their consequences for it. Benefit: homogeneity and accountability. Problem: members take a narrow view of their unit’s interest and ignore the wider organisation; higher positions need a broader outlook.
• From Wilson to Simon: efficiency was the central value of the classical tradition: Wilson sought a businesslike administration; Taylor the “one best way”; Gulick called efficiency “axiom number one in the value scale of administration”; Weber’s bureaucracy was technically efficient. Simon kept efficiency as the criterion for factual decisions but redefined it as a neutral standard of the best result for given resources and placed it within bounded rationality; critics (Waldo, Dahl, New Public Administration) answered that equity and responsiveness rank with it.
• Efficiency: in the factual aspects of decisions, the administrator should choose the alternative that maximises results for given resources (“balance sheet efficiency”). The criterion is neutral as to goals. Simon later narrowed its scope, accepting that it applies mainly to lower-level decisions, where results can be measured.

7.6 Barnard and Simon on individual decisions and organisational authority

• Barnard: the individual decides whether to participate; inside the organisation he acts in an organisational capacity; authority depends on his acceptance; the executive’s task is to keep inducements above contributions and to inculcate a common purpose.
• Simon: the organisation sets the decision premises of members (through authority, communication, training, identification and efficiency); members accept authority within a zone of acceptance, supported by sanctions and habit; the individual remains the decision-maker.
• Common ground: both distinguish the decision to participate from decisions taken as a member; both see authority as consent-based; together they form the Barnard–Simon theory of organisational equilibrium.

7.7 The Barnard–Simon theory as a theory of motivation

• The theory: an organisation is a system of exchange: it offers inducements (pay, status, purpose) in return for contributions (work, money, loyalty). Each participant continues to participate only while inducements equal or exceed contributions, measured by his own values and alternatives. Contributions are the source of the inducements the organisation offers; the organisation is “solvent” only while contributions suffice to provide them.
• Why “essentially a theory of motivation”: March and Simon (1958) wrote this themselves. The theory explains why people join, stay and contribute, that is, the decision to participate and its variations (turnover, absenteeism), rather than structure or technology.
• Strengths: applies to all contributors (employees, customers, investors, citizens); explains survival; links motivation to organisational design.
• Limits: treats motivation as calculative exchange; under-explains intrinsic motivation and commitment; ignores power and constraints that prevent exit; says little about production decisions (how much effort once inside).

8. Simon, Computers and the Future of Decision-Making

• Information as the central problem: Simon argued that the major problems of modern organisations are no longer the division of labour but the processing of information and the factorisation of decisions.
• Effects of computers:
  • more decisions can be programmed, increasing organisational rationality;
  • re-centralisation of decisions becomes possible, as information flows quickly to the top;
  • the concept of delegating responsibility changes, and middle management may shrink;
  • executives’ work becomes more satisfying as routine is automated.
• Attention as the scarce resource: in an information-rich world, “a wealth of information creates a poverty of attention”: the scarce resource is the decision-maker’s attention, not information.
• Today: data analytics, dashboards and AI systems in tax, welfare and policing realise Simon’s predictions, but also raise questions about accountability, bias and explainability that his factual, efficiency-centred model did not fully address.

9. Critique, the Behavioural Approach and Simon’s Contribution

9.1 Criticism of Simon

• Positivism and the fact–value dichotomy: Dwight Waldo argued that administration is suffused with values and that a “value-free” science of administration is neither possible nor desirable; the dichotomy revives the politics–administration dichotomy. Robert Dahl stressed that normative values, individual personality and the social setting make a universal science of administration impossible.
• Exclusion of values trivialises the discipline: separating values reduces public administration to mechanical, routine and less significant matters.
• Efficiency as the master criterion: critics objected that efficiency is not the only goal; equity, responsiveness, satisfaction of interests and legality matter in public administration.
• Decision-making is not all: making decision-making the core neglects other aspects (structure, culture, power, implementation); political, social, economic and cultural factors are relegated to the background.
• Rationality over-emphasised: Chris Argyris criticised Simon for neglecting intuition, tradition and faith; others note emotion and politics.
• Satisficing as excuse: the concept may justify mediocre decisions.
• Abstract and general: the model provides a framework but not enough detail to guide organisation planners; elaborate search is often impossible in practice.
• More relevant to business than to public administration: consequences and costs of government actions are hard to measure (Golembiewski).
• Universality questioned: problems and objectives of administration differ across societies, especially in developing countries.

9.2 Identifying decision-making as the core, on a positivist base

• Logically acceptable: every administrative act involves choice; decisions link levels of the hierarchy; analysing decision premises explains how organisations work; decision-making connects public administration with economics, psychology and computer science.
• Problematic positivist underpinning:
  • values cannot be banished from public decisions (equity, rights, justice are central);
  • the choice of facts is value-laden;
  • positivism excludes normative theory, which public administration needs (constitutional values, ethics);
  • it encourages a technocratic view of administration that sidelines citizens and politics.
• Synthesis: decision-making remains a powerful lens, but it must be combined with normative and political analysis, as later policy sciences, New Public Administration and public value theory attempted.

9.3 The behavioural approach: weaknesses and shifts

• Weaknesses:
  • scientism: preoccupation with method over relevance; quantification of the trivial;
  • value neutrality: silence on justice, equity and the purposes of administration;
  • micro focus: individual and group behaviour, neglect of the political and social environment;
  • status quo bias: studying what is rather than what ought to be;
  • limited utility for practitioners facing urgent, value-laden problems.
• Shifts made:
  • post-behaviouralism: David Easton‘s 1969 “credo of relevance” called for relevance and action alongside rigour;
  • New Public Administration (Minnowbrook, 1968): social equity, values, client focus;
  • policy sciences (Lasswell, Dror): combining rational analysis with values and extra-rational processes;
  • systems and contingency approaches: environment and situation;
  • public choice and institutionalism: incentives and rules;
  • behavioural public policy (nudges, behavioural insights): bounded rationality applied to citizens.

9.4 Administrative Behavior as a synthesis of classical and behavioural approaches

• Classical elements kept: hierarchy, authority, specialisation, coordination, efficiency as a criterion, the search for a science of administration.
• Behavioural elements added: decisions and their premises, psychology of choice, acceptance of authority, identification, informal communication, bounded rationality.
• The synthesis: Simon explained why classical structures work (they reduce complexity for boundedly rational people, set decision premises, factor decisions) and when they fail. In this sense, as later commentators said, Simon and March “somewhat unwittingly” provided the muscle and flesh to the Weberian skeleton (see the article on Weber).

9.5 Implications for the study and practice of public administration

• For the study: made public administration an empirical social science; introduced the decision as a unit of analysis; bridged public administration, business management, economics and psychology; inspired the Carnegie school (Cyert, March), Downs, Tullock, Crozier and Thompson.
• For the practice: decision analysis, management information systems, operations research and policy analysis entered government; professional training emphasised analytical skills; efficiency audits and performance measurement spread.
• For professionalism: the image of the public administrator as a professional decision-maker with expertise in factual premises, accountable to elected leaders for values.
• Caution: the same influence encouraged technocracy and neglect of values, which later movements had to correct.

9.6 Decision studies and the basic administrative processes

• The concern: decision studies have spread in many directions (game theory, operations research, behavioural economics, AI, policy analysis); specialists may lose sight of the basic processes Barnard and Simon described: how organisations secure cooperation, set decision premises, communicate, exercise authority and coordinate.
• Why this matters: technique without understanding of organisational context produces elegant models that do not change real decisions; the Barnard–Simon focus on the organisational setting of decisions keeps decision science administrative.
• “Decisional science” without integration: critics argue that decision theory studies structures, individual choices and feedback separately rather than as one integrated system. In Simon’s defence, his framework explicitly links structure (hierarchy as factored decisions), choice (bounded rationality) and feedback (review, aspiration adaptation); the fragmentation is in later specialised research more than in Simon.

Key Terms

Term	Meaning in simple words
Proverbs of administration	Classical principles that come in contradictory pairs
Decision premises	The factual and value assumptions from which a decision follows
Factual premise	A statement about the world that can be tested
Value premise	An expression of preference that cannot be proved
Logical positivism	Philosophy that only testable statements are scientifically meaningful
Means–ends chain	Each goal is a means to a further goal
Intelligence, design, choice	Simon’s three phases of decision-making
Bounded rationality	Rationality limited by knowledge, time and mental capacity
Satisficing	Choosing the first alternative that is good enough
Aspiration level	The standard a satisfactory alternative must meet; it adapts with experience
Administrative man	Satisficing decision-maker with bounded rationality
Economic man	Maximising decision-maker with perfect knowledge
Programmed decision	Routine decision with a set procedure
Non-programmed decision	Novel, unstructured decision needing judgement
Gresham’s law of planning	Routine work drives out planning
Zone of acceptance	Range within which a subordinate accepts orders
Organisational identification	Adopting the organisation’s goals as one’s own
Criterion of efficiency	Choosing the alternative with the greatest result for given resources
Vertical specialisation	Division of decision functions among hierarchical levels
Procedural and substantive coordination	Coordination of relationships and of work content

Contemporary Developments

• 5 November 2025: MeitY released the India AI Governance Guidelines with seven guiding principles, raising questions of accountability for programmed and AI-assisted public decisions.
• 13 August 2020 onwards: faceless assessment in income tax has turned discretionary assessments into algorithmically allocated, programmed processes.
• 2018–19 onwards: behavioural insights (the Economic Survey’s “Homo Sapiens, not Homo Economicus” chapter) have entered policy design in India, applying bounded rationality to citizens.
• Continuing: data dashboards, GIS platforms and project monitoring systems widen the information available to decision-makers, pushing back but never removing the bounds of rationality.

Revision Grid

Thinker / body	Work or report (year)	Key idea
Herbert Simon	“The Proverbs of Administration” (1946)	Principles are contradictory proverbs
Herbert Simon	Administrative Behavior (1947)	Decision premises; facts and values; bounded rationality
Herbert Simon	Models of Man (1957)	Satisficing
March and Simon	Organizations (1958)	Inducements–contributions; Gresham’s law of planning; “muscle and flesh”
Herbert Simon	The New Science of Management Decision (1960)	Intelligence–design–choice; programmed decisions
Herbert Simon	Nobel Prize (1978)	Decision-making in economic organisations
Dwight Waldo	Simon–Waldo debate (1952)	Values cannot be excluded
Robert Dahl	“The Science of Public Administration” (1947)	Values, personality, social setting
Charles Lindblom	“The Science of ‘Muddling Through'” (1959)	Incrementalism (not Simon’s term)
Cohen, March and Olsen	Garbage can model (1972)	Decisions in organised anarchies
David Easton	Credo of relevance (1969)	Post-behaviouralism
Economic Survey	2018–19	Behavioural economics in policy