Simons Decision Making Theory
Decision-making is at the center of the business world. Managers and entrepreneurs make decisions constantly, which is why they need the guidance of a well thought-out decision-making theory. The work of Herbert Simon stands out as a relevant decision-making theory. His work on feelings, bounded rationality, and limitation of information has created an effective decision-making theory.
Herbert Simon was a Nobel Prize winning economist and cognitive psychologist. He is most famous for his work on decision-making theory. He proposed that decision making involves rational and irrational elements. He argued that decision makers are limited in their ability to search for and access all available information due to limited temporal and physical resources. This idea of bounded rationality suggests a limitation of decision makers in terms of the options they have. Instead of being able to search for every single option and make the best decision with full knowledge of all the options, decision makers are limited to those options that they can find in the given time frame.
Simon also suggested that decision makers often make decisions based on their feelings rather than purely on logic. He argued that decision makers are driven by an emotional state. For example, a decision maker may decide to continue down a path despite evidence that another choice would be more beneficial for the business, because of an emotional attachment to that path. This suggestion breaks away from traditional views of decision makers as purely logical thinkers. Instead, it suggests that decisions involve factors from both the logical and emotional sides.
Simons decision-making theory has been found to be useful in the business world. It has been used to explain the limitations of decision makers in certain contexts. For example, a manager may have to make a decision based on limited resources and time. This theory can be used to explain why the decision maker chose the one option rather than all of them. Additionally, the theory explains why decision makers may choose certain options based on emotion rather than pure logic.
Simons decision-making theory also provides helpful guidance for potential decision makers. It suggests that decision makers should be aware of their own limitations and take into account their own emotional state when making decisions. Furthermore, it suggests that decision makers should take into account all available information, even if it is limited, to get the best results.
In conclusion, the work of Herbert Simon stands out as a relevant decision-making theory. His work on feelings, bounded rationality, and limitation of information has created an effective decision-making theory. This theory has been found to be useful in the business world and provides helpful guidance for potential decision makers. It suggests that decision makers should be aware of their own limitations and take into account their own emotional state when making decisions. Furthermore, it suggests that decision makers should take into account all available information, even if it is limited, to get the best results.
