Simons Principles of Organizational Design
Introduction
The English economist and science theorist Herbert Simon argued that organizations are designed to achieve findings from decision-maker’s decisions, but the way in which this decision is made is dependent on the design of the organization. From this point of view, what design elements will lead to the best organizational outcomes is something that organizational specialists have debated for decades. During his prolific career, Herbert Simon developed a number of principles of organizational design that can be used to help inform the design of organizations in a variety of contexts.
Separation of Decision Authority and Responsibility
Simons conception of organizational design was informed by a view of the organization as a set of decision-making activities. According to this approach, an organization has a variety of decision-makers who take part in the decision-making process and make choices based on their own interests and goals. This approach to organizational design suggests that it is important to separate the decision-making authority from the responsibility for implementing and evaluating the decisions. By doing so, decision-makers can focus on the task of making decisions without having to be concerned about the consequences of those decisions. Additionally, this structure allows for an element of delegation in the decision-making process, which can help to reduce the possibility of one individual making decisions that are not in the best interests of the organization.
Reduction of Complexity
In addition to separation of decision authority and responsibility, one of the key elements of Simons view of organizational design was the potential to reduce complexity. The complexity of an organization can be thought of in terms of the number of decision-making activities that are necessary to make decisions and implement them. Simon argued that reducing complexity can lead to greater efficiency in decision-making and implementation, as well as an improved ability to coordinate resources and manage organizational change.
Centralization of Decision-Making Authority
A third key element of Simons conception of organizational design is the principle of centralization of decision-making authority. The centralization of decision-making authority can be defined as the degree to which decision-making is centralized within the organization. This principle suggests that the more centralized the decision-making process, the more likely it is that decisions will be made in the best interests of the organization as a whole. By centralizing decision-making authority within the organization, Simon argued that organizations can become more efficient, effective and coordinated.
Openness and Dialogue
One of the key elements of Simons view of organizational design was the importance of openness and dialogue in the decision-making process. Openness and dialogue in this context refers to an approach to decision-making in which multiple stakeholders are included in the decision-making process, and feedback and input are actively sought from all stakeholders. By encouraging participation and engagement, Simon argued that the organization can create a more collaborative decision-making environment in which decisions are based on a shared understanding and consensus. Additionally, this approach can help to reduce the potential for conflicts and disagreements, as stakeholders in the decision process can discuss their ideas and opinions openly.
Conclusion
Organizational design can have a significant impact on the performance and effectiveness of an organization. With this in mind, it is important to consider the implications of design when creating or reforming an organization. The principles of organizational design articulated by Herbert Simon provides a useful framework for understanding how design can affect the decision-making process and performance of an organization. By utilizing separation of decision-making authority and responsibility, reduction of complexity, centralization of decision-making authority and openness and dialogue, organizations can better align resources and goals and achieve greater levels of efficiency and effectiveness.
