Chapter 1 Decision-Making and Administrative Organization Administration is ordinarily discussed as the art of "getting things done." Emphasis is placed upon processes and methods for insuring incisive action. Principles are set forth for securing concerted action from groups of men. In all this discussion, however, not very much attention is paid to the choice which prefaces all action -- to the determining of what is to be done rather than to the actual doing. It is with this problem -- the process of choice which leads to action -- that the present study is concerned. In this introductory chapter the problem will be posed and a survey made of the topics to be taken up in the remaining chapters. Although any practical activity involves both "deciding" and "doing," it has not commonly been recognized that a theory of administration should be concerned with the processes of decision as well as with the processes of action. This neglect perhaps stems from the notion that decision-making is confined to the formulation of over-all policy. On the contrary, the process of decision does not come to an end when the general purpose of an organization has been determined. The task of "deciding" pervades the entire administrative organization quite as much as does the task of "doing" -- indeed, it is integrally tied up with the latter. A general theory of administration must include principles of organization that will insure correct decision-making, just as it must include principles that will insure effective action. DECISION-MAKING AND THE EXECUTION OF DECISIONS It is clear that the actual physical task of carrying out an organization's objectives falls to the persons at the lowest level of the administrative hierarchy. The automobile, as a physical object, is built not by the engineer or the executive, but by the mechanic on the assembly line. The fire is extinguished, not by the fire chief or the captain, but by the team of firemen who play a hose on the blaze. It is equally clear that the persons above this lowest or operative level in the administrative hierarchy are not mere surplus baggage, and that they too must have an essential role to play in the accomplishment of the agency's objectives. Even though, as far as physical cause and effect are concerned, it is the machine gunner and not the major who fights battles, the major is likely to have a greater influence upon the outcome of a battle than any single machine gunner. How, then, do the administrative and supervisory staff of an organization affect that organization's work? The nonoperative staff of an administrative organization participate in the accomplishment of the objectives of that organization to the extent that they influence the decisions of the operatives -- the persons at the lowest level of the administrative hierarchy. The major can influence the battle to the extent that his head is able to direct the machine gunner's hand. By deploying his forces in the battle area and assigning specific tasks to subordinate units he determines for the machine gunner where he will take his stand and what his objective will be. In very small organizations the influence of all supervisory employees upon the operative employees may be direct, but in units of any size there are interposed between the top supervisors and the operative employees several levels of intermediate supervisors who are themselves subject to influences from above, and who transmit, elaborate, and modify these influences before they reach the operatives. If this is a correct description of the administrative process, then the construction of an efficient administrative organization is a problem in social psychology. It is a task of setting up an operative staff and superimposing on that staff a supervisory staff capable of influencing the operative group toward a pattern of coordinated and effective behavior. The term "influencing" rather than "directing" is used here, for direction -- that is, the use of administrative authority -- is only one of several ways in which the administrative staff may affect the decisions of the operative staff; and, consequently, the construction of an administrative organization involves more than a mere assignment of functions and allocation of authority. In the study of organization, the operative employee must be at the focus of attention, for the success of the structure will be judged by his performance within it. Insight into the structure and function of an organization can best be gained by analyzing the manner in which the decisions and behavior of such employees are influenced within and by the organization. CHOICE AND BEHAVIOR All behavior involves conscious or unconscious selection of particular actions out of all those which are physically possible to the actor and to those persons over whom he exercises influence and authority. The term "selection" is used here without any implication of a conscious or deliberate process. It refers simply to the fact that, if the individual follows one particular course of action, there are other courses of action that he thereby forgoes. In many cases the selection process consists simply in an established reflex action -- a typist hits a particular key with a finger because a reflex has been established between a letter on a printed page and this particular key. Here the action is, in some sense at least, rational (i.e. goal-oriented), yet no element of consciousness or deliberation is involved. In other cases the selection is itself the product of a complex chain of activities called "planning" or "design" activities. An engineer, for example, may decide upon the basis of extensive analysis that a particular bridge should be of cantilever design. His design, further implemented by detailed plans for the structure, will lead to a whole chain of behaviors by the individuals constructing the bridge. In this volume many examples will be given of all varieties of selection process. All these examples have in common the following characteristics: At any moment there are a multitude of alternative (physically) possible actions, any one of which a given individual may undertake; by some process these numerous alternatives are narrowed down to that one which is in fact acted out. The words "choice" and "decision" will be used interchangeably in this study to refer to this process. Since these terms as ordinarily used carry connotations of self-conscious, deliberate, rational selection, it should be emphasized that as used here they include any process of selection, regardless of whether the above elements are present to any degree. VALUE AND FACT IN DECISION A great deal of behavior, and particularly the behavior of individuals within administrative organizations, is purposive -- oriented toward goals or objectives. This purposiveness brings about an integration in the pattern of behavior, in the absence of which administration would be meaningless; for, if administration consists in "getting things done" by groups of people, purpose provides a principal criterion in determining what things are to be done. The minute decisions that govern specific actions are inevitably instances of the application of broader decisions relative to purpose and to method. The walker contracts his leg muscles in order to take a step; he takes a step in order to proceed toward his destination; he is going to the destination, a mail box, in order to mail a letter; he is sending a letter in order to transmit certain information to another person, and so forth. Each decision involves the selection of a goal, and a behavior relevant to it; this goal may in turn be mediate to a somewhat more distant goal; and so on, until a relatively final aim is reached. In so far as decisions lead toward the selection of final goals, they will be called "value judgments"; so far as they involve the implementation of such goals they will be called "factual judgments." Unfortunately, problems do not come to the administrator carefully wrapped in bundles with the value elements and the factual elements neatly sorted. For one thing, goals or final objectives of governmental organization and activity are usually formulated in very general and ambiguous terms -- "justice," "the general welfare," or "liberty." Then, too, the objectives as defined may be merely intermediate to the attainment of more final aims. For example, in certain spheres of action, the behavior of men is generally oriented around the "economic motive." Yet, for most men, economic gain is not usually an end in itself, but a means for attaining more final ends: security, comfort, and prestige. Finally, the value and factual elements may be combined, in some cases, in a single objective. The apprehension of criminals is commonly set up as an objective of a municipal police department. To a certain extent this objective is conceived as an end in itself, that is, as aimed toward the apprehension and punishment of offenders against the law; but from another point of view apprehension is considered a means for protecting citizens, for rehabilitating offenders, and for discouraging potential offenders. The Hierarchy of Decisions. The concept of purposiveness involves a notion of a hierarchy of decisions -- each step downward in the hierarchy consisting in an implementation of the goals set forth in the step immediately above. Behavior is purposive in so far as it is guided by general goals or objectives; it is rational in so far as it selects alternatives which are conducive to the achievement of the previously selected goals. It should not be inferred that this hierarchy or pyramid of goals is perfectly organized or integrated in any actual behavior. A governmental agency, for instance, may be directed simultaneously toward several distinct objectives: a recreation department may seek to improve the health of children, to provide them with good uses for their leisure time, and to prevent juvenile delinquency, as well as to achieve similar goals for the adults in the community. Even when no conscious or deliberate integration of these goals takes place in decision, it should be noted that an integration generally takes place in fact. Although in making decisions for his agency, the recreation administrator may fail to weigh the diverse and sometimes conflicting objectives against one another in terms of their relative importance, yet his actual decisions, and the direction which he gives to the policy of his agency will amount in practice to a particular set of weights for these objectives. If the program emphasizes athletics for adolescent boys, then this objective is given an actual weight in practice which it may, or may not, have had in the consciousness of the administrator planning the program. Hence, although the administrator may refuse the task, or be unable to perform it, of consciously and deliberately integrating his system of objectives, he cannot avoid the implications of his actual decisions, which achieve such a synthesis in fact. The Relative Element in Decision. In an important sense, all decision is a matter of compromise. The alternative that is finally selected never permits a complete or perfect achievement of objectives, but is merely the best solution that is available under the circumstances. The environmental situation inevitably limits the alternatives that are available, and hence sets a maximum to the level of attainment of purpose that is possible. This relative element in achievement -- this element of compromise -- makes even more inescapable the necessity of finding a common denominator when behavior is aimed simultaneously at several objectives. For instance, if experience showed that an organization like the Work Projects Administration could at one and the same time dispense relief and construct public works without handicapping either objective, then the agency might attempt to attain at the same time both of these objectives. If, on the other hand, experience showed that the accomplishment of either of these objectives through the organization seriously impeded the accomplishment of the other, one would have to be selected as the objective of the agency, and the other sacrificed. In balancing the one aim against the other, and in attempting to find a common denominator, it would be necessary to cease thinking of the two aims as ends in themselves, and instead to conceive them as means to some more general end. An Illustration of the Process of Decision. In order to understand more clearly the intimate relationships that exist in any practical administrative problem between judgments of value and fact, it will be helpful to study an example from the field of municipal government. What questions of value and fact arise in the opening and improvement of a new street? It is necessary to determine: (1) the design of the street, (2) the proper relationship of the street to the master plan, (3) means of financing the project, (4) whether the project should be let on contract or done by force account, (5) the relation of this project to construction that may be required subsequent to the improvement (e.g., utility cuts in this particular street), and (6) numerous other questions of like nature. These are questions for which answers must be found -- each one combining value and factual elements. A partial separation of the two elements can be achieved by distinguishing the purposes of the project from its procedures. On the one hand, decisions regarding these questions must be based upon the purposes for which the street is intended, and the social values affected by its construction -- among them, (1) speed and convenience in transportation, (2) traffic safety, (3) effect of street layout on property values, (4) construction costs, and (5) distribution of cost among taxpayers. On the other hand, the decisions must be made in the light of scientific and practical knowledge as to the effect particular measures will have in realizing these values. Included here are (1) the relative smoothness, permanence, and cost of each type of pavement, (2) relative advantages of alternate routes from the standpoint of cost and convenience to traffic, and (3) the total cost and distribution of cost for alternative methods of financing. The final decision, then, will depend both on the relative weight that is given to the different objectives and on judgment as to the extent to which any given plan will attain each objective. This brief account will serve to indicate some of the basic features of the process of decision -- features that will be further elaborated in this study. DECISION-MAKING IN THE ADMINISTRATIVE PROCESS Administrative activity is group activity. Simple situations are familiar where a man plans and executes his own work; but as soon as a task grows to the point where the efforts of several persons are required to accomplish it this is no longer possible, and it becomes necessary to develop processes for the application of organized effort to the group task. The techniques which facilitate this application are the administrative processes. It should be noted that the administrative processes are decisional processes: they consist in segregating certain elements in the decisions of members of the organization, and establishing regular organizational procedures to select and determine these elements and to communicate them to the members concerned. If the task of the group is to build a ship, a design for the ship is drawn and adopted by the organization, and this design limits and guides the activities of the persons who actually construct the ship. The organization, then, takes from the individual some of his decisional autonomy, and substitutes for it an organization decision-making process. The decisions which the organization makes for the individual ordinarily (1) specify his function, that is, the general scope and nature of his duties; (2) allocate authority, that is, determine who in the organization is to have power to make further decisions for the individual; and (3) set such other limits to his choice as are needed to coordinate the activities of several individuals in the organization. The administrative organization is characterized by specialization -- particular tasks are delegated to particular parts of the organization. It has already been noted above that this specialization may take the form of "vertical" division of labor. A pyramid or hierarchy of authority may be established, with greater or less formality, and decision-making functions may be specialized among the members of this hierarchy. Most analyses of organization have emphasized "horizontal" specialization -- the division of work -- as the basic characteristic of organized activity. Luther Gulick, for example, in his "Notes on the Theory of Organization," says: "Work division is the foundation of organization; indeed, the reason for organization." In this study we shall be primarily concerned with "vertical" specialization -- the division of decision-making duties between operative and supervisory personnel. One inquiry will be into the reasons why the operative employees are deprived of a portion of their autonomy in the making of decisions and subjected to the authority and influence of supervisors. There would seem to be at least three reasons for vertical specialization in organization. First, if there is any horizontal specialization, vertical specialization is absolutely essential to achieve coordination among the operative employees. Second, just as horizontal specialization permits greater skill and expertise to be developed by the operative group in the performance of their tasks, so vertical specialization permits greater expertise in the making of decisions. Third, vertical specialization permits the operative personnel to be held accountable for their decisions: to the board of directors in the case of a business organization; to the legislative body in the case of a public agency. Coordination. Group behavior requires not only the adoption of correct decisions, but also the adoption by all members of the group of the same decisions. Suppose ten persons decide to cooperate in building a boat. If each has his own plan, and they do not communicate their plans, the chances are that the resulting craft will not be very seaworthy; they would probably meet with better success if they adopted even a very mediocre design, and if then all followed this same design. By the exercise of authority or other forms of influence, it is possible to centralize the function of deciding so that a general plan of operations will govern the activities of all members of the organization. This coordination may be either procedural or substantive in nature: by procedural coordination is meant the specification of the organization itself -- that is, the generalized description of the behaviors and relationships of the members of the organization. Procedural coordination establishes the lines of authority and outlines the sphere of activity of each organization member, while substantive coordination specifies the content of his work. In an automobile factory, an organization chart is an aspect of procedural coordination; blueprints for the engine block of the car being manufactured are an aspect of substantive coordination. Expertise. To gain the advantages of specialized skill at the operative level, the work of an organization must be so subdivided that all processes requiring a particular skill can be performed by persons possessing that skill. Likewise, to gain the advantages of expertise in decision-making, the responsibility for decisions must be so allocated that all decisions requiring a particular skill can be made by persons possessing that skill. To subdivide decisions is rather more complicated than to subdivide performance; for, while it is not usually possible to combine the sharp eye of one workman with the steady hand of another to secure greater precision in a particular operation, it is often possible to add the knowledge of a lawyer to that of an engineer in order to improve the quality of a particular decision. Responsibility. Writers on the political and legal aspects of authority have emphasized that a primary function of organization is to enforce the conformity of the individual to norms laid down by the group, or by its authority-wielding members. The discretion of subordinate personnel is limited by policies determined near the top of the administrative hierarchy. When the maintenance of responsibility is a central concern, the purpose of vertical specialization is to assure legislative control over the administrator, leaving to the administrative staff adequate discretion to deal with technical matters which a legislative body composed of laymen would not be competent to decide. MODES OF ORGANIZATIONAL INFLUENCE Decisions reached in the higher ranks of the organization hierarchy will have no effect upon the activities of operative employees unless they are communicated downward. Consideration of the process requires an examination of the ways in which the behavior of the operative employee can be influenced. These influences fall roughly into two categories: (1) establishing in the operative employee himself attitudes, habits, and a state of mind which lead him to reach that decision which is advantageous to the organization, and (2) imposing on the operative employee decisions reached elsewhere in the organization. The first type of influence operates by inculcating in the employee organizational loyalties and a concern with efficiency, and more generally by training him. The second type of influence depends primarily upon authority and upon advisory and informational services. It is not insisted that these categories are either exhaustive or mutually exclusive, but they will serve the purposes of this introductory discussion. As a matter of fact, the present discussion is somewhat more general than the preceding paragraph suggests, for it is concerned with organizational influences not only upon operative employees but upon all individuals making decisions within the organization. Authority. The concept of authority has been analyzed at length by students of administration. We shall employ here a definition substantially equivalent to that put forth by C. I. Barnard. A subordinate is said to accept authority whenever he permits his behavior to be guided by the decision of a superior, without independently examining the merits of that decision. When exercising authority, the superior does not seek to convince the subordinate, but only to obtain his acquiescence. In actual practice, of course, authority is usually liberally admixed with suggestion and persuasion. Although it is an important function of authority to permit a decision to be made and carried out even when agreement cannot be reached, perhaps this arbitrary aspect of authority has been overemphasized. In any event, if it is attempted to carry authority beyond a certain point, which may be described as the subordinate's "zone of acceptance," disobedience will follow. The magnitude of the zone of acceptance depends upon the sanctions which authority has available to enforce its commands. The term "sanctions" must be interpreted broadly in this connection, for positive and neutral stimuli -- such as community of purpose, habit, and leadership -- are at least as important in securing acceptance of authority as the threat of physical or economic punishment. It follows that authority, in the sense here defined, can operate "upward" and "sidewise" as well as "downward" in the organization. If an executive delegates to his secretary a decision about file cabinets and accepts her recommendation without reexamination of its merits, he is accepting her authority. The "lines of authority" represented on organization charts do have a special significance, however, for they are commonly resorted to in order to terminate debate when it proves impossible to reach a consensus on a particular decision. Since this appellate use of authority generally requires sanctions to be effective, the structure of formal authority in an organization usually is related to the appointment, disciplining, and dismissal of personnel. These formal lines of authority are commonly supplemented by informal authority relations in the day-to-day work of the organization, while the formal hierarchy is largely reserved for the settlement of disputes. Organizational Loyalties. It is a prevalent characteristic of human behavior that members of an organized group tend to identify with that group. In making decisions their organizational loyalty leads them to evaluate alternative courses of action in terms of the consequences of their action for the group. When a person prefers a particular course of action because it is "good for America," he identifies himself with Americans; when he prefers it because it will "boost business in Berkeley," he identifies himself with Berkeleyans. National and class loyalties are examples of identifications which are of fundamental importance in the structure of modern society. The loyalties that are of particular interest in the study of administration are those which attach to administrative organizations or segments of such organizations. The regimental battle flag is the traditional symbol of this identification in military administration; in civil administration, a frequently encountered evidence of loyalty is the cry, "Our Bureau needs more funds!" This phenomenon of identification, or organizational loyalty, performs one very important function in administration. If an administrator, each time he is faced with a decision, must perforce evaluate that decision in terms of the whole range of human values, rationality in administration is impossible. If he need consider the decision only in the light of limited organizational aims, his task is more nearly within the range of human powers. The fireman can concentrate on the problem of fires, the health officer on problems of disease, without irrelevant considerations entering in. Furthermore, this concentration on a limited range of values is almost essential if the administrator is to be held accountable for his decisions. When the organization's objectives are specified by some higher authority, the major value-premise of the administrator's decisions is thereby given him, leaving to him only the implementation of these objectives. If the fire chief were permitted to roam over the whole field of human values -- to decide that parks were more important than fire trucks, and consequently to remake his fire department into a recreation department -- chaos would displace organization, and responsibility would disappear. Organizational loyalties lead also, however, to certain difficulties which should not be underestimated. The principal undesirable effect of identification is that it prevents the institutionalized individual from making correct decisions in cases where the restricted area of values with which he identifies himself must be weighed against other values outside that area. This is a principal cause of the interbureau competition and wrangling which characterize any large administrative organization. The organization members, identifying themselves with the bureau instead of with the over-all organization, believe the bureau's welfare more important than the general welfare when the two conflict. This problem is frequently evident in the case of "housekeeping" agencies, where the facilitative and auxiliary nature of the agency is lost sight of in the effort to force the line agencies to follow standard procedures. Organizational loyalties also result in incapacitating almost any department head for the task of balancing the financial needs of his department against the financial needs of other departments -- whence the need for a centrally located budget agency that is free from these psychological biases. The higher we go in the administrative hierarchy, and the broader becomes the range of social values that must come within the administrator's purview, the more harmful is the effect of valuational bias, and the more important is it that the administrator be freed from his narrower identifications. The Criterion of Efficiency. We have seen that the exercise of authority and the development of organizational loyalties are two principal means whereby the individual's value-premises are influenced by the organization. What about the issues of fact that underlie his decisions? These are largely determined by a principle that is implied in all rational behavior: the criterion of efficiency. In its broadest sense, to be efficient simply means to take the shortest path, the cheapest means, toward the attainment of the desired goals. The efficiency criterion is completely neutral as to what goals are to be attained. The commandment, "Be efficient!" is a major organizational influence over the decisions of the members of any administrative agency; and a determination whether this commandment has been obeyed is a major function of the review process. Advice and Information. Many of the influences the organization exercises over its members are of a less formal nature than those we have been discussing. These influences are perhaps most realistically viewed as a form of internal public relations, for there is nothing to guarantee that advice produced at one point in an organization will have any effect at another point in the organization unless the lines of communication are adequate to its transmission, and unless it is transmitted in such form as to be persuasive. It is a prevalent misconception in headquarters offices that the internal advisory function consists in preparing precisely worded explanatory bulletins and making certain that the proper number of these are prepared, and that they are placed in the proper compartment of the "router." No plague has produced a rate of mortality higher than the rate that customarily afflicts central-office communications between the time they leave the issuing office and the moment when they are assumed to be effected in the revised practice of the operative employees. Information and advice flow in all directions through the organization -- not merely from the top downward. Many of the facts that are relevant to decision are of a rapidly changing nature, ascertainable only at the moment of decision, and often ascertainable only by operative employees. For instance, in military operations knowledge of the disposition of the enemy's forces is of crucial importance, and military organization has developed elaborate procedures for transmitting to a person who is to make a decision all relevant facts that he is not in a position to ascertain personally. Training. Like organizational loyalties and the efficiency criterion, and unlike the other modes of influence we have been discussing, training influences decisions "from the inside out." That is, training prepares the organization member to reach satisfactory decisions himself, without the need for the constant exercise of authority or advice. In this sense, training procedures are alternatives to the exercise of authority or advice as means of control over the subordinate's decisions. Training may be of an in-service or a pre-service nature. When persons with particular educational qualifications are recruited for certain jobs, the organization is depending upon this pre-training as a principal me Excerpted from Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations by Herbert A. Simon All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.
