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Consideration of the origin ofHerbert Simons theory ofsatisficing (1933-1947)

Reva BrownOxford Brookes University Business School, Oxford, UK

Keywords Decision making, Decision theory, Business administration, History

Abstract Herbert Simons major contribution to decision-making theory is the concept ofsatisficing. This was first posited in Administrative Behavior, published in 1947, and the book,concerned as it was with establishing a scientific approach to administrative theory, puts forwardan adjustment of then-current economic theory, which viewed administrative choice as a process ofmaximising. While, over the ensuing decades, Simon adjusted his definitions of both economic

man and of satisficing in several subsequent publications, the original exposition of these was amajor contribution to the area of administrative theory. An attempt has been made here to explorewhat circumstances might have led Simon into putting forward the concept of satisficing.

Introduction

In what vacuum is personality formed? Is a mans language independent of the language ofhis fathers; his attitudes divorced from those of his associates and his teachers? Does a manlive for months or years in a particular position in an organisation, exposed to some streamsof communication, shielded from others, without the most profound effects on what he knows,believes, attends to, hopes, wishes, emphasises, fears and proposes? (Simon, 1957, p. xiv).

This research project originated in an attempt to answer an apparently uncomplicated

question: What led Simon to his idea that managers satisfice rather thanmaximise? Initially, the answer seemed equally uncomplicated: Simons personalworld view (not his personality, but the attitudes and beliefs he held) plus his educationat university plus his experience at work resulted in the idea of satisficing.

However, a fuller answer has required consideration of Simons beliefs about theacquisition, content and purpose of scientific knowledge, rationality, functionalism andpositivism, the relation of scientific theories to scientific discovery, the nature of theorganisational aspect of society. It also necessitated looking at the intellectual andacademic milieu of Chicago in the 1930s and at Simons place in it. And it requiredthinking about whether an archaeology of ideas is possible, and what the bestmethod for applying such an archaeology might be. The metaphor of archaeology is auseful one in that the method used to answer the question What led Simon to his

idea that managers satisfice rather than maximise? was a process of excavation, adigging down into layers of the past in order to consider where Simons concepts fitinto the milieu in which they were first posited.

Although archaeologists may find the old and the new existing contiguously, andideas are not concrete artefacts, the archaeological metaphor can indicate that whileideas may be isolated entities, they have a context in their contemporary environment.A useful approach for understanding is to place ideas in that context and to comparethem with their ancestors, in order to consider their development or alteration.

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In order to formulate ways of understanding the evolution of Simons ideas, it hasbeen necessary both to consider the nature of the scientific paradigms in which Simondeveloped and expressed his concepts; and also investigate how Simons theoreticaldevelopment was influenced by the person he was and the contextual influences on

him.Thus, consideration of the idea of satisficing began with an examination of the

concept itself. The latent content (the influence of Simons beliefs about science andsociety, and of his education and work experience on the formation of those concepts)was then excavated from the manifest content of his explication of the concepts inAdministrative Behavior.

Simons contribution to decision-making theory has been examined by focussing onboth the process and the product of his theorising.

SatisficingPeople will satisfice when they make a decision that satisfies and suffices for the

purpose. This satisfactory sufficiency enables decision making which is good enough,rather than the absolute best that which satisfices, while not ideal, will suffice tosatisfy requirements.

It becomes easier to understand why Herbert Simon expressed himself as he didabout good administration if his book, Administrative Behavior, is considered in itshistorical perspective. Digging into the layers of the past reveals that in 1947, whenSimons book first appeared, the USA was involved in the after-effects of the SecondWorld War, and efficiency in the organisation and administration of the armed forceshad recently been a matter of prime importance. Commercial, industrial and publicsector organisations were all aware that a great deal of re-organisation was necessaryin order to build the peace. Decision analysis and games theory were in their initialstages of development and positivism, although fairly new to organisation theory, had

been a dominant aspect of social theory for decades.InAdministrative Behavior, Simon posits a definition of good administration, which

requires that, among several alternatives involving the same expenditure, thealternative to be selected is the one that leads to the greatest accomplishment ofadministrative objectives with the least expenditure. Good administration, oradministrative efficiency, is important for conserving the scarce resources that theorganisation has at its disposal for accomplishing its tasks. This is rationalbehaviour and is evaluated in terms of the objectives of the larger organisation.

Simons (1947, p. 240) attempt to specify the conditions necessary for achievingadministrative efficiency within organisations, leads him to state that the centralconcern of administrative theory is the rationality of decisions that is, theirappropriateness for the accomplishment of specific goals. He adds that the task of

administration is to design the environment in such a way that the individual willapproach as close as practicable to rationality (judged in terms of the organisationsgoals) in his[1] decisions (Simon, 1947, p. 241).

In order to provide a clear understanding of the concept of rationality, Simon(1947, p. 75) provides a general definition:

Roughly speaking, rationality is concerned with the selection of preferred behavioralternatives in terms of some system of values whereby the consequences of behavior can beevaluated.

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He then divides this into six kinds of organisational rationality. A decision is:

(1) Objectively rational if, in fact, it is the correct behaviour for maximising givenvalues in a given situation.

(2) Subjectively rational if it maximises attainment relative to the actualknowledge of the subject.

(3) Consciously rational to the degree that the adjustment of means to ends is aconscious process.

(4) Deliberately rational to the degree that the adjustment of means to ends hasbeen deliberately brought about (by the individual or the organisation).

(5) Organisationally rational if it is oriented to the organisations goals.

(6) Personally rational if it is oriented to the individuals goals.

The view that efficient organisational activity attempts rationally to maximise theattainment of certain ends with the use of scarce means is characteristic of economic aswell as administrative theory[2]. Simon suggests that rational man (or economicman) is synonymous with utility maximising man. (Simons satisficing man is theindividual operating with rationality which is practically feasible within theorganisation.)

The second edition of Administrative Behaviorwas published in 1957, and was areproduction of the 1947 text. The Preface, however, was extended and, in it, Simonmade the first of the subsequent adjustments to his exposition of administrativebehaviour. In the 1957 Preface, Simon defines what he means by organisation: thecomplex pattern of communications and other relations in a group of human beingsrather than something drawn on charts or recorded in elaborate manuals of jobdescriptions (Simon, 1957, p. xxiii).

This is an indication of Simons tendency in Administrative Behaviorto have his

cake and eat it. While he says that an organisation is a pattern of relationships, hediscusses the organisation in terms of roles the cultural values of the organisation.This does not tie in comfortably with his positivistic approach to organisations and isan indication of his inclusion of voluntarism into his positivistic paradigm.

The 1957 Preface also contains Simons description of economic man, who is anormative decision-maker:

Economic man has a complete and consistent system of preferences that allows himalways to choose among the alternatives open to him; he is always completely aware ofwhat these alternatives are; there are no limits an the complexity of the computations hecan perform in order to determine which alternatives are best; probability calculationsare neither frightening nor mysterious to him (Simon, 1957, p. xvi).

On the other hand, administrative man exhibits:

a kind of rational behaviour that is compatible with the access to information and thecomputational capacities that are actually possessed by organisms, including man, in thekinds of environments in which such organisms exist (Simon, 1957, p. 240).

The difference to decision making is that in most global models of rational choice,economic man evaluates all alternatives before making his choice. However, in actualhuman decision making, alternatives are often examined sequentially and the firstsatisfactory alternative is likely to be the one actually selected satisficing.

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One might say that the amount of knowledge is not so crucial and that this is perhapsa difference of style with maximising being rationality at a point in time (a planningoverview) and satisficing being rationality through serial points in time (astep-at-a-time process). It is satisficing which simplifies the choice problem and brings

it within the powers of human computation, and which should be regarded as both adescription of, and a prescription for, decision making.

Simon states that it seems obvious enough that human behaviour in organisationsis, if not wholly rational, at least in good part intendedly so; and adds that it is preciselyin the realm where human behaviour is intendedly rational, but only limitedly so, thatthere is room for a genuine theory of organisation and administration.

He qualifies his advocacy of normative decision making with his introduction of theconcept of administrative or satisficing man. Because administrative theory is thetheory of intended and bounded rationality, it concerns the behaviour of humanbeings whosatisficebecause they have not the wits to maximize (Simon, 1957, p. xxiii).

Simon explains that economic man maximises, selecting the best alternative fromamong all those available to him and deals with (or attempts to deal with) what Simoncalls the real world in all its complexity. But administrative man satisfices, lookingfor a course of action that is satisfactory or good enough and deals with a drasticallysimplified model of the confusion that constitutes the real world (Simon, 1957, p. xxv).Administrative man makes his choices using a simple picture of the situation thattakes into account just a few of the factors which he regards as most relevant andcrucial. As a result, administrative man can make his choices without first examiningall possible behaviour alternatives and without ascertaining that these are in fact, allthe alternatives. Because he ignores the inter-relatedness of all things, which isparalysing to thought and action, administrative man is able to decide with relativelysimple rules of thumb that do not make impossible demands on his capacity forthought.

As the main limits on an individual in an organisation are the limits on his/herability to perform and on his ability to make correct decisions, to the extent that theselimits are removed, the administrative organisation approaches its goal of highefficiency which here is independent of the cognitive faculties of both the individualand the structure of the organisation.

It would seem that Simon, in his thinking about the improvement of administrativeefficiency, uses a behaviourist concept of the person. In addition, he has a positivistconception of organisational theory. He appears to hold that social science is a toolwhich can provide objective knowledge about the world. Simon is considering utilitytheory whereby the individual is held to be able to make a rational choice betweendesired ends and a rational calculation as to selecting a means for the achievement ofends. The existence of the asymmetry between subjective utility and objective

knowledge remains a problem for Simon, which he tackles by dividing subjectiverationality from objective rationality.

Simons approach is positivist because he appears to consider that the scientificpoints he puts forward produce an objective knowledge which can be applied toimprove administrative efficiency. However, he does acknowledge that there is nosingle set of administrative principles that can deliver administrative efficiency, so thatto study organisations in a positivist way will not provide a general enough objectiveknowledge which can be applied to all organisations.


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The theory of administration is concerned with how an organisation should beconstructed and operated in order to accomplish its work efficiently:

Among several alternatives involving the same expenditure the one should always beselected which leads to the greatest accomplishment of administrative objectives. And amongseveral alternatives that lead to the same accomplishment, the one should be selected whichinvolves the least expenditure.

Since this principle of efficiency is, characteristic of any activity that attempts rationallyto maximize the attainment of certain ends with the use of scarce means, it is as characteristicof economic theory as it is of administrative theory. The administrative man takes his placealongside the classical economic man (Simon, 1947, p. 39).

The main consequence of bounded rationality is satisficing. Rational decision makingalways requires the comparison of alternative means in terms of the respective ends towhich they will lead (Simon, 1947, p. 65). This means that efficiency the attainmentof maximum values with limited means must be a guiding criterion inadministrative decisions. The efficient organisation permits the individual to

approach reasonably near to objective rationality. Simon presents the idealisedpicture of such objective rationality, before qualifying it. The individual engaged inobjectively rational behaviour goes through a process of viewing the behaviouralternatives prior to decision in panoramic fashion, considering the whole complex ofconsequences that would follow on each choice and, with the system of values ascriterion, singling out one from the whole set of alternatives (Simon, 1947, p. 80).

However, actual administrative behaviour falls short of objective rationality, whichrequires a complete knowledge and anticipation of the consequences that will follow oneach choice when knowledge of consequences is always fragmentary. Furthermore,since these consequences lie in the future, imagination must supply the lack ofexperienced feeling in attaching value to them and values can be only imperfectlyanticipated. Rationality requires a choice among all possible alternative behaviours

but only a very few of all these possible alternatives ever come to mind.Simon (1957, p. xxv) concludes that administrative behaviour is that of human

beings who satisfice rather than maximise:

While economic man maximizes selects the best alternative from among all those availableto him; his cousin, whom we shall call administrative man, satisfices looks for a course ofaction that is satisfactory or good enough. Examples of satisficing criteria that are familiarenough to businessmen, if unfamiliar to most economists, are share of market, adequateprofit, fair price.

Simon (1947, pp. 240-41) considers that:

The need for an administrative theory resides in the fact that there are practical limits tohuman rationality and that these limits are not static, but depend upon the organizational

environmental in which the individuals decision takes place.The task of administration is so to design this environment that the individual will

approach as close as practicable to rationality (judged in terms of the organizations goals) inhis decisions.

As the individual cannot have the perfect conditions for ideal decision making, it isnecessary to compromise, to settle for the decisions which satisfice. However, in orderto achieve the goals of the organisation, the individual has to be logged in. People areimproved by improving their capacity to remember or to retain information, which

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improves their capacity to make decisions. The attainment of cognitive rationality(purposive behaviour) requires docility from the individual:

The term docility is used here in its proper dictionary sense of teachability. Since theword has no good synonym, it is unfortunate that in general speech it has taken on theconnotations of tractability, submissiveness or pliancy. (Simon, 1947, p. 85).

Simon makes suggestions for the improvement of administrative efficiency. Becausethe individuals rationality is limited by the social and organisational context in whichshe or he operates, Simon suggests that a persons behaviour should be integrated withthe decision-making capability of the individual in the organisation. Whenorganisations create an environment in which stable expectations can be built up,the individuals actions are then structured in such a tray as to maximise the efficiencyof the organisation. Stimuli and attention-directors should be provided to channel thebehaviours of members of the organisation and organisations should set intermediategoals for employees.

The application of these two suggestions would create the organised and

institutionalised individual whom Simon suggests is the rational individual.Disregarding that this is a behaviourist reading of how individuals interact in

organisations and there are other ways to interpret organisational behaviour, thequestion arises: if human rationality is flawed, and if it is the organisation which isfundamental to the achievement of human rationality, where does the rationality ofthe organisation (which is made up of flawed individuals) come from?

This is not to deny that organisational goals do exist and that the individuals whocompose the organisation share in these to differing degrees. Nor that there is an entity,the organisation, which exists despite changes in personnel. Nevertheless a certainamount of scepticism affects acceptance of Simons assertion that there is a rationalityof the organisation itself which exists out there separate from its personnel andwhich can be imposed on individuals in order to create administrative efficiency. (This

relates to Simons deliberate rationality.)Simon considers models of satisficing behaviour to be richer than models of

maximising behaviour because they treat not only equilibrium, but methods ofreaching it as well. Simon (1959) notes that the notion of satiation played no role inclassical economic theory, while it enters rather prominently into the treatment ofmotivation in psychology (and is present in the concept of satisficing).

In most psychological theories, the motive to act stems from drives and actionterminates when the drive is satisfied. Conditions for satisfying a drive are notnecessarily fixed, but may be specified by an aspiration level, which itself adjustsupward or dots inward on the basis of experience.

Current utility theory takes into account such factors as indifference curves andnotions like that of diminishing returns. The psychology which underpins current

utility theory is absent from Simons 1947 version of economics. By allowing himselfelements of voluntarism, he can include a behavioural psychology in his paradigm.

The psychological evidence on individual behaviour shows that aspirations tend toadjust to the attainable. (And organisational decision makers use segments ofrationality in this adjustment.)

Applying this to organisations, Simon posits that it is likely that organisationalgoals are not the maximising of profit, but the attainment of a certain level or rate ofprofit, the holding of a certain share of the market or a certain level of sales.


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Investigation would show that, in the real world, organisations try to satisficerather than to maximise.

In this exposition of satisficing, Simon reveals, almost as a throw-away line, thecontribution he has made to economic theory where Simon is novel is in his

deliberate inclusion of psychological views into economic theory. The economic theoryof the 1930s was practical and empirical. And it is Simons departure from this theoryin including behavioural psychology in his concept of satisficing that is both hiscontribution and is also indicative of a (fortuitous) inconsistency in his thinking.

The views expressed inAdministrative Behaviorallow Simon to have his cake andeat it. He is able to assert a series of contradictions:

. the prime importance of the scientific paradigm, which is crucial to thelegitimacy of his proposition;

. the view of administrative science from the logical positivist position;

. the positing of an objective world for the organisation;

. the inclusion of psychology, allowing room for speculation about the decisionmaker in terms of motivation rather than drive; and

. the provision of space for the complexity of subjective intent and voluntarism.

This inclusion of psychology both creates and legitimates the inconsistencies inSimons logical positivism. It allows him to depend on a strict scientific tradition, wherescience establishes the truth of statements about the world and gives him access to themethod of hypothetico-deduction, allowing statements about the conditions underwhich something holds true.

However, it also provides the space for Simon to include the messyincrementalism of the real world in his version of organisational decision makingwhile still considering his concepts to be validly scientific in the positivistic sense of

the word.

Simons personal world viewThe explication of satisficing in the section above concerned the end result of theprocess which begins with Simons personal world view, and threads its way throughhis education and his work experience to the publication ofAdministrative Behavior.

What is meant by Simons personal world view is his general paradigm ofthought. It is not concerned with his personality the kind of person he was betweenthe ages of 17 when he went to university and 26, when he gained the PhD that was tobecome Administrative Behavior. Rather, an attempt is made to excavate the attitudesand beliefs he held about the areas relevant to the formation of his concept of

satisficing science and the organisation:In his exposition of what he considers administrative science to be (in the Appendix

(pp. 248-53) toAdministrative Behavior),Simon reveals his personal world-view aboutthe acquisition, content and purpose of scientific knowledge. Simon, to a large extent, isa positivist in the twentieth century sense of the word. Nineteenth century positivismhad the additional aspect of viewing the collection of objective, value-free facts as beingpart of a larger project knowledge would allow for social change and progress alongrational lines.

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Simons view is that we are entitled to record only that which is actually manifestedin experience. Additionally, value judgements and belief statements are notknowledge. Any assertion of values that we accept for themselves, rather than inrelation to something else, are not justified by experience for instance, the principle

that human life is an irreplaceable good cannot be so justified. We may accept or rejectit, but we must be conscious of the arbitrariness of our opinion. Observation ofphenomena is value-free.

In his exposition of science, Simon further divides it into two kinds: practicaland theoretical. Scientific propositions are practical if they are stated in some suchform as In order to produce such and such a state of, affairs, such and such mustbe done (Simon, 1947, p. 248). The equivalent theoretical proposition with thesame conditions of verification can be stated in a purely descriptive form: Suchand such a state of affairs is invariably accompanied by such and suchconditions (Simon, 1947, p. 248). (Simon, like his fellow scientists of the late 1930sand early 1940s, was concerned with verification, not falsification. The elucidation

of the idea of falsification of scientific theories by Karl Popper was available inGerman in 1934. Its translation into English, and consequent disseminationoccurred over 20 years later.)

According to Simon, practical and theoretical propositions differ from each otheronly with respect to the motives of the persons who employ them. In a footnote on page62 ofAdministrative Behavior, Simon indicates that the Appendix discusses at greaterlength the distinction between a practical science of administration (the study of whatadministrators ought) and a sociology of administration (the study of whatadministrators do).

Simon divides propositions about administration into two kinds. First, propositionsas to how people would behave if they wished their activity to result in the greatestattainment of administrative objectives with scarce means a science of

administration, which he defines as practical and which is a normative,positivistic view; and second, descriptive propositions of the way in which humanbeings behave in organised groups a sociology of administration, which he definesas theoretical.

Simon considers that these two alternative forms of administrative science areanalogous to the two forms taken by economic science. Economic theory andinstitutional economics, which are generalised descriptions of the behaviour of peoplein the market, and business theory, which states those conditions of businessbehaviour which will result in the maximisation of profit.

For Simon, the distinction between fact and value leads to an understanding ofwhat is meant by a correct administrative decision and clarifies the distinction

between questions of policy and questions of administration.Factual propositions are statements about the observable world and the way inwhich it operates. They may be tested to determine whether they are true or false.Decisions, however, have an ethical content and the task of ethics is to selectimperatives (ought-to sentences). There is no way in which the correctness of ethicalpropositions can be empirically or rationally tested:

We see that, in a strict sense, the, administrators decisions cannot be evaluated by scientificmeans (Simon, 1947, p. 47).


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This statement could be seen as an example of Simons inconsistency, but it is morehelpful to regard it as an example of his breaking out of the paradigm in order to admitnon-positivistic elements.

However, the scientific nature of administrative theory is important to Simon. So

he suggests that while any statement that contains an ethical element cannot bedescribed as correct or incorrect and while the decision-making process must start withsome ethical premise, taken as given, it is this ethical premise which describes theobjective of the organisation in question.

In order, therefore, for an ethical proposition to be useful for rational decisionmaking, Simon prescribes that the values taken as organisational objectives must bedefinite, so that their degree of realisation in any situation can be assessed. He includesa positivistic supplement to the above: it must be possible to form judgements as to theprobability that particular actions will implement these objectives.

When it comes to the concept of satisficing, it is suggested that Simonsformulation lies within normal science (Kuhn, 1970). But what is distinctive andimportant about this concept is that it raises the possibility of moving out of the

existing paradigm and opening new ways of seeing in economics, organisationaltheory (administrative science, in Simons terminology), and decision making.

It would seem, however, that satisficing is not an indication of a revolutionarybreak with normal science but can be seen in three ways:

(1) As a bridge over which to cross from Simons logical positivist paradigm to onewhich takes note of peoples capacity to create and control their environment, aparadigm which contains imperatives.

(2) As a conflation of Simons positivistic and non-positivistic paradigms.

(3) As an anomaly within the positivist paradigm, an indication of a problemwithin normal science, requiring not so much a revolutionary break with theparadigm as an adjustment of the orthodox view in order to incorporate it.

The attitudes and opinions which comprised Simons personal viewpoint on scienceand organisations formed part of the tools which he used in order to arrive at theconcept of satisficing.

Simons educationArchaeologists call the bottom layer on which all the subsequent levels are based, thenatural. It was Simons education that was the first layer laid down in the strata of hislife leading to his discovery of satisficing. Apart from his formal schooling, Simoneducated himself from the library left by his maternal uncle, who died in his early 30s,and the books which his older brother had left behind when he left home. For his ownpleasure, Simon (1980, p. 443) studied economics, psychology, ancient history, some

analytic geometry and calculus, and physics.At school, he was smarter than his comrades (Simon, 1980, p. 449) and skipped

two years, so that most of his friends were several years his senior. He saw himself asdifferent from his friends, because of his brightness, his left-handedness, and hiscolour-blindness.

During his schooldays, Simon had already formed his notion that science was thebest way to view reality, and that human behaviour could be studied scientifically. Hetook this attitude with him to university. Simon graduated from high school in

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Milwaukee, Wisconsin in 1943 at the age of 17. In his Autobiography, he states that hehad experienced a happy boyhood and adolescence. He had to make almost nodecisions, except to take what the world offered him, and the world had been generous(Simon, 1980, p. 447).

Simon won a scholarship to the University of Chicano, Illinois. The university wasbeginning the third year of the Chicago Plan class attendance was not required; mostrequirements for the bachelors degree could be satisfied by taking comprehensiveexaminations; and all students were required to pass examinations covering the majorfields of knowledge: humanities, social sciences, physical sciences, and biological sciences.

Here he encountered the academics who were to guide him[3]. Significantly, perhaps,Simon had little formal teaching on administration. It was his first job, with theInternational City Managers Association (ICMA), with Ridley as director, that providedSimon with his schooling in administration since I had had no administrativeexperience, and had hardly even observed organisations (Simon, 1947, p. 68). As hegained experience, his conviction grew that systematic observation and experimentationwere necessary to provide administrative experience with a theoretical scientific

framework. The friends he made at university shared his interests; several of thoseundergraduate friendships extended into his adult working life.

Simons education fulfils Kuhns (1970) notions about the role of scientific educationin the continuance of normal science. Simon subscribed to the dominant tradition inthe history of science, according to which science is thought of as progressinggradually by the accumulation of empirical knowledge, steadily giving rise toincreasingly elaborate theoretical construction. His concern with administration was todevelop a viable theory of administrative science.

In his short autobiographical account, Simon (1980, p. 443) comments, using thethird person to refer to his childhood and adolescence, that:

Perhaps the most unusual feature of his boyhood, as it influenced his future career, was his

exposure, thanks to the books and the example left behind by his long-dead uncle, to the ideathat human behavior could be studied scientifically. He saw, if dimly, the challenge of bringingto social science or biology the mathematical thinking that had been so powerful in physics.

Simons work experienceIn his autobiographical chapter, Simon (1980, p. 446) explains how he came to beconcerned with administrative decision making:

My career was determined for me in a very casual way. Other people in my environmentpresented me with opportunities. When the opportunities were attractive, I took them. Two orthree such choices (hardly decisions, for I did not search for alternatives) set me on a definite path.

Simon wrote a description of the city government of Milwaukee for a term paper in acourse on municipal government. His professor, Jerome Kerwin, was then studying therelation between city governments and school boards. Liking Simons paper andrecalling that the administration of recreation in Milwaukee involved co-operationbetween city government and school district, he suggested that Simon write a paper onthat arrangement.

The paper, Administration of public recreational facilities in Milwaukee(unpublished, 1935 cited by Simon on page 212 of Administrative Behavior) was


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also well received. Kerwin wondered, however, why Simon had limited myself todescribing the organisation, and had not evaluated it. Because Simon did not knowhow to do this, he enrolled in Clarence Ridleys course on Measuring MunicipalGovernments:

Since my economics training suggested that the evaluation problem could be formulated asone of utility maximization subject to a budget restraint, I wrote a paper in that vein. That ledto an invitation to serve as graduate research assistant to Ridley to a larger project he wasundertaking (Simon, 1980, p. 446).

Thus by that unproblematic route, Simon was launched on his career. Fromresearch assistant in 1936, he became, at the age of 22, in 1938, a staff member ofthe organisation of which Clarence Ridley was director, the ICMA.

The research in which Simon was involved with Ridley during 1936 and 1937 waspublished in volume 19 of Public Management, ICMAs monthly journal, titledMeasurement standards in city administration: technique of appraising standards. InNovember 1937, Simons article, Comparative statistics and the measurement of

efficiency (Simon, 1937), was published in the National Municipal Review. In 1938, themonograph, Measuring Municipal Activities(Ridley and Simon, 1938), also co-authoredwith Ridley, was published by ICMA. Simon was slowly becoming known amongthose interested in municipal measurement and administration.

As a staff member, Simon edited ICMAs Public Management and the annualMunicipal Yearbook, dealing with its statistical sections. He was also responsible forwriting numerous chapters for the training manuals for city executives which theAssociation was then preparing (Simon, 1980, p. 449).

Simon then became involved in writing a major part ofThe Technique of MunicipalAdministration,which was intended to inform city managers about how to run a cityadministration. His task was not to invent a new theory, but to assemble a textbook outof the existing knowledge and literature on the effectiveness of administration.

InAdministrative Behavior,Simon cites the authors of the existing knowledge andliterature who influenced him. It was his examination of current writing onorganisations, which led Simon to conclude that most of the writing on administration. . . was based on everyday observation and not an esoteric experimental orobservational techniques:

This state of affairs in administrative theory did not seem very acceptable to me. Systematicobservation and experimentation were badly needed if this field was ever to become evenmoderately scientific. But until there existed a satisfactory theoretical framework, it wouldnot be clear what kinds of empirical investigations were called for. I decided that I wouldwrite a theoretical doctoral thesis on decision-making in administration (Simon, 1980, p. 450).

In the General Introduction to his 1977 Models of Discovery, Simon explains that, in

July 1937, he produced a three-page outline titled, The logical structure of a science ofadministration. This was the progenitor of the project that emerged five years later ashis PhD, The theory of administrative decision, and ten years later asAdministrativeBehavior(Simon, 1977, p. vii).

Simons predecessors had provided administrative science with principles ormaxims (which Simon (1977, p. 42) called proverbs and only criteria for describingand diagnosing administrative situations arising from their own managerialexperience (Simon, 1977, p. 36). Simon considered this to be unsatisfactory and

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moved from this experiential mode to science, which would (under the auspices of hispositivistic conception) produce true knowledge.

Simons intention was to develop administrative science to the point where, by

means of systematic observation and experimentation, theory could be verified. Good

administrative theory would dispose of the dependence on maxims, and wouldenable administration to be considered scientifically, rather than through principlesderived from the personal experiences of managers:

What is needed is empirical research and experimentation to determine the relative

desirability of alternative administrative arrangements. The methodological framework for

this research is already at hand in the principle of efficiency (Simon, 1947, p. 42).

Simon adds that in the field of public administration, almost the sole example of such

experimentation was the series of studies that had been conducted in the public welfarefield to determine the proper case loads for social workers. He cites his own workundertaken at Berkeley, together with his associates William Divine, William Cooper

and Milton Chernin.This work was part of Simons second job. What had happened was that SamuelMay, director of the Bureau of Public Administration at the University of California at

Berkeley, wished to undertake statistical studies of local government. In order to do so,May applied to the Rockefeller Foundation for financial support. The measurementstudies of public services that Simon had undertaken with Ridley, had generated greatinterest because of the difficult financial plight of the local government gripped by the

Depression, and Simon was asked to plan the study for the Bureau. With University ofChicago fellow-graduate Milton Chernin, Simon produced a document in the summer of1938, outlining a three-year project. When the grant was made, Simon was invited to

direct the study.He was 23 when he went, with Milton Chernin, to Berkeley as director of

Administrative Measurement Studies, and was in charge of an organisation of fivestaff and 50 Work Projects Administration (WPA) workers, who were attached to the

project, as well as a number of people from the State Relief Organisation, in which afield experiment (Simon, 1980, p. 451) was carried out.

In the three years, 1939 to 1942, Simon and his associates, Divine, Cooper andChernin, completed three major studies and produced monographs, published in 1941

and 1943 by the University of California Bureau of Public Administration: FiscalAspects of Metropolitan Consolidation (Simon, 1943), Determining Work Loads forProfessional Staff in a Public Welfare Agency (Simon et al., 1941), the study whichSimon cites in Administrative Behavioras being a good example of an administrativeexperiment. (There is a Taylorite scientific management echo in these titles. And

Simon (1947, p. 43) cites Taylors work as research studies [which] satisfy thefundamental conditions of methodology.)

The field experiment carried out in the State Relief Administration was the

largest experiment that had ever been carried out in an organisation up to that time comparable in scope to the Hawthorne studies and more systematically designed

(Simon, 1980, p. 451). This was written up with William Divine, and published inAutumn 1941 in thePublic Administration Reviewas Controlling human factors in anadministrative experiment (Simon and Divine, 1941).


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In May 1941, Civic Affairs, published Simons Measurement techniques inadministrative research (Simon, 1941). He subsequently adapted this article for use inAdministrative Behavior(pages 192 and 193, Efficiency and the budget.)

While at Berkeley, Simon completed his doctorate, the thesis, which became, in

1947, Administrative Behavior. Simons science is not so much observational asexperimental. His concern was to undertake experiments through which theorganisation can be re-ordered until the best efficiency has been reached. For Simon(1947, p. 44), the importance of the administrative experiment was its use as averification for theory:

To be sure, the literature of administration has not been lacking in theory, any morethan it has in descriptive and empirical studies. What has been lacking has been abridge between these two, so that theory could provide a guide to the design of criticalexperiments and studies, while experimental studies could provide a sharp test andcorrective of theory.

Simons next job also required the accepting of an opportunity rather than the search

for a direction. Victor Jones, whom Simon had known as a graduate student at Chicagoand then as a colleague at Berkeley, had been at the Illinois Institute of Technology inChicago and was returning, in 1942, to Berkeley. Jones arranged for Simon to take overhis position at the Institute in Chicago. Illinois Tech was basically an engineeringschool, and Simon (1980, p. 453) considered that it was more likely to provide acongenial environment for a mathematical political scientist than most otheruniversities.

The years from 1942 to 1947 were spent lecturing at Illinois Tech, editing, writingand participating in the training activities at ICMA and revising his PhD. Towards theend of the War, Simon began to participate in the seminars of the Cowles Commissionfor Research in Economics. He wrote a theoretical piece on the economics of urbanmigration and was co-opted onto the Cowles Commission study ofEconomic Aspects of

Atomic Power, writing chapters 13 and 14 on the macro-economic aspects of atomicpower.The association with the Cowles Commission brought Simon into the thick of the

dramatic intellectual developments that took place in the social sciences just after theWar:

The excitement of the time can be conveyed. . .by listing the labels for the constellations ofideas that were born then: operations research and management science, the theory of games,information theory, feedback theory, servomechanisms, control theory, statistical decisiontheory, and the stored-program digital computer (Simon, 1980, p. 454).

Of great importance to Simon was the existence of what he calls a scientific culture an inter-locking network of scientists with a real sense of community, which wasalmost independent of the special area in which each worked, and which ignored thediversity of their backgrounds and training.

Simons dual participation in the engineering culture of Illinois Tech and in theeconometric culture of the Cowles Commission gave him access to this community.Simon comments that he learned of the theory of games before the vonNeumann-Morgenstern book was published, having met von Neumann on theCowles Commission, and that he considered that the operations research techniques ofLeo Hurwicz (also Cowles Commission) formed a natural continuity with his ownadministrative measurement research.

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ConclusionIt is significant that Simon taught himself administrative theory on the job at ICMA.A newly-graduated young man of 21, Simon experienced some degree of hero-worshipfor Clarence Ridley, a remarkable man whose organisation, ICMA, was a marvellous

school in administration (Simon, 1980, p. 444). It is clear that Simons contribution tothe study of administrative behaviour is based on the administrative work heundertook at ICMA and at Berkeley, combined with the necessity for examiningexisting knowledge and literature (Simon, 1980, p. 444) to construct ICMAstextbook for city managers.

When examining the role of authority in rational behaviour, Simon cites White (1939),who was on the faculty of the University of Chicago and whose book,Introduction to theStudy of Public Administration, as well as Barnards (1958) influential, The Functions ofthe Executive,provided Simon with concepts which he adapted what Barnard (1958)calls the zone of indifference, Simon (1947, p. 12) names acceptance or adoptedunaltered the idea of equilibrium (Simon, 1947, p. 111).

However, Simon was the means whereby these concepts were first applied to thecontext of a theory of administration where it is specifically stated that the task ofdeciding pervades the entire administrative organisation although it has notcommonly been recognised that a theory of administration should be concerned withthe processes of decision (Simon, 1947, p. 1).

It would seem that the answer to the question of what led Simon to his idea thatadministrators satisfice rather than maximise was the elusive combination of theway he viewed reality, society, and scientific endeavour, the formal education hereceived at university, and the mentors he encountered there, and the insights hegained from his work in the measurement of administrative efficiency that led him topropose that maximising to the optimum is not a description of how administratorsactually proceed or indeed, a prescription for how they should proceed.

There is a certain double-think in Simons advocacy of satisficing, created by themisfit between Simons logical positivism, provided initially by his contact with hislecturer Rudolf Carnap, and his assessment that people in organisations are activebeings as well as reactive.

To arrive at his concept, Simon had to take an intermediate position between theneed to study human behaviour scientifically and the realisation that positivism anddeterminism are not the complete explanation of human behaviour.

A kind interpretation of this is to say that Simons view of administrative decisionmaking is a creative way to combine or conflate objective and subjective rationalityinto a coherent and workable theory. A less sympathetic view would be to considerthat Simon wants to have his cake and eat it he is reluctant to abandon his positionin normal science or the legitimacy which the insistence on science gives him.

However, he is aware that the area he is dealing with does not have the purity ofscience. It is messy and is compromised by the individuals psychology.

There is another factor which may have contributed to the discovery ofsatisficing, but one which is necessarily speculative Simons age, or rather, his youth,when he began examining the current theories of maximising economic andadministrative theory.

The Depression was a factor in his development The atmosphere of theDepression put the possession of a job rather in the center of ones thinking (Simon,


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1980, p. 443). Simons work at Berkeley involved the State Relief Administration andthe WPA both organisations concerned to cope with the unemployment of theDepression years.

In his autobiography, he describes himself as incorrigibly introspective as a boy,

shy as a young man at Berkeley, and states that my greatest pleasures andsatisfactions still derive from the world of ideas and not from the world of power(Simon, 1980, p. 451).

For a man whose lifes work has been consideration of decision making at work,Simon appears to have made few decisions about the direction of his own working life.He explains that he grasped opportunities offered but did not consciously takedecisions for I did not search for alternatives (Simon, 1980, p. 470).

This interweaving of outlook, opinion and experience supported the developmentand explication of his two theoretical concepts, underlying both their normative anddescriptive aspects. Yet, paradoxically, it would seem that the insights intoadministrative theory, which Simon considered had been reached scientifically andobjectively, had been influenced by his own world view and his own satisficing.

Simon considered that administrators react to the organisational environment apositivistic and functionalist attitude but needed to give credit to the fact that thisstimulus-and-response viewpoint was in opposition to the view of human beings ascapable of action and capable (even if not optimally) of decision making.

The way to include both these aspects into administrative behaviour was to state:

that there are limits to human rationality, and that these limits are not static, but depend uponthe organizational environment in which the individuals decision takes place. The task ofadministration is so to design this environment that the individualwillapproach as closely aspracticable to rationality (judged in terms of the organisations goals) in his decisions (Simon,1947, p. 240, emphasis in the original).

This adaptation of positivism allowed Simon to retain a functionalist behavioural

paradigm and to approach administrative behaviour from the point of view thatenvironmental factors cause or affect most of observable administrative behaviour.Simon evidently found that his positivistic framework was not sufficiently flexible toaccount for administrative behaviour. Further research is likely to show more clearlythe places where the strains on Simons paradigm created the necessity to breakthrough it.

Simon inherited an administrative theory based on the principles or maxims of hispredecessors formed from their at-in managerial experiences. Simons intention was tocreate an administrative theory which could be verified by systematic observation andexperimentation. Simons intention in his use of the administrative experiment (experienceof which was provided by the time at Berkeley) was to move beyond the maxims andprinciples and to provide true knowledge about administrative efficiency.

The need to include psychology in his decision-making process leads Simon topropose what can be construed as an optimal organisation but for satisficers. It wasthis approach which resulted in Simons proposition that there is not one best methodof administrative conduct, but many ways, which are good enough.

This research project originated in an attempt to answer the question: What ledSimon to his idea that managers satisfice rather than maximise? Archaeologicalexcavation has uncovered the artefacts that it. Simons attitudes and the beliefs he heldabout the nature of the world, truth and knowledge, plus his education, particularly at

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university, plus his experience at work resulted in the idea that, rather than pursuing aproblem until the best solution emerges, the working manager will accept the solutionthat satisfies and suffices.

Notes

1. In those pre-politically correct days, to refer to the manager as he was likely to be accurate,and offshoots such as economic man while ostensibly referring to humankind alsotended to be referring to men rather than to include women. As this paper is concerned withevents and writing that is nearly 60 years in the past, the terminology of the time is used,albeit with an awareness that current practice would find it unacceptable.

2. The administrative theory of the 1940s and 1950s had become organisational theory bythe 1960s, and the administrators about whom Simon and his contemporaries were writinghave become managers. If founded today, the major journal in the field, AdministrativeScience Quarterly, would more than likely have organisational in its title instead.

3. Manley Thompson, who has had a distinguished career in the University of Chicago

Philosophy Department; Harold Guetzkow, who is known for his work in psychology andinternational relations, and with whom Simon has collaborated in the researching andwriting of papers; Milton Chernin, with whom Simon worked at the University of Californiaat Berkeley while director of Administrative Measurement Studies; Victor Jones, who waslater instrumental in arranging for Simon to take over his position at the Illinois Institute ofTechnology in Chicago, when Jones returned to Berkeley; Henry Simons, whose lectures onprice theory gave an insight into the application of mathematics to economics; NicholasRasshevsky, a biophysicist who built mathematics into models of biological systems in

Administrative Behavior, Simon discusses the anatomy of organisation on page 220; L.L.Thurstone, who lectured on factor analysis; Henry Schultz, who provided Simon with theuses of mathematics in economics and modern statistical theory; Rudolf Carnap, wholectured on logic and the philosophy of science Simon cites four of Carnaps works in

Administrative Behavior as being relevant to the nature of scientific propositions and

Clarence Ridley, who was concerned with the measurement of the efficiency of municipalgovernments.

References

Barnard, C. (1958), The Functions of the Executive, Harvard University Press, Cambridge, MA(originally published in 1938).

Kuhn, T. (1970), The Structure of Scientific Revolutions, 2nd ed., University of Chicago Press,Chicago, IL.

Ridley, C.E. and Simon, H.A. (1938), Measuring Municipal Activities, monograph, InternationalCity Managers Association, Chicago, IL.

Simon, H.A. (1937), Comparative statistics and the measurement of efficiency, National

Municipal Review, Vol. 26, pp. 524-5.Simon, H.A. (1941), Measurement techniques in administrative research,Civic Affairs, Vol. 2,

May.

Simon, H.A. (1943), Fiscal Aspects of Metropolitan Consolidation, Bureau of PublicAdministration, University of California, Berkeley, CA.

Simon, H.A. (1947),Administrative Behavior, The Macmillan Company, New York, NY (2nd ed.published in 1957).

Simon, H.A. (1957), Models of Man, Social and Rational, Wiley, New York, NY.


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Simon, H.A. (1959), Theories of decision making in economics and behavioral science,ReprintSeries in the Social Sciences PS-264, Bobbs-Merrill, Indianapolis, IN (reprinted from The

American Economic Review, Vol. XLIX, June, pp. 262-3).

Simon, H.A. (1977), Models of Discovery and Other Topics in the Methods of Science, D. Reidel

Publishing, Boston, MA.Simon, H.A. (1980), Autobiography, in Lindzey, G. (Ed.), A History of Psychology in

Autobiography, Vol. VII, H. Freeman and Co., San Francisco, CA.

Simon, H.A. and Divine, W. (1941), Controlling human factors in an administrative experiment,Public Administration Review, Vol. 1, Autumn, pp. 487-92.

Simon, H.A., Divine, W.R., Cooper, E.M. and Chernin, M. (1941), Determining Work Loads forProfessional Staff in a Public Welfare Agency , Bureau of Public Administration, Universityof California, Berkeley, CA.

White, L.D. (1939),Introduction to the Study of Public Administration, The Macmillan Company,New York, NY.

Further readingKeat, R. and Urry, T. (1975), Social Theory as Science, Routledge & Kegan Paul, London.

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Documents

Transcript of satisfiction