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Herbert Simon and Rational Choice

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David Smailes

on 19 March 2018

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Transcript of Herbert Simon and Rational Choice

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The idea of rational choice theory seems familiar, but it isn't
We use the word "rational" to describe a lot of things like being sensible or predictable - even "common sense"

It's even often confused with the idea of logic or deduction
In general, rational choice theory is about explaining what happens in society based on individual choices
Herbert Simon applied this idea to public administration
Simon thought rational choice theory could explain a lot, but not everything

Human beings have limited perspectives, so we don't always see things clearly - but we try

So where does that leave us?
Simon uses the term "bounded rationality" to explain that while we try to make rational choices, we are always limited by what we can know as human beings.

So we do the best we can, but always have to recognize the limits of what we can know and how we can use
that information to make decisions.

Herbert Simon and Rational Choice
None of this is going to be easy:
we can try to define our criteria, but we haven't studied the "real world" enough to know how realistic those definitions would be

we can also try to figure out consequences, but there are limits to what we can rationally know, and individual actions might not help us figure out what is "rational" for the bigger organization (like the bees in the beehive)

and we really haven't done enough experimentation to begin to help us in weighing consequences
Those individual choices are guided by "costs and benefits" to the individual person - collectively, those decisions become society's choices
Simon says there are four "proverbs" we try to live by in bureaucracy - they sound good, but each is flawed:
1. Specialization means greater efficiency in administration

It sounds good, but think about the different ways to specialize:
tasks: each person is trained to do a specific task well
place: each person is trained to work in a specific office and do all the jobs in that office

Simon argues there really is no reason to choose one over the other - specialization happens because we can't do two things at once, not because it is more efficient
2. We get greater efficiency when we organize things with clear chains of command

Sounds good, but what if the person with some expertise works for someone who lacks that expertise - or has someone outside their chain of command that has it? Should that be ignored?
3. Efficiency is increased if we limit the span of control a person has - "keep it simple"

True, but that also means we'll have many more levels of control, which means even more 'red tape' to deal with - which means we decrease efficiency. One proverb is contradicting another.
4. Efficiency is created when we group bureaucrats by purpose, process, clientele, or place

But 'purpose' is really defined by the others (think of a fire department) and each of them is vague in definition

So in the end this isn't much help in creating efficiency
So none of these proverbs is really all that helpful to us - as good as they sound, they don't help get good admininstration.
Instead, Simon argues, we need to use a kind of rational choice theory to figure out what to do:

we need to decide what our criteria are for listing our alternatives
we need to decide what the consequences of each of those alternatives would be
and we need to weigh those consequences, see which ones contradict, and make our best choice from there
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