Administrative Behavior: a Study of Decision-Making Processes in Administrative Organization is a book written by Herbert A. Simon (1916–2001). It asserts that "decision-making is the heart of administration, and that the vocabulary of administrative theory must be derived from the logic and psychology of human choice", and it attempts to describe administrative organizations "in a way that will provide the basis for scientific analysis". The first edition was published in 1947; the second, in 1957; the third, in 1976; and the fourth, in 1997. As summarized in a 2001 obituary of Simon, the book "reject[ed] the notion of an omniscient 'economic man' capable of making decisions that bring the greatest benefit possible and substitut[ed] instead the idea of 'administrative man' who 'satisfices—looks for a course of action that is satisfactory'". Administrative Behavior laid the foundation for the economic movement known as the Carnegie School.
The book crosses social science disciplines such as political science and economics. Simon returned to some of the ideas in the book in his later works, such as The Sciences of the Artificial (1969). The Royal Swedish Academy of Sciences cited the book as "epoch-making" in awarding the 1978 Nobel Memorial Prize in Economic Sciences to Simon. A 1990 article in Public Administration Review named it the "public administration book of the half century" (1940-1990). It was voted the fifth most influential management book of the 20th century in a poll of the Fellows of the Academy of Management.
Background
The book is based on Simon's doctoral thesis in political science at the University of Chicago, which he began planning in 1937. At the time, the chair of the political science department was Charles Edward Merriam.
Beginning in 1936, Simon worked as a half-time research assistant and then as a full-time staff member at the International City Managers Association (ICMA). Among other activities at ICMA, he learned about administration and about scientific collaboration from director Clarence Ridley, and published his first book with Ridley in 1938. Although Simon cites Ridley as a major influence on his thinking, Simon did not actually work on his thesis while at ICMA.
Simon took a position at the Bureau of Public Administration at the University of California, Berkeley between 1939 and 1942. It was at Berkeley that he completed his University of Chicago Ph.D. thesis, which was approved by a committee consisting of Leonard D. White, C. Herman Pritchett, Clarence Ridley, and Charner Marquis Perry. Simon received his doctorate in 1942.
Influences
In writing his thesis and book, Simon was influenced by The Functions of the Executive (1938) by Chester I. Barnard. In his 1991 autobiography, Simon wrote that he found Barnard's book "wholly superior to the other administrative literature of the day and fully compatible with my preference for looking at management in decision-making terms". The book, which Simon read "with painstaking care", motivated Simon to reflect upon his experiences and to focus on administrative decision making. In a 1988 interview, Simon was quoted as follows: Of course I built squarely on Barnard, and have always felt deeply indebted to him; science is a cumulative endeavor...In the book itself there are fourteen references to Barnard...the notions of the contribution-inducement equilibrium, authority, and zone of acceptance were all derived from Barnard...What I would now regard as the principal novelties in Administrative Behavior are the development of the concept of organizational identification...the description of the decision process in terms of the processing of decision premises, and the bounded rationality notions...Most of the rest is highly "Barnardian", and certainly even those "novel" ideas are in no way inconsistent with Barnard's view of organizations.
Mitchell and Scott have noted similarities in Barnard's and Simon's concepts of authority, organizational equilibrium, and decision making. For example, Barnard's "zone of indifference" (a subordinate's unquestioned acceptance of authority) became Simon's "zone of acceptance". In addition, Mitchell and Scott concluded that both Simon and Barnard believed that large organizations control individuals' behavior and manipulate their opinions.
Philosophers who influenced Simon include William James, John Dewey, A. J. Ayer, and Rudolf Carnap. The ideas of behavioral psychologist Edward C. Tolman and sociologist Talcott Parsons also contributed to Simon's work. Simon characterized his own philosophical approach as logical positivism.
Editions
Preliminary (1945) In 1945, when Simon was at the Illinois Institute of Technology, he sent mimeographed copies of a preliminary version of the book (which was similar to his thesis) to about 200 people he thought might be interested in his work. One of the recipients of the preliminary version was Barnard. Although Simon did not know Barnard personally, Barnard sent a total of 25 pages of detailed comments to Simon, which resulted in a thorough revision of the book. Simon then asked Barnard to write the book's foreword.
1st (1947) The first edition had 16 pages of front matter (e.g., a foreword by Chester Barnard, a preface, and acknowledgements), as well as 259 pages of body matter (i.e., Chapters I-XI) and back matter (appendix and index).
The published first edition was different from the preliminary version in many ways, including: Mathematical appendices and a comparison of rats and humans in organizations was removed The chapters were rearranged, with "Some Problems of Administrative Theory" moved up to Chapter II Some discussion of logical positivism was deleted There was more discussion of communication within organizations Material that could be considered "political" (e.g., passages that appeared to support New Deal economics) had been taken out
In the foreword, Barnard states that Simon's conclusions are "consonant with [his] experience" as an executive, and expresses hope that "ultimately it may be possible to state principles of general organization". In the Acknowledgements, Simon thanked Barnard for The Functions of the Executive, for "the extremely careful critical review he gave the preliminary version of this book", and for his foreword.
2nd (1957) The second edition featured a new Introduction, causing the book to contain 48 pages of front matter and 259 pages of body and back matter. The Introduction summarized the book's structure, suggested how practitioners might apply the book's lessons, discussed the concepts of rational behavior and satisficing, commented on specific chapters in the book, and provided recent references.
3rd (1976) The third edition, which had 50 pages of front matter and 364 pages of body and back matter, placed the original Chapters I-XI and Appendix into a Part I. Its "Part II" consisted of six new chapters (XII through XVII) based on articles that Simon had written: XII: "On the Concept of Organizational Goal" (pages 257-278), originally published in 1964 XIII: "The Future of Information-Processing Technology" (pages 279-287), originally published in 1968 XIV: "Applying Information Technology to Organization Design" (pages 288-308), originally published in 1973 XV: "Selective Perception: the Identifications of Executives (with DeWitt C. Dearborn)" (pages 309-314), originally published in 1958 XVI: "The Birth of an Organization" (pages 315-324), originally published in 1953 XVII: "The Business School: a Problem in Organizational Design" (pages 335-356), originally published in 1967
4th (1997)
For the fourth edition, with 15 pages of front matter and 368 pages of body and back matter, the last word in the subtitle was changed from "Organization" to "Organizations". The fourth edition lacked Barnard's foreword which had been present in the first through third editions. Instead of the third edition's lengthy Introduction and Part II, in the fourth edition the Introduction was briefer and Simon's commentaries followed each chapter of the original text.
Summary The text and pagination of the 253 pages of Chapters I-XI and of the Appendix ("What Is an Administrative Science?") were the same in the 1st, 2nd, and 3rd editions. Although the text of Chapters I-XI and the Appendix was the same in the 4th edition, the pagination was different.
Chapter I. Decision-Making and Administrative Organization This chapter was based on a 1944 article with the same name in Public Administration Review. Simon distinguishes between "value judgments" (which "lead toward the selection of final goals") and "factual judgments" (which "involve the implementation of such goals"), a topic which he explores more fully in Chapter III. The relationship of the individual and the group in decision-making is explored; for example, influences upon individuals include authority, organizational loyalty, efficiency, advice and information, and training.
Chapter II. Some Problems of Administrative Theory Based on a 1946 article in Public Administration Review entitled "The Proverbs of Administration", Chapter II is notable for the following passage near its beginning: It is a fatal defect of the current principles of administration that, like proverbs, they occur in pairs. For almost every principle one can find an equally plausible and acceptable contradictory principle. Although the two principles of the pair will lead to exactly opposite organizational recommendations, there is nothing in the theory to indicate which is the proper one to apply. To substantiate this criticism, it is necessary to examine briefly some of the leading principles. Administrative efficiency is increased by a specialization of the task among the group Administrative efficiency is increased by arranging the members of the group in a determinate hierarchy of authority Administrative efficiency is increased by limiting the span of control at any point in the hierarchy to a small number Administrative efficiency is increased by grouping the workers
These principles were found in the 1937 book Papers on the Science of Administration edited by Luther Gulick and Lyndall Urwick. After pointing out the shortcomings in the four principles, such as ambiguities and lack of empirical evidence, Simon states that "over-all efficiency must be the guiding criterion" in administrative organizations and that scientific methods must be applied to determine how to improve that efficiency.
Chapter III. Fact and Value in Decision-Making Chapter III "clarifies foundational aspects of the logic of choice." The first section of the chapter provides details for the explanation in Chapter I of "facts" versus "values". The chapter's second section on "Policy and Administration" discusses how the legislative and executive branches of government apply facts and values.
Chapter IV. Rationality in Administrative Behavior After considering how the ideas of means and ends relate to decision-making, Simon distinguishes among "objectively", "subjectively", "consciously", "deliberately", "organizationally", and "personally" rational decisions.
Chapter V. The Psychology of Administrative Decisions In the first part of this chapter, "The Limits of Rationality", Simon wrote: Actual behavior falls short, in at least three ways, of objective rationality…: (1) Rationality requires a complete knowledge and anticipation of the consequences that will follow on each choice. In fact, knowledge of consequences is always fragmentary. (2) Since these consequences lie in the future, imagination must supply the lack of experienced feeling in attaching value to them. But values can be only imperfectly anticipated. (3) Rationality requires a choice among all possible alternative behaviors. In actual behavior, only a very few of all these possible alternatives ever come to mind.