Decisions are not made by 'organizations', but by 'human beings' behaving as members of organizations. How do Bernard and Simon conceptualize the relation between the decisions of the individual employee and the organizational authority?

Chester Barnard’s Acceptance Theory of Authority

Chester Barnard viewed organizations as systems of consciously coordinated human activities. He argued that authority isn’t inherent in a position but is derived from the willingness of subordinates to accept orders. This ‘acceptance theory of authority’ is central to understanding his perspective. For Barnard, an order is accepted when:

• The subordinate understands the communication.
• The subordinate believes the order is consistent with the purpose of the organization.
• The subordinate believes the order is compatible with their own personal interests.
• The subordinate is physically and mentally capable of complying with the order.

Barnard recognized that individuals bring their own values, beliefs, and motivations to the workplace. Organizational authority, therefore, isn’t a top-down imposition but a negotiated process. He emphasized the role of ‘moral and logical imperatives’ in influencing acceptance. For example, a factory worker might accept a supervisor’s instruction to increase production if they believe it benefits the company (organizational purpose) and doesn’t jeopardize their safety (personal interest). Barnard’s concept of ‘zone of indifference’ highlights the range of orders an individual will accept without conscious questioning.

Herbert Simon’s Bounded Rationality

Herbert Simon, a pioneer of behavioral economics, challenged the classical economic assumption of ‘perfect rationality’. He proposed the concept of ‘bounded rationality’, arguing that individuals have cognitive limitations that prevent them from making fully rational decisions. These limitations include:

• Limited Information: Individuals rarely have access to all relevant information.
• Cognitive Constraints: Human minds have limited processing capacity.
• Time Constraints: Decisions often need to be made quickly, leaving little time for exhaustive analysis.

Simon argued that instead of maximizing, individuals ‘satisfice’ – they seek solutions that are ‘good enough’ rather than optimal. This ‘satisficing’ behavior is influenced by individual heuristics and biases. He also emphasized the importance of ‘organizational routines’ and ‘standard operating procedures’ (SOPs) as mechanisms for simplifying decision-making in complex environments. For instance, a bank teller doesn’t re-evaluate the entire lending process for each customer; they follow established SOPs to process loan applications efficiently. Simon’s work highlights how organizational structures and processes shape individual decision-making.

Comparing and Contrasting Barnard and Simon

Both Barnard and Simon moved away from the classical, purely rational view of organizations. They both acknowledged the importance of individual psychology and behavior in shaping organizational outcomes. However, their approaches differed in emphasis:

Feature	Chester Barnard	Herbert Simon
Focus	Acceptance of authority & organizational cooperation	Cognitive limitations & decision-making processes
Key Concept	Acceptance Theory of Authority, Zone of Indifference	Bounded Rationality, Satisficing, Heuristics
Level of Analysis	Organizational level – how to achieve cooperation	Individual level – how individuals actually make decisions
Emphasis	Social and psychological factors influencing acceptance	Cognitive processes and information limitations

Barnard focused on the conditions under which individuals would willingly cooperate and accept authority, while Simon focused on the cognitive processes that underpin individual decision-making. Simon’s work can be seen as providing a psychological explanation for why individuals might accept or reject orders, as described by Barnard. Both scholars recognized that organizations are not simply logical structures but complex social systems shaped by human behavior.

Implications for Public Administration

The insights of Barnard and Simon have profound implications for public administration. Understanding the importance of acceptance of authority is crucial for effective leadership and policy implementation. Public managers need to ensure that policies are clearly communicated, aligned with organizational goals, and perceived as legitimate by those affected. Recognizing bounded rationality suggests that public servants need to simplify complex problems, develop clear SOPs, and avoid overwhelming decision-makers with excessive information. The use of behavioral insights (nudges) in policy design, drawing on Simon’s work, is a growing trend in public administration.