Model Answer
0 min readIntroduction
The assertion that ‘decisions are not made by ‘organizations’, but by ‘human beings’ behaving as members of organizations’ underscores a fundamental shift in organizational theory. Traditionally, organizations were viewed as rational entities making objective decisions. However, scholars like Chester Barnard and Herbert Simon challenged this notion, emphasizing the role of individual cognition and social processes. Barnard, in his seminal work *The Functions of the Executive* (1938), focused on the acceptance of authority as crucial for organizational functioning. Simon, with *Administrative Behavior* (1947), introduced the concept of bounded rationality, highlighting the limitations of human decision-making. This answer will explore how both conceptualized the relationship between individual decisions and organizational authority, revealing a nuanced understanding of organizational behavior.
Chester Barnard’s Perspective: 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 its acceptance by subordinates. This acceptance isn’t blind obedience; it’s contingent upon whether the communication conveying the order is understood, believed to be legitimate, and acceptable to the individual’s own purposes.
- The Zone of Indifference: Barnard posited that individuals will obey orders only within a ‘zone of indifference’ – a range of directives that don’t conflict with their personal beliefs and goals.
- Moral and Logical Factors: Acceptance of authority relies on both moral (legitimacy of the order) and logical (utility of the order) factors.
- Communication is Key: Effective communication is vital for ensuring orders are understood and accepted.
Therefore, for Barnard, organizational authority isn’t a top-down imposition but a negotiated outcome based on individual acceptance. Decisions, even those seemingly made by the ‘organization’, are ultimately the result of individual choices to comply.
Herbert Simon’s Perspective: Bounded Rationality
Herbert Simon challenged the classical economic model of ‘rational man’ – the assumption that individuals make perfectly rational decisions based on complete information. He introduced the concept of ‘bounded rationality’, arguing that human rationality is limited by cognitive constraints, incomplete information, and time pressures.
- Satisficing: Instead of seeking the optimal solution, individuals ‘satisfice’ – they choose the first option that is ‘good enough’ to meet their needs.
- Heuristics and Biases: Simon highlighted the use of heuristics (mental shortcuts) in decision-making, which can lead to systematic biases.
- Organizational Routines: Organizations develop standard operating procedures (SOPs) to simplify decision-making and reduce cognitive load.
Simon’s view implies that organizational decisions are not the result of a comprehensive, rational analysis but are rather constrained by the cognitive limitations of the individuals making them. Organizational authority, in this context, provides a framework within which these boundedly rational decisions are made.
Comparing and Contrasting Barnard and Simon
Both Barnard and Simon moved away from the traditional, mechanistic view of organizations. However, their approaches differed in emphasis.
| Feature | Chester Barnard | Herbert Simon |
|---|---|---|
| Focus | Acceptance of authority, cooperation | Cognitive processes, decision-making |
| Key Concept | Acceptance Theory of Authority | Bounded Rationality |
| Decision-Making Driver | Individual willingness to cooperate | Cognitive limitations and heuristics |
| Organizational Role | Facilitating cooperation and communication | Providing frameworks for boundedly rational decisions |
While Barnard focused on the social and psychological factors influencing acceptance of authority, Simon concentrated on the cognitive limitations shaping individual decision-making. Barnard’s theory explains *why* individuals comply with organizational directives, while Simon’s explains *how* they actually make decisions within those directives.
Synthesis: The Interplay of Individual and Organization
The perspectives of Barnard and Simon are complementary rather than contradictory. Organizational authority, as Barnard argued, provides the necessary framework for coordination and control. However, the effectiveness of this authority depends on the willingness of individuals to accept it. Simon’s work explains that this acceptance isn’t based on blind obedience but on individuals making rational (albeit boundedly rational) choices within the constraints of the organizational structure. Decisions are thus a product of the interaction between individual cognition, organizational authority, and the social context.
Conclusion
In conclusion, both Barnard and Simon convincingly demonstrate that decisions within organizations are fundamentally human decisions. Barnard’s acceptance theory highlights the importance of legitimacy and communication in securing compliance, while Simon’s bounded rationality reveals the cognitive limitations that shape individual choices. Their combined insights offer a more realistic and nuanced understanding of organizational behavior, moving beyond the simplistic notion of organizations as rational actors and recognizing the crucial role of individual agency within organizational structures. This understanding is vital for effective leadership and organizational design in the modern era.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.