Model Answer
0 min readIntroduction
Herbert Simon, a Nobel laureate in Economics, revolutionized the study of organizational decision-making. He challenged the classical economic model of ‘rational man’ and proposed a more realistic view of how decisions are actually made within organizations. A central component of his work is the two-dimensional taxonomy classifying decisions based on their degree of programmability. This taxonomy distinguishes between ‘programmed’ and ‘non-programmed’ decisions, offering a framework to understand the complexities of administrative choices and the cognitive limitations of decision-makers. Understanding this distinction is crucial for effective public administration and policy formulation.
Herbert Simon’s Two-Dimensional Taxonomy
Simon’s taxonomy categorizes decisions along two dimensions: programmability and novelty. However, the primary focus is on programmability, which refers to the extent to which a decision is repetitive and routine. This leads to the classification of decisions into programmed and non-programmed categories.
Programmed Decisions
- Definition: These are decisions that are repetitive, routine, and well-structured. They involve established rules, procedures, and policies.
- Characteristics:
- Clearly defined problem
- Known alternatives
- Established criteria for choosing among alternatives
- Standard operating procedures (SOPs)
- Examples:
- Processing salary payments
- Approving routine purchase requisitions
- Handling standard customer complaints
- Decision-Making Process: Often automated or delegated to lower levels of the organization.
Non-Programmed Decisions
- Definition: These are decisions that are novel, unstructured, and require unique solutions. They deal with complex or ambiguous problems.
- Characteristics:
- Ill-defined problem
- Uncertain alternatives
- No established criteria
- Require judgment, intuition, and creativity
- Examples:
- Responding to a major economic crisis
- Developing a new product strategy
- Addressing a significant ethical dilemma
- Decision-Making Process: Typically made by higher levels of management, involving extensive analysis and deliberation.
The distinction isn’t always absolute. Decisions can fall on a continuum between fully programmed and fully non-programmed. Furthermore, non-programmed decisions can, over time, become programmed as organizations develop routines for handling similar situations. This process is known as ‘institutionalization’.
| Feature | Programmed Decisions | Non-Programmed Decisions |
|---|---|---|
| Problem Structure | Structured, clear | Unstructured, ambiguous |
| Repetitiveness | Repetitive, routine | Novel, unique |
| Information Availability | Complete, readily available | Incomplete, uncertain |
| Decision-Making Level | Lower levels, automated | Higher levels, strategic |
Conclusion
Herbert Simon’s two-dimensional taxonomy provides a valuable framework for understanding the nature of administrative decision-making. Recognizing the difference between programmed and non-programmed decisions allows organizations to optimize their processes, delegate authority effectively, and develop appropriate strategies for addressing complex challenges. The taxonomy remains relevant today, informing contemporary approaches to organizational design and public policy, particularly in an increasingly dynamic and uncertain environment.
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.