Decision-making models

All people need to make decisions from time to time. Given limited time in formulating policies and addressing public problems, public administrators must enjoy a certain degree of discretion in planning, revising and implementing public policies. In other words, they must engage in decision-making (Gianakis, 2004). Over the years, many scholars tried to devise decision-making models to account for the policy making process.

Rationality

Since the development of public administration, scholars have assumed that people make decisions rationally. By rationality, [[]] (1976) means ”a style of behaviour that is appropriate to the achievement of given goals, within the limits imposed by given conditions and constraints” (P. 405). Max Weber, in the early part of the 20th century, suggested distinguishing two types of economic rationality: formal rationality and substantive rationality. The "formal rationality of economic action" referred to "the extent of quantitative calculation or accounting which is technically possible and . . . actually applied." "Substantive rationality" referred to the degree to which economic action serves "ultimate values no matter what they may be." (Weber, The Theory of Social and Economic Organization, Parsons, ed., 1947, pp. 184-186) Weber noted that "the requirements of formal and of substantive rationality are always in principle in conflict." (Ibid., p. 212) Decades later, Simon used a similar terminology to distinct two meanings of "rationality", which have developed separately in economic and psychology. He defined substantive rationality, stemming from the concept of rationality within economics, as behavior that "is appropriate to the achievement of given goals within the limits imposed by given conditions and constraints". Procedural rationality, based in psychology, refers to behavior that "is the outcome of appropriate deliberation". [1]

Facts

According to Gortner (2001), facts are the information and knowledge that the public administrators possess in formulating policies. Facts are important in deciding the appropriate means to take to achieve higher ends. They may not be readily known by administrators but need to be acquired through extensive research and analysis. Rationality is defined in terms of appropriateness for the accomplishment of specific goals.

Values

Values are internal perceptions on the desirability and priority of one’s actions and choices. (Van Wart, 2004) Besides setting goals for their plans, decision-makers make priorities, interpret facts and act upon objective situations according to their values. Besides balancing conflicting values within an individual, government has to weigh and balance values embodied in different departments (Van Wart, 1996, 1998).

Means

Means are the instruments to satisfy a higher end (Simon, 1997). Although they are used to achieve a higher end, they are not neutral in value. When policy makers devise their strategies, they choose their means according to their internal values and consequences...

Ends

Ends are the intermediate goals to a more final objective. In a means-end hierarchy, the concept of means and ends is relative.[2] An action can be a mean relative to the higher levels in the hierarchy but an end relative to the lower levels. However, in this hierarchy, an action is more value-based when moving upwards in the hierarchy but more fact-based when moving downwards.

Types

There are several models of decision-making:[3]

Economic rationality model

This model comes from the classical economist models, in which the decision-maker is perfectly and completely rational in every way. In this, following conditions are assumed.

1. The decision will be completely rational in means ends sense.
2. There is a complete and consistent system of preferences that allows a choice among alternatives.
3. There is a complete awareness of all the possible alternatives
4. Probability calculations are neither frightening nor mysterious
5. There are no limits to the complexity of computations that can be performed to determine the best alternatives

According to Kuwashima (2014, p. 1) in organizational decision-making context, the decision-maker approaches the problem in a solely objective way and avoids all subjectivity. Moreover, the rational choice theory revolves around the idea that every individual attempt to maximize its own personal happiness or satisfaction gained from a good or service. This basic idea leads to the “rational” decision model, which is often used in decision-making process. (Bergmiller, McCright and Weisenborn 2011, p.2)[4][5]

Social model

At the opposite extreme from the economic rationality model is the social model drawn from psychology. Sigmund Freud viewed humans as bundles of feelings, emotions and instincts, with their behavior guided by their unconscious desires. These processes have even an impact in the international arena as they provide some basic rules of protocol.

Simon's bounded rationality model

To present a more realistic alternative to the economic rationality model, Herbert Simon proposed an alternative model. He felt that management decision-making behaviour could be described as follows:

1. In choosing between alternatives, manager attempt to satisfy or looks for the one which is satisfactory or “good enough”. Examples of satisfying criteria would be adequate profit or share or the market and fair price.
2. They recognize that the world they perceive is drastically simplified model of the real world. They are content with the simplification because they believe the real world is mostly empty anyway.
3. Because they satisfy rather than maximise, they can make their choices without first determining all possible behaviour alternatives and without ascertaining that these are all the alternatives.
4. The managers treat the world as empty, they are able to make decision with simple rule of thumb. These techniques do not make impossible demands upon their capacity for thought.

Neuroscientific (neurocognitive) model

In cognitive neuroscience decision-making refers to the cognitive process of evaluating a number of possibilities, and selecting the most appropriate thereof in order to further a specific goal, or task. This faculty is a fundamental component of executive functions, although recent studies show that a complex brain network is involved including motor areas.[6]

Incrementalism

While the rational decision-making model can be very demanding in respect of the scope and cost of information collection and subsequent computation, the incrementalism model, also known as disjointed incrementalism, focuses on the limited cognitive capacities of the decision-makers. In the incremental model the decision-maker only concentrates on those policies which distinguish incrementally from existing policies. This leads to a small number of policy alternatives, which are getting evaluated by a restricted number of criteria. Accordingly, the process is getting more manageable for the decision-maker [7]

See also

• Cross-cultural differences in decision making
• Decision model
• Decision-making software

References

1. Simon, H. A. (1976). From Substantive to Procedural Rationality. In S. J. Latsis (Ed.), Method and Appraisal in Economics. Cambridge: Cambridge University Press: pp. 130-131
2. Simon, H. A. (1964). On the Concept of Organizational Goal. Administrative Science Quarterly, 9(1), 1-22.
3. zeepedia.com
4. KUWASHIMA K, 2014. How to Use Models of Organizational Decision Making? Ann Bus Adm Sci.
5. Bergmiller GG, McCright PR, Weisenborn G, 2011. A new model for organizational sustainability. 61st Annu IIE Conf Expo Proc.
6. O’Sullivan, Owen (2014). Losing control: the hidden role of motor areas in decision-making. Dialogues in Philosophy, Mental and Neuro Sciences, 7(2):45–49.
7. (Amitai Etzioni 1967, p. 386).