The Simon-process

Herbert Simon contributed to the decision-making practices via his descriptive theory which gives a clear picture of the world in which decisions are made. According to Simon, a decision is the choice we make among the various options which we have available to us at the time of making a decision.

The optimal course of action depends on several factors and there may always be knowledge that the decision-maker is missing. In other words, it is true that there is always a better method to decide depending on the information that is accessible.

The ability of an employee to solve a challenging problem is greatly influenced by stress and motivation. Simply said, when risks or uncertainties are involved, a people’s decision making ability is affected. The theory deals with a satisficing strategy, which considers an adequate and satisfactory outcome rather than an optimal outcome. This approach ignores excessive complexity and produces a solution with minimal risk and maximum reward.

The process of decision-making is divided into stages. Each stage has its own importance and cannot be skipped.

Intelligence

It is at this stage of the decision-making process that we identify the problem. Accordingly, we attempt to find a solution that can be applied in order to provide an effective solution. Being the first step towards the decision-making process, decision-makers detect a problem or an opportunity. A problem is anything that is not according to the plan, rules or standards. Opportunity, on the other hand, is the identification of a promising circumstance that might lead to better results. We see that either in the case of a problem or for the purpose of opportunity seeking, the decision-making process is initiated for which the first stage is understanding the stimulus that triggers this process.

During the intelligence phase of the decision-making process we go through several phases:

• Problem Searching: where we search for the problem and compare it to reality or to some standards. Differences are measured and evaluated to determine whether there is a problem or not.
• Problem Formulation: when the problem is identified, there is always a risk of solving the wrong problem. In problem formulation, establishing relations with some problem solved earlier or an analogy could be helpful.

Design

This stage involves the study of several strategies which can be applied to find the solution to the problem. The main characteristic of this stage is the analysis of strategies based on the pros and cons. Pros and cons are analyzed in order to decide which strategy is best suited for the given problem. During the design phase, alternative solutions are designed to solve the same problem. Each alternative solution is evaluated after gathering data about the solution. The evaluation is done on the basis of criteria to identify the positive and negative aspects of each solution. Quantitative tools and models are used to decide upon the chosen solution.

Choice

The third phase of the decision-making process produces the decision output. In this stage, the best-suited strategy, is decided, which can then be applied based on the pros and cons listed in the design phase. This is the stage in which the possible solutions are compared against one another to find out the most suitable solution. The best solution may be identified using quantitative or qualitative techniques.

Implementation & monitoring

Although implementation and monitoring were not included in Simon’s original work, they are very significant. Thus, we would argue that they should be added as a fourth step to the decision-making process. The following diagram illustrates Simon’s phases of decision-making.