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Herbert A. Simon, Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization

Abstract and Keywords

In Administrative Behavior, Herbert Simon proposed a science of administration where organizational decisions represent the primary units of analysis. In constructing a conceptual framework to guide that science, Simon drew heavily on insights from cognitive psychology. Since its publication in 1947, Administrative Behaviorhas inspired researchers investigating institutional and organizational practices across many settings. Here, consideration is given to the impact of Administrative Behavior in public policy and public administration. Four legacies are highlighted. They are: scholarship on incrementalism in policy-making, scholarship on agenda setting, scholarship on choice architecture, and scholarship on expertise and learning organizations. Continuous improvements in information technology and its application, combined with increasing citizen demands for more effective and efficient government, suggest ideas introduced in Administrative Behavior will continue to influence theory and practice in policy design and public management for years to come.

Keywords: Management, decision-making, organizational behavior, bounded rationality, incrementalism, agenda-setting, choice architecture, expertise

Herbert Simon (1916–2001) was an intellectual giant, best known for contributing the concepts of “bounded rationality” and “satisficing” to the vocabulary of the social and behavioral sciences. Simon trained as a political scientist at the University of Chicago in the 1930s and early 1940s, where Harold Lasswell and Charles Merriam—both major contributors to the development of political science—served as mentors. Early in his academic career, Simon engaged in extensive, empirically grounded studies of city governance and administration. His close observation of local political hierarchies and their service delivery systems generated several books and contributed to his doctoral studies. Administrative Behavior, first published in 1947, had its origins in his doctoral dissertation. The book was highly influential. Over the subsequent fifty years, it appeared in three further editions (1957, 1976, and 1997). Each edition retained the original 1947 text but augmented it in various ways. The 1997 edition—the edition referenced here—contained commentaries by Simon at the end of each of the original chapters. Those commentaries discussed developments in Simon’s thinking and that of others during the half-century from when the book first appeared. In Simon’s own judgment, Administrative Behavior laid the foundation for all the subsequent developments in his own research. It stimulated much research by others. That research contributed (p. 13) to advances in at least five separate disciplines: political science, economics, cognitive psychology, computer science, and artificial intelligence. The influence of Administrative Behavior continues in various streams of research either relevant to, or falling within, the fields of public policy and public administration. Toward the end of this chapter, four legacies are noted. They concern the study of political decision-making, agenda setting, choice architecture, and the development of expertise.

In Administrative Behavior, Herbert Simon showed how organizations can be understood in terms of their decision processes. Simon self-consciously cast himself as a scientist. “[T]‌his volume deals with the anatomy and physiology of organization and does not attempt to prescribe for the ills of the organization. Its field is organizational biology, rather than medicine; and its only claim of contribution to the practical problems of administration is that sound medical practice can only be founded on thorough knowledge of the biology of the organism” (p. 305). The starting point for Simon’s science was the psychology of decision-making. In his own words: “[D]ecision-making is the heart of administration, and … administrative theory must be derived from the logic and pyschology of human choice” (p. xi). Simon saw himself as contributing to an intellectual tradition where others before him had engaged in close analysis of administrative behavior. He acknowledged as influences the writings of Chester Barnard (1938), Luther Gulick (1937), and Frederick Taylor (1915). Yet Simon saw establishing a science of administration as an essential corrective to the ad hoc amassing of “principles”—or what he preferred to term “proverbs”—of administration. The “principles” commonly found in the extant literature referred to aspects of task specialization, unity of control, and span of control in organizations. Simon viewed those “principles” as frequently contradictory. Administrative Behavior set forth “a vocabulary … for the description of administrative organization”. It also took acknowledgment of “the limits of rationality” as the starting point for developing “a complete and comprehensive enumeration of the criteria that must be weighed in evaluating an administrative organization” (p. 47).

Bounded Rationality and Satisficing

Herbert Simon received the Nobel Prize in Economics in 1978. The award honored his contributions to knowledge of decision-making in organizations. Simon’s most notable contribution to the economics literature was “A Behavioral Model of Rational Choice” published in the Quarterly Journal of Economics in 1955. That article elaborated on ideas concerning the bounded nature of rationality and its implications as first articulated in Administrative Behavior. Simon’s emphasis on bounded rationality challenged orthodoxy in economics. He asserted that, in the presence of cognitive limitations, decision-makers “satisfice” rather than “maximize.” That is, they tend to choose actions that are “good enough” rather than engage in exhaustive comparison of all possible alternatives. Satisficing typically involves rapid elimination of alternatives (p. 14) in a hierarchical fashion, meaning that certain decision-paths are completely ignored, and opening the risk that any chosen action may be significantly less desirable than others that were not considered. Nonetheless, given search and decision costs, the practice of satisficing appears more efficient in many instances than does the pursuit of maximal outcomes. This view is at odds with the full rationality assumption central to mid-twentieth-century mainstream microeconomics, and which underlies traditional models of individual choice and market processes.

Simon rehearsed his argument concerning rationality in chapters 4 and 5 of Administrative Behavior. Chapter 4, “Rationality in Administrative Behavior” established that “[t]‌he problem of choice is one of describing consequences, evaluating them, and connecting them with behavioral alternatives” (p. 85). Chapter 5, “The Psychology of Administrative Decisions” presented the book’s fundamental intellectual contribution. Here we find a discussion of the limits of individual rationality and the means by which organizations can structure the “environment of choice” (p. 92). Simon claimed that individuals are both boundedly rational and intendedly rational, and that appropriate organizational forms can promote more rational decision-making.

Simon opened chapter 5 by stating: “It is impossible for the behavior of a single, isolated individual to reach any high degree of rationality. The number of alternatives he must explore is so great, the information he would need to evaluate them so vast that even an approximation to objective rationality is hard to conceive” (p. 92). This was the human predicament as Simon saw it. To elaborate:

  1. (1) Rationality requires a complete knowledge and anticipation of the consequences that will follow on each choice. In fact, knowledge of consequences is always fragmentary.

  2. (2) Since these consequences lie in the future, imagination must supply the lack of experienced feeling in attaching value to them. But values can be only imperfectly anticipated.

  3. (3) Rationality requires a choice among all possible alternative behaviors. In actual behavior, only a very few of all these possible alternatives ever come to mind. (pp. 93–4)

The human limits are both cognitive and informational. All relevant information about future consequences of actions cannot be readily accessed. Even if it could be, cognitive limits would inhibit effective analysis in service of good decision-making. The number of alternatives to be assessed stretch brain power. However, while bounded in their rationality, Simon recognized that humans do intend to make good decisions. That intended rationality drives the search for improved methods of decision-making. Individuals take various actions with the purpose of improving the rationality of their choices. These include remembering (including making use of informal and formal libraries, files, and records), habit formation (which allows conservation of mental effort), and conscious direction of attention. Yet deliberate social organization is the (p. 15) mechanism that does most to raise the rationality both of individuals and of groups. The reason lies in the ability of organizations to channel and focus the attention of individuals, allowing for the development of expertise and the coordination of individual actions. Commenting on his original discussion of rationality, Simon observed: “The central concern of administrative theory is with the boundary between the rational and the nonrational aspects of human social behavior. Administrative theory is peculiarly the theory of intended and bounded rationality—of the behavior of human beings who satisfice because they have not the wits to maximize” (p. 118). Simon suggested that “organizations permit the individual to approach reasonably near to objective rationality” (p. 93) and the bulk of chapter 5 of Administrative Behavior is devoted to an explanation of how they do so.

Individual purposive behavior can compensate somewhat for bounded rationality. The capacity to learn—what Simon terms “docility”—is central to the human ability to do so. “By the use of experimental method, by communication of knowledge, by theoretical prediction of consequences, a relatively little bit of experience can be made to serve as the basis for a wide range of decisions. As a result a remarkable economy of thought and observation is achieved” (p. 99). Organizations compensate further for individual limitations through deliberate construction and control of the environment of individual choice. This involves systematic planning, task allocation, communication, and control. Simon observed that the organizational influences on the individual are of two kinds:

  1. (1) Organizations and institutions permit stable expectations to be formed by each member of the group as to the behavior of the other members under specified conditions. Such stable expectations are an essential precondition to a rational consideration of the consequences of action in a social group.

  2. (2) Organizations and institutions provide the general stimuli and attention-directors that channel the behaviors of the members of the group, and that provide those members with the intermediate objectives that stimulate action. (p. 110)

From these observations, Simon concluded that organizations are fundamental to the achievement of human rationality. In his words:

The rational individual is, and must be, an organized and institutionalized individual. If the severe limits imposed by human psychology upon deliberation are to be relaxed, the individual must in his decisions be subject to the influence of the organized group in which he participates. His decisions must not only be the product of his own mental processes, but also reflect the broader considerations to which it is the function of the organized group to give effect. (p. 111)

Subsequent chapters in Administrative Behavior explored in greater detail how specific organizational structures and practices serve the greater social purpose of achieving rational decision-making.

(p. 16) Administrative Behavior: The Structure of the Argument

Simon divided Administrative Behavior into eleven chapters. Chapter 1, “Decision-Making and Administrative Organization,” provided an introduction to the argument and introduced major topics to come. Chapter 2, “Some Problems of Administrative Theory,” served to situate Simon’s thesis within the broader tradition and contemporary concerns of public administration scholarship. It is here where the claim is first made for placing decision-making at the heart of the analysis of administrative behavior. Chapter 3, “Value and Fact in Decision-Making,” observed that the administrative practice of getting things done would be meaningless in the absence of goals or objectives. Simon referred to the selection of goals and objectives as “value judgments.” In contrast the selection of strategies intended to achieve specific goals and ojectives he termed “factual judgments.” As already noted, chapter 4, “Rationality in Administrative Behavior,” set forth Simon’s reasons for focusing on decision-making in organizations, and for using the decision as the central unit of analysis for understanding administrative practices. Again as already noted, chapter 5, “The Psychology of Administrative Decisions,” laid out the limits of individual rationality, suggested ways that compensation could be made for those limits, and presented appropriately designed institutions and organizations as the means by which societies can approximate rational decision-making on the part of both individuals and collectivities.

In the second half of Administrative Behavior, Simon developed a series of elaborations upon selected themes introduced in chapters from the first half. Chapter 6, “The Equilibrium of the Organization,” explored why individuals would be prepared to conform their own actions to broader organizational goals. Simon noted that wages served as a primary motivation for employees, but suggested that other inducements were also necessary, such as good will, loyalty, and prestige. Chapter 7, “The Role of Authority,” explored the typical division of labor in organizations, noting the traditional hierachy of decision-making and why it was efficient. Chapter 8, “Communication,” elaborated on the theme developed earlier that effective interaction among individuals is crucial to the achievement of desired collective outcomes. Simon argued that good communication is fundamental to effective teamwork. Chapter 9, “The Criterion of Efficiency,” explored the importance of conserving resources in organizational contexts. Competition for scarce resources—in any setting—forces a need for efficiency and Simon observed that review processes in organizations are almost always focused on promoting the pursuit of efficiency. Chapter 10, “Loyalities and Organizational Identification,” explored how individuals in organizations develop attachments and loyalties to the broader enterprise. Simon suggested that people identify with organizations through the process of substituting the organization’s objectives for their own personal motives. Identification brings with it the economic advantage of decreasing the degree of control and oversight higher-level decision-makers must give to (p. 17) individual actions. A risk, however, is that slavish identification with specific organizational goals and habituated practices toward them may inhibit the making of effective choices when new factors enter the choice environment. The final chapter, chapter 11, “The Anatomy of Organization,” reiterated Simon’s claim that the distribution and allocation of decision-making functions should serve as the central object of research on administrative behavior. Here Simon set forth his views on where research on administrative behavior could be most fruitfully developed. These centered around the functions of planning, devolution of decision-making, influence, and review.

Four Legacies in Public Policy and Public Administration

Administrative Behavior was conceived as a conceptually coherent, logical explanation of the structuring of organizations and institutions. As such, it laid the groundwork for development of a theoretically driven, empirical science of administration. In the years following its publication, Simon engaged in a wide range of both conceptual and empirical explorations of decision-making practices, all of which had their antececents in this initial conceptual work. Many other scholars—some in collaboration with Simon—contributed to that broader enterprise. The pay-offs have been significant. Here, I discuss four legacies of Administrative Behavior relevant to, or falling within, the fields of public policy and public administration. They concern the study of political decision-making, agenda setting, choice architecture, and the development of expertise.


Over the past fifty years, public policy scholars have developed a range of conceptions of policy-making processes (Birkland 2010; Sabatier 2007). Simon’s work on bounded rationality has greatly informed that scholarship. In 1959, Charles Lindblom introduced the argument that, when undertaking policy formulation, policy-makers never engage in “root and branch” assessment of policy alternatives, but rather work through a process of “successive limited comparisons.” In arguing for development of a science of policy-making based on observation of actual policy-making practice, as opposed to theoretical ideals, Lindblom directly cited Simon’s work on bounded rationality and decision-making. Aaron Wildavsky’s (1964) subsequent study of government budgeting processes gave central place to bounded rationality as an explanation of decision-making behavior in government. Wildavsky termed it “incrementalism.” The long-accepted wisdom among policy scholars is that politicians rarely pursue policy changes that depart from the status quo. Rather, they make small (p. 18) or incremental policy changes, while keeping broader policy and institutional settings in place. The predominance of incrementalism in decision-making practice can be explained by information problems, limited attention, and risk aversion. Political decision-makers rarely have the time needed to pay close attention to policy problems. When they make changes, therefore, they tend to be risk-averse. The result is the making of change through small steps. This process was elaborated most clearly by Charles Lindblom (1968) in his classic explanation of the policy-making process. Today, incrementalism remains a highly useful way of characterizing the process of policy change under normal circumstances.

The Politics of Attention

While policy-making processes across a broad range of settings exhibit incrementalism most of the time, instances are also observed of significant, dynamic policy change. Various efforts have been made to explain the forces that lead to instances of dynamic change. Among these, the work of John Kingdon (1984) on agenda setting in policy-making has been highly influential. The heart of Kingdon’s study is a model of decision-making that owes much to work conducted by Herbert Simon in collaboration with James March (see March and Simon 1958; Cohen et al. 1972; Cyert and March 1963). According to Kingdon, windows of opportunity arise for non-incremental policy change when there is alignment between a problem, the surrounding politics, and the portrayal of the possible policy response. At such times, major policy changes can be observed. Subsequent, systematic investigations of policy change over long periods of time have confirmed two things. First, areas of public policy are often characterized by long periods of stability punctuated by brief periods of dynamic change. Incrementalism explains policy development during the periods of stability but not the period leading up to the dynamic change. Second, significant change requires concerted effort on the part of advocates to gain and channel the attention of politicians toward the making of significant policy change. This second observation is consistent with Simon’s discussion of the structuring of decision-maker attention in Administrative Behavior.

Since the early 1990s, Frank Baumgartner and Bryan D. Jones (1993, 2002, see also Jones and Baumgartner 2005) have led a highly fruitful public policy research agenda exploring stability and change in public policy. In so doing, they have indicated the significant role that attention plays in change processes. These authors have been explicit about the influence of Simon’s earlier examination of attention and decision-making, as found in Administrative Behavior (see also Jones 1999, 2003). Meanwhile, related research has explored the practices of the change agents—sometimes termed policy entrepreneurs—who deliberately marshall advocacy coalitions, present evidence, and engage in problem framing to influence the political agenda and promote policy change (Mintrom and Vergari 1996; Mintrom and Norman 2009).

(p. 19) Choice Architecture

In Administrative Behavior, Simon observed that humans can achieve “[a]‌ higher degree of … rationality … because the environment of choice itself can be chosen and deliberately modified” (p. 92). Indeed, an essential insight of the work is that smart environments can make people smarter. Much of the literature produced over recent decades concerning the theory of the firm has served to elaborate on this point (Cyert and March 1963; Williamson and Winter 1991). The links to the literature on public policy and public administration have been much more tenuous, although it could be said that March and Olsen’s (1989) classic contribution to the new institutionalism literature demonstrates a direct line of influence from Simon. Bryan D. Jones’s Politics and the Architecture of Choice (2001) highlighted how Simon’s conceptual work in Administrative Behavior could support analysis of political decision-making and the structures that enable it. Jones explores how groups of people adapt to make more rational decisions in government and, in turn, how the very institutions of government are occasionally subject to change in the service of better decision-making.

With the publication of Nudge (2008), Richard H. Thaler and Cass R. Sunstein greatly raised the profile of choice architecture as a matter of significant importance to policy designers and public managers. Drawing upon developments in cognitive psychology and behavioral economics—fields influenced significantly by Simon’s early work—Thaler and Sunstein review problems of bounded rationality and how the structuring of the environment of choice can improve individual decision-making and, hence, collective outcomes. In their view, considerable scope exists for governments to support better individual or family decision-making regarding financial planning, healthy living, and the selection of public services, such as schools and hospitals. Simon’s argument that structures can compensate for limitations in human cognition is currently enjoying a renaissance. Given the profoundity of the argument, and the enormous expansion in data collection and analysis concerning choices and their consequences, this renaissance will continue for decades. Investigations of how choice architecture can promote smart decisions remain in their infancy.

Expertise and Learning Organizations

In discussing the psychology of administrative decisions (Administrative Behavior, chapter 5), Simon noted how individuals and organizations can build expertise in decision-making. Actions that are often attributed to genius (e.g. the choices of chess masters, musical virtuosity, sporting prowess, the diagnostic skills of medical specialists) are, in fact, the result of memorization and pattern recognition (Ericsson et al. 2007). Towards the end of his career, Simon became increasingly interested in artificial intelligence, the modeling of human expertise, and organizational learning (Simon 1991). Others, influenced by Simon, contributed to our understanding of (p. 20) the development of expertise and the evolution of learning organizations. For scholars of public policy and public administration, these developments are of significant interest. In particular, advances in the use of systems for codifying and accessing knowledge hold the promise of improving individual and collective decision-making. Large corporations are becoming increasingly adept at collecting relevant data from their operating contexts and “competing on analytics” (Davenport and Harris 2007). Governments, likewise, have opportunities to assemble knowledge dispersed across multiple sites and use it to guide both the making of better decisions at the local level and the improvement of higher-level system design and executive decision-making. As they do so, they will further exhibit the purposive rationality that Simon observed at work in large organizations, decades before the invention of computer systems that have greatly eased the pursuit of rational decision-making.


In Administrative Behavior, Herbert Simon cogently argued for the development of a science of administration where organizational decisions would represent the primary units of analysis. In constructing a conceptual framework to guide that science, Simon drew heavily on insights from cognitive psychology. In the years following its first publication in 1947, Administrative Behavior has proven a rich source of inspiration for researchers from several disciplines who have investigated institutional and organizational practices across many settings. Here, consideration has been given to how Administrative Behavior has influenced the fields of public policy and public administration. That influence has been huge. Indeed, several other classics of public policy and public administration featured in this volume have an intellectual lineage that traces directly back to Administrative Behavior. By eshewing a tradition of scholarship where “principles” were no more grounded than “proverbs,” Simon set an intellectual path for himself and others that was grounded in logic and that favored rigorous empirical testing of claims. Simon knew prescriptions designed to address administrative problems would prove useful, and withstand the tests of time, only when they were based on correct diagnostics. Administrative Behavior was intended to guide the science of administration that would ultimately produce such diagnostics. The richness of the extant legacy confirms the fundamental contribution of the scientific method to the advancement of knowledge concerning human behavior in organizations.


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