What Is Herbert Simon's Decision-Making Model?

herbert-simon-s-decision-making-model Credit: Thomas Barwick/Stone/Getty Images

Intelligence, design and choice are hallmarks of the Herbert Simon decision-making model. In the intelligence phase, information is gathered that helps define the impending decision. Alternative decisions develop through the design phase, and alternatives are evaluated and implemented during the choice phase.

According to "The Economist," Herbert Simon (1916-2001) is known for a theory he called "satisficing," a combination of "satisfy" and "suffice." Simon supported the idea that individuals do not attempt to expand the benefits they receive from a singular decision simply because the diversity of information is overwhelming, and the human mind is bounded by what Simon identifies as "cognitive limits."

Simon believes "satisficing" is a real-world behavior, because people often settle for something that is "good enough" even though it may not be the optimal choice. In other words, as people search through alternatives, they do so in progression and they often stop looking once they encounter an item that meets their expectations.

According to the MBA, when Simon's theory is applied to business, the organizational structure is a major factor with three distinct areas. The economic, legal and social settings within the organization determine its societal environment. Marketplace trends and behavior and how these influence the business comprise its competitive environment. The organizational environment is its operating efficiency and includes its strengths and weaknesses.