How bounded rationality affects strategic, tactical and operational decisions

Abstract : This article deals with the bounded rationality and its effect on different types of decision-making , such as Strategic , Tactical and Operational it gives the example with a story of six blind men who opined different opinion about the Elephant . It also defines the types of schools with their thoughts , like , Environmental school , according to this school strategy formation is a reactive process in which initiative will not lies into the organization , Cultural School which is based on fundamental of collective and cooperation . Design School is to build the other two schools

and it focuses on strategy formation as a process of informal design . Planning School , the main concept of this school 's strategic planning models are to reduced to small basic idea take the SWOT model divide it into eagerly by using special technique . It clearly analyses the operational processes . It concludes with a brief discussion of the decision-making by an individual or a group in respect of public administrators to perform their duty

Decision making means choosing one alternative from among various alternatives . The act of determining in one 's own mind upon an opinion or course of action is called the decision making . There is slight difference between the decision and policy where the former affects a particular problem and non continuous type usage the later affects many problems and can use again . A decision is usually made with in the guidelines established by policy

Simon 's concept on Decision-Making

Herbert A . Simon is a foremost decision theorist . According to him Decision-Making is the optimal rational choice between alternative course of action ' The administrative science is concerned purely with factual statements . The two basic elements of administration give by Simon are

1 . Structural approach

2 . Value free approach

The structural approach lays emphasis on the classical thinkers and value free approach focus on the empirical approach against the normative approach to study of administration . Simon proposed a new concept of administration based on the theories and methodology of logical positivism with the focus on decision making Every decision is base on two premises . They are Factual Premises and Value Based Premises . They have slight variation among the two

Factual Premises Value Based Premises

1 . Measurable means tested empirically to find out its validity

2 . Choice of means of action

3 . It is bases on reality . 1 . Measurable means cannot be tested empirically . Subjectively assessed as valid

2 . Choice of ends of action

3 . Based on Preference Process or stages

Simon has given 3 Principal Phases

Intelligence activity

Design

Choice

The intelligence activity is all about the finding the occasions for Decision Making . The executives spend large time in surveying

Design activity works on inventing , developing , and analyzing . The executives spend even large amount of time for handling decisions

The last phase i .e . choice activity works on selecting . The executive spend small time to develop alternatives to meet the identified problem .The Decision Making is classified into Programmed and Non-programmed by the Simon

Programmed DM Non-programmed DM...