INTRODUCTION TO PUBLIC ADMINISTRATION

Certainly, decision theory is the most obvious multidisciplinary body of theory in public administration, influenced as it is by economics, organizational sociology, social psychology, and political science.

Decision theory is associated with the early work of Herbert Simon and particularly his Administrative Behavior (1947).

In the public sector, Simon argued, decisions are made in the context of organizations that tend to stability and equilibrium.

Decisions made under conditions of the rational conserving efficiency concept will be guided by preferences for institutional order, stability, predictability, and survival.

In its most simplified form, rational decision theory describes goal-oriented behavior.

Rational decision theory was challenged early on because it was considered unrealistic and out of touch with actual patterns of organizational decision-making.

Decision theorists coming from the perspective of the logic of consequences tend to be associated with economics and political science.

The decision logic of appropriateness is more suited to institutional analysis, historical analysis, contingency theory, population ecology, case analysis, and narrativedeductive methodologies.

Instead of seeing the individual or the organization as intendedly rational, they emphasize Simon’s “satisficing” concept that, rather than finding the best course of action, decisionmakers usually search for actions that are good enough.

Anchoring simply means that past decisions disproportionately affect future decisions.

Decision theory is associated with the early work of Herbert Simon and particularly his Administrative Behavior (1947).

In the public sector, Simon argued, decisions are made in the context of organizations that tend to stability and equilibrium. In an organization, “the controlling group, regardless of its personal values, will be opportunistic—will appear to be motivated in large part at least by conservation objectives”. In decision theory, therefore, it is rational for organizations to minimize risk and to regard collective institutional survival as an end or a value.

In its rudimentary form, rational decision theory sought to (1) clarify and put in priority order organizational values and objectives; (2) consider the available alternative or alternatives that might achieve those objectives; and (3) analyze alternatives to find the alternative or group of alternatives most likely to achieve preferred objectives. In its most simplified form, rational decision theory describes  goal-oriented behavior.

The decision logic of consequences is more suited to modeling, cost-benefit analysis, performance measurement, risk analysis, and quantitative methodologies.

The decision logic of appropriateness is more suited to institutional analysis, historical analysis, contingency theory, population ecology, case analysis, and narrative-deductive methodologies.

Decision-theoretic modeling usually includes at least some assumptions, such as agreement regarding objectives or values; perfect or, at least, highly developed knowledge of alternatives; and the known consequences of applying alternatives.

Anchoring simply means that past decisions disproportionately affect future decisions.

As can been seen by this description, decision theory following the logic of appropriateness is deeply contextual. Contexts can be highly complex and decision-making heavily informed by contextual rules and identities filled with ambiguity, uncertainty, risk, imperfect information, and limited attention.

To deal with complex, confusing, inconsistent, and ambiguous environments, complex organizations decentralize, delegate, and contract out. In the language of decision theory, this is loose coupling.

In formal decision theories, preferences are assumed to be observable, consistent, stable, and exogenous. In the sense-making perspective, preferences may or may not be revealed, and, when they are revealed, are contradictory, volatile, ambivalent, and both exogenous and endogenous.