Chapter 12

Simon’s Normative Model is a model, guided by bounded rationality, of processes that managers use when making decisions. Bounded rationality means that the decision makers have certain restrictions that affect their decision, such as, personal or environmental characteristics that lower rational decision making. This restriction results in minimal solutions to problems as opposed to optimal solutions, making it difficult for alternative solutions to be identified in the long run. Thus, decision makers are forced to satisfice with minimal solutions. An example of this would be when I received an assignment to compute a company’s financial ratios. The teacher left out the part where he wanted us to compare the ratios to the industry ratios and what the industry’s normal ratios were, therefore this lack of information created the restriction for my classmates and me. We had to satisfice by just computing the ratios and presenting the numbers, however, the numbers meant nothing without a comparison. As a result, my class handed in papers that only met the minimum and not the full requirements of the assignment.

In Power’s (2005) website, Simon claims that rational humans are satisficer and not optimizers by nature. According to Herbert Simon:

“The social sciences suffer from acute schizophrenia in their treatment of rationality. At one extreme, the economists attribute to economic man a preposterously omniscient rationality. Economic man has a complete and consistent system of preferences that allows him always to choose among the alternatives open to him; he is always completely aware of what these alternatives are; there are no limits on the complexity of the computations he can perform in order to determine what alternatives are best; probability calculations are neither frightening nor mysterious to him ... At the other extreme, are those tendencies in social psychology traceable to Freud that try to reduce all cognition to affect. Thus we show that coins look larger to poor children than to rich, that pressures of a social group can persuade a man he sees spots that are not there, that the process of group problem-solving involves accumulating and discharging tensions, and so on.”

This means that social sciences suffer from rationality because it constricts us to only think one way and therefore we fail to think outside of the box. It limits our intuition and only allows our problem-solving skills to be used which cause us to be easily influenced rather than using our own thoughts to make decisions. It makes people follows norms instead of being unique and embracing individuality.

Works Cited
Power, Daniel. Ask Dan! about DSS - How do decision-making models relate to the design and use of DSS? 6 August 2005. 27 March 2010 .