Administrative Behavior

Herbert A. Simon

Book cover

An interesting experience, reading this book. For one thing, my copy is an extremely old beat-up paperback that I got as a free library remainder from the NY Fed, so it was literally falling apart as I was reading it, and I would generally be carrying around a chunk of about 50 pages at any given time.

Herbert Simon is an extremely influential and original thinker. He is the only person ever to have won the Nobel Prize in econ and the Turing Prize, which is like the Nobel Prize for computer science. He essentially invented the concept of bounded rationality, and built models of the world where people don’t optimize but “satisfice”, going with the first acceptable solution they find. He emphasized how much of decisionmaking is consumed with figuring out what the options are, where classical economics assumes all the options are known beforehand.

For all these reasons, I grabbed this book from the library. I picked it up to read recently because I’m applying for an operations leadership job, and I thought it might have some interesting lessons for me. On the whole, I didn’t find it terribly helpful, but there was some useful material. Unfortunately, I have the feeling that it’s the sort of book that might be nice to have around, so I could look up relevant passages once in a while–unfortunately because it has completely fallen apart and I’m definitely going to have to recycle it.

The book was Simon’s PhD dissertation in the ‘40s, and it represents his attempt to build a formal analytical foundation for the analysis of organizational structure and decision-making. A couple of chapters have been added on in later editions, which are basically just relevant papers that he published later. Much of these chapters is concerned with the impact of information technology on organizations, so I was very surprised to find them to be some of the most insightful of all–though Simon was writing before the advent of what we would consider to be moder computers, he makes many subtle points that I think most people are just now beginning to understand. In particular, I think his focus on attention as a scarce resource is very prescient.

There are other interesting insights scattered throughout, and I think his characterization of authority and influence as the ability to determine some of the premises that enter another’s decision (but not the decision itself, usually) is a very useful analytical framework. As you might expect of a book trying to build a formal analytical foundation, however, a lot of it is kind of boring. I may have a look at some of his other work eventually, but not for a while.

My Goodreads rating: 2 stars

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