Decision Making

1. Decision Analysis
•It is related to decision theory. According to Herbert Simon, the task of decision
spreads throughout the entire organization. Hence, it is necessary to understand that
the locus of decision making remains the nation-state no matter whether there is the
influence of global agenda setting in decision making. Furthermore, according to
Wayne Parsons, decision making extends throughout the policy cycle.
• Decision about what to make into a problem (Identification of problem)
• What information to choose.
• Choice about what policy options to consider.
• Choice about strategies to influence policy agenda.
• Choice about what options to select
• Choices about ends and means of choices and tools and techniques of decisions.
• Choices in how a policy is implemented.
• Choices about how a policy may be evaluated.

2. Rationality and Decision Making
•The rational approach to decision making has two contexts or
sources.
1. The idea of economic rationality that is developed in economic
theory. According to economic theory every rational individual is
a self-interested individual who tries to maximize the cost or
minimize loss. For this he calculates the pros and cons
(advantages and disadvantage) of each alternative and makes a
choice accordingly.
2. The idea of bureaucratic nationality is formulated by
sociological theories of organization and industrial society.
• Rationality has its root in the construction of economic man
(self-interested individual). In such a context, in making decision
and economic man derives his choice from the acquisition of all
the information necessary comparing the information on different
options and selecting the alternative which enables to achieve his
goals and interest.
•The concept of rationality emerged after post-war era (1945) by
theory and practice.

3. Rational Choice Theory
•Originally developed by economist
•Rational choice theory is mainly concerned with how individuals
and policy makers make choice while making choice. It is necessary
to observe whether set of assumptions are possible to develop or not.
Secondly it is to see whether elected officials can address the will of
the voters or not. Thirdly it is to explain whether political
competition can be compared with economic competition.
•Rational choice theory is the study of the collective decision made
by groups of individuals through political process (political
participation) to maximize their interest. The core assumption of
public choice theory is that individuals are rational and
self-interested in the political sector as in the economic marketplace.
But people behave differently in political sector (political choice)
than in the marketplace it is because institutional arrangements are
different. Public choice theory is supposed to be value free and
scientific as it attempts to provide an analysis and an explanation of
the society as it is not as should be.

4. Contd
•The Rational choice explains the actual social
behavior. For example people from the middle class
tend to go to voting then the people from the upper
class.
•Robert Haveman views that rational policy is that type
of policy which is designed to maximize (net value
achievements)
• Thomas Dye said that a policy is rational when it is
most efficient in terms of bringing positive values and
result than the negative ones but the values and results
of a rational policy can not be counted in dollars since
the social values are not counted in economic values.

5. Elements or process of Rational
Choice Theory
1. Identification and determination of goals. (What is to
be achieved that has to be identified (short term or
long term goal).
2. The ranking of goals in order of importance.
(prioritize of goals).
3. The identification of various policy alternatives for
achieving these goals. (In this state we prepare
complete set of alternatives or options. We allocate
resources for each alternative with weight.)
4. Calculations of predictions about cost and benefit of
policy alternatives.
5. Selection of the best alternative and monitoring.

6. Key assumptions of Rational choice
theory
1. Rational choice theory believes that decision makers have a
complete knowledge of social values and the identify values
and preferences of society and rank them in order.
2. There must be the complete knowledge of options in
selecting one option among the other.
3. There should be the proper forecasting of future
consequences of a policy.
4. There must be the proper analysis of cost-benefit.
5. The policy maker must have the ability to decide rationally.
For rational decision making the decision maker should be
equipped with adequate time, information and resources.

7. Appraisal of rational choice theory
• Rational policy making explains the basis in
which various steps or processes of decision
making are involved. They are systematically
analysed to achieve the goals and objectives.
Rational decisions making provides crucial
insights into the nature of problem, causes and
consequences of policy options. In the sense, this
model is significant in term of facilitating
comparisons of various alternatives. However, the
possibility of a rational policy depends upon how
it is implemented.

8. Criticism or Limitations
4. Define a problem is a major problem for decision
makers as they are not faced with concrete and
clearly defined problems but they have identify
and formulate the problems on which they have to
make decisions.
5.Rational policy making emphasizes comprehensive
analysis but in practice decision makers are
hindered with time information and resources for
making a rational choice.
6. Rational choices are not always optimal choices
because optimal choice is a choice based on
comparison of cost and benefit, In practice, it is
difficult to demarcate between individual
rationality and collective rationality.

9. Contd
7.There is a problem of 'sunk cost'. It means
previous decision, commitment and instrument
can hardly be replaced by new alternatives or
policies. For example moving an airport or a
public hospital from one place to another place
can be a difficult decision.
8.Uncertainty about the consequences of various
policy alternatives compels decision makers to
stick to previous decision.
9.Politically feasible choice may not be technically
feasible because rational choices are hardly
adopted by political actors.

10. Herbert Simons Theory of Limited
Rationality or Bounded Rationality
• Herbert Simon's administrative behavior
1947 is a great writing on the subject of
decision making in his book he explains the
realistic context of decision making rather
than idealistic context.

11. Contd
• Simon criticizes the weakness of classical
politics- administration dichotomy and
emphasizes that efficiency should be the
primary objectives of administration.
• While making decision he recognizes the
limits of individuals and organization to
behave rationally due to various constraints
imposed in the political system.

12. To forward his view he presents two
models of decision making.
a) Economic man model: This model emphasizes
to the maximization of benefits considering
various alternatives.
b) Administrative man model: This model is
motivated by satisfying behavior rather than
maximizing behavior. In his research he looks
for a care of actions that is satisfactory.

13. Contd
• He explains that human behavior is not as
rational as explained by the economist and it is
not irrational as explained by Sigmund Freud.
For him a rationality which is limited but not
irrational is bounded rationality. Human
rationality is bounded because it is difficult to
reach optimum level of rationality due to the
difficulty in exploring alternatives and evaluating
them.

14. Contd
• In other words bounded or limited rationality
believes that the capacity of human mind in
formulating and solving complex problems is
very small compared with the problem
emerging in the society and the policy makers
are needed to make objective rational decision
in the real world of decision making

15. Contd

16. Limitations to human rationality
Human rationality is limited by the following reasons.
• The incomplete and fragmented knowledge. Complete knowledge about
alternatives is impossible as knowledge is scattered.
• Imperfect judgment of future consequences.
• Limits of attention by policy makers. Decision maker can not address too
many issues at the same time.
• The existence of multiple values and large measure of uncertainty.
(Values may be individual, collective, national, societal, international,
ideological. Various values affect while decision making).
• Limits of storage capacity of human kind.
• Human beings are limited by psychological environment. (Psychological
conditions of human being affects decision making. (Psychology may
differ from person to person.)
• Human beings are as creatures of habits and routine they can not make
significant departure from the existing policies.
• Decision making is also bounded by an organizational environment which
shapes the process of choice.
• Tendency to stick to the past policies to avoid criticism or election defeat.

17. Methods of improving rationality
1. Specialist groups and organizations: They help in
reducing the elements of rationality.
2. The use of technical tools for making decision.
3. Knowledge of political institution. It can be achieved
through political education.
4. The proper use of knowledge, skill and experience for
making a more informed and effective decision.
5. The public information bases: It explains to the
improvement in the level of public information. It can
be achieved through awareness programs and public
advocacy.

18. Incrementalism
(Incremental theory of decision making or science of
muddling thought)
• Charles E. Lindblom has propounded
incremental theory of decision making.
Incrementalism views the public policy as
continuation of past government activities
with only some incremental change. It
means choices changes are incremental or
marginal. Further, it views present
policies as the iron grip of past policies.

19. Contd
• Lindblom is of the opinion that constraints of time,
intelligence, skill and cost prevents policy makers
from identifying a full range of policy alternatives
and their consequences. So, he proposes that
"successive limited comparison" is both more
relevant and more realistic in a condition of
bounded rationality.
• There are basically two schools of thoughts related
with it. 1) It tries to avoid the problems of rational
comprehensive theory. 2) This is the descriptive
way in which policy markers make policies.

20. Elements (assumptions) of
Incrementalism
1. Incremental theory of decision making is
characterized by limited analysis as a limited number
of important consequences of alternatives are
evaluated.
2. The problem that is confronted/faced by the
decision makers is continuously re-defined. Hence,
incrementalism permits means-ends and ends-means
adjustment that makes the problem more manageable.
3. There is no single right solution for a problem. The
test of a good decision is that various analyst find
themselves directly agreeing or disagreeing for certain
objectives.

21. Contd
4.Incrementalism is more oriented towards
eliminating the current problems rather than the
development of choices for long-term benefits.
5. It involves trial and error.
6. It is not theoretically driven, more applied based.
7. It involves mutual adjustment and negotiation
among groups or parties.
In short, incremental approach of decision making
involves a process of continually building out from
the current situation step by step and by a small
degree

22. Stages of Incrementalism
1. Identification or recognition of problem. (What
is problem? why it emerged? How serious it is real
or created?)
2. It tries to find out how similar problems were
handled in the past. The process of finding out is
investigation.
3. Analysis and evaluation of few policies
alternatives.
4. Select the one that solve the problem
satisfactory

23. Limitations
• Incremental decision would reflect the interest of the
most powerful and organized in interest of society,
• It focuses on the short run and seeks only limited
variation in current policy (myopic orientation).
• Less feasible to revolutionary or comprehensive policy.
• It would neglect the social innovation (status quo
oriented.
• It can muddle through without any theoretical
understanding
• It emphasizes on limited analysis
• Fundamental decisions play crucial role in incremental
decision as they provide new context.

24. Mixed Scanning Theory: Third
Approach to Decision Making
• Amatai Etzioni has proposed the concept of mixed
scanning theory. This is a compromise approach
which combines the elements from both rationalism
and incrementalism. He is not convinced that
incremental and rational model of decision making
are either realistic or satisfactory normative accounts
of decision making. Rational policy making is not
always a sufficient approach because it has limitation
and makes high demands of the rationality of the
decision maker. On the other hand, incrementalism
reduces some problems of rational model but it is
conservative and status quo-oriented as it does not
accept functional changes in decision making.

25. The dualism of this approach is explicit
by two reasons
1) It demands higher orders of fundamental policy
making process.
2) Incremental process which prepares for fundamental
decision and makes conducive (suitable) environment
for reaching to the decision.
•Mixed scanning model of decision making is drawn
using the weather forecasting and observation
techniques. Two cameras were used to record the
weather picture at two levels, one is broad scanning
(rationalism) and the other is more detailed images on
selected areas of interest (incrementalism)

26. contd
•Hence, rationalism and incrementalism were considered as
analogues term in term of scanning. In the context of decision
making it involves a detailed examination of some areas of
problem with a general sweep (understanding) across as a
whole. Mixed scanning depends upon the different decision
into those that are fundamental and that are incremental.
•The value of the third way approach of decision making is that
it emphasizes how no theory is true in itself in relation to
decision making but is more or less instructive and informative.
•Furthermore. mixed scanning assumes flexibility of decision
making in the light of change and uncertainty in the
environment.
•It also addresses the differing ability of decision makers and
co-ordination and consensus among policy option and policy
makers is sought.

27. Appraisal of mixed scanning theory
1. Decisions vary in magnitudes (It indicates size, scope etc.)
Amatai Etzioni differentiates fundamental decisions from
incremental decisions. In this process (in mixed scanning)
fundamental decisions give direction to incremental decisions and
the accumulation of incremental decision lead to fundamental
decisions.
2. The key element of mixed scanning is flexibility of decision
making after proper consideration of current environmental factors
and actors.
3. Different decision makers possess different capacity of decision
making due to the different environmental context. Hence, decision
making permits the decision maker to tailor the decision making
strategy in their own situational context.
4. Mixed scanning theory has coordination between theory and
practice as it uses the best elements from the both theories and
creates conducive situation to make a strategic decision (long term
effect)

28. Limitations
1. Mixed scanning is a flexible theory but there are
limited situation in which one can achieve goal by
being flexible.
2. There is problem of implementation with mixed
scanning theory. For this reason, Anderson says it is
not at all clear as the theory work in actual practice.
3. It is very difficult to scan fundamental or
incremental concepts of decision making at the time
of emergency.
4. It is time consuming as well as expensive.
5. It is very difficult to distinguish which decisions
are incremental and which are rational.

29. Constraint (theory) of decision making
•The constraint theory of decision making has
been propounded Edward III and Sharkansky.
Their theory emphasized the larger context of
policy makers in which decisions take place.
They explain two types of constraints on policy
decision.
1) Constraint imposed by the nature of economy.
2) The constraint originating in the character of
government & policies

30. Economic Constraints
•Economy plays a vital role as it helps to regulate what is possible
or desirable. The label of economic development is important
because various economic policies shape public policy. Though we
make a good policy we can not implement unless it is supported by
sound financial system (adequate resource). The economic
constraints differ from country to country as resource poor
developing countries face serious challenge than the developed
countries with strong economic strengths.
•The economy of a country facilitates or constraints policy maker
in a short-run or long-run. Various types of policies such as
monetary policies, fiscal policies, regulatory policies, spending
policies etc directly or indirectly aimed at increasing the economy
of a country. Sound economy is essential as it provides the funds,
personnel and infrastructure necessary to carry out programs
ranging from public welfare to space shuttle. However, it is here to
understand the wealthy educated population living in urbanized/
industrialized regions may demand different policies than poor
populations in less well off areas. Hence, we can see the two way
reciprocity between economic development and public policies.

31. contd
• Finally, economic constraints are crucial
factors in decision making in the sense that
policy makers are restricted to decide on what
is wanted or desirable by evaluating the overall
economic strength of a country.

32. Economic Development
The economic development involves.
1. The quality and quantity of natural resources such as
agricultural land, fuel and other minerals.
2. The human, physical and financial capital as judged by
the skill of the population.
3. The quality of industry and agriculture.
4. The capacity of financial institution such as tax system,
banks, stock exchange to generate the funds needed for
investment.
5. The character of foreign trade.
6. The capacity of educational and health institution to
serve the population as a whole.
7. The nature of the distribution of economic reward.

33. Political Constraints
•Political constraints mainly emphasizes with the nature of
politics and government. Choice of the policy option is largely
affected by political factors. So political constraints involves:
1. Political feasibility related with the political culture.
•Political feasibility is a vital factor in changing the existing
policy as well as adopting a new policy. While choosing a viable
policy option the policy makers try to fulfill the minimum of
political support or requirements. Political feasibility is influenced
by value and culture. the choices available to pubic officials. me
policy alternatives are not politically feasible because they
contradict with important public values and beliefs. So a policy
must be sensitive tPolitical culture explains the set of values held
by members of society regarding political behavior. SoPolitical
culture limits o the existing acceptance of cost and benefit of a
purposed policy

34. contd
2. Bargaining and compromise also affects decision
making.
•The constitution of a country demonstrates the
separation of power requiring common action in politics
or political decision. It means bargaining and compromise
are crucial part of policy making. There may be implicit
bargaining as well as explicit compromise.
3. Weight of history (Importance of history)
The weight of history in decision making is concerned
with established traditions and programs or previously set
practices. Precedent plays an important role in shaping
present as well as future policies as contemporary
officials seldom write upon a clean slate.

35. contd
4. Committed resources to certain policies and
program is likely to affect policy making or decision
making. Committed resource denotes to the previous
commitment of the existing resources to certain
program and polices. Hence, they are the
uncontrollable expenditures, which may affect in
considering (adopting) a new policy alternative.
5. Fragmentation of administrative responsibility
hinders policy makers in their selection of
administrative responsibility. Division of
responsibility can create a great deal of overlap that
lacks coordinated efforts to solve complex problem.

36. Social Constraints
• Educated and aware society accepts new
policy initiatives or changes easily. There
is likely to be less protest, demonstration
etc.
• On the other hand conservative and
traditional society does not accepts new
innovations easily as the new policies
seem to contradict with their norms,
values, behavior and practices.