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chapter 15
her bert a l ex a n der si mon:
phi l osoph er of t h e
orga n iz ationa l
life-wor ld
j.- c. s pender
Philosophy does not begin in an experience of wonder, as ancient
tradition contends, but rather, I think, with the indeterminate but
palpable sense that something desired has not been fulfilled, that a
fantastic effort has failed. Philosophy begins in disappointment.
Critchley, 2007: 1
It is going to be easier to simulate professors than bulldozer drivers
Simon in Stewart and Clark, 1994: 78
Any analysis of Herbert Simon’s long working life and output has to confront its amazing volume, variety, and complexity—so here are some mileposts to mark my route:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Introduction
Chicago Times (Cowles Commission and RAND)
Five Aspects of Simon’s Thought
Evaluating Administrative Behavior (1947)
Assessing Academic Giants
Carnegie Times (and Inventing AI)
The Battles in AI
Legacy
Coda
They need little explanation. Beyond this short life-story—given Crowther-Heyck’s
biography is unlikely to be bettered—my chapter’s real purpose is evident in my title, to
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think how we might best understand Simon’s work. Many know him as a Nobel Prize
winning economist, an adminstrative theorist, a founder of ‘artificial intelligence’ (AI),
or as a psychologist—a man of many identities, a polymath working in many disciplines
perhaps? I suggest the contrary, that Simon’s life and work were ‘of a piece’, articulating a
single world-view and method to engage it. This view was, at bottom, philosophical, and
I believe it essential to dig down to this level if we are to make proper sense of his work.
Here we can find a platform from which to judge his contribution. I conclude ‘bounded
rationality’ was his metaphor for the dynamic and pragmatic humanism he stood up for
against the ‘rational man’ that he saw as a metaphor for today’s infertile anti-humanist
‘rational choice’ theorizing.
To simplify the text I use acronyms for several multi-cited sources:
AB—Administrative Behavior (Simon, 1947a, 1958a, 1976, 1997)
RHA—Reason in Human Affairs (Simon, 1983)
SA—Sciences of the Artificial (Simon, 1981, 1996)
MML—Models of My Life (Simon, 1991b)
and
BRA—for Crowther-Heyck’s biography (Crowther-Heyck, 2005)
Introduction
By all accounts, Herb Simon (1916–2001) was a good man. Aside from what we find in
his huge oeuvre, especially his autobiography, we know a lot about him from CrowtherHeyck’s magisterial biographical works (Crowther-Heyck, 2005: 9; 2006), the commentaries about him and his work (e.g. Golembiewski, 1988a, 1989; Golembiewski,
Welsh, and Crotty, 1969; Leahey, 2003), and the many obituaries and remembrances
(Assad, 2011; Augier, 2000, 2001a, 2001b, 2002; Augier and Feigenbaum, 2003; Augier
and Frank, 2002; Augier and March, 2004b; Colquhoun and Wroe, 2008; Feigenbaum,
1989; Klahr and Kotovsky, 2001; Lewis, 2001; Rainey, 2001; Velupillai, 2001; Zelený,
2001). He was a good son, brother, husband, and father (Frank, 2001, 2004); a good student who won a full scholarship to the local major university (University of Chicago); a
good, if sometimes disputatious colleague (MML: 269), and a good and attentive
teacher (Augier and Feigenbaum, 2003; Augier and March, 2004b; Klahr and Kotovsky,
2001; McCredie, 2001). A man of regular habit, Simon worked at Carnegie from 1949 to
2000, the majority of his life, and kept the same house throughout. His daily one-mile
walk to his office, like Immanuel Kant’s, was so regular his neighbours joked they could
set their clocks by it. He showed a steadiness; he volunteered; he was a combination of
his mid-western Germanic heritage (BRA: 16) and his intellectual ‘monomania’—his
lifelong focus on a single topic (Feigenbaum, 2001; Heuklom, 2006: 4; Simon, 1957: viii;
2001). To the end—he taught a course in Fall 2000, and was working from his hospital
bed the day before he died in February 2001 (Augier and Frank, 2002; Cooper, 2004)—
he was helping colleagues and students, listening to and respecting their views in spite
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of his intellectual aggression, massive publication record, Nobel Prize, and many other
awards (Assad, 2004; Augier and March, 2004a: 26).
Without doubt, Simon’s achievements were vast and exemplary, but they are of particular interest to management theorists. Although Simon was awarded the Nobel Prize
in economics, his work stood on a devastating critique of neoclassical economics. Thus
the award struck many economists as odd (MML: 325) (Hunt, 1980), and his major positive contributions seemed elsewhere (Cyert, 1979). His Nobel commendation was written by a management theorist (Sune Carlson—MML: 326), and the main elements of his
reputation are as a theorist of organizational decision-making, cognition, and management. As such, Simon possibly remains our discipline’s dominant theorist and certainly
our only Nobel winner—even as management has become the most taught and perhaps
most studied college subject. Yet the puzzle for us is that while Simon’s legacy is extraordinary, his mark on management thinking is less obvious, smudged, even forgotten. This
chapter explores some of how this happened. Because Simon’s work was in so many
fields, evaluating his contribution means getting a fix on the disciplinary context in
which they are to be judged—and different writers have taken different lines. Along with
Crowther-Heyck, I see Simon as ‘a synthetic and empirical positivist philosopher’ (BRA:
137), rather than as an mathematician, economist, political scientist (Bendor, 2003),
social scientist (Augier and March, 2004a), or cyborg (Sent, 2000)—largely because
I think this best illuminates the many moves, countermoves, and contradictions of his
career. From this platform Simon broke new ground towards what some now label ‘computational philosophy’ (Bynum and Moor, 1998; Chen, 2005; Downes, 1990; Floridi,
2004; Shaw, 2003). But despite the seeming paradox between Simon’s distrust of human
computation and his untroubled faith in computers (Patokorpi, 2008; Zelený, 2001),
I argue Simon never abandoned his early humanizing pluralism and philosophical
positions.
Chicago times (Cowles
Commission and RAND)
Simon became a freshman at the University of Chicago in 1933, taking courses in the
humanities and the social, physical, and biological sciences. The UC regime was flexible
and he was soon auditing upper level courses. He decided to major in economics, discovered this required him to take accounting—which he did not care for—so switched
to political theory (MML: 39). His project synthesized a pre-college love of mathematics
with its application to the political and social affairs so vigorously discussed at home
(Frank, 2001, 2004). From his teenage reading, including of the library inherited from
an uncle who studied with the institutional and labour economist John R. Commons, he
concluded the messy vitality of the democratic political and social process could be bettered by a more scientific approach. Two books were especially formative—Richard Ely’s
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Outlines of Economics (1893) and Henry George’s Progress and Poverty (1882) (MML: 14).
Simon reflected the zeitgeist of the time that looked to ‘a new breed’ of professionally
trained men who would serve the public interest with objective, data-driven, and scientific skills (Khurana, 2007). He resolved to become a mathematical social scientist
(MML: 62) (Simon, 1978). As a left-leaning student, child of the Depression (Simon,
1985c: 18), and ardent debater (Velupillai, 2001), he made a connection between empirical social science and practical social reform that would drive his whole career
(Frederickson, 2001: 8). Simon’s home-shaped weltanschauung was profoundly enriched
in the multi-disciplinary environment he found at Chicago (Dasgupta, 2003; Heaney
and Hansen, 2006; Simon, 1985a). There he gathered up sociology, psychology, politics,
and biology, as well as mathematics, philosophy, and scientific research methods
(Heuklom, 2006; Simon, 1982).
His academic contributions began early. In 1935 at the age of 19 he wrote an undergraduate term paper on allocating Milwaukee’s municipal funds between playground
maintenance—such as planting trees and cutting grass—and leadership activities—
planning and running neighbourhood programmes, an allocation decision that—postSimon—we might call ‘messy’ or ‘wicked’ (Kuehn and Hamburger, 1970). His paper led
to a collaboration with Clarence Ridley and a manual for municipal administrators trying to evaluate public services (MML: 64, BRA: 77) (Ridley and Simon, 1936, 1938). Its
publication made him a nationally visible expert in the treacherous field of public-sector
performance evaluation—at 22, without any managerial experience, public service, or
research credentials (MML: 75). By the time the manual appeared he had taken enough
politics and economics courses to identify the central puzzle in his undergraduate
assignment, which crystallized into the research question that was to define his life-long
project: ‘How do human beings reason when the conditions for rationality postulated by
neoclassical economics are not met?’ (MML: 370) (Augier and March, 2004a: 8; Larkey,
2002: 9; Simon, 1978: 352; 1991b: 370). The question came to him ‘forcibly’ as he was trying to apply what he had learned in Henry Simons’s intermediate price theory course
(Simon, 1985c: 17). As a political science student with good insight, he intuited politics
and administration, perhaps democratic society itself, would be superfluous were people actually like those the neoclassical economists imagined. The insight was not merely
the fruitful germ of a critique of most of economics and sociology; it also implied a different approach to the question: ‘How might real-world decision making and administration be better understood and improved?’
After a period of personal depression (MML: 48) Simon settled into the richness of
Chicago college life and soon moved on to graduate studies. He also met Dorothea Pye,
a fellow graduate student of political science, whom he married Christmas 1937, a relationship that lasted until his death (MML: 65). The municipal administration manual
led to an invitation to UC Berkeley to work on a three-year Rockefeller Foundation
funded research project (Assad, 2004). After spending the summer of 1938 in California,
without Dorothea, he returned there for the summer of 1939, this time with Dorothea, to
manage a substantial team of researchers working on an extended series of projects
(BRA: 85). He also continued working on his doctorate by special arrangement with the
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Chicago Economics Department (MML: 83). His thesis was on ‘administration as a
decision-making process’ and he initially offered a lab-rat maze framework—excised at
the suggestion of some of those who read the early drafts (MML: 86). Simon’s thesis
offered a ‘logical structure of an administrative science’, following the lines of Carnap’s
classes at Chicago (BRA: 73) (Golembiewski, 1988a: 262). Towards the end of 1941 his
reworking was accepted and his oral was in May 1942. With his degree done and the
California projects completed, the family returned to Chicago and Simon joined the
Illinois Institute of Technology (IIT).
Around 1945, settled into his teaching at IIT, Simon began to think about publishing
his PhD thesis and the process of turning it into AB began (BRA: 130, MML: 85). He
believed the argument turned on two axioms: (a) human beings were able to achieve
only a very bounded rationality, and as one consequence of their cognitive limitations,
they were (b) prone to identify with sub-goals (MML: 88). He made about 100 mimeographed copies of a draft and circulated it widely. Crucially, one person who responded
at length was Chester Barnard (BRA: 131, MML: 88)—and Simon’s larger story began. As
he wrote later: ‘I would not object to having my whole scientific output described as
largely as gloss—a rather elaborate gloss to be sure—on the pages of AB where these
(two) ideas are set forth’(MML: 88).
In rejecting ‘rational man’ (RM), Simon had set himself to find or construct a theoretically tractable alternative model of the individual (MoI), that is, to pursue his own
answer to that most ancient of philosophical questions: ‘What is Man?’ Offering
bounded rationality (BR) rather than merely dismissing RM, he said: ‘You can’t beat
something with nothing’. We can argue that the puzzle about our own nature is philosophy’s originating question and those who engage it are philosophers whether they care
to call themselves so or not. In this sense Simon’s lifelong question was clearly philosophical, overtly so after he began to simulate human decision-making. But he paid no
attention to mainstream philosophy as he engaged this project. As an undergraduate he
took an interest in various kinds of philosophy, declared himself a ‘logical positivist’ (or
‘empiricist’), studied with Rashevsky, Schultz and Carnap, and enthusiastically debated
his fellow students’ philosophies of religion and politics (MML: 44, 50, 51; BRA: 101).
At IIT he collaborated with two colleagues to add a ‘little intellectual stimulation’ by
offering a seminar on the philosophy of science (MML: 100, BRA: 129). This led to a
Philosophical Magazine paper on the axioms of Newtonian mechanics; ‘accepted with
almost no revision’ (MML: 101) (Simon, 1947b)—no small achievement for someone
with neither philosophical nor natural science credentials. For most, the philosophy of
science was about the physical universe (nature and ‘objectivity’). There was less interest
in the philosophy of the human sciences, human agency, and ‘subjectivity’—a distinction that, for many, began to dissolve with Kuhn’s Structure of Scientific Revolutions and
Merton’s Sociology of Science (Kuhn, 1970; Merton, 1973). It seems Simon had no evident
contact with or interest in existentialism, phenomenology, or the philosophies of subjectivity or the Self we now label ‘Continental Philosophy’ (Critchley, 2001), even as
these led to gestalt psychology and, after World War II, to the ‘cognitive turn’ and ‘sensemaking’ (Fuller, De Mey, Shinn, and Woolgar, 1989; Thagard, 1996). While Simon was
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sympathetic to gestalt work and made a close friend and important intellectual sparring
partner in the psychologist Harold Guetzkow (MML: 46), Simon’s familiarity with nonpositivistic philosophy seemed limited to acquaintance with the pragmatisms of James
and Dewey (AB: 93n14).
AB was published in 1947 and attracted considerable attention (BRA: 134), plus it
helped Simon make full Professor (MML: 110). He also began to find a larger audience
through the Cowles Commission (then based in Chicago), for whom he began research
projects in 1945 (BRA: 128, MML: 101) (Assad, 2004). The Commission brought together
the nation’s top social and natural science researchers. All were infused with urgent
excitement about the post-war possibilities for applying scientific (positivistic) methods
to economic and social policy issues. The Commission also brought Simon towards the
centre of the highly influential network that reached as far as RAND in Santa Monica
(‘the Sun’—MML: 113) and gave him unmatched insider connections to leverage his rising academic reputation (Hounshell, 1997). The RAND and Cowles Commission programmes’ shared positivism—even given the divergence of Simon’s view of mathematics
as the ‘language of thought and discovery’ from Tjalling Koopmans’s view of mathematics as ‘the language of proof ’ (MML: 106)—enabled him to move between disciplines
with remarkable facility. Simon’s psychology was positivist and extended to Tolman’s
behavioural programme rather than Freudian and post-Freudian ideas (AB: 80, n. 3, 86,
205). Likewise, his sociology did not embrace Hegel, Marx, Husserl, or the Frankfurt
School: it lay more with the empirical Chicago sociology of Thomas, Wirth, Park, and
Lazarsfeld (MML: 55), and with Parsons’s social systems theorizing (AB: 62, n. 3). But,
putting Simon’s pragmatic humanism in tension with his positivism, was Dewey, much
cited (BRA: 36,100,107), sustaining Simon’s empirical and socially oriented disposition.
Interestingly, much Chicago sociology at that time focused on the interaction of different social groups that were ‘bounded’ culturally, socio-economically, and geographically
(e.g. Wirth’s work on ghettoes).
The epistemological and methodological conflicts between positivistic analysis and
synthesizing humanism seem sharper today than they were in the 1930s. But given
Simon’s interest in process rather than equilibrium he was comfortable with both agendas and let each colour the other (Loasby, 2004: 276). He achieved an epistemological
duality that would give him somewhere to stand philosophically even as he critiqued
microeconomics’ obsessive rationalism. Many have commented on Simon’s dualism
without making much of it (e.g. Dosi, 2004; Frantz, 2005; Goodin, 2004: 240; Peng, 1992;
Pitt, 2004: 491; Porac and Shapira, 2001; Sarasvathy, 2010). But finding ‘middle ground’
meant Simon’s confidence to attack RM (and thereby the entire neoclassical economics
edifice) was not mere youthful bravura, but sprang from his comfort with complementing his mathematics and positivism with the pragmatic humanism and subjectivity he
learned before he arrived at Chicago—and much reinforced there (BRA: 47). He concluded ‘substantive’ rationality was a Platonic abstraction, an anti-humanism isolated
from and irrelevant to the lived world. In contrast, those living in the world aspired to a
value-penetrated ‘procedural’ rationality. Each person would have to work out their synthesis differently because all were pursuing their own objectives—thereby generating
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democratic society. In the background was a notion of administrative society based on
the procedural interaction of boundedly rational individuals rather than of rationalizing economic men.
The procedural rationality Simon proposed had to be bounded contextually to each
person’s world, but not quite in the way we think of ‘bounded rationality’ today.
Boundaries occupied a special place in his thinking (Augier and March, 2003; Barros,
2010; Lamont and Molnar, 2002). Aside from the Chicago sociologists’ interest in
bounded groups, Simon’s 1947 Philosophical Magazine article argued that modern physicists appreciated mass was not a universal but something contingent on the inertial reference system specified (Simon, 1947b: 904). This could never be the entirety of space
nor, accepting the system’s dynamism, for all time. Especially after Gödel’s work, physics
demanded careful attention to the space-time bounding that underpinned the
analysis—an echo of Simon’s Chicago interest in Bridgman’s operationalism (BRA: 65).
Without a boundary there could be no analysis. Thus Simon found his methodological
and philosophical intuitions about the importance of boundary setting reinforced
directly by the natural sciences. Bounded rationality was also reflexively subject to its
own boundaries, and the selection of the bounding dimensions of human experience
became this framing’s way of characterizing the human being—its MoI. The boundary
separating bounded and unbounded rationality would also be relative and personal, to
be established empirically and agentically by living, rather than abstractly. Thus BR
would be irrelevant to most players of tic-tac-toe, who quickly see the game’s options
(strategy), but highly relevant to those playing chess, for whom the game lies in a region
beyond the bounds of their rationality (Bendor, 2003:436).
With a workable concept of knowledge boundary-as-practice in hand, Simon was
able to move from the banalities of the boundary-free world of perfect knowledge and
towards the bounded space-time contingent humanism of the lived world—whose
boundaries were grounded in the experience of ‘bounded rationality’, rather than in any
‘objective’ or scientific determination of the limits to humans’ computing or fact-gathering capacity. Philosophically, Simon stood on the boundaries of his MoI’s practical
rationality, unlike those other philosophers who found institutionalized religious, ethical, or historical boundaries more germane.
Five aspects of Simon’s thought
Before we get deeper into details, five general aspects of Simon’s question help illuminate
his life’s work. First, he threw into question the nature of the human beings whose behaviour was being studied. One of his most cited maxims was: ‘[T]here [is] nothing more
fundamental in setting the research agenda and informing our research methods than
our view of the nature of the human beings whose behavior we are studying’ (Loasby,
2004: 259; Simon, 1985b: 303; Williamson, 2004: 284). Simon’s ongoing attention to real
living people rather than to abstract models like RM was thus very different from those
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who generalized about people’s reasoning with axiomatic models, or those who
examined the behaviour of ‘things’ like organizations, social systems, or markets
(Stewart and Clark, 1994). Presuming there could be no unproblematic model of the
human being, Simon’s lifelong—though not sole—intellectual butt was the neoclassical
microeconomics profession and its adoption of RM as its axiomatic MoI—without critical reflection on the consequences. Focusing on ordinary people rather than on RM-ascipher also framed human choosing as morally and value loaded, so Simon’s criticism of
neoclassical economics had an undercurrent of moral outrage at those who focused on
‘numbers alone’ and thereby denied or ‘forgot’ the humanity of their ‘subjects’.
A second aspect of Simon’s project, in spite of his claim that his choice of work was
‘accidental’ (MML: 64), was that it showed there is nothing more fundamental to a seminal academic’s career than early intuition-driven engagement with a problem whose
complexity and depth could sustain an entire career, as we find with Einstein, Picasso,
Turing, Piaget, and others (Albert, 1975: 147; Wallace and Gruber, 1989). Raskin’s research
indicated the average age of first publication for the most highly regarded ‘men of letters’
was around 22 (cited in Albert, 1975: 148)—so Simon was on track to greatness from the
beginning.
A third aspect was that Simon’s stance was critical rather than imitative or derivative.
He was intellectually independent even as he readily acknowledged being influenced by,
and working collaboratively with, many other authors. Criticism as a scholarly practice
is now almost lost from our discipline in spite of Popper’s stature as our token methodologist and his insistence that ‘criticism is the spur to academic progress’ (Popper, 1968,
1969, 1994), so it is useful to note that while Simon’s life-long quarry was not yet visible
in his 1944 Public Administration Review (PAR) article ‘Decision-making and
Administrative Organization’ 1944 (Simon, 1944), an uncritical Barnard-derived
thought-piece on the problems of administering an organization’s division of labour, it
burst into full view in his 1946 PAR paper ‘The Proverbs of Administration’ (Simon,
1946). The 1946 paper contained the seeds of his Nobel; and the intellectual arc from critique to disciplinary innovation was becoming clear. After showing the proverbs’ contradictions led to an ‘impasse’ (AB: 35), Simon wrote: ‘Two persons, given the same
skills, the same objectives and values, the same knowledge and information, can rationally decide only upon the same course of action. Hence, administrative theory must be
interested in the factors that will determine with what skills, values, and knowledge the
organization member undertakes his work. These are the “limits” to rationality with
which the principles of administration must deal’ (Simon, 1946: 64). He went on to suggest three types of ‘limit’ or ‘bound’ to the organizational member’s or agent’s knowledge
and skills; (a) those skills, habits, and reflexes that were no longer in the realm of consciousness—‘frozen into habit’ (Simon, 1997: 139), (b) the acquired values and conceptions of the organization’s ‘purpose’, (c) the practical knowledge relevant to the task in
hand (AB: 39).
Simon’s critique of the proverbs of administration illustrated how new work generally
stands on a considered criticism of an established position, in this case the core of classical organization theory as derived from a long line of management practice writers,
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though especially from Gulick’s articulation (Gulick, 1977). Given the devastating nature
of Simon’s attack it is surprising that organization theorists have cheerfully carried on as
if nothing had happened—one exception being Hammond’s punishing counter-critique,
arguing that Simon’s points do not actually carry (Cruise, 1997, 2004; Hammond, 1990).
Even if Simon’s attack turns out to be less effective than was first thought, there was more
going on than is sometimes appreciated. In his 1946 paper Simon famously turned his
back on the administrative literature that dealt with structure, command, and control,
which thinking pushed the employee into the background as an object, a passive
resource to be directed and manipulated by managers. Labour became a resource like
any other, though contracted for rather than fully owned. Simon, in contrast, pulled the
individual being managed into the foreground. He explicitly adopted what is now called
a ‘micro-foundational approach’ (Felin and Spender, 2009), theorizing forward from his
axiomatic ‘boundedly rational’ MoI at the core of the organization, rather than from
classical notions of rationality and organizational design, or the organizational system’s
emergent characteristics.
How did Simon arrive at this intellectual vantage point, given it helped precipitate a
revolution in English-language organizational and administrative theorizing? He related
reading Barnard’s Functions of the Executive (Barnard, 1938) with ‘painstaking care’
shortly after its publication in 1938, and led a discussion group on it at Berkeley (MML:
73,86). Barnard’s book, and his lengthy response to Simon’s mimeographed draft, caused
Simon to change both method and target, presaging another methodological shift later
in his career. Barnard became the major influence on Simon’s PhD thesis (Wolf, 1972),
not completed until after the publication of the ‘proverbs’ paper that became AB’s
Chapter 2. Barnard also wrote the ‘Introduction’ to AB (MML: 88). Simon went on: ‘The
other central idea that appears in (AB) that appears in only muted form in Barnard’s
(book) is bounded rationality’ (MML: 87). Barnard’s Chapter 2 opened: ‘I have found it
impossible to go far in the study of organizations, or of the behavior of people in relation
to them, without being confronted by a few questions . . . For example “What is an individual?” “What do we mean by a person?” “To what extent do people have a power of
choice or free will?” ’(BRA: 103) (Barnard, 1938: 8).
Barnard explored the managerial and organizational implications of adopting a MoI
that was far from RM (O’Connor, 2011). He concluded that the executive’s principal
function was to provide ‘leadership’ which being the resource in shortest supply was the
organization’s ‘strategic factor’ (Barnard, 1938: 288). Simon, in contrast, came to focus on
what individual decision-makers lacked beyond leadership or, more precisely, what
administrators would still have to deal with, even if they had been able to provide ‘perfect’ leadership. To use the vernacular, Simon addressed a leader’s quintessentially
American question—‘What didn’t you understand about what I just told you?’ His focus
was on the ‘intendedly rational’ individual rather than on the organization as a ‘thing’
even as he matched Barnard’s micro-foundational and organizationally committed
move—‘In the study of organization, the operative employee must be at the focus of
attention, for the success of the structure will be judged by his performance within it’
(AB: 3). Barnard’s MoI differed from Simon’s BR person, and as Simon brought BR to the
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centre of his thinking he headed away from Barnard’s answers—even as both agreed the
‘only real certainty in life lay in accepting the burden of personal ethical choice’ (AB:
xxix, n. 8; BRA:102) (Barnard, 1938: 296). Simon went on: ‘The closest parallel (to
bounded rationality) is Barnard’s notion of opportunism and strategic factors, ideas he
derives from John R. Commons. Since I had also read Commons, (his) Institutional
Economics may have been a common source for these various conceptions of rationality
that deviate from the economists’ maximization of subjective expected utility’ (MML:
87). In his Nobel lecture Simon argued: ‘The principal forerunner of a behavioral theory
of the firm is the tradition usually called institutionalism’ (Simon, 1978: 351).
A fourth aspect of Simon’s question was that he contrasted observable decision-making against the abstractions that came with RM, so laying a course towards empirical
individualist psychology and behavioural theorizing driven by induction and evidence.
His methodological stance was not that of a deductive theorist deriving testable hypotheses from RM-like assumptions—epitomized by the Chicago ‘rational choice’ economists (Stewart and Clark, 1994). Ironically, Simon’s guide was what he had learned at
Chicago of Tolman’s empirical behaviorism (AB: 80, n. 1). His hope to ‘harden’ the social
sciences through the application of scientific rigour was balanced against (a) his respect
for empirical evidence and (b) his respect for Chicago sociological theorizing’s ‘higher
aims’ of social relevance. He told a ‘teachable moment’ story of a paper he wrote for
Henry Schultz, the Chicago statistician for whom he eventually worked as a graduate
assistant. Schultz gave him a lowly B for presuming to know more than necessary to construct a testable equation—rather than proposing a more general equation. Simon
wrote: ‘The incident stuck in my memory and perhaps helped convince me that in
empirical science the final test is not mathematical elegance or a priori plausibility, but
the match between theory and data’ (MML: 53). He concluded that examining real decision-making behaviour would mean going beyond the boundaries of mathematics and
logic and into the psychological, political, and sociological causes and constraints ordinary people took into account. He equipped himself assiduously to draw from many
disciplines. Even then, while some regarded him as arrogant and imperious, with an
intimidating encyclopedic knowledge of almost everything, he remained generally
respectful of others’ views. Likewise, his empirical bent made him patient with experimental failure, yet profoundly optimistic about the possibility of science’s improving the
human condition.
A fifth and perhaps more fundamental aspect of Simon’s approach was that having
soundly disparaged RM and, under pressure, eschewing Tolman’s psychology, Simon
drew on his sense of himself as the most proximate MoI to underpin his own theorizing,
much as Freud drew on himself as his first patient. Crowther-Heyck argued Simon’s
greatest legacy from his father was his strong sense of personal identity, defined by his
family and professional memberships (BRA: 19). Simon’s self-confidence was as obvious
as his intellect, focus, and capacity for hard work. At the core of his self-image was an
Enlightenment commitment to the power of human reason—not to the exclusion of
emotion or faith, but to reason’s priority. For Simon, as for many, the challenge around
personal identity then pointed to the struggle between reason and various forms of
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irrationality. He took the logical positivist line that separated facts and values (AB: 4;
MML: 44). One implication was that rationality was value-free, a ‘gun for hire’, subordinated and available to the actor’s specific purposes (Mingus, 2007; Nieuwenburg, 2007;
Sent, 2001). A second was that rationality could neither exist on its own as a fully detachable abstraction nor ever be sufficient to our thinking about a specific situation—for we
must be actively present in an incompletely known and ethically penetrated world made
up of others with equally limited and differing views, values, and utilities. If we reject
RM and agree our identity cannot be condensed into a simple Spock-like capacity to
‘reason alone’, we must seek another MoI that occupies a place in the social world, ‘be a
Man’ in a situation that cannot ever be completely comprehended just as we cannot ever
fully comprehend ourselves. Thus AB was not only about the implications of non-RM
decision-making, it engaged the management of socially situated BR actors with problematic identities (Fiori, 2011; Jones, 2002, 2003; Sturm, 2012).
There is a significant difference between reading Simon’s life-long question literally,
as some do, and concluding he spent his life as a positivist psychologist exploring individuals’ decision-making, versus arguing, as I do here, that his core question was essentially philosophical, even if it was sometimes expressed in the language of formal
modeling rather than in regular philosophical language (Cook and Levi, 1990; Wilson,
1978). Simon, especially when arguing in defense of the potential of AI, could come
across as the epitome of inhumanity, and was often characterized this way (H. L. Dreyfus,
1965, 1987; Mintzberg, 1977). Yet in the longer run his MoI comprised rationality, emotion, intuition, learning, memory, sociability, and sexuality among the many dimensions
of its empirically observable behaviour. While he often declared his interest was in
human decision-making (Spice, 2000), his first engagement was with political sociology, implying the decision-making he had in mind was not simply the mental process of
an isolated quasi-computer-like individual, but something richer, the way human choosing affected and articulated the broader and ethically burdened business of living in
contemporary society, especially in its administrative situations (Stewart and Clark,
1994). After all, Simon was a widely read, multilingual, cultured man, a proficient musician who liked to play every day, and for many years an effective administrator of large
research teams and a successful ‘politician’ of the university, government research, and
grant-getting milieu and its arcane ways (BRA: 151). His grasp of these practical realities
was obviously well above average—though it was never clear whether his researches
provided him with any ‘competitive advantage’.
Taking Simon’s oeuvre as a whole, we can think of it as a sustained Lakatosian research
programme to model human decision-making scientifically and ‘explain’ Man the
Decision-Maker, or as an essentially philosophical programme in which he pressed rigorous science to the limit, seeking a clearer sense of what of Man might lie unexplained
in the void beyond science’s boundaries (Cruise, 1997; Hatchuel, 2001). Opinion remains
divided, though I conclude neither is correct and that Simon remained ambivalent until
the end of his life—in the middle, sometimes stressing the positivist programme, sometime the humanist, but generally reflecting both (RHA: 5, 24). Clearly an important part
of Simon’s appeal was his focus on a philosophical issue we all recognize in ourselves
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(the limits to our rationality) without using esoteric philosophical language (Campitelli
and Gobet, 2010). The contrast between ‘Simon as scientist’ (Augier and March, 2004a)
and ‘Simon as humanist philosopher’ was nowhere clearer than in his career-long writings about ‘rationality’ and the various neologisms he found as he explored the boundary between the positivist and humanist projects: ‘boundedly’, ‘procedurally’,
‘substantively’, ‘objectively’, ‘subjectively’, ‘consciously’, ‘deliberately’, ‘organizationally’,
‘personally’, ‘intendedly’, ‘purposively’—all modifiers to be set against ‘perfect’, for irrationality can only be defined against some viable form of rationality-in-practice (AB:
76) (Barrett, 1962; Heuklom, 2006: 8; Hoffrage and Reimer, 2004; Kalantari, 2010;
Simon, 1997: 76). At the same time Simon’s project dealt with the specific philosophical
issues of the organizational life-world rather than of society generally—so his language
differed from the professional philosophers’ writings on rationality.
The philosophical context of Simon’s move was the shift of the economics and management disciplines towards positivism—just getting under way in Simon’s time but
now fully established as a methodological hegemony pushing almost all alternative
notions of research aside (Khurana and Spender, 2012; Locke and Spender, 2011).
Positivistic science’s project is about establishing knowledge of the real, of what lies
beyond the scientist (and his/her community) as knower. It is located within a philosophical aesthetic that aspires to be universalistic and independent of humans’ fallible
sense-making, seeking insulation from their subjective relativism, idiosyncrasy, emotions, and other irrationalities. There are other philosophies. But all are about taking up
and fleshing out a coherent view of the human condition: how we might make sense of
our world and ourselves in ways that have justifiable implications for our choices and
behaviour. Merely to have a view, as do all bigots, is not to have a philosophy: that
requires the further capacity to doubt, to be able to step back from one’s beliefs, to critique and probe how one’s view might be wrong, and to ponder how and what can be
done about it. In the end philosophizing is more about posing penetrating questions
than about finding definitive answers. If the world presented its true nature to us unequivocally we would have no doubts and so have no need of philosophy—a broader version of Simon’s intuition about administrative theory growing out of what people do not
know as a result of their being boundedly rational. Today much philosophizing has
moved on from axioms that presume and seek certainty, what some call the ‘God’s Eye
View’. Over the past two centuries the trend of Western philosophy has been away from
realism and naïve positivism, with its assumption that certainty is potentially available
to us with its attendant possibility of complete ‘objectivity’. Primarily under the European
impulse the focus has moved towards subjectivism and forms of phenomenology, to
accepting that human perceptions and experiences must remain central to all human
knowledge. Simon was ambivalent in that he espoused a weak form of positivism, even
as his thinking reflected his critical shift away from positivism. His project called for a
non-mechanical and non-deterministic philosophy of the administrative situation that
admitted the human being as an agentic contributor rather than as a passive calculator—
a position for which there was no established language, though Barnard’s was probably
the best available. The mainstream economics project, in contrast, remains focused on
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developing languages and methods for the study of markets as a form of objective reality
we do not create and about which we simply calculate (Arrow, 1974; Balzer and
Hammings, 1989).
The rest of my chapter argues that Simon was, at bottom, a ‘working philosopher’ puzzling about ‘What is Man?’—but doing so narrowly, in the value-penetrated organizational contexts that interested him most, rather than in society generally—and that all
else was peripheral and, if necessary, expendable. By ‘working’ I mean ‘artisan’, the
antithesis of ‘scholastic’, passionately engaged in experiencing, observing, and shaping
the administrative world around him, with little patience for the abstractions and methodological weaknesses of academic philosophizing—however amusing its mind-games
might be to someone, like himself, with more than enough ability to play them. Simon’s
initial target was probably an empirically researchable extension of Barnard’s somewhat
pragmatist humanist philosophy of administration, so Simon’s take on the underlying
philosophical questions about being human was unusual but not original—it was
through the lens and language of administrative decision-making. Even though this
specification hid his project’s philosophical nature from most readers, it was a handy
way of explaining his ideas, eventually memorialized in the citation to his Nobel. But his
interest in individual decision-making did not end at the individual or contradict his
initial interest in political action and social reform. Thus the family discussions with his
parents and brother probably meant more to him—intellectually—than the rigorous
abstractions of the ivory tower; and when his Nobel was awarded, his longtime friend
and colleague Jim March was surely correct in describing him as an: ‘unrepentant knight
of the Enlightenment’ (Augier and March, 2004a: 8).
Before moving on to the next evolutions in Simon’s career and thinking, it is useful to
look again at its founding document—AB—and reconsider whether or not this offers
the sound platform from which we can evaluate Simon’s overall contribution.
Evaluating Administrative behavior (1947)
Given its prominent place in our canon, AB is curiously under-analyzed and its critiques
more or less forgotten (Banfield, 1957; Kerr, 2007; Morçöl, 2007; Peng, 1992; Storing,
1962; Vickrey, 1964)—in spite of the symposium organized by Golembiewski (Bartlett,
1988; Chisholm, 1989; Dunn, 1988; Golembiewski, 1988a, 1988b, 1989), the debate
between Simon and Argyris (Argyris, 1973; Lovrich, 1989) and the even more acerbic
spat with Waldo (Harmon, 1989; Waldo, 1952, 1953). It is not clear how AB influenced
management research, save for the part it played in introducing the Simonian language
of bounded rationality, satisficing, partial decomposability, and so on, all of which
helped ‘psychologize’ management beyond the Hawthorne studies, the pre-World War II
work at Harvard, and the evolving ‘human relations’ syllabi in business schools and elsewhere. AB is likewise curiously under-considered in the extensive commentary on
Simon’s legacy assembled by Augier and March (Augier and March, 2004b). Exceptions
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were the pieces by Williamson and Winter. As a Carnegie student himself, Williamson
noted Simon ‘epitomized the “Carnegie Triple”—to be disciplined, inter-disciplinary
and have an active mind’ (Williamson, 2004: 280). He implied AB achieved the grand
synthesis Weber sought—for it brought organization theory, economics, and psychology together, being ‘concerned with the same decision-making phenomena’—and contained several lessons for theorists like himself (Williamson, 2004: 291). But he offered
no analysis or critique of Simon’s synthesis—and Augier and March noted ‘conflicts of
interest’ between them (Augier and March, 2001). Winter likewise provided no analysis
but indicated the importance of Simon’s attention to learning (Winter 2004: 301).
Simon’s obituary in the New York Times (10 February 2001) captured the ‘received
view’ of his contribution. It reported he proposed ‘satisficing’ in lieu of RM and in AB set
out the implications, rejecting the notion of omniscient ‘economic man’ capable of making decisions that would bring the greatest benefit possible, and substituting instead
‘administrative man’ who looked for a course of action that was ‘satisfactory’ or ‘good
enough’. Administrative man would adjust his ‘aspiration levels’ depending on the costs
of gathering information to improve his decision-making and on how things turned out.
It neglected to mention this only made sense if the decision-maker was able to act rationally, albeit on unproblematic expectations, and that Simon offered no coherent theory of
organization or choice based on satisficing, and that his work was therefore merely suggestive, even as it seemed enough to earn him a Nobel.
In contrast, Crowther-Heyck’s careful unpacking of AB argued it grew out of the critique of the ‘proverbs’ and was Simon’s offer in their place (BRA: 98). Its principal sources
were Parsons, Tolman, Barnard, and Dewey (BRA: 99). First, even in the absence of full
knowledge and thus full determination by ‘causes’, Simon’s MoI still hinged on ‘purpose’,
the intentionality provided by the actor that set a direction, absent which there was only
disorientation and chaos. Second, Simon presumed a hierarchy of purposes that bound
together the organization’s heterogeneity and divisions of labour—both horizontal (productive) and vertical (administrative). Third, there was the matter of communicating
these disaggregated purposes and values. Bounded rationality problematized all three,
implying an inevitably incomplete communication and control by the hierarchy that
led, for instance, to individuals’ tendency to adopt local sub-goals—as explored majestically in Chapter 3 of Organizations (March and Simon, 1958: 34). Crowther-Heyck
showed how Simon tried to repair the damage he had inflicted by bridging fact and
value, turning to ‘organizational identification’ as the underpinning to effective communication. Doing so, Simon displayed a debater’s penchant for changing terms’ meaning
to suit his own argument. He sketched his MoI’s fundamentals, dismissing the lay view
that ‘decision’ is conscious deliberation while ‘choice’ embraces other modes of behaviour adopting and proposing in lieu, the term ‘decision-making’ as ‘any process whereby
one behavior-alternative is selected to be acted out from all the alternatives which are
accessible to choice’ (BRA: 103; AB:3). Along with Barnard’s ‘Mind in Everyday Affairs’
(Barnard, 1938: 302), Simon noted decision-making involved ‘both conscious and
unconscious, rational and non-rational elements’. In this way Simon aligned himself
with the Austrian economists’ as well as with Parsons’s attempt to develop a general
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philosophy that brought expectations and subjective elements into the analysis (BRA:
103) (RHA: 7)(Augier, 1999; N. J. Foss, 1994; N. J. Foss and Klein, 2012; Vaughn, 1994).
Parsons’s ‘voluntaristic theory of social action’ sought to grasp the ways society shaped
the actions of independent individuals without completely denying their agency (BRA:
104) (Hayek, 1979: 30; Parsons, 1968). While Parsons’s theorizing was sociological,
grounded social evolution, and survival-seeking functionality, Simon made a different
micro-foundational choice, centering his analysis on the individual. The new meaning he
gave the term ‘value’ followed from his choice to contrast fact and value. On the one hand,
values were those aspects of an employee’s decision-making that stood beyond the limits
of her/his rational deliberations, on the other, they were those shaped by higher levels of
the hierarchy. Given his public policy background, Simon presumed values in the public
sphere should be determined democratically, but without justification, he argued that in
the private sphere the organization’s values should be set by the Board of Directors (AB:
61), so conflating values with organizational purposes and setting off the long debate with
his many critics in the public policy arena for confusing ‘is’s’ and ‘oughts’ (AB: 68)(Argyris,
1973: 255; Bendor, 2003; Chisholm, 1989; Storing, 1962; Waring, 1991).
Simon’s redefinition of values was a remarkable simplifying move that led directly to
tractable theory—but it was also a heavily political reconstruction of the lay notion of
value. It implied a deep commitment to and uncritical acceptance of democratic capitalism and its modes of executive authority (Morgan, Kirwan, Rohr, Rosenbloom, and
Schaefer, 2010: 624; Waldo, 1952). From a methodological point of view, rationality was
thereby detached from any association with the absolute of logic, or even of social institutions, and re-attached—relativized—to the organizational purposes at hand.
Rationality as generally understood was replaced by ‘intendedly rational’—pragmatic
interests displaced Platonic essences, culture, and objective science. At the same time
Simon redefined ‘unconscious’ in a way that similarly trivialized the lay conscious/
unconscious distinction: ‘wholly persuaded . . . that a theory of decision-making had to
give an account of both conscious and subconscious processes, I finessed the issue by
assuming that both these processes were essentially the same: that they draw on factual
premises and value premises, and operate on them to form conclusions that become the
decision’ (AB: 131). Mintzberg, reviewing one of Simon’s later works (Simon, 1965), was
one of the few to even notice this trivialization, let alone criticize it (Mintzberg, 1977).
Even after such heroic moves Simon’s model remained complicated by the notions of
hierarchy, sub-goal adoption and uncertainty avoidance and the problems of internal
heterogeneity explored in Organizations (March and Simon, 1958). Simon’s model could
also be compared with Thompson’s somewhat simpler model, more directly derivative
of Barnard’s. Thompson viewed an organization as a coherent and therefore bounded
system of managed activity interacting with its environment—suggesting boundary
processes acting between a rational core and a mantle of boundary-spanning uncertainty absorption (Thompson, 1967: 7). Simon needed further notions to contain
the heterogeneity resulting from distinguishing the goals at each operative’s location
from those shared as overall organizational goals (Simon, 1964a). ‘Organizational
identification’ allowed his MoI a degree of personal agency—limited on the one hand by
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the organization’s ‘values’ (instructions from above) and on the other to a ‘zone of
acceptance’ that defined individual’s identity (maybe ‘personal’ instructions from
beyond the organization’s boundary) (AB: 10, 200). Thus Simon brought the ‘incomplete
employment contract’ with its attendant inducements-contribution complex to the centre of his model, following Barnard’s similar move, even as he attempted to formalize the
relationship (Simon, 1951).
Commons’ ideas were hovering in the background, especially his Hegelian distinction
between the analytic and synthetic aspects of human economic behaviour. Barnard’s similar Commons-based definition of leadership was the executive’s ability to synthesize the
physical, social, and psychological ‘sub-economies’, and so bring a coherent organization
into existence (Barnard, 1938: 246). Simon got inside the synthesis differently, reframing
it as a fusing of (a) fact, (b) value, (c) rigorous goal-oriented decision-making, and (d)
practice-based intuition. He also saw that the possibilities for an analyzable synthesis
were contingent on a consistent epistemological approach to the parts being synthesized.
So while today’s sociologies and psychologies are often post-modern—infused with
Continental/European philosophy—rich in methodological disputes that reveal contrasting and sometimes incompatible philosophies, Simon’s notions remained largely
positivist. It followed he could look directly at empirical examples of experts synthesizing
their bounded knowledge as they generated ‘heuristics’ (Hoffrage and Reimer, 2004).
Aside from issuing clear instructions to be understood rationally, the ability of superiors to influence the individuals comprising the organization also depended on these
individuals’ ‘docility’ or ‘teachability’, a notion of the adaptive individual’s psychology
that Simon again took from Tolman (AB: 97, n. 185; RHA: 65). Organizational identification was not mere subjugation, for Simon’s MoI retained a measure of personal agency
and individual identity. It was about individuals voluntarily taking up the organization’s
complex of task-specific goals, more obviously so than in Parsons’s model. A further
simplifying element of Simon’s model was his matching the hierarchy that comprised
the organizational problem-solvers’ ‘internal reality’ with an assumption that ‘external
reality’ was likewise organized hierarchically, and so decomposable and comprehensible
at the various operative different levels. The result was that each person worked within
the bounded ‘bubble’ of her/his own task- and purpose-specific ‘intended rationality’,
and engaged a local partially comprehended part of the world. The senior executives
managed the organization’s values to relate these bubbles and bring them together
behind the Board’s chosen purpose, even as each individual, retaining a degree of agency
within her/his bubble, engaged the organization voluntarily. Simon illustrated this complex inter-dependence and direction by telling of the major’s ability to influence the battle by ‘directing’ the machine gunner’s hand (AB: 2).
AB was rich with insights about organizational behaviour and had many further subtleties and complexities. But from this short analysis we can sense considerable tension
between (a) Simon’s humanist rejection of bureaucratic power and its subjugation of
the individual, and (b) his uncritical acceptance of the organization’s purposive
(Gesellschaftlich) nature that made it possible to tie rationality into the organization as a
collective capability. Note the concepts of limited or bounded rationality seemed applied
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principally to the operative within her/his bubble rather than to those at the Board level
who set the organization’s values, and who were thereby given the freedom to detach the
organization from the kinds of external social or political concerns that stakeholder theory now explores (Freeman, Harrison, Wicks, Parmar, and de Colle, 2010). Hence, also,
the tension between Simon’s positivist tendencies and flirtation with ‘efficiency’ throughout AB (Simon, 1953c, 1964b) and his originating humanism. The final element that
helped this all hang together was Simon’s handling of time, learning, and memory (AB:
67), and here his epistemological distance from neoclassical economics was especially
clear. Bounded rationality was also a metaphor for arguing that resources were never the
‘strategic factor’, that human beings’ time, attention, learning, and memory set their limits (RHA: 79) (Frank, 2004: 42), the axiom Penrose later put at the core of her theory of
the growth of the firm (Penrose, 1959: 16n). Simon sought descriptive analyses that could
help individuals develop ‘working rules’ to shape and improve their practical decisionmaking rather than ‘normative’ timeless laws reflecting neoclassical economics’ ‘physics
envy’ (Simon, 1972). Again Commons was an influence as he took the notion of ‘working rules’ from Veblen to have them re-emerge in Simon’s analysis—and in Nelson and
Winter’s terminology of ‘organizational routines’, duly noted in Simon’s added commentary (AB: 89; RHA: 41) (Commons, 1924: 137; Lazaric, 2000; Simon, 1953c).
Thus the analysis in AB is hung within a contingent framework of time-dependent
interaction between individuals, their intentions, their knowledge, and their experiences,
as they act purposively in a specific context. Given the inclusion of time, it presupposes
individuals learn from their experiences, a reflection of Dewey’s philosophizing. In short,
AB was not the simple positivist science-based story sometimes suggested or even the
‘received wisdom’ of substituting ‘administrative man’ for RM. On the contrary, AB’s critique and insights sprang from a carefully managed epistemological ambivalence and
duality that called for an agentic experience-informed synthesis at every point of the
organizational purpose’s application: (a) in each operative’s bubble, as the role-occupant
synthesized fact and value together with her/his voluntarily contributed agency, and (b)
at the macro-organizational level where the Board synthesized their own agency and
freedoms of action along with the complex physical, social, and psychological constraints
suggested by Barnard’s analysis of the executives’ function. Simon’s organization was fundamentally a body of intendedly rational and inter-related synthesizing and learning
practices hung between incommensurate interfaces: one, the incompletely known socioeconomy, the other the psychologically defined and incompletely known individuals
whose memorizing, agency, and practice gave the organization its only ontology. These
syntheses could only be achieved by human beings—most definitely not by computers.
To summarize this bit of the discussion, in AB Simon created an open analysis or framework by rejecting the presuppositions of rationality and certainty that would pull actor,
context, and interaction into a coherent deterministic analysis, and then by adopting three
very different axioms, none ever fully formulated: (a) bounded rationality and satisficing
as metaphors for his MoI, (b) hierarchy and partial decomposability as a metaphor for the
ontology of his MoI, its organization, and its world, and (c) experiential remembering and
learning as a metaphor for their interaction and its results. While these axioms were
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obviously under-specified in AB, Simon believed they were neither tautological nor nested;
rather they mutually clarified and stabilized each other, as do the axioms in a natural science theory such as F (force) = M(mass) x A(acceleration). Thus decomposability was a
corollary of bounded rationality, for individuals could never hope to know anything if they
had to know everything before grasping anything. Things had to be decomposable (chunkable, memorable) before human knowledge of them would be possible (Gobet et al., 2001;
Simon, 1974). Experiential learning likewise implied the time-wise decomposability of
knowledge—things (or chunks) were learned seriatim, the present separated from past
and future. For boundedly rational people, time was lived in this present through their
experiencing, remembering, and learning. The open-ness ensured learning let the individual sustain her/his agency despite her/his docility and partial subordination to the
organizational hierarchy’s deliberate purposiveness, views, and values.
The three axioms showed Simon’s methodology had little to do with the economists’
pursuit of theory that presumed individual behaviour could be fully and timelessly
determined by the situation’s facts or causes. They were the groundwork for Simon’s philosophy of organizations. His humanism led him to define the actor’s world as time-full,
bounded, and therefore under-determined, and he thereby placed the synthesizing individual’s ‘free’ choices or agency at the very centre of the analysis. He worked towards an
empirically testable philosophy that considered scientific knowledge as useful to guiding the problem-solver’s ongoing synthesizing—but useful for supporting managers
rather than prescriptive. He had no intention of displacing them with formulae or algorithms. From his undergraduate days, Simon’s hope was to help policy-makers, public
or private, make better decisions. His research programme was empirical—to observe
behaviour and memorizing, and distil the successful experience-based and contextspecific heuristics observed into ‘working rules’. In this his project did not differ much
from Taylor’s Scientific Management and its attempt to codify workplace ‘best practices’
(Spender and Kijne, 1996; Taylor, 1911, 1912). Indeed, Waring argued that Simon was our
leading post-Taylorite theorist, and that for ‘all of his departures from Taylorism, he did
not go beyond its basic psychology and premises’ (Waring, 1991: 50).
AB’s weakness was not the under-specification of axioms that prevented their being
distilled into prescriptive theory, as some might have hoped were AB ever seriously critiqued by positivist management scholars rather than merely accepted—or rejected, as
it was by many public administration scholars (Storing, 1962). Rather, its most obvious
weakness lay in its operationalization, the difficulty of separating the particularities of
context that shaped an individual’s synthesizing from their own desire or agency, and
then discerning the extent to which their agency had been contributed to the organization; all aspects of what is now called the ‘structure and agency problem’ (Archer, 2000,
2003). At bottom, Simon’s positivist inclinations and dependence on empirical inputs
prevented him getting to the agentic core of the dynamic quasi-constructivist MoI he
adopted after he dumped RM. Comfortable as he was managing the ambivalence and
duality of his position successfully, he seemed unaware of, or unbowed by the severity of
the philosophical and methodological task he had set himself. Methodologically, it
seemed he believed Tolman’s behavioural psychology was rich enough to provide an
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answer. Thus, rather than more of the ‘arm-chair philosophizing’ he noted in his 1944
PAR paper, he took a behavioural route to narrow the context studied from the ‘buzzing
confusion’ of the real world into the artificialities of the psychology lab. ‘maze’—like the
mazes he long regarded himself as negotiating (MML: 86, 180; BRA: 14)—and then to
make scientific sense of the micro-behaviours observed (Simon, 1991b:xvii).
Before going further into Simon’s work and thought it is useful to step back once again
to consider how scholarly reputation arises—especially when it does so rapidly enough
for a scholar to be recognized and honoured in her/his lifetime. The comments can illuminate and balance the specificities of Simon’s thought, those considered so far, against
the vigour with which he published—his principal means of telling others.
Assessing academic giants
The paean to variety is the obvious commonplace in the Simon literature, embracing as
it does, computing science, AI, psychology, management science, public administration,
and economics (Finch 2003); the philosophy and methodology of science, applied mathematics, various aspects of economics, computer science, management science, political
science, cognitive psychology, and human problem-solving behaviour (Boumans, 2001: 75);
or management science, political science, AI, information-processing psychology, operational research (OR), statistics, economics, computer science, psychology, education,
philosophy of science, biology, and the science of design (Gobet and Chassy, 2009;
Gobet et al., 2001) or, more succinctly, that Simon was a ‘modern Leonardo da Vinci’ or
a true ‘Renaissance man’ (Andresen, 2001; Secchi, 2011: 14).
Heuklom’s analysis (Heuklom, 2006) puts numbers to these notions just as Cowan’s
abbreviated (!) bibliography helps make the point (Cowan, 2007). Heuklom, familiar
with Cowan’s work, identified the Simon oeuvre—excluding translations, re-issues, and
journalistic items—as comprising 684 distinct publications (228 co-authored with 117
other people) ranging across:
Cognitive Psychology
Business & Organization
Computer Science
Economics
Political Science
Philosophy
Mathematics and Statistics
Sociology
Engineering
Social Psychology
Biology
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94
83
79
73
52
26
12
7
6
4
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Volume, of course, is not the sole determinant of academic impact but it certainly
helps, as we know with Picasso, Wundt, Binet, and Dickens. There were the various
awards Simon garnered aside from his Nobel: the Turing Award (with Allen Newell),
the ORSA/TIMS John von Neumann Theory Prize, the National Medal of Science, the
American Psychological Association Lifetime Achievement Award, the Dwight Waldo
Award from the American Society of Public Administration, and more too numerous to
mention—including one from our own Academy of Management (Assad, 2004). He was
awarded twenty-four honorary doctorates and was one of the few foreigners to be
inducted into the Chinese Academy of Sciences (in 1994). He was a Life Trustee of
Carnegie Mellon University and a campus building was named ‘Newell-Simon’. Dunn,
following Merton’s sociology of knowledge methods, examined how AB had impacted
public administration texts. He concluded that AB failed to inspire a ‘new paradigm’
(Dunn, 1988: 381). Citation scores, especially problematic in management, offer another
measure of scholarly impact (Macdonald and Kam, 2007). As I write, AB shows over
15,000 hits on Google Scholar, the 1955 QJE article ‘A Behavioral Model of Rational
Choice’ scores 7,000, the 1956 Psychological Review article ‘Rational Choice and the
Structure of the Environment’ scores 2,030. Many would regard these, along with
Sciences of the Artificial, as Simon’s principal works. The scores compare with Coase’s
1937 ‘Nature of the Firm’ at 21,100, Williamson’s 1973 Markets and Hierarchies article at
23,000, Porter’s 1980 Competitive Strategy at 21,450 and Barney’s 1991 Journal of
Management article at 23,400.
In spite of the volume of Simon’s publications and his huge academic profile, many
commentators noted his project seemed not to have fulfilled its promise—yet (Ando,
1979; Bendor, 2003; Callebaut, 2007; Simon, 1997: 269)(Campitelli and Gobet, 2010).
While oft-dubbed one of the ‘fathers of AI’ (Andresen, 2001; Baber, 1988; Frantz, 2003;
Pomerol and Adam, 2005), Simon is not memorialized by anything like von Neumann’s
‘computer architecture’, Turing’s ‘machine’, the Church-Turing Thesis, or Shannon’s
‘entropy’. The Logical Theorist (LT) and General Problem Solver (GPS) Simon built
with Newell are little more than museum pieces of historical interest as the first running AI programmes (Klahr and Kotovsky, 2001). His Nobel speaks of significant
impact in economics—but its nature remains far from clear (Ando, 1979; Baumol, 1979;
Loasby, 2004). We also know Simon as one of the fathers of behavioural economics
(Schwartz, 2002), but no theory of his has the fame of Tversky and Kahneman’s ‘prospect theory’ (Camerer and Loewenstein, 2004), nor was Simon’s work cited in their
early papers (Campitelli and Gobet, 2010; Tversky and Kahneman, 1974). Even bounded
rationality and satisficing, the centrepieces of his Nobel commendation, remained
‘much cited and little used’ (Fiori, 2011; N. J. Foss, 2003b; Morçöl, 2007; Sturm, 2012).
How come?
Larkey pointed out that Simon’s commitment to practical policy issues, to worldly
relevance rather than to academic rigour, set him on a difficult course of perpetual
criticism and empirical engagement with detail (Larkey, 2002). Simon did not choose
the scholastic escape route into sweeping generalities and high theory, especially the
one marked ‘subjective expected utility’ (RHA: 12), or even the simplifications the pos-
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tulates of optimization and equilibrium offered (Stewart and Clark, 1994).
Intellectually doubtful and restless, Simon was never wholly satisfied with either the
theoretical or empirical foundations of the subjects he studied. He thought that to
declare an interest in human decision-making and then adopt RM uncritically was to
accept defeat from the get-go—inter alia an implausible, simplistic, dehumanizing
dismissal of our own experience—and all for the sake of a disciplinary rigour that was
not worth achieving.
Larkey argued that Simon’s notion of rigour reflected the lesson he learned from
Schultz: ‘rigor was in the correct application of any language, device, or methodological procedure that would, for the purpose of building and testing explicit models of processes, advance his understanding of how human beings decided and
solved problems . . . Simon’s rigor is the rigor of understanding how something
works to the extent that you can build and test a model by putting it to a task in a
specified domain’ (Larkey, 2002: 243). Especially early in his career Simon brashly
co-opted every project, typically done for a client such as RAND, as yet another
opportunity to advance his own agenda—all the while hanging onto the multidisciplinary approach he learned at home but developed scholarly knowledge about as a
Chicago student. There was considerable professional risk here, for abandoning RM
drops the researcher into an epistemological morass that could spell the end of many
an academic career. Perhaps Simon, not only hugely self-confident but also having
made his name early in public administration and the theory of organization and
behavioural economics—even by 1952—concluded he could indulge himself and
follow his own star. Without doubt, he spent the next half-century working flatout—but what was there to show for it? How do Simon’s achievement’s compare with
other ‘greats’? Was he a genius (Perry and Rainey, 1988)? What actually underpins
his reputation?
We tend to take academic reputation for granted, without enquiring into how it is
gained (Frey and Neckermann, 2009; Simonton, 1988). In fact there is a cottage industry in evaluating seminal figures beyond mere biography. Thus Albert’s work on genius
considered how great academic achievement came about, drawing on Galton and
Freud (Albert, 1975). He noted Galton’s five interlocking propositions about genius: (a)
evident eminence, (b) reputation as a leader or originator of ideas, (c) even given the
variability of contemporary opinion, the person’s long-term reputation, (d) that being
based on real achievements, (e) these being the result of ‘real ability, that blend of intellect and disposition that urges a man to perform the acts that lead to reputation—
capacity, zeal and the power to do a great deal of laborious work’. Without doubt, Simon
met these criteria in spite of moving from one discipline to another like a ‘gadfly’
(Velupillai, 2001). In contrast, Freud’s criteria were less directed to professional harmony, he showing more evidence of the ‘genius’ required to run against the stream and
be a ‘detonator of change’ –though Simon had more than his share of this too.
While both Galton and Freud were ultimately dissatisfied and gave up trying to analyze ‘genius’, Albert pressed on to argue ‘the key ingredient . . . is productivity—large in
volume, extraordinary in longevity, more or less unpredictable in content’ (Albert, 1975:
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144). Many empirical studies of academics who stand out support the connection
between publication volume, professional impact, and recognition, though the causality
is unclear (e.g. Sackett, 2001). There seem to be few connections with IQ—provided the
subject’s is over 120 (Albert, 1975: 147). We hope that academic reputation follows from
the dislocation or reorganization processes that lead to a major shift rather than mere
extension or professional politicking. Success seems not much influenced by either seeking after (as in Freud’s case) or ignoring eminence (as in Einstein’s case). Albert’s
approach was ‘institutional’ and emphasized the social impact of the work over any criteria that might be independent of time and place. He focused attention on social interplay of the work’s producer and the context’s receptivity. Likewise, Lekachman argued
‘In economics it is reasonable to term a book truly significant if, after its appearance,
economists think differently, students are presented with a fresh set of textbooks,
politicians hear unexpected voices, and perhaps most important of all, the public at large
comes to expect a different set of government policies and a transformed attitude . . . Keynes rewrote the content of economics and transformed its vocabulary’
(Lekachman, 1968: 8). Albert argued:
Important work is6 ‘transactive’. Its capacity for developing and being significant
over decades is necessary; by doing so it attracts new generations of adherents . . . at
several levels: cognitive, cultural, educative, as well as political . . . long term productivity helps overcome others’ resistance . . . (and) makes time a critical variable . . . It
often takes a generation of education to overcome resistance . . . Since most published work, at least in the social sciences, does not receive immediate or large-scale
attention the importance of persistence is clear. (Albert, 1975: 146)
He concluded:
Genius is not a blessing, danger, or a fortuitous occurrence: it is not a trait, an event,
or a thing. Rather, it is, and always has been, a judgment overlaid with shifting values. What genius has often been based on is far more solid . . . creative behavior
which, although highly personalized, is made public and is eventually influential
over many years and often in unpredictable ways . . . Of all the qualities attributed to
persons of genius the most remarkable, along with perceptiveness, are continuity,
endurance, productivity and influence. (Albert, 1975: 150)
Given Simon did not change economics, public administration, or even organization theory we need some other way to categorize and analyze his contributions and
discern whether they were profound, such as the disciplinary changes noted by
Albert, or peripheral, even as they managed to attract considerable attention during
his lifetime. Andresen considered Simon’s contributions fell into four principal
areas: psychology, economics, management science, and computer science, and he
saw these as discrete (Andresen, 2001). Crowther-Heyck, knowing well the breadth
of Simon’s interests, connections and writings, as well as the historical flow of his
career, focused on Simon’s hunt for an alternative MoI to ‘stand up against’ RM, and
differentiated an early from a late period. In the first, Simon’s central contribution
was the MoI Crowther-Heyck dubbed homo administrativus—the basis for AB
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(BRA: 96). In the second, following Simon’s work with Newell, the development of
LT and GPS and the publication of Human Problem Solving, (Newell and Simon,
1972) the MoI was homo adaptivus, the ‘finite problem solver’ (BRA: 255) (Andresen,
2001:71). So one way to survey Simon’s intellectual arc is to wonder whether these
two periods—and the two MoIs—share a common underpinning or, instead,
showed his rejection of an earlier jejune approach. Did AB capture Simon’s overall
philosophy and thinking, or did that evolve considerably later? Specifically, to what
extent did Simon’s involvement with the Cowles Commission, RAND, and Allen
Newell lead him into new thinking or new politically driven accommodations
(Amadae, 2003)? Were Simon’s contributions evidence of a single Lakatosian
research programme, or did they range opportunistically between the various disciplines that honoured and afterwards ‘claimed’ him?
Carnegie times (and Inventing AI)
Simon arrived at Carnegie in 1949, and rapidly found a home using a typically Simonian
search routine (BRA: 329, MML: 136). He was already plugged into the political-academic complex that was transforming US social science as part of the nation’s response
to the Cold War (Amadae, 2003; Hounshell, 1997, 2001; Peck, 2010; Waring, 1991). He
got to work helping build the Graduate School of Industrial Administration (GSIA)
into a social science research school that could compete with Chicago, Harvard,
Wharton, or Stanford, as well as the government sponsored ‘think-tanks’ like RAND
(BRA: 143, MML: 135) (Crowther-Heyck, 2006). His vision was of an institution that,
equipped with the most up-to-date scientific techniques, could make real progress
towards the synthesis of organization theory, finance, economics, psychology, and
decision science that Weber, Parsons, and the other ‘grand theorists’ had failed to
achieve (e.g. Cyert and March, 1963: 16; Khurana and Spender, 2012). Part of the vision
was to inject analytic rigour, in contrast to Harvard’s case-work (MML: 154). Part of the
vision recalled Merriam’s multi-disciplinarity at Chicago (Simon, 1985a) and, as if to
prescribe it for others, he later argued that everyone on the faculty should be able to
teach an introductory course in each of the school’s subjects. Aside from Simon’s intuitions about what was involved in building GSIA as an exemplary organization (Khurana
and Spender, 2012; Revans, 1967; Simon, 1967), his 1952 RES ‘Comparison of
Organization Theories’ paper formalized the paradox that under conditions of perfect
competition and full rationality, the distinctions between market-based and organization-based theories collapse (a different way of pointing out that administration would
then be unnecessary), while under the typical organizational conditions of bounded
rationality and imperfect markets the distinctions were probably unbridgeable, save
through a rigorous programme of empirical research along institutionalist lines
(Simon, 1952b: 44).
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The Cowles and RAND connections established during his Chicago years were
strengthened, and ensured a plentiful flow of funded research work from RAND or the
government or, as in Charnes and Cooper’s seminal OR work for Gulf Oil (Charnes,
Cooper, and Mellon, 1952), from the larger private sector firms. But Simon’s feistiness
soon generated friction with the other GSIA economists who did not appreciate him
‘preaching his AB heresies’ (MML: 144) and this led to his ‘retreating’ from his administrative roles (he had a somewhat problematic term as Acting Dean and Department
Head (MML: 150)). Increasingly, he focused on his own research programme: ‘During
the first six years of my research at GSIA I filled out, empirically and theoretically, the
decision-making framework I had laid down in AB’ (MML: 161). He plunged into the
Controllership Study and, with his GSIA colleagues Cyert and March, a Ford-funded
project that led to the Behavioral Theory of the Firm (Cyert and March, 1963), plus joining into and administering many other studies. While consulting for RAND, he produced the 1953 report (Simon, 1953a) that evolved into the 1955 QJE paper ‘A Behavioral
Model of Rational Choice’ (Simon, 1955)—often cited as the basis for his Nobel for its
explicit call for mainstream economics to adopt a realistic psychology of decision-making (MML: 165) (Cruise, 1997; Secchi, 2011). In spite of the great span of his working life
Simon later wrote that 1955 and 1956 were ‘the most important years of my life as a scientist’ (MML: 189).
In the 1955 QJE paper Simon adopted the quasi-formal ‘mathematical format with
which economists are comfortable’ (MML: 165). The essence of decision-making was to
be found in ‘the properties of the choosing organism’ rather than in the characteristics of
the ‘environment of choice’, an aspect left to a second paper—‘Rational Choice and the
Structure of the Environment’—that appeared in Psychological Review in 1956 (Simon,
1956). This pair of papers—which Simon later implied should be seen as scissor blades
(Simon, 1990: 7)—was pivotal to Simon’s achievement and reputation. Given the standard story credits Simon with introducing ‘bounded rationality’, it is interesting to note
neither paper mentions it. Though he used the term in his 1957 Models of Man (Simon,
1957: 198) it did not move into wider usage until he wrote a new Introduction for AB’s
secnd edition (Simon, 1958a: xxiv), updating the wording from the ‘rational choice’ he
used in the QJE paper (Klaes and Sent, 2005; Simon, 1953a).
In the 1955 QJE paper Simon argued that human decision-makers made process simplifications, such as adopting ‘pay-off ’ functions and ‘aspiration levels’ that enabled
them to make a choice once these criteria were met. On the one hand, these simplifications were neither explained nor justified, but on the other, they were clearly changeable
in the light of the decision-maker’s information gathering and experience, reflecting the
‘docility’ of AB’s MoI. Experiencing, remembering, and learning changed Simon’s
MoI—RM, of course, is unchangeable and never learns anything—simply being fed with
new inputs to compute. The contested economic notion of ‘utility’ hovered in the background (MML: 360). Simon noted that whether the simplifications were productive or
not ‘depended on certain empirical facts’ about the decision-maker’s situation.
Remarkably, the paper’s note 4 and conclusion section also mentioned the possibility of
using a computer to ‘simulate’ the kind of human decision-making found in IQ
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tests—signalling the arrival of the new MoI that would mark a radically new phase of
Simon’s thinking. The companion 1956 Psychological Review paper leveraged off the 1955
QJE paper as Simon sketched a practical psychology of decision-making and focused on
the ‘approximating mechanisms’ adopted. He drew an analogy with an animal hunting
for and storing food, and only searching for more when it needed it. He concluded:
‘Provided that the needs of the organism can be specified at any given time in terms of
the aspiration levels for the various kinds of consummatory behavior, the model can be
applied’ (Simon, 1956: 137).
Simon’s claim that these papers—and the other papers from this crucial period in his
life, 1952 and 1953 especially—‘filled out the framework laid down in AB’ is curious
(Simon, 1952a, 1952b, 1952c, 1952d, 1952e, 1953a, 1953b, 1953c, 1953d). There was clearly a
marked evolution from the MoI in AB—which Crowther-Heyck dubbed homo administrativus—to the new MoI homo adaptivus that began to emerge in these papers. Aside
from the 1956 Psychological Review paper’s focus on the decision-making ‘animal’ rather
than on a living human being, there was a shift in Simon’s notion of ‘value’. The previous
notion of ‘values’ as those aspects the decision-maker was unable to treat as ‘facts’, which
in AB were made the purview of the Board, disappeared. To his new MoI, values were
simply quantities (Simon, 1955: 104). This MoI had no need of the value-inputs that were
central to AB and whose management was the core of his previous theory of administration. The problems of administering human beings who had both factual and valuational needs were no longer central. In short, the underpinning philosophical position
Simon had shared with Barnard seemed to dissolve. His new MoI was more an automaton of limited information gathering and computing capability whose only functionality was logical processing, where this was seen as computer-like (Katsikopoulos and
Lan, 2011). (It) did not live in the messy political world of practice invoked in AB. Simon
mentioned Grey Walter’s mechanical turtle (Simon, 1956: 130, n. 8), and had earlier been
excited about Ashby’s similar work (MML: 114; BRA: 185). The bottom line was that during Simon’s early years at Carnegie, far from ‘filling out’, the value-needy MoI of AB crystallized into a ‘nobody home’ logic machine. Artificial intelligence had arrived (Baber,
1988). Simon transformed the challenge of defining AB’s MoI into that of importing a
real human being’s rationality into a machine—with a sulfurous whiff of Frankenstein.
Simon wrote of his excitement about the advances in mathematics and game theory
in the 1940s and 1950s that primed him for this later switch of MoI (MML: 107). As early
as 1950 he made a boostering speech to business executives about the prospect for computing in business (MML: 198), a theme that led to The New Science of Management
Decision (Simon, 1960) and The Shape of Automation for Men and Management
(Mintzberg, 1977; Simon, 1965). As every ‘nerd’ knows, we get excited, even obsessed,
with our tool-gadgets and Simon confessed some ambiguity about the tension between
his monomania and his love of mechanical methods and machines as he outlined his
‘life philosophy’ (Simon, 1992: 265). The ‘tipping point’ was his meeting Allen Newell at
RAND in 1952—with the exception of his meeting Dorothea perhaps the most significant event in his life (MML: 168) (Simon, 1965). Newell had a background in physics and
cognitive psychology (MML: 199). He had also taken classes with the mathematician
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George Polya, the author of How to Solve It who introduced him to the notion of
‘heuristic’ (Polya, 1973). Note 1 in Simon’s 1956 Psychological Review paper acknowledges
Newell’s involvement in this emerging post-AB MoI. The resulting meeting of minds
helped Simon see that computers were not mere ‘number crunchers’ but were the symbol-processing devices Turing had indicated (Simon, 1993: 1148) (Stewart and Clark,
1994). Likewise, post-Skinnerian cognitive theory suggested the human brain computed
with symbols, so the way was immediately cleared to computer simulations of human
decision-making—for symbols could be treated as a type of heuristic. Today’s ‘standard
Simon story’ presumes all this because the notion of the brain as a bio-computer has
permeated the contemporary consciousness (e.g. Gigerenzer and Goldstein, 1996;
Hoffrage and Reimer, 2004). We no longer give the assertion a second thought; especially after Simon’s challenge that ‘a computer will someday beat the world’s chess masters’ was borne out. Of course Simon and Newell were central to bringing this cultural
shift about.
Simon arranged for Newell to join him at Carnegie, notionally as his PhD student,
and together with Cliff Shaw, who had worked with von Neumann building the
JOHNNIAC computer at RAND (MML: 202), set about turning the vision of simulating a human decision-making being into reality. The appendix to Simon’s 1953 RAND
paper laid out suggestions for programming a computer to play chess (Simon, 1953a).
Bringing these ideas together, Simon intuited it should be possible to surface the heuristics mathematicians used to solve geometry problems, and a joint project began to
build the LT, a programme/machine for proving the theorems of logic (MML: 203). The
key to the computer’s ‘problem-solving’ was to programme the human-generated
structural and sequential characteristics of problem-solving into the machine as axioms, digital representations of the ‘rules of thumb’ or heuristics human beings used as
they went about framing or simplifying the problems in question. So captured, these
heuristics would bring the relevant aspects of real human decision-making—in this
specific problem-solving context—into the machine. From a technical point of view
Simon’s team had to develop a new type of programming language, one that moved
sequentially, now known as list-processing (e.g. LISP—MML: 212), and crucial to artificial intelligence (AI).
Simon’s contributions to cognitive theory were based on generalizing these intuitions
about machine adaptation, memory management, and learning into the proposition
that human beings learn by developing work rules or heuristics from their experience of
acting in a bounded context (BRA: 233; ML: 190) (Collet, 2009). This model stood against
the model of learning as developing sense-data-based representations of reality. Like
Dewey, Simon posited human knowledge was experiential rather than representational,
the product of reflecting on explorative practice in a specific bounded context. The result
was not a picture of that context’s reality: it was a reconstruction of the explorer’s experience. Simon considered chess playing a good example of a structured context whose
complexity was bounded yet which required actors to develop practice-based heuristics.
Plus, once an actor had enough heuristics in place to create some ‘absorptive capacity’,
the heuristics could be regarded as mental objects that might also be acquired through
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the study of others’ chess games. An extension might be that, even without being able to
specify the processes involved in searching, perceiving, memorizing, and learning, one
could probe these mental artefacts as an actors’ rules-in-use in domains other than chess
and logic proofs—especially in economic and organizational activity. With this in mind,
Simon and his colleagues at Carnegie sought ‘verbal protocols’ from financial decisionmakers (MML: 219) (Augier and Prietula, 2007; Clarkson, 1963; K. J. Cohen and Cyert,
1965: 329; M. D. Cohen, 2007; Cyert and March, 1963 Frantz, 2003>). By the summer of
1958 research into advancing simulation into the broad range of projects that now make
up the AI field was moving fast (MML: 222). In Simon’s phrase, ‘they had climbed the
mountain’ and got a machine to make a human-like choice, an event memorialized in
Feigenbaum’s story of Simon coming into their class and announcing that, over the
Christmas 1955 holiday, he and Newell had ‘invented a thinking machine’ (MML: 206)
(Feigenbaum, 2001; Stewart and Clark, 1994).
Simon’s research programme was now converging on the work of other cognitive psychologists, and questions were arising about whether one could regard computers as
‘intelligent’, whether the ways in which a machine’s task problems were ‘represented’
were similar to the ways in which human beings addressed, considered, or solved problems in the ‘real world’. These questions, of course, had been central to philosophy for
millennia so the team’s claims to model human decision-making began to attract the
attention of professional philosophers (Bynum and Moor, 1998; H. L. Dreyfus, 1965;
Franchi, 2006; Frantz, 2003, 2005; Searle, 1987; Tsoukas, 1998). As Simon’s 1955
Psychological Review paper suggested, the decision-maker’s heuristics might also reflect
the ‘real structure of the environment’. Then what a decision-maker ‘knows’ about a context would be her/his inventory of heuristics for engaging it, rather than simply data
‘about it’, recalling the Jamesian distinction between knowledge of something and
knowledge about it. Given his multi-disciplinary background, Simon presupposed
social contexts had multiple dimensions. The work he did to produce Organizations illuminated the social and political heterogeneity and localization of organizational behaviour. Later, in a comment in a grant application that struck Simon as interesting, he
wrote: ‘Our work has led us to the conclusion that there is an intimate connection
between organizational structure and the learning of frames of reference and roles by
members of organizations’ (MML: 161). This anticipated the work on prospect theory
that Simon later championed, recommending Tversky and Kahneman for the Nobel
their work eventually attracted—even though their early papers indicated no interest in
Simon (RHA: 17) (e.g. Campitelli and Gobet, 2010; Kahneman, 2003a; Tversky and
Kahneman, 1974). The theorizing also gave Simon a way of looking at education and
educational policy. He drew on his experiences of helping build GSIA in a paper on the
problems of managing business schools (MML: 135) (Khurana and Penrice, 2011;
Khurana and Spender, 2012; Simon, 1967), and a line of writing about the application of
cognitive theories to education that he carried on until the end of his life (Anderson,
Greeno, Reder, and Simon, 2000).
Before moving to Simon’s AI-based disputes, especially to his stand-off with Hubert
Dreyfus, it is important to note that AB had already brought him into conflict with his
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erstwhile colleagues in his first field of public administration (Banfield, 1957; Bartlett,
1988; Bendor, 2003; Chisholm, 1989; Daneke, 1990; Fry, 1989; Harmon, 1998; Lowi and
Simon, 1992; Mingus, 2007, 2008; Morgan et al., 2010; Ostrom, 2008; Rainey, 1989,
2001; Simon, 1958b; Spicer, 1998; Storing, 1962). Henry perceived Simon as one of the
group of theorists who successfully attacked ‘classical’ principles in the interests of
developing a rigorous ‘science’, but who also appreciated the need to link theorizing to
policy, application, and reform (Henry, 1975: 380). But many in public administration
saw Simon as the proponent of ‘positivist science alone’; plus they were not at all amenable to the idea that social psychology would become their discipline’s new base
(Mintzberg, 1977). The most widespread disagreements pivoted around Simon’s notion
of ‘value’ and his a-typical treatment of this central concept (Storing, 1962). The contrasts flared into a remarkably public display of academic invective between Waldo,
Drucker, and Simon in the pages of the PAR (Frederickson, 2001; Simon, Drucker, and
Waldo, 1952; Waldo, 1952). Harmon showed the ruckus was at three levels; (a) an almost
accidental insult, (b) some technical disagreements but, most of all, (c) deep philosophical differences (Harmon, 1989). Waldo’s review and slap down of Simon’s suggestion that public administration should be evaluated in terms of scientific norms of
efficiency was scarcely justified. Simon came back as if recalling his boxing days at
Chicago and ripped into Waldo, writing: ‘I do not see how we can progress in political
philosophy if we continue to think and write in the loose, literary, metaphorical style
that he and most other political theorists adopt’ (Simon et al., 1952: 496). Waldo counter-punched with: ‘Professor Simon seems to me to be that rare individual in our secular age, a man of deep faith. His convictions are monolithic and massive. His toleration
of heresy and sin is nil. We must humbly confess our sins, accept the Word, and be
washed pure in the Blood of Carnap and Ayer’ (Simon et al., 1952: 501).
Aside from the boxing, the technical issues were that Waldo and Storing saw public administration as the challenge to reflect public values in social action, while
Simon’s concerns were primarily methodological, on efficiency and his ‘hardening’
agenda. On the one hand were concerns about the nature and role of the public sector, on the other ideas about organizational efficiency. But in the end, it was their
philosophies that divided them—Simon’s positivist tendencies colliding with Waldo’s
Deweyian pragmatism (Cruise, 1997). Another way to put their differences was that
Simon’s focus was on decision-making—which he saw everywhere—while Waldo
and Storing focused on the practical politics of a democratic system that embraced
divergent value systems (Perry and Rainey, 1988; Rainey, 1989; Waldo, 2007). Waldo
more or less won the fight and, ironically, had Simon contribute a chapter on efficiency to his popular book of public administration readings (Simon, 1953c). More
tellingly, Waldo stayed in the public administration field, rising to become its most
highly regarded figure, especially after he organized the 1968 Minnowbrook conference at Syracuse that precipitated public administration theorizing’s turn away from
‘physics envy’ and back towards ‘proactive administration’ with ‘positive values’
(Cruise, 1997: 355; Marini, 1971). Simon, on the other hand, seemed to move away
from public administration entirely—some said he abandoned it—even though he
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was awarded the American Political Science Association (APSA) community’s
Dwight Waldo Award for his contributions to the discipline in 1995.
The battles in AI
While Waldo and Storing established one battlefront in public administration, commanding the attackers on a second front was Hubert Dreyfus, a professional philosopher in the Continental tradition, considered the leading US interpreter of Husserl,
Heidegger, and Foucault. Dreyfus completed his PhD in philosophy at Harvard in 1964
and began teaching at MIT, whence he was drawn into the RAND network to consider
the possibilities and limitations of digital computing. He had feelings on the matter
already, having attended a talk by Simon in early 1961. He was shocked by Simon’s claim
that computing was about to solve some of philosophy’s longest-standing problems—
and at the hubris of the series of RAND report and papers Simon had been writing with
Newell (Newell, Shaw, and Simon, 1957; Newell and Simon, 1972; Simon and Newell,
1958a, 1958b, 1962), including the famous claim that by 1967 a computer would beat the
world’s leading chess payers. Dreyfus’s resulting RAND report Alchemy and AI (H. L.
Dreyfus, 1965) caused an uproar in the nascent AI community—eventually being
reworked into the best-selling What Computers Can’t Do (H. L. Dreyfus, 1972, 1992).
Echoing Mintzberg’s earlier points, Dreyfus attacked the biological, psychological, epistemological, and ontological assumptions adopted by the emerging AI community,
arguing their theoretical implications and empirical validity were much in question (H.
L. Dreyfus, 1987; H. L. Dreyfus and Dreyfus, 1986, 1988). Many took his arguments as
accusations that the AI community had simply adopted the wrong kind of machine, an
impression enhanced by Dreyfus’s work on learning with his brother Stuart who was
already working at RAND as a JOHNNIAC programmer. They suggested a five-stage
progression in intelligence from awareness to skilled performance (S. E. Dreyfus and
Dreyfus, 1980). In time the AI field abandoned many of the assumptions Dreyfus identified, such as the likeness of neurons to digital switches.
But it took Dreyfus a while to appreciate the real nature of his dispute with Simon and
then to take up a position of strategic strength that focused on the undeniably different
ways in which they presumed human beings and machines could ‘know’. The heuristics
Newell and Simon were programming into their machine (early expert systems) were
compensations for the fact the machine could not experience its world as human beings
experienced theirs or, rather, the machine’s world is not ‘lived’ and so does not provide it
with what we call experience. As Turing pointed out, the computer is a ‘universal
machine’ and, as such, detached from our lived experience. Simon and the other AI
researchers took note of the machine-learning work of Ashby and Grey, and that sensory feedback and control systems engineering offered a powerful metaphor for learning (MML: 194,195). But everything that was to count as knowledge had to be subsumed
under the machine’s purposive activity, the programmer’s intent that framed the ‘lens’
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through which the machine could learn. The machine was not capable of considering
events unrelated with this goal, so was not aware of the life-world or context that lay off
the path to its goal—key aspects of the Heideggerian philosophizing that shaped
Dreyfus’s views. Simon’s oft-used maze and ant food-seeking analogies simply presupposed the purposiveness of all behaviour—unlike real human beings that also ‘live’
(MML: 409) (Callebaut, 2007; Simon, 1955). From a technical point of view, the consequence was that a machine had nothing to ‘fall back on’ should its programme halt when
it was no longer able to process the inputs it had been given. In this situation—one of
Knightian uncertainty—human beings typically (but not invariably) fall back on some
‘background knowledge’ peripheral to their goal seeking and look there for ‘workarounds’.
Polanyi’s writing and popularization of ‘tacit knowledge’ have sensitized us to alternative ways of knowing (Polanyi, 1962). It has helped us recapture something of the
Enlightenment philosophers’ distinction between reasoning and judging, or the Kantian
distinction between analysis and synthesis, and how these lead to distinguishing facts
from values—matters positivism disregards. The Procrustean treatment of human and
social values that so distressed public administration theorists about Simon’s work was
precisely the same move as the AI researchers made as they ignored the difference
between machinic existence and human living (De Landa, 1991, 2011; Guattari, 2011).
The implication that the world beyond the animal’s explicit goal-seeking was irrelevant
would be fine if living human beings could be simulated as never doing anything other
than seeking a single overarching goal or as sufficiently omniscient to resolve any complexity or incommensurability in a lived world of multiple goals (Baudrillard, 1994).
Again, ironically, Dreyfus’s critique demonstrated that Simon’s notion of bounded
rationality lay in the lived partially known world, and only made sense as a description
of the condition of not fully comprehending a time-full situation. A machine cannot
simulate bounded rationality or have any sense of time or awareness of whatever is unrelated to its goal. Its world is completely defined by the heuristics or rules programmed
into it, and the notion that its capability can be extended beyond its previously defined
goals, and so simulate the human experience of living and learning, simply overlooked
the role of the human beings who generated the heuristics programmed into the
machine. Thus Dreyfus’s ‘debate’ with Simon and the AI field, reflected a difference of
problem-specification, a philosophical disjunction between Simon’s ‘empirical positivism’ and Dreyfus’s Continental-philosophy-based notions of consciousness and the Self
that Simon was not familiar with.
Opposition to Simon’s notions of BR and learning also arose in neoclassical economics and so circled back to his previous work there. In spite of the rising popularity of the
language of ‘bounded rationality’ and ‘satisficing’, nothing much changed. Indeed, the
powerful rational choice network that helped change the US social sciences (especially
the business schools through the Foundation Reports as part of ‘gearing up’ for the Cold
War) pushed back successfully against those, such as the Austrian economists and, perhaps, the Nobel committee, who showed any interest in psychologizing economics away
from the naiveté of RM (Khurana, 2007). RM shrugged off such critics to stand ever
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taller with the emergence of the new Chicago and Rochester thinking about ‘rational
choice theory’ and the many Nobels garnered (Amadae, 2003; Amadae and de Mesquita,
1999; Peck, 2010). Simon noted the ‘rational expectationists’ as among those who had
made GSIA ‘less congenial’ to him (MML: 250). Again, deeply ironic, those criticizing
neoclassical economics’ ‘colonization’ of the social sciences often lumped Simon’s AI
work into the same target area (Fine and Green, 2000; Mintzberg, 1977). Mirowski, for
instance, lambasted Simon for the inhumanity of his schema rather than seeing him as
an endangered humanist resisting RM’s intrinsic inhumanity (Mirowski, 2002).
Simon also recognized divergences between himself and von Neumann. Simon was
initially enthusiastic about The Theory of Games and Economic Behavior (MML: 114)
(Simon, 1945; von Neumann and Morgenstern, 1944) and after hearing him at RAND
(MML: 166). But he felt von Neumann overstated the difficulties of simulating human
decision-making, especially as he felt he already had some good chess-playing examples
to hand. He also felt von Neumann’s mathematically rigorous notion of ‘games’ ignored
human game playing practice, the ‘going beyond’ the information carried by pieces on
the board into sensing the competitor’s thinking and behaviour during the time-full
flow of play. Increasingly Simon concluded ‘game theory’ was a blind alley when it came
to illuminating human behaviour, a view he made very public much later in his Nobel
address (Leahey, 2003; Sent, 2001, 2004; Simon, 1978). Characteristically aggressive in
the 1940s, Simon had written to Morgenstern after reviewing the book (MML: 108), who
commented to von Neumann that he was at a loss as how to reply. Much later Simon
suggested von Neumann had little appreciation of AI’s potential (BRA: 206). Again, the
differences were primarily philosophical, identifying a potential third front to add to
Simon’s public battles with Waldo, Storing, and Dreyfus.
Von Neumann was a true logical positivist who presupposed the world that interested
him most was constructed logically and could therefore be understood through the
exercise of reason alone (Bochner, 1958). While, to my knowledge, Simon never elaborated on the distinction between logical positivism and logical empiricism (MML: 44),
they are crucially far from the same. Simon’s third axiom (of the three mentioned above:
bounded rationality, hierarchy, and empiricism) stressed the Deweyian principle that
human experience was the basis for all knowledge, opposite to the Platonic a priori
assumptions about the essentially logical nature of reality, disassociated from the human
condition (Sturm, 2012). For Simon rationality was one of our ways of dealing intellectually with the lived world, not with its essence, so he spoke of our ability to reason rationally as interesting only because it could be harnessed to human purposes, along with our
other attributes, such as our concern with values. Theoretical progress would depend on
improving the techniques for distilling and harnessing our experience in ways that
rationality could act on, and none of this depended on discovering any of Nature’s essential truths. Again, Simon’s disagreement with von Neumann was ultimately about their
assumptions about the nature of reality and human knowledge and its relevance to
human action. Von Neumann’s notion of game prescribed a fully knowable logically
constructed world—such as within a computer—a notion Simon felt increasingly irrelevant to his project.
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Simon’s work in his early Carnegie years was poorly captured by his comment that he
‘filled out AB’s framework’. Quite the opposite: he dug back down to his pluralist philosophical foundations and, from there, probed new ways of examining his lifelong question that would not require dealing with values—at least not in the way he dealt with
them in AB. So it is useful to appreciate Simon’s problem was not transformable into the
question that prospect theory or behavioural economics aspires to address—discovering a science of species-wide bias that can be used in lieu of RM because human
decision-makers’ behaviour failed to conform to the assumptions of RM. Proposing an
alternative set of universals (anchoring and so on) this line of thinking struck some as
saving RM from Simon’s ‘proverbs’ attack, so justifying Kahneman’s Nobel. But Simon’s
question was actually quite different—a philosophical question about Man’s humane
heterogeneity, refracted through Simon’s Barnard-inspired focus on Man as a decisionmaking and searching entity, and life as an endless flow of problem-solving about a
dynamic and never fully grasped relationship with the Barnardian world (Campitelli
and Gobet, 2010; Khalil, 2011). Vigorously pushing his thinking into a variety of relatively isolated fields or ‘islands of theory’ (BRA: 166), Simon found the locals resisting
for reasons seldom fully articulated but mainly philosophical. Thrown somewhat offbalance and frustrated by not grasping the basically philosophical nature of the repulses,
Simon sometimes failed to moderate his feistiness and inclination to invective—as illustrated in his disputes with Waldo, Banfield, Argyris, and Dreyfus. At the same time his
frustration showed in a 1977 letter to his daughter Barbara. He wrote that the questions
had been moved beyond debate, to ‘become matters of “religion” like those he debated
as a Chicago student’ (MML: 274).
Simon was not helped by his choice of vocabulary. In his Nobel lecture he referred to
decision-making in the title and throughout, perhaps to associate himself more strongly
with mainstream economics. But most economists knew perfectly well what decisionmaking meant, and it was little to do with BR. Only towards his talk’s end, when touching on his work with Newell and their huge book together, did he speak of ‘problem
solving’ (Newell and Simon, 1972; Simon, 1979: 507). There is a fundamental difference,
of course: decision-making is an abstract mechanical theory-implementing procedure
while problem-solving must reflect the context in which the problem arises and cannot
be considered without it. While a context could be defined as abstract, such as the logical
environment of Principia Mathematica, or quasi-abstract, such as the rule-bound contexts of chess or the Towers of Hanoi Simon loved to play (MML: 195, 327), his project
was about problems situated in an incompletely known socio-political world. As we
know, his initial insight as a Chicago undergraduate was drawn from the allocation of
municipal playground funds, a messy problem without determinable or even stable
rules, whose nature and universe of possible solutions grew out of the social, psychological, and political dimensions of the situation, rather than any procedural rationality.
Eventually, in the Afterword to MML, Simon philosophized about problem solving
itself, but curiously only about his own work as a social scientist, eschewing presenting
his MoI as a dynamic and creative Living-in-the-World Problem-Solver. In short, had
Simon spent as much time with European philosophy as he did with European languages,
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for he mastered a dozen or more including Swedish, used at his Nobel event (MML: 323),
he would have been better armed to plunge into the multi-front conflict his disciplinary
precocity exposed him to.
In summary, Simon was working towards a post-modern and post-bureaucratic philosophy of Man for our increasingly widespread and immersive post-Weberian machinic
administrative situations, a philosophy of the organizational life-world. He memorably
scolded his colleagues for thinking of the world as a vast market, the effect of man’s propensity to barter and exchange, suggesting instead they might better focus on man’s propensity to organize (Simon, 1991c). Positioning himself to think radically about
organizations rather than markets, radically unusual for an economist, he followed in
the noblest academic tradition, rejecting his principal mentor’s story just as Marx
‘upended’ Hegel, and Keynes ‘upended’ marginalism. In spite of Simon’s acknowledgement of others, such as Carnap and Schultz, Barnard’s thinking and cooperation on AB
shaped him deeply (BRA: 103, 114). As his mentions of Barnard in his Nobel lecture indicated, Barnard was ever-present, reaffirming Simon’s humanist tendencies and interest
in an ethically penetrated administrative world-view even as Barnard had none of the
mathematical dispositions that led Simon to ‘harden’ his enquiry and develop his three
axioms.
Simon’s and Barnard’s organizations were both of real human beings, heterogeneous,
limited, time-dwelling, and experiencing—that is, living. Their organizations were not
machine systems or blind economic agents or the mindless emergent patterns of ‘small
worlds’. Perhaps Simon moved on from such ‘childish thoughts’ as he laboured to harden
the social sciences and embrace the computer as simulating a mind (MML: 189). There is
certainly a good case to be made saying that he forgot his humanism and developed into
a full-blown positivist, but I think not. As his disagreements with von Neumann showed,
Simon saw a definite limit to the application of mathematics-based rationality and his
expectations that computers could meet his needs; again he remained ambivalent, balancing empirical rigour against humanism (RHA) (Crowther-Heyck, 2008). He argued
later that the challenge of computers is to programme them to help us live better, not to
make them function more perfectly (Spice, 2000; Stewart and Clark, 1994). Even as one
of AI’s inventors, HAL was not on his agenda. Rather, Simon saw AI as a locus for scientifically controlled experiments into human judgements based on experience and learning, distinguishing sharply between ‘hard’ AI, the belief that computers can displace
human decision-makers, and ‘soft’ AI, the belief that computers were a new tool that
could help human decision-makers cope better with their limits. In this respect the programmed computer was an instantiation of Turing’s universal tool (an abstraction)—
built only to help us cope with the limits to human reasoning, just as AB suggested the
instantiation of a generalized administrative apparatus might salvage the intended
rationality of organizational practice from the limited rationality of its participants. But
perhaps heuristics were less the phenomenon of empirical interest than some might
argue. To focus on them would suggest a huge empirical research project to inventory all
known management heuristics and present them as a complete functional model of the
individual decision-maker—a project that must fail, of course, as contexts and practices
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are always changing. We now have a keener appreciation that expert systems are only
useful when kept up to date with their supposed contexts or life-worlds. We can surmise
Simon’s mind’s eye was more on human beings’ remarkable capability to generate heuristics ‘on the fly’, at the point of collision between our freely chosen purposes and our
flawed understanding of our contexts, especially as these change. If this is somewhat
near the target, Simon was probing behind our learning for some native generative capability, somewhat like human imagination or agency—to be researched, perhaps, by
exhausting the possibilities of machine learning. Human beings would be defined as
observably able to do what machines could not.
So I suspect that what attracted Simon to ‘soft AI’—apart from the sheer fun of playing
with expensive and powerful machines that few had access to, and having a ‘boundary
object’ in his evolving relationship with Newell—was that it provided him with a relatively controllable situation in which the heuristic-generation processes themselves could
be observed and modelled, so establishing an empirical foundation for the broader study
of humans negotiating realistic problem-situations. In which case, simulating chess was
simply clearing underbrush (e.g. Simon, 1972: 165): nothing to do with suggesting Deep
Blue or Watson lay on a path to a dehumanized post-digital Big Brother-managed society.
Indeed the contrast between Deep Blue and Watson illuminated the different contexts for
which they were built and the shortcomings of both as a model of a real human being.
Deep Blue’s ‘knowledge’ derived from a massive inventory of past games, more than any
human can remember, plus some heuristics associated with great players, and, of course,
chess’s rules. In contrast, Watson was built to engage in one-shot question answering in
pre-defined and equally massively memorized domains of ‘everyday knowledge’—a far
cry from the natural language multi-period open-ended interactions of ordinary conversation. Both machines were capable of searching their memories—that is, exploring their
static programmer-defined and inventory. But neither machine ‘lives’ in or could explore
their context as a living animal does. Neither machine has any generative capability, so
both were utterly dependent on the living programmers who developed and encoded
new rules and heuristics as they judged the computers’ contexts changing—leading to
new kinds of game-show questions for Watson, more games and changes in chess-playing
techniques for Deep Blue. Again, both programmes/machines were best characterized as
aides to real world problem-solvers.
Simon was long interested in the design of tools that internalized general rules or heuristics (SA: 130) (Simon, 1988). His notion of a ready-to-hand tool was a way of articulating his humanist philosophy, spinning around a dynamic sense of bounded rationality
as empirical evidence of Man’s most fundamental heuristic-generating identity, that
remarkable capability that complemented human rationality and fleshed out Simon’s
adopted MoI. Given certainty was inaccessible to the individual mind, he saw humanly
generated heuristics as the path to improved efficiency—just as they were the source of
dynamic improvement for Adam Smith’s pin makers. Heuristics were evidence of our
going beyond the limits of rationality, living as imaginative human beings confronting
the kinds of uncertainty-induced breakdowns that brought machines to a standstill.
Here Simon’s context-specific agentic tool-making, under-specified as it was, could be
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contrasted with Habermas’s entirely contrary notion of approaching rationality through
‘ideal speech situations’ and rationality-inducing public discourse (Finlayson, 2005)—
an avenue of analysis Dreyfus did not explore.
If this take on Simon’s intuitions about heuristic-generation is more or less correct,
the assertion that his move into AI was a ‘second project’ or a ‘retreat’ that abandoned
his monomania becomes less tenable. At the same time, the proposition that Simon’s
overall project—and achievement—was primarily philosophical, somewhat obscured
behind his many unsuccessful attempts to capture BR with the positivist language he
had available (Simon, 1972), seems illuminated by (a) the nature of his major professional and intellectual conflicts and (b) the paucity of his disciplinary impact.
Legacy
So what, then, is Simon’s legacy (BRA: 324)? Going back to Albert’s attempt to define
genius, there can be no doubt that Simon changed several fields—but not economics
(Earl, 2001; Knudsen, 2003; Loasby, 2004; Munro, 2009; Nielsen, 2010; Sarasvathy, 2010;
Sargent, 1994). Even as RM rides high, there is a pervasive sense of crisis in economics,
exacerbated by the recent financial upheavals. Without doubt, Simon opened up a new
way of dealing with Knightian uncertainty, in spite of the economics discipline’s studied
disinterest in Knight’s work (Knight, 1921; Nelson and Winter, 1982:4n) and, in so doing,
created the possibility of radial disciplinary change. Indeed, given that Knight was the
dominant figure at Chicago when Simon took his economics courses there, one can surmise some relationship between Knightian uncertainty and bounded rationality, though
there is no historical evidence for this conjecture. Note 9 on page 74 and Note 4 on page
252 of AB show Simon had read Risk, Uncertainty and Profit.
Using verbal protocols and heuristics, Simon and Newell helped theorize and operationalize a context-bound post-Skinnerian behavioural psychology, and make a connection to AI and the simulation of human thought and behaviour. Simon’s deeper
impact on AI, aside from the considerable technical achievement of ‘list processing’, was
to establish that discipline’s philosophy of action or computation. Leveraging from
Polya, it offered a machine-compatible language for drawing human creativity and
agency into machines that lacked that capacity via context modelling and encoding the
heuristics humans developed, making ‘the programme the theory’ of contextualized
problem-solving (BRA: 215). As an aside, this work also helped prepare the university
environment for cognitive science and AI (MML: 248). In these areas Simon impacted
business schools worldwide, especially through the GSIA curriculum innovations and
the GSIA-driven Foundation Reports (Khurana and Spender, 2012). Many bits and
pieces of his legacy were lying around. How might we gather them up and evaluate them
as Simon sought to evaluate public officials?
On the one hand there is his Protean scholarly and professional achievement, on the
other, its curiously indefinite legacies (Callebaut, 2007; Finch, 2003; N. J. Foss, 2003b;
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Sent, 2000, 2001); or his awesome ability to move through a variety of scholarly fields
and take prisoners in each, set against the professional rejections that cut him to the
quick and remained unresolved at the end of his life (MML: 273; BRA: 134, 197, 270). His
distress here was spiced with frustration, for he felt he was articulating and ‘hardening’
the very positions his attackers adopted as they miscaricatured his efforts. Plus there is
the curious business of his move from GSIA to Carnegie’s Department of Psychology
(ML: 249)—which many presumed ‘an exile’—when he could have moved triumphantly
to his alma mater or to any prestigious university of his choice (Larkey, 2002). Or why, as
a practising philosopher of the human condition in administrative situations, he became
so enamoured of non-human computers, to the point of predicting their writing acceptable music and beating the world’s chess champion (Patokorpi, 2008)?
I have suggested Simon’s philosophizing rested on three axioms—bounded rationality (which embraced satisficing), hierarchy, and empiricism. If correct, one way of evaluating his intellectual impact is to consider how these are treated today. Taking them in
reverse order, management research and business school teaching seem ever more
closely wedded to positivist empiricism (Augier and March, 2011; Durand, 2008;
Khurana, 2007; Locke and Spender, 2011; O’Connor, 2011; Spender, 2007, 2008b; Spender
and Scherer, 2007; Starkey et al., 2009). Neither our discipline’s researchers nor Simon
paid much attention to the philosophical and methodological implications of the
Continental argument that empirical observations are ‘theory-laden’. Even as this seems
obvious in the social sciences, it raised questions about the natural sciences that set
Kuhn and a group of English-language post-positivist philosophers against the commonplace empiricism of falsificationism (Popper, 1968; Putnam, 1992). The critique was
formalized as the Duhem-Quine thesis (Curd and Cover, 1998; Gillies, 1998)—that an
empirical test only compared one’s faith in an observation against one’s faith in the outcome hypothesized, a situation that, based on induction, offered no hope of certainty
for, contrary to Popper’s claim, there is no logical asymmetry between verification and
falsification in an unbound universe of possible events—they are simply alternative
descriptions.
This becomes vastly more complicated when the observation theories that attach disciplinary meaning to experimentation protocols are not widely agreed across the
researchers’ community—giving rise to many studies of scientific knowledge generation and institutionalization. It is no secret that in the managerial sciences there is little
stability of terms, measures, and conclusions, absent which there can be little ‘accumulation’ or disciplinary progress. Pfeffer’s notorious call for ‘theory police’ brought this to
the surface once again and it will not disappear no matter how satisfied we are that we
are doing good science and are true scholars (Pfeffer, 1993; Walsh, 2011). In this respect
we might see Simon as one of the last widely influential positivist social scientists standing like King Canute, holding back the European philosophy-based erosion of empiricism that helped precipitate the ‘campus wars’. At the same time, the promise of his
devastating critique of RM has, for some unidentified reason, not yet been articulated
into a critique and reframing of our positivist methodology (N. J. Foss, 2001b). Instead,
the ‘rigorous methods’ so central to our research and journals are left standing on wobbly
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foundations and, along with those of neoclassical economics, have become an elephant
in the BSchool faculty common room (Blaug, 1984; Van de Ven, 2007; Walsh, 2011),
almost everyone conscious of the issue—yet mostly staying quiet (Bluhm et al. 2011).
Simon’s second axiom, hierarchy, has become a popular design principle, not only
because of the many citations to his engaging tale of the watchmakers Hora and Tempus
(SA: 200) (Simon, 1973: 7), but because the notion has been widely shared across other
research communities and absorbed into the emerging ‘science of complexity’ (Allen
and Starr, 1982; Egidi and Marengo, 2004; Mitchell, 2009; Simon, Egidi, Viale, and
Marris, 2008). There is rising interest in ‘modularity’, though this may not be quite the
same thing (Ethiraj and Levinthal, 2004). When Dreyfus criticized the AI field’s ‘ontological assumptions’ he also had in mind to reject the idea that ‘the world’ is an assembly
of separable ‘things’ or stand-alone building blocks that have some correspondence to
reality’s ‘facts’. An associated thought is ‘reductionism’, the assumption that the nature of
a thing resides in the properties of its discrete invariant parts. Simon was neither a naïve
realist nor a reductionist, even as many of his inclinations were positivist. His appeal to
‘near-decomposability’ attached significance to the heterogeneity within a system or
organism, in particular to the non-uniform patterns of interaction that led to patches of
intense activity separated by relatively clear regions—islands of activity (SA: 209) and
organizations as ‘green masses connected by red lines of market interaction (Simon,
1991c: 28). The metaphor sat well with Simon’s humanist MoI and, as noted previously,
hierarchy and heterogeneity had long been part of Simon’s thinking, an echo of his
mathematical work with Ando (Ando and Fisher, 1963; Ando, Fisher, and Simon, 1963;
Simon and Ando, 1961).
In the later Architecture of Complexity paper (reprinted in SA: 192) Simon defended
hierarchy on three non-mathematical grounds: (i) the empirical evidence provided by
social systems, (ii) biological and physical systems, and (iii) symbolic systems. At the
beginning of SA, Simon defined ‘artificial’ as ‘produced by art rather than nature; not
genuine or natural; affected; not pertaining to the essence of the matter’ (SA: 6), and
blithely stepped into a much debated issue, especially in the philosophy of the social sciences (e.g. Andresen, 2001: 71). The European philosophizing here goes back at least to
the work of Vico, whose influence has long been underrated (Berlin, 2000; Vico, 2000).
Inter alia, Vico argued for the distinction many sense between the physical and social
sciences, much debated among philosophers committed to the ‘unity of the sciences’
(e.g. Baert, 2005; Schlick, 1992). Vico argued that since Man cannot ‘enter God’s Mind’
(in the manner of the certainty Descartes implied with his maxim cogito ergo sum) Man
cannot ever have certain knowledge of the natural world God created. We can, however,
have profound knowledge of the things we have created—the artificial. Vico was a historian of legal systems and language, social artefacts that do not occur in Nature.
Additionally, as Kant pointed out later, the way in which we understand things must
inevitably reflect the structure, processes, and limits of the human mind—an empty
observation were we completely rational. It follows that our discussion of what we make
mirrors the only way in which we can understand what we do; the watches in Simon’s
story are ‘hierarchical’ machines because we made them so—this feature is not given by
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some external power. So about Nature we cannot say anything about her/its architecture
because we did not make her/it. We can never know for sure whether or not Nature is a
machine, as Newton argued, even though it often seems useful for us to think of it as if it
were—and herein lies the strength of our positivist assumptions and research methods.
The assumption often works—but less so when it comes to understanding the human
business of living.
Simon’s appeal to ‘social systems’ was little more than a recitation of Parsons’s mechanistic theorizing. It presumed, of course, that absent a Creator of all things, the entities at
the various levels of the ‘social system’ inherit or acquire a degree of self-organizing
capacity that provides their stability and durability. The critiques of Parsons’s theorizing
have thrown this entire edifice into question (Carnap, 1992; Fox, Lidz, and Bershady,
2005; Oppenheim and Putnam, 1992; Trout, 1992). Especially damaging is the micro
foundational critique that seeks to explain all action as the consequence of properties
existing at a single level—especially the human individual—an approach taken up by
Simon as he followed Barnard’s philosophy of administration and focused on the individual actor rather than on ‘the organization’. There was an echo of Hayek’s individualistic thinking here. Simon’s appeal to a hierarchy of symbolic systems was even more
questionable when he pointed to the chapters, paragraphs, sentences, and words that
comprise a book (SA: 199). Words matter, but pictures and signs can be symbols too, and
many cognitive scientists believe these must be taken in holistically, ‘in a flash’ as a ‘coup
d’oeil’, without being decomposed and recomposed as a TV picture is when captured
and transmitted—a process Simon recognized as ‘hot cognition’ (RHA: 29). Neither the
TV camera nor the TV set ‘understands’ or ‘organizes’ the picture.
Simon’s most problematic example of hierarchy was biological. He asserted, even
without claiming to understand the vitalism of living things, that evolution would be
more efficient if it occurred at the ‘component level’ of the organism, each level being
separated into layers of stable subsystems (Simon, 1973: 7). It was not easy to see how this
would work without reverting to naïve Lamarckism or some equally problematic teleological ideas. It is not that organisms cannot ‘evolve’ so that the relationships between
their parts change: the challenge is to explain why the evolution is in one direction rather
than in another, especially one we do not know about until some other time—a reminder
that evolutionary theory is not predictive in the sense positivist theory is and so arguably
the crucial measure of theory’s truth-content. Simon further diluted the strength of his
example by confessing to limited biological knowledge (SA: 203). Precisely the same
questions were raised by Maturana’s seeming reversal when he argued that social systems were not autopoietic, in spite of contrary assertions by Luhmann and Beer (a leading British AI theorist) (Maturana and Poerksen, 2004; Maturana and Varela, 1980).
Later work on the natural science grounds that Simon developed with Ando also suggested serious limits to the decomposability that first provided him with the analogy
(Shpak, Stadler, Wagner, and Altenberg, 2004). The point here is that hierarchy may be
less an inevitable characteristic of things natural or artificial than a mere thumbprint of
the way we humans comprehend and make things, itself a reflection of the yet-to-bediscovered way our minds work. If this is correct, Simon’s work has added little to our
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understanding of hierarchy and it remains a wobbly axiom for a philosophy of Man or
even homo administrativus.
Bounded rationality (BR) was unquestionably the jewel in Simon’s philosophical system and the key to his varied contributions (Simon, 1972, 1991a). It informed everything
in his work, just as the assumption of personal certainty informed Descartes’s philosophy (MML: 88). BR memorialized Simon’s place in the study of human decision-making
(Buchanan and O’Connell, 2006). It has been interpreted as the intuition behind team
theory, transaction cost economics, and the evolutionary theory of the firm (N. J. Foss,
2001a; Gavetti and Levinthal, 2001; Gavetti, Levinthal, and Ocasio, 2007; Radner, 2006).
Klaes and Sent traced BR’s emergence, confirming its long history (Klaes, 2000; Klaes
and Sent, 2005). Some game theorists have followed Simon’s lead and tried to make more
formal sense of BR (Rubinstein, 1998; Sent, 2004). But Man’s inability to be fully rational
was, of course, already axiomatic to Enlightenment philosophy. As Arrow noted tartly,
the intuition in economics goes back to Veblen and was not new with Simon (Arrow,
2004: 47)—notwithstanding neoclassical economics seemed to forget it. Inasmuch as
they could be distinguished, BR and satisficing were complementary aspects of a procedural rationality about what real people do in ‘lived’ contexts (Simon, 1972). Simon was
clear that BR presumed human problem-solvers were impelled to search their contexts,
driven by Lacanian desire rather than mere goal-seeking, so satisficing was a metaphor
for the otherwise unjustifiable ‘subjective’ criterion for arresting that search (Simon,
1991a). BR also draws the imagining and searching time into the analysis, denying the
universality of goals and the instantaneous clearing of markets or equilibrium. In the
previously mentioned metaphor, BR arose in the scissor jaws between the world’s complexity and the mind’s limitations (Simon, 1990: 7; Todd and Gigerenzer, 2003), and the
exposition of these ideas was clear in RHA (RHA:17). The reciprocal relationship
between BR and hierarchy was clear too.
Thus one strategy for ‘filling out’ BR was to clarify and inventory all its presuppositions and implications in the positivist manner illustrated by Deep Blue and Watson
(Bendor, 2010b; Koumakhov, 2009). Along these lines Jones illustrated four axioms or
principles of BR: intended rationality, adaptation, uncertainty and trade-offs (Jones,
2002, 2003). The combination of intention and adaptive learning was often taken to be
BR’s core message (e.g. Nelson, 2008). But the strategy elides the human agency that
deals with Knightian uncertainty, such as that of resolving the incommensurabilities in
Barnard’s or Jones’s analysis, just as it also presupposes learning converges on full (objective) knowledge of the real. As soon as BR is seen as an essentially philosophical concept
lying beyond positivism, entailing (a) abandoning the positivist notion of certainty and
(b) our human ability to act agentically, it is not easy to get beyond tautological description and into explanation and/or mechanism. It is obviously difficult to operationalize
BR, though Simon’s lifelong interest in ‘chunking’ and ‘expertise’ were among his many
attempts (RHA: 94) (Simon, 1974). His positivist inclination, frequently cited, was to
define BR in terms of some quasi-objective scientifically established physical, computational, memory, or learning capacity limits to the individual mind—as compared to RM
who had no such limits (Simon, 1972). While Simon invariably had a specific context in
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mind, the notion of BR has floated free of such constraints and many now presume
neurophysiology or the like will determine the human mind’s boundaries. Aside from
the problem of reflexivity here—how boundedly rational researchers might establish
such findings about our poor understanding of the brain and its capabilities—the
current excitement about how MRI imaging is approaching this destination suggests
clarification remains some way off.
A more promising route, somewhat like prospect theory, was to see how the differences between BR and RM might lead to observable discrepancies (Prietula and Simon,
1989; Simon, 1974; Starbuck and Mezias, 1996). Conlisk surveyed the evidence from economics, pointing out that experimental evidence of people failing to be fully rational
merely ‘confounds’, without telling us much about BR itself (Conlisk, 1996: 672). He
worked the distinction between limited resources and information and deliberation
costs, reinforcing the economists’ approach to cognitive capability as a scarce resource
and theorizable on that account. His conclusion matched that of Foss, that there was no
overarching theory of BR; at best it was a way of viewing human activity, a background
or philosophically contextualizing concept (Conlisk, 1996: 672; N. J. Foss, 2001a, 2001b).
Forester and, separately, Murphy argued that because the activity being analyzed was
socially and politically contextualized, BR implied aspects other than the physical and
cognitive, the social and political perhaps (Forester, 1984: 24; Murphy, 1992). This
enlargement spoke to Barnard’s conception of organization as arising out of the synthesis of several sub-economies—the implication being that BR would have also to synthesize the many incommensurable aspects of the BR individual’s world and not be a simple
‘falling-back’ into a limited one-dimensional comparison against ‘the real’.
Often BR became little more than another term for ‘muddling through’ or ‘doing
whatever’, with its implications of our normal experience of living in an incompletely
understood or anticipated world in which search can be costly and risky—but in which
some action seems mandated by our desire. Both Arrow and Foss noted that BR forced
attention onto the relationship between the decision-process and the context of decision
or, in other words, the empirical and contextual relationship between the heuristics
developed and their range of application. BR was a way of arguing every lived situation
called for heuristics—and bounded rational actors had to come up with ways to limit the
context of action before it could be analyzed. Indeed, all theorizing is grounded in simplifications—the theory’s axioms. It followed no heuristics were of universal application:
they were simply reflections of the heterogeneity of life’s bounded contexts. Total knowledge eliminates heterogeneity; everything’s place becomes clear. Thus, to know ‘universality’ is a restatement of certainty, precisely what is unavailable to BR. The entire
apparatus of BR, satisficing, decomposability, and heuristics, belongs in a non-positivist
contextualized analysis, one that cannot hinge on either universality (general laws) or
logical rigour. Hence, inasmuch as prospect theory’s biases are useful in practice, they
cannot be mere adjustments to the universality of RM; rather, they must reflect specific
bounded contexts of human experience. Many read prospect theory as a universal truth
about human biases, whereas it can only be meaningful and differentiated from full
rationality when the appropriate boundary conditions have been surfaced and accepted
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(Campitelli and Gobet, 2010). Interestingly, there is some empirical evidence that
prospect theory’s biases are related to the artificial contexts (psychological labs and so
on) in which they have been researched, and that they are not characteristic of everyday
living. If this is correct, the route to understanding BR as an empirical phenomenon may
lie in the direction Simon suspected, through research into the particular heuristics that
people develop in specific situations (Kahneman, 2003b; Klein, Moon, and Hoffman,
2006a, 2006b) or, as Hatchuel put it, to ‘design their lives’ (Gigerenzer, 2004; Gigerenzer,
Todd, and The ABC Research Group, 1999; Hatchuel, 2001; Todd and Gigerenzer, 2003).
Simon’s enduring habit of explaining BR in terms of the individual’s cognitive limits
rather than in terms of the interaction of individual and context did not help illuminate
its nature. Aside from the rigour implied, his habit was more a product of his micro
foundational move to stress the individual against the social or collective—which, for
economists, is the market. Similarly Bendor opened up a gap between alternative notions
of BR, charging others with confusing it with satisficing (Bendor, 2003: 435). First he
pointed out that sometimes people act quite rationally, as noted previously when playing tic-tac-toe after grasping the game’s narrow strategic options. BR came into play as
the game was ‘scaled up’ from tic-tac-toe’s trivialities towards chess’s complexities. There
is a ‘crossing point’ where the humans’ information-processing limitations become paramount, operationalized as selective perception, serial processing, multiple kinds of
information, alternatives to machine-like calculation, the reconstructive memory, limited capacity of short-term memory (Bendor, 2010a; Hatchuel, 2001). While playing tictac-toe can be ‘explained’, chess play is qualitatively more complicated—and that is the
point of chess, since it draws on very different human capabilities. Thus Bendor argued
the BR literature focused inappropriately on human beings’ shortcomings—as implied
by prospect theory and transaction cost economics (TCE)—where they are compared to
RM or computers—inappropriately—thus paying insufficient attention to the human
achievement of reasoning imaginatively under uncertainty and then learning from
experiences of real complex situations. Instead of thinking of a ‘glass half empty’ Bendor
argued that BR should be understood as a ‘glass half full’. This framed BR in constructivist terms, focusing on Man’s agentic ability to synthesize the ‘booming confusion’ of the
lived world into a computable pattern and thereby match Barnard’s concept of leadership as order-creation at the organizational level. Bendor argued most of those discussing BR had simply ignored Simon’s argument for organization as a hugely important
human-made artefact, an apparatus to help ordinary individuals make better sense of
their world/s and practices.
As soon as we think of BR in constructivist terms, as an achievement rather than as a
failing to achieve certainty (BRA: 9), we abandon the positivist position and move into
other philosophical waters—and into very different analyses (Bendor, 2003: 437; Flach
and Hoffman, 2003). For instance, BR is opened up to a feminist critique that it has patriarchal implications (Mumby and Putnam, 1992). In an interesting late paper with
Anderson and others, Simon attacked constructivism and defended an older style of
cognition theory (Anderson et al., 2000). But framing BR as like entrepreneurship and a
humanist achievement opens up questions about the place of social, institutional,
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normative, or other ‘external’ influences on the processes of its construction, and thereby
the relationship between BR and the considerable literature on ‘sense making’—amongst
which Weick’s work is the most prominent.
Weick was a social psychologist who, like Simon, was sympathetic to gestalt psychology, to Barnard’s ideas, and was appreciative of AB (Weick, 1969: 8; 2001); his methods
were unlike Simon’s and would probably have attracted comments like those Simon
made about Waldo and Banfield. Yet it may be that Weick and his colleagues did more to
clarify BR than Simon and his followers did. The social and/or institutional construction of a local rationality of practice seems as compelling a story as an individual one—
especially as Simon suggested there was little technical difference between organizational
and individual rationality (Simon, 1972: 161; 1991a). Our discipline took up ‘institutional
theory’ eagerly without noting its relationship with Simon’s question or the links back to
Commons (March and Olsen, 1989; Scott, 1987). In the opposite direction, there was no
indication that Simon paid much attention to the sense-making literature even as
Weick’s powerful analyses of the Tenerife Airport and Mann Gulch disasters were superb
empirical examinations of ‘collective BR’ at work (Weick, 1988; 2001: 100,125). Nor, again,
was there much evidence of the sense-making theorists’ interest in Simon’s individualistic analyses. Generally speaking, the sense-making analyses were less about identifying
and analyzing the content of the heuristics that had been generated than with how ignoring them or adopting inappropriate ones led to real-world catastrophe, or how people
responded to breakdowns to create new rules of action when the context changed in
ways that rendered the previous heuristics useless (Hutchins, 1995; Van de Ven, 1993;
Weick, 2001: 100, 125; Weick and Roberts, 1993).
Towards the end of his life Simon was encouraged by the resurgence of interest in BR
and by various attempts to formalize and model it. Rubinstein’s work was prominent as
he pursued the abstract mathematical line that Simon took in his 1955 QJE paper
(Aumann, 1997; Conlisk, 2004; Simon 1997; Osborne and Rubinstein 1998; Rubinstein,
1998). It is useful to recall Simon’s own relativized notion of rationality was bound up
with the actor’s purpose and knowledge of the space-time context of the actor’s lived
world. But it seems his positivistic inclinations hindered his seeing that world as a
dynamic and perhaps socially constructed place rather than as a definable maze to be
run by isolated individuals (or ants) struggling to reach their known goals by gathering
information and computing it into satisficing activity. So too the Chicago sociologists
might have been more interested in seeing how stressed actors reached out to their
neighbours or associated to reshape their situation agentically in the various ways that
led De Tocqueville to declare ‘the science of association is the Mother Science; the
progress of all others depends on the progress of that one’ (de Tocqueville, 2000: 492).
In the end we are left unsure what Simon really thought about BR—given the limits of
his chosen philosophy’s language. Without doubt, he was ambivalent from the time he
first adopted the distinction between fact and value—surely just another expression of
bounded rationality. On the one hand, there were his many suggestions that BR might
be researched rigorously, empirically, neurologically perhaps, so pinning down the
absolute limits of our brain-computers. On the other, there is the matter of the
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open-endedness of living, the focus on our evident ‘dynamic capability’ to deal with the
new. My sense is that Simon continued to occupy some middle ground as his Deweyshaped humanism led him to see human beings and our doings as the source of all knowledge, that our ‘scientific knowledge’ could never be fully ‘objective’ or separated from the
values manifest in our life-world, especially when we collaborate. There remain unbreakable philosophical entailments between what we might mean by BR and our sense of the
dynamism of the human condition. As Simon wrote: ‘no conclusions without
premises . . . Reason, then, goes to work only after it has been supplied with a suitable set
of inputs, or premises’(RHA: 7)—and among these are our values, emotions, and faith.
Coda
Herbert Alexander Simon casts a long shadow into contemporary thinking about organizations, management, chess playing, automation, AI, economics, psychology, public
policy decision-making, and even leadership theory (Spender, 2008a) and into business
schools and management education worldwide (Khurana and Spender, 2012). But as far
as the analysis of administration and organizational life goes, his principal achievements
were philosophical. His life-long project—to develop a way of analyzing economic and
organizational situations that did not stand on the presumption of ‘rational man’—was
monumental, radical, and even if only partially successful, as significant as the development of marginalism in economics or the socio-economic work of Weber. We know the
font of all great theorizing is philosophical, and Simon successfully went way beyond
merely repeating the questions Barnard posed at the beginning of his equally seminal
work. While Barnard opened up new thinking about economic leadership in democratic
capitalism, Simon’s theorizing had rigour, embraced the led and the interplay of their
context and action, and opened up new theorizing about the organizational situation
and its micro foundations.
When it comes to evaluating his legacy, he worked long and hard on several fronts to
persuade his colleagues towards a new philosophical position from which to rethink
economics, organizations, and management entirely. BR was his label for this. There was
the complementary view of democratic capitalism as a life-world of organization rather
than of markets—though this idea has not yet acquired a resonant label even as the
recent crises in the private sector threaten to crush the economy (MML: 325). The biographical puzzle lies in the contrast between the recognition and honours Simon garnered in his lifetime and the extent to which his philosophical offering was dismissed,
now almost forgotten, a trend that began while he was still alive and working as hard as
he knew how. In the lead-up to his Nobel he noted: ‘bounded rationality seemed to be
dying a quiet death, in the United States at least. The neoclassicists had clearly won the
day’ (MML: 320). Their victory is no less today (Locke and Spender, 2011).
It is not easy to guess what comes next. Should Barnard’s and Simon’s work be consigned to the ashcan of history, or should we urge young scholars to think their way
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around ‘rational choice’ and send them back to Barnard and Simon for a basis on which
to re-theorize organizations and their management? Prospect theory—replacing RM
with ‘Biased Man’—took up only a fraction of Simon’s challenge but required neither a
shift of philosophy nor offered a new theory of managing (Campitelli and Gobet, 2010).
In contrast, Simon remained focused on real people, with values, morals, and emotions,
while engaging the most fundamental of sociological questions—‘How might we understand social order given individual differences?’ He probed the deepest philosophical
questions around human choice—‘What are we free to choose?’ and ‘Why do we act as
we do?’ Choosing under the more or less fully determined conditions of economic
analysis was almost totally irrelevant to this project. At best it pointed to the boundaries of the kinds of ‘free’ choosing that are the distinguishing mark of a humanist philosophy. For Simon, administration was about managing those aspects of human
choice that are under-determined by the ‘facts’. Yet his project seems to have stalled in
the current environment of disciplinary ‘physics envy’ and the excruciating pressure
on our young scholars to be risk-averse, simply get done, hew to the mainstream, and
focus on A-journal publications that buttress our discipline’s RM-based achievements
over the last twenty years—however problematic these might be (Simon, 1985b: 303;
Walsh, 2011).
An energetic intellectual magpie, Simon looked into many disciplines for concepts,
methods, and problematics that could be harnessed to his project. Overall his achievements in each owed less to the novelty of his theorizing than to the energy and persistence with which he worked his core intuitions into a masterly display of theorizing and,
publishing hugely, made a lot of people notice he was there, vigorously engaging their
narrower problematics. While most social science philosophers and methodologists
had already abandoned positivist inclinations—management being a major exception—
Simon’s vigour and productivity shook these fields up. In the case of cognitive science,
AI and computing, he helped reconstruct the field and made a lasting impact. In economics, he added to the debate about whether our Emperor wears more than the invisible gossamer of full rationality (Hambrick, 1994; Khurana, 2007; Spender, 2007). In
public administration, Simon propelled that discipline into new methodologies and a
search for new modern value- and political bases. In psychology he generated productive explorations and solidified an empirical approach to human decision-making (Earl,
2001; Gintis, 2005; Loasby, 2004; Tisdell, 1996).
In management, alas, his record remains problematic, in spite of his Nobel (Morçöl,
2007). The approach he and Barnard shared implied that any viable theory of organizing must include the axiom that non-RM individuals are subordinated to the will of
others—a view Coase shared (Coase, 1937: 391; Cruise, 2004; Langlois, 2003). We may
forget that Simon was pondering subordination while the nation’s focus was on the
Cold War, the Korean War, Communism, and the attendant political propaganda.
The Nuremberg Trials were fresh in everyone’s memory. All knew that subordination
and docility (even ‘indoctrination’ (AB: 103)) raised ethical issues and the burdens of
being responsible for the actions of others. Yet inadvertently Simon’s discussion of
subordination helped reinforce the managerial–subordinate distinction that became
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a commonplace after scientific management, without articulating the concomitant
managerial responsibilities about which Commons and Barnard wrote.
Is disciplinary change simply about waiting a generation or two for the penny to drop,
as Albert suggested? The challenge of channelling individual heterogeneity into organizational activity that Simon opened up in AB seems lost to all but those, for instance,
exploring principal-agent theory and transaction cost economics (K. Foss, Foss and
Klein, 2007; N. J. Foss, 2002, 2003a, 2003c; N. J. Foss and Klein, 2005, 2012; Hardt, 2009;
Spender, 2011). The answer surely turns on the quality and endurance of Simon’s philosophical contribution. His talent here was considerable and his critique of RM lives on
as a ritualistically honoured disciplinary ‘irritant’ (in Luhmann’s sense) without, regrettably, widespread acceptance that RM is of little use if we want to understand human
behaviour. Without doubt, the ‘hardening’ Simon espoused helped set the methodological direction we see around us today, especially through his institutional impact via the
Committee on Science and Public Policy (COSPUP) and the President’s Science
Advisory Committee (PSAC) (MML: 294), the Foundation Reports, and the way he
showed how universities might research OR and AI (MML: 248). In spite of his attempts
to balance scientific rigour and humanism, Simon’s writings on administrative decisionmaking inadvertently helped reinforce the notion that managing is rational, cold, and
unemotional. Equally ironic, his work encouraged our discipline into ways of thinking
that actually diverted attention away from the singularities and particularities of the
contexts of real-world problem-solving under uncertainty—and the human agency it
drew forth. Even given Albert’s researches, Simon could scarcely have anticipated the
degree to which the practical policy-shaping results he sought in his earliest research
projects have been wholly displaced by A-journal publication counts as our metric of
intellectual achievement, and how such institutional pressures have worked to obliterate
his agenda of harnessing social science to the service of humanity.
Simon was not a naïve positivist searching for more powerful deterministic models.
On the contrary, he engaged the essential puzzles of philosophical thinking—the interplay of the general and the specific, the individual and the environment, the past and the
future. To ignore the bounded specificity and heterogeneity of the human condition, he
sensed, would trash the baby with the bathwater. On the other hand we seem to have
mislaid the essence of his achievement—in particular his identification of organization
as our invented artefact for coping with our limitations. Here is an echo of Commons
and of North’s notion of institutions as the artefacts we created to deal with our society’s
anxieties (North, 1991). As Simon moved into simulating individuals he appeared to
drift away from administrative and organizational theorizing, though again I think this
incorrect. His last public lecture (the 2000 Gaus Lecture1) showed him as attached to his
initial undergraduate agenda as ever. In it he argued the Web had opened up new possibilities for administrative coordination, and he touched on socio-economic decomposability as the explanation for why organizations exist and can become the democratic
engines of economic progress. He returned to concerns about the political consequences
1
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of the centralization of power in large organizations and the need to think about distribution and fairness. Viewing the world through the lens of his own philosophy, he
argued the history of human civilization would be better measured in terms of our
capacity for democratic organization, reaffirming the neo-Tocquevillian outlook at the
centre of his world-view.
We might think that Simon, like all great philosophers who, making a massive intellectual effort, to find and communicate a more penetrating question about the human
condition—and failing to answer it as they had hoped—end up feeling the disappointment captured in Critchley’s quotation at this chapter’s opening. I think this incorrect,
for it misses Simon’s boundless optimism about Man, rigorous criticism, and social theorizing, even as he experienced his fair share of setbacks and disappointments among
the accolades. Perhaps the core of his legacy is his optimism about our ability to deal
with our condition. That would show Simon was a good man who chose to ride a perilously narrow rail between serving science and serving humanity, who showed all of us
what it meant to contribute as an academic and to engage with all the insight, energy,
and methodological precision one can muster, an exemplary scholar, debater, and author
who, as he faced his own life-boundary, said ‘Tell them I had a good life’.
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