SIMON MODEL OF DECISION MAKING
The Intelligence Phase
The intelligence phase consists of finding, identifying, and formulating the problem or situation that calls for a decision. (This has been called deciding what to decide.) The intelligence stage may involve, for example, comparing the current status of a project or process with its plan. The end result of the intelligence phase is a decision statement.
Example. At about 6 o’clock one evening, we suddenly realize we are hungry and haven’t made any preparations for dinner. We have at this point identified a situation that calls for a decision. The decision statement is simple: What to do about dinner?
It is important not to confuse the symptoms of a problem with the underlying problem itself. Suppose a customer calls to complain about late deliveries. If we think in terms of alleviating the symptom, we may arrange for that customer to receive future shipments via an overnight air courier service. If the underlying problem is an understaffed shipping department, however, this will merely placate one of many unhappy customers without identifying, let alone dealing with, the real issue.
The name of this phase, “intelligence,” can be confusing. Intelligence, as we usually use the term informally in talking about decision making, is what we use after we know a decision must be made. Simon borrowed the term from its military meaning, which involves the gathering of information without necessarily knowing what it will lead to in terms of decisions to be made. In business decision making, we must often collect a great deal of information before we realize that a decision is called for.
Military intelligence can also, of course, be more focused: We might try to determine an enemy’s troop distribution in order to concentrate an attack on its weak points. That type of information gathering falls into the next phase of decision making.
The Design Phase
The design phase is where we develop alternatives. This phase may involve a great deal of research into the available options. During the design phase we should also state our objectives for the decision we are to make.
Example. In deciding what to do about dinner, we have two broad categories of choices, cooking or letting someone else cook. Both can be broken down further. If we cook, we can either use ingredients that are already in our kitchen, or we can go to the store. If we let someone else cook, we can try to get a free meal at a friend’s house, or we can go to a restaurant in any of several categories.
The Choice Phase
In the choice phase, we evaluate the alternatives that we developed in the design phase and choose one of them. The end product of this phase is a decision that we can carry out.
Example. We might select a dinner option on the basis of speed, cost, and food quality. Their relative importance varies from person to person and from time to time for a given person. If we’re in a hurry, on a budget, and just want to fill out stomach, we can eat a container of yogurt or make a peanut butter and jelly sandwich. Given more time and money, we might go to the new restaurant down the street
The three decision phases are not as separate as this description implies.