The following is a book comparison between Herbert A. Simon’s work titled
Administrative Behavior (1997) and Edgar H. Schein’s work titled Organizational Culture and
Leadership (2004). This paper will begin with a summary of each author’s credentials, followed
by a review of each works major thesis and supporting arguments, and conclude with this
writer’s opinion on the application of these works to the management discipline and which one
is believed to be superior. In an attempt to de-clutter this paper, only references beyond the
two authors and books listed above will be cited. In general, only last names will be used to
reference the two authors and their works reviewed by this writer.
Herbert A. Simon was the son of German immigrants. Interested in administrative
decision making from a young age, his fascination became the topic of his doctorate and
dissertation which later became the book Administrative Behavior . A Nobel Prize winner in
1978 in the field of economics, Simon is both a University of Chicago trained Psychologist and
has applied psychological principles to all of his works; even across disciplines. The author of 27
books, Herbert A. Simon is considered by many, including this writer, to be the first theorist to
completely discuss administrative behavior from a social psychology perspective. (Lewis, 2001)
Edgar H. Schein was born in 1916 and has dedicated his life to psychology. With a
master’s degree from Stanford University, a PhD from Harvard University, and a life-long
scholar and professor, Edgar H. Schein has spent his entire professional career learning about
human behavior within the organizational setting, specifically organizational culture. Schein is
currently professor emeritus at the Sloan School of Management and the author of 14 books on
organizational culture and leadership. (Official Ed Schein Website, 2004)
Major Thesis
Simon clearly states in the Introduction that “Administrative Behavior was written on
the assumption that decision making processes hold the key to understanding organizations.”
This declaration is the premise for the entire book, a book born out of dissatisfaction with the
current administrative theory literature, a book that involves a psycho-social journey through
the dissection of decision making and how it relates to the organization. Simon makes no
attempt to create global theory, only to provide a vocabulary to which organizational decision
making and behavior can be dissected, understood, and correlated.
As part of this organizational exploration, Simon makes some astute observations
related to the rationality of decision making. In an attempt to add definition to administrative
behavior, Simon uncovers numerous fallacies within the current organizational wisdom and
proposes that most decisions are not the best decisions, but decisions made that meet the
needs of the organization. The best decision requires a level of data gathering and processing
inconsistent with that of a single individual. Simon calls the process of using an acceptable vs.
perfect decisions “satisficing” and claims this occurs because of the process of making a
decision within the realms of “bounded rationality” is more realistic and consistent with human
data processing limitations. Simon also discusses barriers to other administrative behaviors
such as coordination, communication, authority, and how they affect what Simon calls the
sociology of administration.
Schein states on page 1 that “…processes of culture creation and management are the
essence of leadership and make one realize that leadership and culture are two sides of the
same coin.” Although culture has many definitions, Schein uses an anthropological
definition/model in defining culture and professes that culture is the root of all organizational
actions. Throughout his book, Schein explores both the positive and negative effects of culture,
the birth and death of culture, and although Schein is not a fan of the ambiguity of this term,
how to effect cultural change through leadership and how to train said leaders to build and
manage culture within the organization.
There are numerous examples used throughout the text, most of which are based on
Schein’s tenure as a consultant and the organizations in which he played a role. Schein explores
the psychology of culture through specific examples and how organizational leaders who
overlook culture are doomed to struggle and may ultimately fail. Throughout his book Schein
reveals the process of cultural analysis (artifacts, socialization, etc.) and at the conclusion of his
book lends the cultural consultant advice on how to conduct a complete cultural analysis. This
theoretical turned practical approach to culture is both informative and relevant and every
point made within the context of culture is thoroughly explained.
Arguments (Simon)
Simon supports his theory that decision making is crucial to understanding
organizational behavior by defining his view of an organization. He states that an organization
involves the “art of getting things done” but emphasizes that rarely do leaders focus on the
decisions required to get things done; the processes of deciding what do to is the basis of his
intellectual discussion (p. 1). To begin, Schein discusses the notion that administrative activity
is a group activity therefore everything the group does involves a decision (p. 7). In Chapter 2,
Simon spends ample time discussing the “fatal defect” in the current administrative principles.
Using hypothetical examples, he proceeds to dissect and dismantle the logic found in these
principles accusing them of being superficial, over-simplified, and lack realism (p. 44). This
dissection of current literature begins Simon’s attempt to categorize organizational theory as a
series of decisions, made by people, using authority, not just a set of overreaching and generic
principles.
From here, Simon discusses the limits of human decision making and how most
decisions can be empirically tested and validated even if they contain subjective, ethical
components (p. 56). Simon re-words a passage from the US Army Infantry Field Manual (p. 57)
to demonstrate that often, ethical components can be tested. In Chapter 4 Simon concludes
that humans are not always rational and are limited in the information they can process to
formulate conclusions. Simon states that a high degree of rationality is “impossible” (p. 92) and
barriers and biases are listed and discussed. He goes on to a theory that he feels is extremely
important element to decision making and states that the Criterion of Efficiency, the notion
that if all costs are equal, the greatest gain should be chosen, and if the outcomes are the same,
the lower cost choice is superior is the hallmark of good decision making (p. 149).
In Chapter 7, Simon emphasis that authority is required to hand down decisions, and
warns that the in ability to affect discipline within the organizational structure will lead to the
destruction of one’s authority (p. 196). Simon states that “decisions are not made by
organizations, but by human beings behaving as members of organizations” (p. 281). This
distinction is why Simon has chosen to address the individual and his or her decisions as the
foundation of a successful organization. Simon concludes with suggestions that one must
formulate more concrete, specific evidence through case study before attempting to create
“administrative principles” and we must have the metrics for measuring said case studies if
ambiguity is to be avoided; the current flaw with the original administrative “principles” Simon
effectively dismissed (p. 328).
Arguments (Schein)
Schein sets the tone of his book with the prefacing statement “*culture+..is more
important than ever in helping us to understand intergroup conflict.” (p. xi). The totality of
culture is explored throughout this book, but this understanding begins with the definition of
culture and the willingness to see things through cultural lenses (p. 7). Schein immediately
dismisses superficial definitions of culture and insists that culture is a deep, central, core value
that stems from our innermost beliefs. Several rational examples are used to endear the
reader to this cultural concept by asking the reader to recall events in our own lives where we
experienced organizational frustration, misplaced authority, and wonder “*how+… smart people
can do such dumb things.” and related this to potential cultural differences. (p. 9)
Drawn from his background in psychology, Schein insists that that human mind requires
cognitive stability and that all cultural changes will induce anxiety. This concept is central to his
beliefs that two things are required for cultural change: management of change anxiety and
determining if change is within the capacity of those involved (p. 32). If either of these things is
not possible, change cannot occur. To better understand culture, Chapter 4 discusses the lifecycle of a group from its initial formation its mature stage to illustrate how culture is formed
and what elements, or as Simon calls the “pattern of shared assumptions” define a group’s
culture (p. 88.).
To further illustrate the depths of culture, Schein uses several chapters (5-9) to
evaluates core dimensions of culture, including how an individual sees reality and truth, time
and space, human nature, activity and relationships. It’s these defining concepts that often
determine compatibility or incompatibility with a specific culture. Schein introduced some
research methods to help one understand culture but admits that gathering data can be
difficult and data integrity questionable and likens the researcher to a corporate therapist (p.
211-215).
The book is almost divided in half with the second half a discussion of leadership and
the role of a leader in culture. Schein recognizes that “leadership” is ill defined, but according
to his own definition, the defining task of leadership is to manage change and culture, up to and
including a cultural massacre if necessary to effect change (p. 223). The leadership section now
discusses how leaders create culture and transmit culture; according to Schein, it’s charisma
that is the messenger of an effective leader (p. 245). The books concluding Chapters (16-17)
contain a practical guide to cultural analysis and a set of principles Schein believes are
necessary to create psychological safety, reduce learning anxiety, and effectively change culture
through leadership (p. 329-336).
Analysis (Simon)
Simon takes a social psychology approach to organizational behavior and focuses on
decision making as the primary metric within an organization along with dispelling what he
believes are incorrect organizational principles such as the relationship between efficiency and
specialization, hierarchy, span of control, and grouping. Although Simon makes no attempt at
conclusive theory, his astute observations are informative, beginning with the realization that
all decisions are a matter of compromise. Building on that theme, Simon uses logical analysis
and hypothetical examples to effectively argue that paired efficiency assumptions are in fact
false and do not consider relevant variables. Simon further describes the limitations of
decision making and information processing in such a way that exposes the finite capacity of
the individual decision maker and simply stated in the words of this writer “we do the best we
can with what we have”.
Simon divides decisions into factual and ethical and discusses how most all decisions
have an ethical component that cannot be empirically tested, such as “good quality”. This
writer has found this to be the case with most organizational decisions, further supporting
Simon’s position that decision making is an extremely complex process. Further discussed is
how behavior often falls short of being completely rational due to the limitations mentioned
previously. Most of Simon’s discussion on communication, loyalty, decision types, efficiency,
and other decisional variables is sensible within the bounds of adding definition to ambiguous
concepts.
One major limitation of the text is the lack of real-world examples, case-study’s or other
test beds for Simon’s definitions. The few examples used where only used for the sake of
example and generally involved fictitious local governments or agencies. In addition to the lack
of relevant examples, is the absence of any clear cut guidance on steps to be taken by the
reader. Although this was an admitted limitation, this writer is unsure that many of today’s
managers would read a text solely for the purpose of definition without conclusion.
Another weak point in the text is the author’s lack of depth in certain areas. Although
not a text on communication, Simon states “No step in administrative process is more generally
ignored, or more poorly performed, than the task of communicating decisions.” (p. 116) yet the
Communications chapter hardly addresses these issues or emphasizes that point. The true
limitations of the human decision maker are clear, but what impact to they truly have on the
organization? Is bounded rationality such a limitation as to impair decision makers to the point
of incapability? It would seem that most organizations get around many of the limits of
bounded rationality by using departments to provide information to the decision maker; one
person rarely makes decisions in a vacuum hence the effects of bounded rationality clearly
exist, but to what extent they are problematic is unknown and this distinction in this writers
opinion is key to the merit of the decision making science within the confines of Simon’s
definitions of human limitation.
Analysis (Schein)
Throughout the book, Schein maintains a logical and believable psychological
perspective that endears the reader to it’s validity through relevant examples. Schein’s
experience with DEC and Ciba-Gray are interesting examples of culturally bi-polar organizations
that he was able to dissect, understand, and formulate conclusions from using his own
principles of cultural understanding. There were several perspectives that were grounded in
psychology and Schein makes every attempt to educate the manager turned practical
psychologist. Understanding the scope and debilitating power of anxiety, the importance of a
shared emotional experience to group formation, and the nature of human relationships are all
relevant to culture and change.
It was interesting and beneficial to dive into many underlying assumptions that often
are overlooked; such as the nature of time and space and how different cultures perceive these
fundamental truths differently. Although many people in the Western world share similar
views at the macro level, differences at the micro level will help any manager understand why
someone who is 3 minutes late doesn’t understand what they did wrong. In addition, Schein’s
discussion on individual reality helps one understand why people disagree so vehemently or fail
to acclimate to a new culture when changing employers. Schein’s reference to Hofstede and
other cultural guru’s solidified his stance that cultural definition is important and critical to the
success of any organization.
Schein ties his somewhat theoretical, cultural discussion together with a practical
viewpoint on how leadership should create, analyze, and destroy culture. A simple checklist
and set of principles makes applying the “Schein viewpoint” easy and caters to both the
theoretical and practical reader. It is appreciated how much effort was put into espousing the
limitations of the human element and how nothing that involves culture is a quick fix.
There were some noticeable trends found within the text that makes this writer wonder
how many arenas these methods have been tested in. The primary examples used in this text
(DEC and Ciba-Gray) were large, global organizations in the technology business. In addition,
many other cited examples (HP, Compaq) involved large-scale technology organizations. This
leaves open the question as how effective such cultural analysis tools are in a small
organization, service business, or other occupational arenas or organizations not in the learning
mode.
The discussion on the entire group formation process from birth to death and the
influence of the leader on said process is interesting. However, how many leaders will have the
benefit of birthing a group to influence the cultural development of the new group and see it
through to maturity? It would seem as though most leaders are at a disadvantage, often thrust
into dynamic groups without any real method of quickly acclimating to their new culture in
order to better manage it. Once a leader has established authority, Schein makes it clear that
cultural change is not quick fix; but how is the leader who is new to an organization going to
make changes fast enough to make a difference without creating more anxiety that can be
handled by the organization? This writer believes it would be helpful t create a “quick list” of
tasks that a new leader can address or analyze to appear active in the change process, without
overwhelming the organization, but maintaining the confidence of others that change is in
progress. This concept would support a quick fix turned slow fix approach that allows visible
things to happen now as the slower-to-act concepts bring about real change.
This text seems requires one fundamental assumption to be meaningful; that leadership
is willing to engage in a soft-science approach to organizational harmony and as Schein cites in
his work, the manager must embrace McGregor’s Theory Y for this cultural approach to be
meaningful. Although the number of managers who embrace each theory is unknown, this
writer has personal experience in organizations that still cater to Theory X managers and would
look at culture as an unnecessary distraction from management by control and see soft-science
management as an attempt to blur the line between organizational needs and personal needs,
needs that should be satisfied outside of the workplace.
Conclusion
It is no simple task to compare and contrast the work of two great authors and even
more difficult is to choose the superior work. I will attempt to explain the similarities,
differences, readability, usefulness, and overall benefit of each work to the management
discipline and provide opinion as to which is superior.
Both Simon and Schein, based on their formal educations, have a psychosocial
perspective on management and both effectively use psychological principles to convey their
message. In the preface of each book, both authors agree that problems exist within the
current management paradigm and both agree that superficial discussions of organizational
issues should be avoided. Both authors take the stance that organizations are composed of
individuals and that a human-centric approach is best. From this point, the authors diverge,
Simon defines the organization as a series of decisions made by people, and Schein defines the
organization as a set of assumptions, housed by people, contained within the group, a culture.
Simon’s work is valuable in that it defines several core concepts and provides a
foundational template that which managers can use to better understand why they do the
things they do. Beyond “satisficing” based on the theory of “bounded rationality” and the
Criterion of Efficiency, I think the book is long winded and sacrifices depth for breadth.
Although many points are interesting, I am not sure they are hyper-relevant to today’s
managers in the format presented. Although the author makes no attempt at conclusiveness, a
good psychologist should readily understand that most readers will quickly loose interest in
abstract, descriptive works due to a lack of motivation, motivation generally borne out of desire
to understand, conclude, or apply new things. I can only assume that most readers would be in
search of something more conclusive, and few would argue that reading Simon’s dictionarystyle work is not near as captivating as reading an encyclopedia full of examples, correlations,
and colorful realizations. With this being said, it doesn’t undermine the importance of such a
dictionary, but I was hoping for more information that I could relate to and apply.
Beyond my opinions on readability and usefulness, I can only imagine how
groundbreaking this work when it was originally released in 1945 when organizations needed
definition, decisions makers lacked a common language, and the post-industrial knowledge
society was being born. Decision science has come a long way since 1945, and has matured
into many spin-off disciplines including Human Factors, Computer Programming, and many
more. My brief research of Simon shows he played a role in these disciplines with his interest
in computers and modeling. As a trained Human Factors Engineer, I read his book with specific
interest because in living color, I saw the genesis of my discipline. Although in awe of its
humble beginnings, this book read more like a history book in decision science and only loosely
correlated it to organizations. It’s clear that Simon has a logical, almost mathematical approach
to a very human-centric and subjective science, but arguably few managers today are
interested in the nuts and bolts of decision science, only the points of application to help make
good decisions; something not present in Simon’s work.
My last comment on Simon involves what I believe to be, unknowingly, a primitive view
on what we now call culture. I think Simon was on the cusp of understanding the subjective
analysis of culture with his focus on loyalty and authority, but the term culture had not yet
entered the management discipline. I enjoyed reading Administrative Behavior and feel that is
an important work in documenting the history of management and how the science of
management has evolved.
Schein’s book appears to be the answer to Simon’s book and a greatly expands on the
concepts Simon was attempting to define. In the conclusion of Simon’s book he noted that
further study is required using actual organizations and studying administrative situations and
the development of a metric to determine the effectiveness of administrative arrangements.
Schein seems to answer this call with his book Organizational Culture and Leadership. Schein
uses examples from his days as an international business consultant to take the reader on an
explanatory journey deep into the discussion of culture. Although the examples used are more
than likely not relevant to the average reader, they substantially add to the validity of the work
and make the reader believe these concepts are anything but abstract, they are subjective
measures of human and group behavior as witnessed by a professional consultant.
The average manager is looking for explanation into why things are the way they are, a
way to view things that are unexplainable, and a solution to remedy a corporate ill. Schein
meets this need by instructing the reader to view the organization through a cultural lens,
dissect the components of the organization, identify problems within the culture, and even
goes so far as to discuss ways to effect change. Although not a quick fix, I can only assume that
most managers would find this work to be insightful, informative, and even possibly curative.
I believe this book is a must for all managers, scholars, and anyone interested in group
dynamics as viewed through a cultural lens. I thoroughly enjoyed this book and will not only reread it again, but use this book as a springboard to other relevant works to better understand
culture and use what I’ve learned in my own organization. In contrast to Simon, I also
appreciate what I believe is better readability through editions. I found that the commentary
sections in Simon’s book where distracting in comparison with Schein’s seamless and integrated
re-writes.
It’s with potential ignorance that I believe the superior work to be Schein’s book
Organizational Culture and Leadership. Schein meets all the needs of this reader by blending
the theoretical and practical in an easy to read manual. Examples abound and add substantially
to the work, solidifying the usefulness of the information. While Simon’s work is historic and
interesting I think Schein answered Simon’s call in writing a book that explores many aspects of
culture, including decision making, with administrative situations serving as the catalyst to
further understanding.
References
Lewis, P. (2001, February 10). Herbert A. Simon, Nobel Winner for Economics, Dies at 84. New
York Times. Retrieved November 23, 2008, from
http://www.umsl.edu/~sauterv/DSS/10SIMON.html
Official Ed Schein Website. (2004). Retrieved November 23, 2008, from
http://web.mit.edu/scheine/www/bio.html
Schein, E. H. (2004). Organizational culture and leadership (3rd ed.). San Francisco: Jossey-Bass.
Simon, H. A. (1997). Administrative behavior : A study of decision-making processes in
administrative organizations (4th ed.). New York: Free Press.