Chapter I refers to “vertical” specialization: the division of decision-making duties between operative and supervisory personnel. The chapter also notes that the subdivision of decision-making into components goes much farther than this. Any important decision is based on numerous facts (or suppositions of fact) as well as numerous values, side conditions, and constraints. We can think of all of these facts and values as the premises of the final decision—the raw material inputs, so to speak, to an assembly process that ends with the decision itself.
The manufacture of a physical product can be carried out in a large number of specialized departments: for converting the raw materials, fab- ricating them into components of the final product, assembling the com- ponents, and finishing the product. In the same way, a decision can be divided into components, each fabricated by specialists and specialized groups, and finally brought together into a coordinated picture. Thus, reaching a decision to put a new product on the market may require contributions of facts and goals from design engineers (improving the product or lowering its cost), manufacturing engineers (simplifying the manufacturing process by redesign), marketing specialists (predicting the size and nature of the prospective market), financial specialists (designing alternative methods of financing a new factory), legal specialists the facts and values that enter into this decision-fabricating process, a process that involves fact-finding, design, analysis, reasoning, negotiation, all seasoned with large quantities of “intuition” and even guessing.
A major task in organizing is to determine, first, where the knowledge is located that can provide the various kinds of factual premises that decisions require, and, second, to what positions responsibility can reliably be assigned for specifying the goals to be realized and the constraints and side conditions a decision must satisfy. Designing effective processes for composing premises into decisions is as important as designing effective processes for fabricating and distributing the organization’s products. A considerable part of this book will be concerned with identifying the origins of different kinds of decision premises and tracing their processes of assembly.
Source: Simon Herbert A. (1997), Administrative Behavior, Free Press; Subsequent edition.