Simon has demanded three stages of decision- making. They are:
The intelligence activity – discovering when and where it is necessary to make a decision, the design activity- finding and developing alternative courses of action, and the choice activity- making the actual selection from among the alternatives developed. The decision – making approach to organization accepts the hierarchical from of organization but suggests a few modifications with regard to division of work. A decision which approximates to the prescribed procedure is described as the programmed decision. On the other hand, decision relating to a problem which has no precedent or past experience to go is described as programmed. The latter type requires maximum use of intelligence of human beings. Simon suggests that an enterprise should programmer as many decisions as possible by encouraging habits, or installing clerical procedures and routines, or by building the right organizational structure and values, and that is inefficient to rely on the intelligence of human beings when decisions can be programmed.
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