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The Business School: A Problem In Organizational Design (1967)

Herb Simon's list of accomplishments --- spanning organizational design, economics, management, artificial intelligence and computer science --- have contributed to a wide range of academic, commercial, and research institutions. He is best known for his work with Alan Newell in the design of the "information processing" model of human cognition. Their co-authored book, Human Problem Solving, was a landmark in rethinking how the brain functions and also provided pathways toward Artificial Intelligence theory and Cognitive Psychology.

Simon's earlier work focused on human decision making, landmark research that accounted for why people do not behave in a consistent or optimum manner called “bounded rationality.” His theory of decisions underscores the limited capacity of human processing systems, reflected in the observed pattern of least best decision choices. Simon's interest and influence in public administration and administrative organizations. It was for this work that he won the Nobel Prize in Economics in 1978.

The theory of organizations has become a standard topic for business school instruction and research. Business schools, of course, are organizations, generally associated with those larger organizations we call universities. It would seem appropriate, therefore, to ask whether business schools are not themselves interesting objects --- or specimens --- for organization theory. Does anything we know about the design of organizations apply to business schools? Can we use our knowledge of organization theory to improve our own institutions?

…the professional school must have effective access to information and skills within the several sciences that are relevant to and contributing to the improvement of professional practice. In the case of the business school, the relevant sciences include at least economics, psychology, sociology, applied mathematics and computing science.

To speak of 'business school knowing' about the world of practice, and about the relevance business sciences is, of course, a metaphor. Schools do not 'know;' people in them do.

Pierson, in his study of American business education, speaks of colleges and universities as being 'the product of two distinct and sometimes conflicting traditions. According to the first...knowledge is pursued for its own sake…Most proponents of this view…would regard direct preparation for particular careers as basically alien to the purpose of academic work…The other great tradition…would leave ample room for those students desiring to prepare for particular careers. According to this tradition, the search for truth is not impugned because it proves useful nor is education necessarily unworthy because it is pursued for its career value.'

The present paper assumes that the goals of a university include both the pursuit of knowledge for its own sake, and the application of knowledge to practical pursuits. It does not assume that one of these goals is the sole possession of the discipline, the other, the sole possession of the professions. On the contrary, there is no reason why knowledge about physics should be useless; and no more reason why knowledge about optimal inventory control or organization structure should not be intellectually and esthetically interesting.

The sometimes explicit premise that utility is the only touchstone of relevance for knowledge in the professional school, and the sometimes implicit premise that inutility is the only touchstone of relevance in the disciplines are mischievous doctrines that have caused untold harm to education in both professions and disciplines.

Even if, for purposes of argument, we were to accept utility as the primary criterion of ultimate professional relevance, a much broader criterion would have to be applied within the professional school to make of it a viable educational enterprise. Education cannot go on, at a satisfactory level, without intellectual challenge and excitement. The professional school must be vigorous in research as well as teaching, and must provide a solid intellectual core to the professional as well as the disciplinary portion of its concerns.

(Reprinted from the Journal of Management Studies, "The Business School: A Problem In Organizational Design," February 1967)


"The professional school must be vigorous in research as well as teaching, and must provide a solid intellectual core to the professional as well as the disciplinary portion of its concerns."

- Herbert A. Simon

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