<P> As summarized by Simon in the 4th edition's "Commentary on Chapter VI", the central idea of this chapter is that "the survival and success of organizations depend on their providing sufficient incentives to their members to secure the contributions that are needed to carry out the organizations' tasks". </P> <P> Chapters VII - X deal with four ways in which an organization can influence an individual's decisions . In Chapter VII, Simon discusses the nature of authority and how it is used in organizations: for enforcing responsibility, for obtaining decision - making expertise, and for coordinating activity . Four methods are described for avoiding conflicts in authority when a subordinate has multiple superiors . </P> <P> Simon defines communication as "any process whereby decisional premises are transmitted from one member of an organization to another". Communication can be formal or informal, may need to be archived to provide "memory" for an organization, and is sometimes accomplished through training . The 4th edition's "Commentary on Chapter VIII" discusses computerized communications which were unavailable in 1947 . </P> <P> This chapter expands upon a concept that had been mentioned briefly in preceding chapters . In a for - profit organization, the "criterion of efficiency" states than an individual will select an alternative that will maximize income and minimize cost so as to "yield the greatest net (money) return to the organization". More generally (i.e., to include nonprofit organizations) the criterion causes "that choice of alternatives which produces the largest result for the given application of resources ." In the remainder of the chapter, Simon counters criticisms of the efficiency criterion and outlines methods by which efficiency can be attained (e.g., by "functionalization" and by the public budgeting process). </P>

Administrative behavior a study of decision-making processes in administrative organization pdf