Decision theory approach
The decision theory school focused on the managerial decision making which, in its view, is the core management task, pervading all management functions. Herbert A. Simon, the chief exponent of this school, uses managing and decision making as synonymous. Decision theory approach has the following features.
1. Management is essentially decision making.
2. The members of the organizations are decision makers and problem solved.
3. Organization can be treated as a combination of various decision centers. The level and importance of the organizational members are determined on the basis of importance of decision which they make.
4. Quality of decision affects the organizational effectiveness.
5. All factors affecting the decision making are the subject matter of the study.
Uses and limitations: the approach contributes a lot of towards the sharpening of the managerial tools especially for making suitable decisions in the organization. The school as how the managers can discharge their functions effectively. But it does not take the total view of the management. As such, its scope is quite limited considering the requirements of the management.