Rethinking optimality: eight concepts

Traditional concepts of optimality in economics, operations research and management sciences are characterized by maximizing (or minimizing) a single objective function, i.e., Max f(x) or Max U(J(x)) subject to constraints X. This usually explicates a unique solution x* subject to all x E X, i.e., considering only the decision alternatives Of options belonging to a fixed, constrained set. As a concept, the traditional optimization model (of Max f (x) subject to x E X) is quite simple, unambiguous and 'crisp'. Although economists and engineers often use this as a well-structured reduction of the ill-structured reality, human beings, in their roles as decision makers and problem solvers, are striving to cope with reality in its fuller complexity and only rarely resort to such extreme reductionism. People do not just minimize cost, maximize profits or maximize expected utility. Humans are always trying to balance and harmonize the competing claims of quality, quantity, time and space all at the same time. Human systems management, being a systemoriented approach devoted to searching for the best and the 'optimal', cannot be rooted in a simplistic single-criterion maximization with respect to constraints. Similarly, maximization, minimization and optimization processes are rarely unconstrained, unlimited or occuring out of context, striving for some absolute maxima or minima. Constraints and limitations are ever present and reflect the prevailing conditions of scarcity. Absolute extremes, if they occur at all, are more appropriate for Utopia or certain mathematical exercises. In reality, however, (as Milton Friedman was one of the very few to argue) an economic problem exists only when scarce means are used to satisfy alternative ends. If the means are not scarce, there is no problem, but Nirvana. If the means are scarce, but there is only a single end, then the problem of how to use the means is a technological problem: no value judgments enter into its solution; only knowledge of physical and technical relationships.