Knowledge and Action

Those who have thought and written about management often refer to management "know-how." By this they apparently mean the ability of the manager to understand what is going on in his environment. It is the chief concern of the management scientist to translate these vague stipulations about management knowledge into precise and verifiable assertions about how decisions are made an~ how decisions ought to be made. One of the central problems of management science is the understanding of the role of information in desision making. The reason why this problem is so difficult is that we have failed to pay enough attention to the very subtle concept of the use of information. The much maligned, classical economic man was supposed to act in accordance with his self-interest, "given" complete information. But what does "given" mean in this context? What the economi~t meant was that information was automatically fed into the rational decision process, and the correct answer was thereby derived. If the manager of a firm can be adequately represented as a computer, this concept of "given" may be adequate, for then we merely mean by "given" information the inputs to a computer program.