The correct answer is the Identification activity.

• According to Simon, an organization is a structure of decision-makers.
• The decisions are made at all levels of the organization.
• The decisions made are based on a number of assumptions.
• According to him, there are three stages of Decision Making Process:
  • Intelligence Activity:
    • In this stage, the executive tries to understand the organizational environment.
    • He understands and identifies the condition which needs decision-making.
  • Design Activity:
    • This stage deals with identifying, developing, and analyzing all possible alternatives.
  • Choice Activity:
    • The last stage is to choose the best alternative.
• Simon says that these stages are simple in appearance, but are more complex in the practical world.
• Each phase involves all three phases in itself.

• Simon's view on Decision Making:
  • He states that decision-making is a process of drawing conclusions from assumptions.
  • He said that decision-making is the core of administrative action.
  • He disapproved policy-administration dichotomy and proposed fact-value dichotomy.
    • ​He states that the science of administration should be based on factual assumptions of decision-making.
    • It should be based on systematic, empirical investigation, analysis, inductive, and descriptive methods.