How does bounded rationality affect strategic decision making?
A)Managers pursue their interests and make choices within the formal and informal constraints in a given institutional framework.
B)Relying on informal connections as a strategy is only relevant for firms in emerging economies.
C) Only with prior experience can managers of multinationals make rational strategy decisions.
D) Bounded rationality has no effect on decision making.

Question

How does bounded rationality affect strategic decision making?
A)​Managers pursue their interests and make choices within the formal and informal constraints in a given institutional framework.
B)​Relying on informal connections as a strategy is only relevant for firms in emerging economies.
C) ​Only with prior experience can managers of multinationals make rational strategy decisions.
D) ​Bounded rationality has no effect on decision making.

Quizplus · Accepted Answer

Bounded rationality refers to the idea that humans have limitations in their ability to process information and make decisions. As a result, managers may pursue their interests and make choices within formal and informal constraints in a given institutional framework. Therefore, option A is the correct choice as it directly relates to how bounded rationality affects strategic decision making. Options B and C do not address the concept of bounded rationality, and option D is incorrect as bounded rationality does have an effect on decision making.

How Does Bounded Rationality Affect Strategic Decision Making