Managers and firms rationally pursue their interests and make choices within the formal and informal constraints in a given institutional framework.

Question

Quizplus · Accepted Answer

This statement is true as managers and firms aim to maximize their own interests while operating within laws, social norms, and other institutional constraints. This statement is a foundational principle in the study of organizational behavior and management. Managers and firms are assumed to act in their best interest, while also operating within the formal and informal constraints of their industry, society, and legal system.

Managers and Firms Rationally Pursue Their Interests and Make Choices