Tim is the production manager at a steel factory. One of the steel processing machines in the factory has broken down and has to be replaced. Tim decides to buy a new machine from a company that he has read reviews of in industry magazines, even though there are other companies offering a discount on machines with better functionality. This is an example of how managers are constrained by _____.
A) bounded rationality
B) escalation of commitment
C) risk propensity
D) groupthink
E) political forces

Question

Quizplus · Accepted Answer

This scenario illustrates bounded rationality. Bounded rationality is a concept suggesting that decision makers are limited by their values and unconscious reflexes, skills, and habits.

Tim Is the Production Manager at a Steel Factory