When managers try to make decisions rationally but within the limits of their information-processing abilities,they are operating under the assumptions of ________.
A)perfect rationality
B)bounded rationality
C)certainty
D)objective rationality
E)optimization

Question

Quizplus · Accepted Answer

Bounded rationality refers to the idea that managers have cognitive limitations that prevent them from processing all available information and making completely rational decisions. Instead, they use heuristics and satisficing strategies to make decisions that are "good enough" given their constraints. Perfect rationality and objective rationality assume that managers have access to all relevant information and can process it perfectly, which is not feasible in most real-world situations. Certainty and optimization are related concepts, but do not capture the idea of bounded rationality.

When Managers Try to Make Decisions Rationally but Within the Limits