How Does Bounded Rationality Affect Strategic Decision Making

question 53

Multiple Choice

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.

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Definitions:

Different Groups

Diverse collections of individuals categorized by unique characteristics, interests, or attributes, often referred to in the context of social, professional, or cultural distinctions.

Smooth-flowing

Describes processes or operations that proceed in a steady and efficient manner without interruptions.

Orderly Process

A structured series of actions or operations conducted in a systematic sequence to achieve a specific outcome.

Understanding Uncertainty

The process of recognizing and rationalizing the unknown elements in decision-making scenarios.