Background Note | HBS Case Collection | January 2014 (Revised November 2015)

Rational Choice and Managerial Decision-Making

by Willy Shih

Abstract

This note discusses Herbert Simon's notion of bounded rationality: how managers may sometimes make suboptimal choices because of their limited ability to access or process information.

Keywords: Rational choice; bounded rationality; satisficing; Herbert Simon; agenda-setting; choice; alternatives; Decision Making; Decision Choices and Conditions; Decisions; Judgments;

Citation:

Shih, Willy. "Rational Choice and Managerial Decision-Making." Harvard Business School Background Note 614-048, January 2014. (Revised November 2015.)