Herbert Simon noted that managers generally fail to make rational decisions because they are limited by their own values,skills,habits,and unconscious reflexes as well as by incomplete information.What name did Simon give this phenomenon?
A) Decision framing
B) Satisficing
C) Escalation of commitment
D) Innovation
E) Bounded rationality

Question

Quizplus · Accepted Answer

Herbert Simon called this phenomenon "bounded rationality," which refers to the idea that people have limited cognitive abilities and resources to make decisions, resulting in an incomplete and imperfect decision-making process. This is because decision makers are influenced by personal biases, heuristics, and cognitive limitations when processing and evaluating information. Therefore, they tend to rely on shortcuts or "rules of thumb" to simplify the decision-making process, which can lead to suboptimal outcomes.

Herbert Simon Noted That Managers Generally Fail to Make Rational