What is bounded rationality?
Bounded rationality Making rational decisions is the process of choosing the best alternative that gives the maximum value. A rational decision maker would understand all the alternatives available, the steps that should be followed to attain the goal. Bounded rationality is the decision-making approach which says that individuals have limited cognitive ability, resource, and time to make a restricted amount of information on which they try to make rational choices in a complexed organizational environment . Bounded rationality is one of the tools which Herbert A. Simon used to explain the administrative model of decision making. This model portrays how managers face complexed, non-programmed situations by making spontaneous decisions, it also helps to understand human and natural limits on rational decisions of a manager. Bounded rationality is explained as the logical way of describing how rational decisions are made by managers as rational decisions are made with less...