Question

Herbert Simon (cited in Certo & Certo (2014) questioned the ability of managers to make rational decisions. In his opinion, managers are not able to make perfectly rational decisions. Do you agree? Why/Why not?

Answer 1

I quite agree that managers are unable to make perfectly rational decisions because when making decisions, they typically have incomplete information and can't predict the outcome of their decisions.

• According to Herbert Simon, decisions are made at every level in the organization, and that the decisions affect the output and the prices of goods in the market.

• He further stated that for an individual to make a decision, he must choose between the different alternatives that he has.

• He further questioned the ability of managers to make rational decisions that are considered perfect as he stated that when a manager makes a decision, there are different alternatives that the manager could have chosen from and that the manager may not know if the other alternatives would have been better off.

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