MGT Notes

Reference: Strategic Management (5e) – Frank T. Rothaermel (Pg 57)

Our decision making is often fraught with cognitive limitations and biases. The Theory of Bounded Rationality states that rather than optimize our decisions based on all available information, we instead ‘satisfice’, which is a combination of satisfy and suffice. Decisions end up being just good enough rather than optimal. Today, instead of information scarcity, we are faced with information overload, with limited availability of time and attention.

Strategy frameworks allow us to overcome the above limitations by directing our focus to a well defined decision making process.

[To be continued…]