A central element in these alternative approaches is the concept of 'bounded rationality', with companies demonstrating a satisficing behaviour
under conditions of imperfect knowledge.
The main reason for satisficing behaviour is the extent of `diversified entrepreneurship'.
Satisficing behaviour is also related to the age and background of owners.
In essence, satisficing behaviour occurs when the managerial decision maker sets up a feasible level of aspiration and then searches for alternatives until finding one that achieves the level.
There are several alleged limitations that constitute the case against satisficing behaviour in strategic decision making.
Conversely, applications of satisficing behaviour on the part of corporate strategic decision makers tend to result in higher levels of successful strategic outcomes.
Satisficing behaviour involves the setting of minimum objectives which are adjusted according to how difficult they are to fulfil (Simon, 1955; 1959).
They utilise informal information, act intuitively, take into account ethical considerations and exhibit satisficing behaviour. It would, however, be wrong to argue that they are acting irrationally because they do not focus on profit maximisation.
This suggests that satisficing behaviour may be far more predominant in this particular industry.
The industry as a whole is not suffering from "short-termism" and this may offer some explanation as to why satisficing behaviour persists.
This pattern of decision making is described by March and Simon as satisficing behaviour, in contrast to maximization, which is most often an impossible ideal.
In sum, the limited rationality of satisficing behaviour, the variations in perception among managers, and the oblique uses of information should caution us against excessive optimism about the free and fruitful deployment of information in the pursuit of organizational goals.