The framework also known as Rational decision making is used to describe how managers SHOULD make decisions. Which term is this describing?

• A. Bounded rationality
• B. Rational decision making
• C. Intuitive decision making
• D. Incremental decision making

Answer: (B)

The main idea here is that this framework is prescriptive, describing how decisions should be made under ideal conditions. The term that fits is rational decision making. It views decision making as a logical, step-by-step process: define the problem, set objectives, generate alternatives, evaluate each alternative against chosen criteria, and select the option that maximizes value. This approach assumes decision makers have complete information, clear preferences, and can weigh trade-offs objectively.

In contrast, the other approaches describe more real-world or alternative ways decisions often unfold: bounded rationality acknowledges limits in information and cognitive capacity, leading people to satisfice rather than optimize; intuitive decision making relies on gut feelings and quick judgments without formal analysis; incremental decision making involves small, gradual changes rather than a full optimization.