scholarly journals Contextualized Behavior for Improving Managerial and Entrepreneurial Decision-Making

2021 ◽  
Vol 11 (1) ◽  
pp. 14
Author(s):  
Matteo Cristofaro ◽  
Maria José Sousa ◽  
José Carlos Sanchéz-Garcia ◽  
Aron Larsson
Keyword(s):  
Decision Making ◽  
Bounded Rationality ◽  
Herbert Simon ◽  
Entrepreneurial Decision

Since the conceptualization of bounded rationality by Herbert Simon (1947), management scholars started investigating how people—managers and entrepreneurs—really make decisions within (and for) organizations [...]

Reasonable Bounds on Rationality

2020 ◽  
Author(s):  
Igor Grossmann ◽  
Richard Eibach
Keyword(s):  
Decision Making ◽  
Bounded Rationality ◽  
Cognitive Resources ◽  
Previous Theory ◽  
Making Choices ◽  
Points Of View ◽  
Sound Judgment

Previous theory and research on bounded rationality has emphasized how limited cognitive resources constrain people from making utility maximizing choices. This paper expands the concept of bounded rationality to consider how people’s rationality may be constrained by their internalization of a qualitatively distinct standard for sound judgment, which is commonly labeled reasonableness. In contrast to rationality, the standard of reasonableness provides guidance for making choices in situations that involve balancing incommensurable values and interests or reconciling conflicting points-of-view. We review recent evidence showing that laypeople readily recognize the distinctions between rationality and reasonableness and thus are able to utilize these as distinct standards to inform their everyday decision-making. The fact that people appear to have internalized rationality and reasonableness as distinct standards of sound judgment supports the notion that people’s pursuit of rationality may be bounded by their determination to also be reasonable.

Influence of Confucian culture on entrepreneurial decision making using data from China's floating population

2020 ◽  
Vol 48 (7) ◽  
pp. 1-12
Author(s):  
Ran Xiong ◽  
Ping Wei
Keyword(s):  
Decision Making ◽  
Floating Population ◽  
Positive Role ◽  
Confucian Culture ◽  
Chinese Nation ◽  
Using Data ◽  
Entrepreneurial Decision ◽  
And Behavior ◽  
The Relationship

Confucian culture has had a deep-rooted influence on Chinese thinking and behavior for more than 2,000 years. With a manually created Confucian culture database and the 2017 China floating population survey, we used empirical analysis to test the relationship between Confucian culture and individual entrepreneurial choice using data obtained from China's floating population. After using the presence and number of Confucian schools and temples, and of chaste women as instrumental variables to counteract problems of endogeneity, we found that Confucian culture had a significant role in promoting individuals' entrepreneurial decision making among China's floating population. The results showed that, compared with those from areas of China not strongly influenced by Confucian culture, individuals from areas that are strongly influenced by Confucian culture were more likely to choose entrepreneurship as their occupation choice. Our findings reveal cultural factors that affect individual entrepreneurial behavior, and also illustrate the positive role of Confucianism as a representative of the typical cultures of the Chinese nation in the 21st century.

Beyond Bounded Rationality: CEO Reflective Capacity and Firm Sustainability Performance

2021 ◽  
pp. 1-38
Author(s):  
Yingya Jia ◽  
Anne S. Tsui ◽  
Xiaoyu Yu
Keyword(s):  
Decision Making ◽  
Bounded Rationality ◽  
Three Dimensional ◽  
Strategic Decision ◽  
Future Research ◽  
Sustainability Performance ◽  
Business Executives ◽  
Dimensional Measure ◽  
Reflective Capacity ◽  
Mediating Mechanisms

ABSTRACT Optimal or rational decision making is not possible due to informational constraints and limits in computation capability of humans (March & Simon, 1958; March, 1978). This bounded rationality serves as a filtering process in decision making among business executives (Hambrick & Mason, 1984). In this study, we propose the concept of CEO reflective capacity as a behavior-oriented cognitive capability that may overcome to some extent the pervasive limitation of bounded rationality in executive decision-making. Following Hinkin's (1998) method and two executive samples, we developed and validated a three-dimensional measure of CEO reflective capacity. Based on two-wave surveys of CEOs and their executive-subordinates in 213 Chinese small-medium sized firms, we tested and confirmed three hypotheses on how CEO reflective capacity is related to a firm's sustainability performance (including economic, societal, and environmental dimensions) through the mediating mechanisms of strategic decision comprehensiveness and CEO behavioral complexity. We discuss the contribution of this study to the literature on the upper echelons and information processing perspectives. We also identify the implications for future research on strategic leadership and managerial cognition in complex and dynamic contexts.

scholarly journals Global development of innovative financial services. Does family economic socialization influence investor behavior in real estate crowdfunding?

2021 ◽  
Vol 129 ◽  
pp. 02010
Author(s):  
Renata Legenzova ◽  
Gintarė Leckė
Keyword(s):  
Decision Making ◽  
Real Estate ◽  
Bounded Rationality ◽  
Financial Services ◽  
Family Members ◽  
Investor Behavior ◽  
Equation Modeling ◽  
Global Development ◽  
The Impact ◽  
Economic Socialization

Research background: Globalization, digitalization and growth of technological innovations trigger development of new financial services, such as real estate crowdfunding. Seeking better return opportunities individual investors often disregard neoclassical decision-making criteria, while behavioral factors, such as social influence, emotions, cognitive abilities are gaining importance. This paper addresses the role of family economics socialization as a complex process by which individuals acquire social skills, knowledge, behavior patterns needed to make investment decision by purposively or spontaneously interacting with their family members. Purpose of the article is to assess if and how family economic socialization impacts on investor behavior in real estate crowdfunding. Methods: Research data was collected through an online survey of Lithuanian real estate crowdfunding investors. Then structural equation modeling technique was employed to investigate the impact of family economic socialization on behavior of real estate crowdfunding investors. Findings & Value added: Findings revealed that majority of real estate crowdfunding investors make bounded rationality investment decisions. Family, as one of the main agents of the economic socialization, does not ensure rationality of the crowdfunding decision-making process. Purposive family economic socialization has no impact on the behavior of investors with bounded rationality, yet it has a significant impact on behavior of rational family members. Spontaneous family economic socialization proved to have a positive and significant impact on the behavior of investors with bounded rationality. Taking into consideration rapid global development of innovative financial services market, such results might be a troubling signal for the product developers and market regulators.

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