Bounded Rationality
In Herber Simon's later work (especially March and Simon 1958), greater
emphasis is put on the variability inherant in tasks and environments in
addition to the cognitive limits of organizational actors. Individuals use
"performance programs" to help in decision-making, though in uncertain
situations decision-making is more like problem-solving. In volatile environments
organizations may have to even institutionalize innovation into performance
programs as well.
Furthermore, they discuss how decision-makers "satisfice" rather
than optimize, attend to problems sequentially than simultaneously, and
rely more on performance programs than novel approaches to problems. Some
environments are so complex that organizations must rely on simplified decision-making
to function.