RATIONAL DECISION-MAKING IN BUSINESS ORGANIZATIONS

Political Economy or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing. Thus it is on the one side a study of wealth; and on the other, and more important side, a part of the study of man. For man's character has been moulded by his every-day work, and the material resources which he thereby procures, more than by any other influence unless it be that of his religious ideals. In its actual development, however, economic science has focused on just one aspect of Man's character, his reason, and particularly on the application of that reason to problems of allocation in the face of scarcity. Still, modern definitions of the economic sciences, whether phrased in terms of allocating scarce resources or in terms of rational decision mak- ing, mark out a vast domain for conquest and settlement. In recent years there has been considerable exploration by economists even of parts of this domain that were thought traditionally to belong to the disciplines of political science, sociology, and psychology.