Since organizations may be viewed from a number of different perspectives, it is important to clarify the assumptions that underlie the analysis of this book. The most basic assumption is that organizations are open social systems which process both external and internal information. Organizational members acquire information from the environment in order to reduce uncertainty and share information internally to reach a common understanding to enable them to proceed with managerial action.
A second assumption is that organizational members have limited information-processing capabilities. This is the case because people usually have to act on the basis of incomplete information about possible courses of action and the consequences of these. Since people have limited time, they are unable to explore all the alternatives relating to any given decision and are unable to assign accurate values to outcomes. Organizational members are essentially bounded in their rationality.