CMA Foundation · Fundamentals of Business Economics and Management · Decision-making - Types and Process
Which of the following is an external constraint that limits the effectiveness of a manager's decision, rather than a personal psychological barrier?
Legal restrictions and government regulations are an external constraint. They come from the environment and narrow the choices available to a manager. Overconfidence, personal bias and reluctance to take risk are internal psychological factors within the decision maker rather than outside limits.
- AOverconfidence of the manager
- BPersonal bias in judging alternatives
- CLegal restrictions and government regulationsCorrect
- DReluctance to accept risk
Explanation
Legal and regulatory restrictions arise from the environment outside the manager and limit the available choices. Overconfidence, bias and risk reluctance are internal, personal or psychological factors.
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