Abstract
While strategic decision-making has long been theorised through the lenses of bounded rationality and information processing theory, the rapid emergence of generative artificial intelligence (GenAI) necessitates a re-examination of the fundamental assumptions underlying organisational information processing needs and capabilities, and cognitive decision-making constraints. Using an exploratory approach and in-depth interviews, this study examines how GenAI reshapes the boundaries of managerial decision-making and impacts managerial rationality. Our findings show that GenAI does not eliminate bounded rationality per se but fundamentally reshapes it by redistributing cognitive effort between human and intelligent systems. GenAI expands the scale, speed, and scope of information processing, enabling managers to generate alternative options, explore scenarios, and interpret complex data more effectively. However, GenAI-related benefits are contingent on complementary human capabilities, appropriate governance structures, and responsible integration practices. The study advances decision-making research by proposing a novel conceptualisation of human–machine co-processing, where rationality becomes an emergent property of human–AI interaction and offers new insights into managerial judgment.