diff --git a/lib/core.ps1 b/lib/core.ps1
index 1640d1a433..555e9aa20b 100644
--- a/lib/core.ps1
+++ b/lib/core.ps1
@@ -269,6 +269,15 @@ powershell -noprofile -ex unrestricted `"& '$resolved_path' %args%;exit `$lastex
     }
 }
 
+function search_in_path($target) {
+    $path = (env 'PATH' $false) + ";" + (env 'PATH' $true)
+    foreach($dir in $path.split(';')) {
+        if(test-path "$dir\$target" -pathType leaf) {
+            return "$dir\$target"
+        }
+    }
+}
+
 function ensure_in_path($dir, $global) {
     $path = env 'PATH' $global
     $dir = fullpath $dir
diff --git a/lib/install.ps1 b/lib/install.ps1
index acdc936d27..45a08df8f4 100644
--- a/lib/install.ps1
+++ b/lib/install.ps1
@@ -679,14 +679,16 @@ function create_shims($manifest, $dir, $global, $arch) {
         $target, $name, $arg = shim_def $_
         write-output "Creating shim for '$name'."
 
-        # check valid bin
-        $bin = "$dir\$target"
-        if(!(is_in_dir $dir $bin)) {
-            abort "Error in manifest: bin '$target' is outside the app directory."
+        if(test-path "$dir\$target" -pathType leaf) {
+            $bin = "$dir\$target"
+        } elseif(test-path $target -pathType leaf) {
+            $bin = $target
+        } else {
+            $bin = search_in_path $target
         }
-        if(!(test-path $bin)) { abort "Can't shim '$target': File doesn't exist."}
+        if(!$bin) { abort "Can't shim '$target': File doesn't exist."}
 
-        shim "$dir\$target" $global $name (substitute $arg @{ '$dir' = $dir; '$original_dir' = $original_dir; '$persist_dir' = $persist_dir})
+        shim $bin $global $name (substitute $arg @{ '$dir' = $dir; '$original_dir' = $original_dir; '$persist_dir' = $persist_dir})
     }
 }