Analysis of Decisions You Have Observed in the Workplace - Assignment Example

Bounded rationality Name Institution The decision Avril, the branch manager is off to attend a community social responsibility (CSR) in Dublin for a week. In her absence, a project bid for the construction of an education center is due for tendering the same week. Avril is at a loss upon who to leave in charge of the branch and of the project which is worth £500,000. Romeo, who could be said to be the next in charge is an ambitious, hardworking man who very much envies the job Avril does and thinks that he is better suited to do be the manager. Avril has noted that Romeo has been coming to work late and taking rather really long lunches. She does not want to entrust the project to him. Jenny, a recent graduate is the one given the task of steering this project. She is tasked with organizing the team to deliver the proposal before the deadline elapses on Friday the same week especially since her competition will also be doing the same. Jenny overhears Romeo having a conversation over the phone talking to a rival company and she is at a loss on what to do. Rumours have been spreading in the office that Romeo could be sharing vital information with other rival companies. Jenny has known Romeo for some time having met at a conference three years earlier and they have had a cordial relationship since then. The other employees of the company have differentiated opinions on the subject. She could decide to either report the matter to Avril when she comes back from the trip or let it go, hoping that Romeo has the best interests of the company at heart. Whatever decision she makes will have an impact, either adversely or positively depending on whether it is to be proven that Romeo was selling secrets or not. she decides to expose him. (314 words) Analyzing Jenny’s decision Jenny’s decision to expose Romeo is made within the boundaries of the theory of bounded rationality. Bounded rationality is a theory that was postulated by Herbert Simon in 1995 and it states that in a decision making process, the kind of decision that one makes is limited to the information that these people are exposed to (Simon, 1995). Other factors that come into play in this decision making process are time frame and span of the minds of the people who make these decisions (Gabaix, 2013). According to Simon (1995) and Selten (1999), the process of formulating a cognitive decision pertaining to a certain scenario could never be wholesomely objective because these decision are constrained by the limitation of the rationality of the human mind. Technically, people make rational decisions basing them upon the context and reach of their knowledge and this forms the theory of bounded rationality (Simon, 1995; Selten, 1999; Gabaix, 2013; Rubinstein, 1998). In this office, Jenny is faced with a number of issues. To relate to how she makes the decision of exposing Romeo, it is important to analyze the information that she is exposed to so that we can understand whether she acts along the lines of bounded rationality. Firstly, let’s explore her reasoning before bringing in the other opinions of the other team members. Jenny is a recent graduate having studied project management in college. Now she is tasked with the job of bringing a tendering project to completion, so we can imply she is duly qualified for the job based on her academic background. The time frame for the same is a week and they stand to lose £500000 if this is not done in time and done appropriately. She met Romeo at a conference three years ago and she liked him. Her relationship with Romeo has been kept quite professional during this period and she thinks he is a hard worker and a capable hand in the office. She has also noticed that Romeo is coming to work late and he takes long lunches. She has also overheard the rumours circulating in the office that Romeo could be selling trade secrets to the rival company but she has no evidence. This is the much information she has and her dossier on Romeo is quite thin. Then she overhears him having a conversation over the phone with another company and her suspicions are aroused. She asks the other team members of their take. The reason she does that is to enable her to increase her avenues of information so that she could break the ties of bound rationality and become objective in her decision. The decision to report the activities of Romeo and exclude him from the project due on Friday of the same week, Jenny applies the theory of bound rationality based on the rationale discussed in the ensuing sentences. She has a week to finish the project and present the tender proposals to the tendering committee. This means that she has to rally her team to the absolute and timely completion of the task ahead. Some team members believe that Romeo is innocent, basing their argument on totally personal issues. Others are more subjective and they look at the issue from a more professional level. However, in the end the decision lies with Jenny. The union worker urges her to call him once she has enough evidence against Romeo. Her best friend James at the university urges her to report the matter. Jenny faces a dilemma based on two factors; what if she decided not to report and it comes out that Romeo was actually trading secrets with the enemy? What if she reports and Romeo was found to be innocent? Her decision to report Romeo emanates from this pool of information that Jenny has. She has to ensure that her decision is totally objective despite being constrained by this bounded rationality. Putting the interest of the company comes first and any activity that might be seen to derail this interest is shunned. Jenny must also prove that she is capable of managing projects that she is handed so that her portfolio in the company and hence her career could grow. (701 words) Reflection If I had been in a similar position as that Jenny found herself in, I would have applied the theory of bounded rationality (Simon, 1995) to make decision in the company. Arthur (1994) argues that deductive reasoning capacity is affected by the information that one is exposed to. For instance, a person can only be able to make an informed decision regarding a certain subject based primarily on the information that he or she has at her disposal. The implication is simple; that the accurateness or inaccuracy of the decisions that we make is based on the information that we have in our hands that we use to make those decisions. Fiori (2005) and Aumann (1997) agree with Arthur (1994) in his statement on information levels resulting into deductive reasoning and bounded rationality. The job of a manager is very tricky as he or she is expected tom make decisions that are well informed, subjective and ones that are designed keep the interests of the company first (Shanteau, 2001). They should not be seen as to favor some people or make some decisions that are biased in nature to prevent chaos in the workplace. Romeo seems to have a lot of enthusiasm at work, but he feels sidetracked and he feels that he is not getting what he deserves. It is an open secret in the office that Romeo wishes to have Avril’s job as he feels he could do it better than she could. In my opinion, I would rate Romeo as a man to watch. I would expose what he intends to do following a matter of deductive reasoning. Either way, there would be consequences for the action I take, or not take. If I decide not to report him and it turns out that he actually has been selling secrets to the rival company, it will not only mean loss of business for our company but also loss of confidence in me as a project leader. On the other hand, if I turn him in and it is found out that it is not true, my confidence as a project leader will be much undermined. Looking at all the evidence in this case, resulting from the information available through a rational scrutiny of the other team members, it points out to the fact that Romeo is actually trading secrets with a rival company. Firstly, there is the tendency of coming late that he has developed of late and taking very long lunches. Next would be the rumours spreading across the office that Romeo could be engaged in talks with rival companies. This implies that he could be trading or even selling our own trade secrets with the rival companies. Lastly, I personally overhear him speaking over the phone to other people of rival companies. As a result of this and acting on the premises of bounded rationality, I would report the activities of Romeo so that I could prevent such acts from reoccurring in the future and at the same time cement my position as a capable project manager. (512 words) References Aumann. R.J. (1997). Rationality and Bounded Rationality. Games and economic behavior. 21(2). pp.1-14. Arthur. B. (1994). Inductive Reasoning and Bounded Rationality (The El Farol Problem). American Economic Review. 84(406). pp. 1-11. Fiori, S. (2005). Simon’s Bounded Rationality. Origins and use in Economic Theory. Working paper series 09/2005. Retrieved September 30, 2013 from http://www.cesmep.unito.it/WP/2005/9_WP_Cesmep.pdf Gabaix. X. 2013. A Sparsity-Based Model of Bounded Rationality, Applied to Basic Consumer and Equilibrium Theory. Working paper. Retrieved September 30, 2013 from http://pages.stern.nyu.edu/~xgabaix/papers/sparsebrconsumer.pdf Rubinstein, A. (1998). Modeling Bounded Rationality. Zeuthern Lecture book series. pp. 1-204. London: MIT Press. Shanteau, J. (2001). Encyclopedia of Psychology and Behavioral Science, (3rd ed), pp. 913-915. NY: Wiley. Simon. H. A. (1995). A Behavioral Model of Rational Choice. The Quarterly Journal of Economics. 69(1).pp. 99-118. Selten, R. (1999). What is Bounded Rationality? SFB Discussion Paper B-454, Retrieved September 30, 2013 from http://www.wiwi.uni-bonn.de/sfb303/papers/1999/b/bonnsfb454.pdf Read More