Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Caselets on Leadership


A Troublesome Employee


Ms. Z was a team leader managing a team of 5 members. There are targets to be achieved quarter over quarter. Any lapse would severly curtail her growth irrespective of the reasons for lapses. A new employee Ms. V joins the team. Ms. V suffers a hangover from a personal problem and thus seems least interested in work. No matter whatever task assigned to her, she is stubborn not to work. At the very least, a perception is sought to convey she is not capable of working. Ms. Z however knows V has some capabilities and perhaps pretending the personal hangover as an excuse for non-performance. She perhaps is bidding time to get a better offer. A discussion with the superior fails to yield any result. Apparently, the boss seems least interested in penalising the employee as she seems to have been pushed into the organization on compassionate grounds by somebody top in the hierarchy. The other members of the team start complaining about the non-performance of the new employee. The team leader is stuck between a rock and hard place. If non-performance seems rewarded at least implicitly, it has an impact on the other employees, they too start taking their work lightly. The superiors have no interest even in transferring the troublesome employee to some other department. For the team leader however, her performance is contingent to targets. How will Ms Z handle the scenario? What kind of leadership she has to provide. What motivational theories come into the fore a Ms. Z grapples with the targets? What personality traits do we see in Ms V and the boss?



An Act Gone Wrong


Ms. A was heading a team of social media marketing. They landed a contract of marketing a mega event expected to be graced by celebrities. Any sign of even a minute shortcoming would boomerang big. Given the lead time of around 3.5 months, she with a team of 15-20 members began toiling day and night for the first task- building and refining the database. .in parallel, marketing campaigns were launched across various social media platforms.  The boss Mr.J however wanted to retain the email component with himself.  He asked the team to hand the database to enable him to mail the same through the mass email platform he has had access to. Ms. A was in touch Mr.J for the follow up, yet he seemed to procrastinate. Perhaps after a couple of weeks, the mails were sent as part of promo campaign. During the course of campaign, allegedly on spam ground, the mail id was blocked. Mr. J kept it to himself and did not reveal to Ms. A or other members of the team. It is by chance Ms. A comes of know of this. They depended on Mr.J for the emails, now on ground of mail-id being blocked no progress seemed to have happened. Further J sounded casual. Ms. A and her team whose fortunes depended on the success of the event were left clueless. There was a hardly a month left for the event and they had a mammoth task ahead. It seemed they were back on square one.  How would Ms. A motivate her team to perform? What kind of leadership does Ms. A will have to demonstrate to achieve the outcomes? What kind of leadership and personality does Mr. J represent? Will textbook leadership, motivation and personality theories work in this context?

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