Every person is required to make decisions in their life which needs to be accurate in order to provide benefit to all the users that developed over a certain period. This report is all about selecting a situation on which a user will take decision by applying the theoretical concepts of bounded rationality theory.
Nature of decision taken
XYZ company currently deals with providing food and beverage services to its variety of clients in order to maintain loyalty among all the customers in the external business environment. The company wants to improve their current conditions of their business by expanding their current market share as they are extending their existing share by taking higher competitive advantages over the external business environment (Barlett ed., 2016). Expansion decision was made by the business owner as their desired aim is to capture higher market share by enhancing the existing quality of services offered by them to all its customers. The company uses the external opportunities in terms of FDI in order to uplift the current conditions of business.
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Current expansion decision has made by the CEO by discussing the current matter with all the board of directors as the support of all the members of an enterprise is essential in order to achieve higher market advantage (Roll and Cheater, 2016). Support of all the employees is essential as without the support all the personnel of an entity a business will not able to accept the external market opportunities. Foreign direct investment chosen by an entity will be regarded as the biggest decision as this will affect all other companies operating in a similar industry as this would increase the existing market competition.
The decision of expansion has taken by the top management by their decisions get fluctuated with the each and every support of all the members stage doubts or queries of all the members will be resolved easily in order to facilitate all the members to support the decision of the business owner.
Factors Influencing Decisions
Various factors that are required to be considered by an entity owner in order to execute its decisions as their basic motive is to implement the decision in a business in order to generate higher outcome of a decision.
Support of employees is the ultimate factor that are required to be considered as important rationale that help an employer in taking important business decision. The expansion business will satisfy the needs of all the employees who are working for the betterment of the business (Crane and Matten, 2016). Satisfaction of personnel is essential as expansion decision of an entity will not get achieved in fewer employees as in this way an entity will be suffered with heavy loss due to lack of resources and its overall application in a business in generating higher sales and the revenue within a given span of time.
The basic concern of an employer while taking important decision is trio emphasise on the final outcome of a particular decision taken by them in their business (Roll and Cheater, 2016). Role of an entity gets increases with the passage of time when they focus on satisfying all the needs and higher expectations of all the external market users as their basic aim is to achieve the desired aims by capturing higher market share in the external business environment.
Outcome of Decision
The outcome of this expansion decision is fruitful for an entity as their existing value of the business get increases with the time as the more customers will be attracted towards the business in generating higher business revenue for an entity. Quality of all the services will get improved as by adopting FDI as major hero of a business entity will be able to deliver higher quality goods in order to satisfy all the customers towards their business.
Decisions are important part of every business that needs to be taken by an employee after considering various key factors which are required by an entity in order to generate higher outcome. An entity owner will focus on various parameters as important guiding framework that improves the quality of decision taken by a person in an entity (Hertel-Fernandez, Skocpol and Lynch, 2016). Decision making process requires analytical ability that will be helpful for an individual in order to expand their current share in the external market. Role of a business entity improves with the time. Theoretical concept will be applied in order to improve the quality of decisions taken by an employer for the betterment of current business that helps in generating higher sales and the revenue of a business concern.
Bounded rationality is one of the theory used for improving the quality of decisions taken by an entity owner in their business. This is a theory that depicts that rationality of a user will be restricted while taking a particular decision in order to get satisfaction in each and every decision taken by an individual. Satisfaction is regarded as the positive factor for a user who make decisions in a business which helps in generating satisfactory solution of a particular problem (Crane and Matten, 2016). Views and opinions of a user is restricted in terms of specific decision taken by them as their major emphasises lies on improving the existing condition of a business by resolving all the doubts and queries faced by an individual while choosing various aspects important for them. Behaviour of human will be analysed in the current model as the difference among satisfaction and dissatisfaction will be ascertained which helps in increasing reliable solutions to all the problems incurred in a business as the efforts made by a user while taking a decision in a business will increases with the passage of time (Glazer and Rubinstein, 2016). Cognitive limitation has imposed on an individual in order to improve their thoughts and opinions by moulding them on a right direction towards the decision taken by an individual for the betterment of an entity. Resources used while taking a decision will also be explained in order to generate positive aspects rather than emphasises on the negative aspects associated with a particular decision as every wrong decision leads towards the deterioration of the desired aims and targets taken by an entity (Schneiderman, 2017). Tastes and preferences of all the external market users are taken into consideration as the efficiency of every decision is associated with each and every decision taken by an individual. In the current case scenario where expansion decision of XYZ Ltd has taken by top management of the company are required to focus on their common aim without getting fluctuating from its common aim without thinking about all other parties associated with the current decisions.
I need to analyse by analytic ability as this would help me in taking important decisions in my life. I need to improve my judgemental skills as in the tough time in a business I need to be calm and take suitable decisions in the favour of both the parties involved in a decision-making process. My employer is expanding its business by taking external market opportunities in form of foreign direct investment in their business as the role of the existing business gets increase when new opportunities are taken by employer as his would help them in expanding their business. My decision would impact my employer's business as if I resist to support my employer in the expansion of business this would badly affect its business as in lack of employees support an entity will not able to maintain its survival in the external business environment. But at the same time, if I support the current decision taken by CEO of XYZ Ltd this would be better for me as it creates lots of opportunities for me in order to enhance my existing skills and the capabilities in order to stay for long period in the similar sector. Before making any decision on the business expansion, I need to ask about the positive aspects of the current expansion as simply resisting in supporting the business concern in the current matter will affect my overall career as I have no other job choice as I don't get job easily if I lose job in mid of my career. Application of FDI in the existing business will enhance the quality of services offered by an entity to all is customers as the customers will get variety of products in cheaper costs s compared to all the sellers located in the industry. I can use this Bounded rationality theory that restricts unwanted thoughts and opinions about the current decisions of business which would negatively affected my decisions by distracting my determination towards the decisions of expansion of an entity. After analysing the positive as well as negative aspects related to the current decisions I would support an organisation as shifting to new aspects will not always affect me as adopting FDI will increase the overall business standards. Taking decision in favour of my career will be supported as this would enhance the quality of different career paths.
It can be summarised from the above report that bounded rationality theory has used effectively by a user in order to make good and accurate decisions. Decision related to business expansion will be supported by an employee by understanding the benefits of the decision by using this particular theory.
Barlett, P. F. ed., 2016. Agricultural decision making: Anthropological contributions to rural development. Academic Press.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Glazer, J. and Rubinstein, A., 2016. Models of bounded rationality and mechanism design. World Scientific Books.
Hertel-Fernandez, A., Skocpol, T. and Lynch, D., 2016. Business Associations, Conservative Networks, and the Ongoing Republican War over Medicaid Expansion. Journal of health politics, policy and law.
Roll, C. L. and Cheater, F., 2016. Expectant parents’ views of factors influencing infant feeding decisions in the antenatal period: A systematic review. International journal of nursing studies.
Schneiderman, D., 2017. Lauge N. Skovegaard Poulsen. Bounded Rationality and Economic Diplomacy: The Politics of Investment Treaties in Developing Countries. European Journal of International Law.
Smith, B. R., Kistruck, G. M. and Cannatelli, B., 2016. The impact of moral intensity and desire for control on scaling decisions in social entrepreneurship. Journal of Business Ethics.
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