Growth in terms of revenue and earnings is the priority of every investor. In most companies, rapid developments lead to decreased performance in stock (Jones 201). Growth and death are not found in every organization. However, it is important to note that stagnation does not necessarily translate to death. Growth has some limitations, especially when it is unregulated. It is important to progress slowly in order to effectively handle the change. Evolutions impact on organizational culture. To this end, it is hard to preserve the customs of a growing workforce. In the case of a declining firm, the cultural framework is likely to ‘fall’ with the organization (Jones 49). As such, the company is unable to sustain itself and its culture. A small organization experiencing fast growth may record rapid changes in its customary attributes. Increased business will lead to the recruitment of additional workers. The development translates to cultural shifts.
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Organizational Decision Making
The rational model of economic decision making is based on a number of assumptions. It is viewed as a straight forward way of formulating policies. One presupposition is that decision making progresses through three stages. The three include identification of the problem and formulation of possible solutions (Jones 34). The last stage entails a comparative analysis of all alternatives and selection of the most appropriate one. The assumptions are rational in the context of a typical organization. The reason is that every solution is analyzed carefully (Jones 20).
The best approach is the one with more advantages than disadvantages. Bounded rationality affects most decisions made in a firm. It addresses the issue of limited capacity to process information on the part of the employees and the management. The concept is common in many organizations. The reason is that humans are assumed to be incapable of handling information overload. The approach is adopted in many firms since it is not possible to comprehend and analyze important data when coming up with policies. There are differences between rational and bounded decision making processes. For example, there are variations in the information used and costs incurred when using the two approaches. Bounded rationality has a number of impacts on the decisions made in a firm. For instance, the solution selected is aimed at satisfying the needs of the company (Jones 90).
The Case Study of Mattel’s Barbie
Mattel’s Managers’ Slow Reaction to Change
The managers were slow to adopt change because Barbie was still the best selling toy in the market. What they did not understand was that the world was changing very fast at the time. They feared that altering Barbie may not be acceptable to the consumers (Jones 301). They were unprepared when MGA unveiled the Bratz doll, which took over the market. Jones states that “cognition is the process of knowing through judgment and reason” (p. 301). The cognitive errors that led to poor decision making on the part of the managers include over-generalization and fortune-telling. In relation to fortune-telling, the executives thought that they could predict future outcomes. Overgeneralization made the managers believe that something good will happen in the future just because it happened once in the past.
The Battle between Mattel and MGA
A number of factors affected the decisions made by managers on both sides. Executives at Mattel believed that the idea behind the Bratz doll was stolen from them. They were convinced it was not possible to create a toy that is better than Bratz (Jones 302). As Mattel managers were busy trying to take over their rival’s product, MGA was inventing ways to protect its profits. The defensive element on the part of MGA affected the decisions made by the managers. The physical and emotional impacts of losing a significant market affected Mattel’s way of thinking. The factors impacted negatively on the company’s creativity. Competition helped MGA to think clearly. As a result, the firm emerged victorious at the end of the battle.
Jones, Gareth. Organizational Theory, Design, and Change. 7th ed. 2012. Upper Saddle River, N.J: Prentice Hall. Print.