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8/3/2019 Bounded Rationality in Business
http://slidepdf.com/reader/full/bounded-rationality-in-business 1/15
Influence of government in China
US based Google started providing its services in China in2000.
In 2002 Google became the leading search engine in theChinese market.
But the content of search had to pass through Chinesefirewalls, which often stalled the browser and slowed itdown.
Then the data received from US servers was then filtered byChinese government and censored the data that violated theGovt. regulations.
But this slowed down the speed of internet and the usersfound it inefficient to use.
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In 2005,a Chinese search engine company, Baido became
popular, bcoz it was 7 times faster than Google as the
company filtered the content itself.
Google lost its market share in china but still to have its presence in china it tried to compete by having its own
servers in China.
But again after setting up the local servers, Google had to
take a license known as ³Internet Content Provider License¶that kept a restriction on sensitive data transferred by Google.
As a result, finally users found the content of Google to be
less reliable and also Google was unhappy with the services it
provided in China and this brought end of Google- China.
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US SERVER
CHINESEFIREWALL
CHINESEINTERNET
SERVICE
TRANSPONDER
CENSORED
CONTENT
SERVICE
PROVIDER
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Other examples of how Bounded Rationality bringschanges in business decisions are :
Different players of Airline Industry recentlyincreased the air fares unexpectedly high tomaximize their profits.
But the Aviation Ministry interfered to bring downthe escalating fares and relieve the customers. Thus, the influence of Govt. limits the profit of many
companies.
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³There is no case for
capping airfare either up or
down in a liberalisedenvironment. However, if
the government chooses to
do so, it will have to look
comprehensively at bothsides of the equation," said
Vijay Mallya, chairman of
Kingfisher Airlines.
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The idea that executives should makedecisions according to what their intuition
or gut tells them.
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Hitachi is going beyond the application of
new technology that has been developedfor new power plants to old facilities
Hitachi is making use of IT, which has
developed rapidly in recent years, toprovide global services that contribute to
life-cycle cost minimization for powergeneration facilities
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Steve jobs the charismatic Apple founder pioneered
several industries.
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Jobs twice altered thedirection of thecomputer industry.
(i) In 1977 the Apple IIkicked off the PC era,and the graphical user
interface launched byMacintosh in 1984 hasbeen aped by every othercomputer since.
(ii)Jobs conceived of "desktop publishing,"gave the world the laserprinter, and pioneeredpersonal computernetworks.
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He persuaded themusic industry, the
television networks,andHollywood to lethim show them how todistribute their wares
in theD
igital Age withthe iTunes Music Store.
Five industries thatJobs has upended
i.computers,ii.Hollywood,Iii.music,iv.retailing,
v.wireless phones.
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We don't think in terms of power," says Jobs."We think about creating new innovativeproducts that will surprise and delight ourcustomers.
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THANK YOU!!!!!