Question

Decision making

Harish Bhatt, a very bright and ambitious young executive, was
born and raised in Jaipur. He graduated from a local college
and married a girl who was his class-mate. Harish then went to
Mumbai where he received an MBA. He was now in the
seventh-year with Birla Steel Ltd. which was located in Jaipur.
As part of an extension programme, the Board of Directors of
Birla Steel decided to build a new branch plant. Bhatt was
selected to be the manager at the new plant. He was also
informed that if the new plant is a success he would be
promoted to a higher post. The location of the new plant was to
be decided by an ad hoc committee of which Bhatt was made
the chairman. In the committee’s first meeting Bhatt explained
to the members the ideal requirements for the new plant and
gave them one month to come up with three choice locations.
When after a month the committee re-met, it recommended the
following cities in order of preference: Gurgaon, Chennai, and
Indore. Bhatt thanked the committee member for their fine job
and told them he would like to study the report in more depth
before he made his final decision. That evening he asked his
lovely wife,” Honey, how would you like to move to Gurgaon?”
Her answer was quick and sharp. “Heavens no!” She said, “ I
have lived in Rajasthan all my life and am not at all inclined to
move out to Gurgaon – extension of Delhi. That kind of life is
not for me.” Bhatt weakly protested by saying that the
committee had ranked Gurgaon as the best location for the new
plant. The second was Chennai and the third was Indore. His
wife thought a moment, then replied,

” Well I would consider moving to Indore, but if you insist on
Gurgaon you will have to go by yourself.”

The next day Bhatt called his committee together and said, “
Gentlemen, you should all be commended for doing an
excellent job on this report. However, after detailed study, I am
convinced that Indore will meet the needs of our new plant
better than Gurgaon or Chennai. Therefore, the decision will be
to locate the new plant in Indore, Thank you all again for a job
well done.”
a) Did Bhatt make a personally rational decision?
b) Did he make an organizationally rational decision?

Answer 1

Answer:

- Yes, he made a personally rational decision

- No, he didn't make an organizationally rational decision