The Not-So-Smart Phone Company Decision-Making
The article called Not-So-Smart Phone is devoted to analyzing the experience of the irrational decision-making of the RIM company. The main problem of the executives was underestimating the competitors and overconfidence in the quality of their products. As a result, they provided an insufficient market analysis and lost their positions compared to the iPhone and Android. The wrongful and irrational interpretation, the psychological biases, and the inability to adjust to the market conditions caused the decay of the world’s most influential technology company.
The two distinct groups of customers with which RIM worked were the business and individual clients. It was impossible for the company to provide the services for both clients because their needs were different from the technological perspective. The company had no technical resources and developments to combine the daily functions with a high level of security. RIM had plans to advance the devices to the corporate clients first. However, the changing mobile market and the iPhone and Android experiences showed that this process should be reversed. The primary clients base should be oriented on the individual customers. One of the significant risks in decision-making was the evaluation of the iPhone position. Underestimating the influential competitor caused negative consequences.
The RIM’s decision-making can be considered as having bounded rationality. RIM has one significant problem of low level of reaction to the market change, which can be seen in the discussed case and the whole policymaking. Mentioned companies abandoned the partnership due to the bounded rationality in decision-making of the RIM’s executives. It is also irrational to focus on one type of client, in the RIM case, on corporative. The company lost its position due to the limited evaluation of customers’ needs. Another irrational decision was to underestimate the competitors due to overconfidence.
The executives of RIM were too focused on the advantages of their production. They were confident in the security level and QWERTY keyboard pros, which led to the incorrect evaluation of the market conditions. Rational analysis of the customers and mobile trends could help the company to adapt to the changes and gain a competitive advantage.
Employers can take advantage of such a situation even though it is unethical. Today’s mobile market should focus on creating devices that can be used efficiently for personal and work aims even though it is more convenient to use one phone. However, the security level can become doubtful due to diverse activities.