Organisational Politics – Through the Lens of Rationality & Bounded Rationality

Rationality is a concept that originated in ancient Greece, where philosophers interpreted mythological texts by applying logic and reasoning. The prominent philosophers - Aristotle and Plato, present their respective schools of thought on human thought and reasoning. As per an article, (Lab, n.d.) on one side, Aristotle argued that humans are rational beings who act based on thought; on the contrary, Plato established the foundation of logical reasoning and the systematic pursuit of knowledge. 

In the 17th-18th century, the “Age of Reason” proclaimed that rationality evolved from seeking absolute certainty to embracing probabilistic reasoning, which means that sound decisions could be focused on despite of the incomplete information and uncertainty by way to emphasising the reasonable responses. Particularly in the year 1776, with the release of Adam Smith’s book – “The Wealth of Nations”, he proposed the concept of Rational choice theory, which suggested that individuals make decisions by weighing costs and benefits, and this shaped the modern economic thought.

With the advent of neo-classical theory in the 20th century, the concept of “Perfect Rationality” emerged in normative economics, i.e., how people ought to make choices. This concept of rationality basically revolves around the thought processes that the evaluation of choices can be done for achieving a goal or for finding an optimal solution to a problem, i.e., to attain “THE BEST” solution of a problem. Based on this concept of rationality as a core assumption, several theories in different domains have been introduced like – theories from economics (Expected Utility Theory or Utilitarianism, Game Theory, Cost-Benefit Theory, Prospect Theory, etc.); from Psychology (Theory of Planned Behavior, Information Processing Theory, etc.) from Organisartional behaviour (Agency Theory, Transaction Cost Economics, Strategic Choice Theory, etc.).

But, in 1957, Herbert Simon critically challenged the framework of ‘Rationality’ by highlighting its unrealistic assumptions and propounded the concept of “Bounded Rationality”. He stated that a perfectly rational decision cannot be made because of shortcomings that individuals face with regard to the inadequacy of information, the time constraints, and the limitations of their cognitive processes. He added, according to the study, (Cristofaro, 2017), that bounded rationality serves as a satisficing decision-making ability to an individual, i.e., Satisfy+Sufice, which means that enough satisfaction will be gained by a decision-maker and not the optimum one as suggested by the rationality concept. 

In reality, as per an HBR article (Reill, 2023), an individual takes approximately 35000 decisions in a day and if we consciously observe, then most of them are just for our enough satisfaction, as at the end we have to understand our limitations – limitations of cognition, limited information, uncertainty, limited time span and limited resources. He further explained that to arrive at a certain decision, human beings might use their own judgments or mental shortcuts or a rule of thumb known as heuristics. 

The concept of heuristics has also been preliminarily introduced by Herbert Simon in the 1950s, followed by Daniel Kahneman & Amos Tversky in the 1970s. Furthermore, with the conception of the Bounded rationality concept, several psychologists and other researchers sometimes interchangeably use the term with the ‘Irrationality’. Thus, Simon, in the year 1997, clarifies the difference between bounded rationality and irrationality, which could be understood as an equational form as follows:

Bounded rationality = Cognitive limitations + Incomplete Information + Uncertainty + Scarce Resources (time, etc.) + Situational Pressures

In sum, Bounded Rationality = Constrained but reasoned decision-making.

Whereas, Irrationality = Illogical-emotion or intuition-driven behavior, but not aligned with reason

What is Organisational Politics?

Organisational Politics refers to the use of tactics, influence, and power dynamics by individuals or groups within an organisation to achieve either their own goals or the organisational goals. It involves intentional acts of influence to navigate ambiguity, control information, and achieve desired outcomes, whether individual or organisational. Based on this, we can categorise organisational politics into two core aspects – Positive as well as Negative. The key defining trait of political behaviour is its self-serving nature, often at the expense of others or the organisation. This is in contrast to pro-social behaviours, which benefit the organisation.

On the one hand, Jeffrey Pfeffer, a prominent personality in the field of Organisational behaviour, defines organisational politics as "those activities taken within organisations to acquire, develop and use power and other resources to obtain one's preferred outcomes in a situation in which there is uncertainty or dissensus about choices”, while another eminent figure from the domain of organisational psychodynamics – Abraham Zaleznik in his HBR article (Zaleznik, 1970) “Power & Politics in Organisational Life”, explained that work-behaviour and decision making would be based on the power dynamics and thus, viewing organisations as a rational system would be an illusion. 

Furthermore, in support of his opinion on rationality, he described organisations as a political arena where each individual competes for limited resources, influence and status. Seeking power for validating their self-worth drives the psychological need for comparison. The formation of several alliances, coalitions, trust among executives and the distinction between mere compliance and genuine commitment further highlighted the nuanced nature of political behaviour within organisations. 

If managed effectively, political awareness could lead to foster collaboration, resolve conflicts and support leadership effectiveness. However, if unchecked, it may lead to mistrust, fragmentation and organisational dysfunction. Therefore, understanding and navigating these political undercurrents is essential for leaders and employees aiming to thrive in complex and competitive workplace environments.

Based on the Understanding of Organisational Politics, its relation with the bounded rationality can be deduced as follows:

Political Scenario	Bounded Rationality Mechanism
Interpreting motives in ambiguous behavior	Reliance on heuristics and biases
Navigating role conflict or resource competition	Satisficing decisions under pressure
Assessing fairness and justice in promotions	Bounded perception influenced by limited visibility
Choosing political alliances	Strategic decision-making with incomplete information
Avoiding conflict in high-politics environments	Risk-averse, simplified decision-making
Coping with overload from perceived politics	Mental shortcuts to reduce cognitive strain

-submitted by Nisha Bajaj, Ph.D. Scholar (2024-25)

References:

Cristofaro, M. (2017). Herbert Simon’s bounded rationality: Its historical evolution in management and cross-fertilizing contribution. Journal of Management History, 23(2), 170–190. https://doi.org/10.1108/JMH-11-2016-0060

Kacmar, K. M., & Baron, R. A. (1999). Organizational politics: the state of the field, links to related processes. Personnel and Human Resources Management, 17(August), 1–39.

Lab, T. D. (n.d.). Rationality. Retrieved May 21, 2025, from https://thedecisionlab.com/reference-guide/philosophy/rationality

Reill, A. (2023). Subscribe Sign In Latest Magazine Topics Podcasts Store The Big Idea Data & Visuals Case Selections HBR Executive Early career A Simple Way to Make Better Decisions. HBR. https://hbr.org/2023/12/a-simple-way-to-make-better-decisions

Zaleznik, A. (1970). Power and Politics in Organizational Life. Harvard Business Review, 48, 47–60.