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Breaking the Limits of Bounded Rationality

California Mountains Our minds may be boundless but our rationality has limitations. The ability to make accurate and beneficial decisions is one of those core abilities that separates the successful from the unsuccessful. Our rationality is bounded by constraints of ability, time and information which forces us to follow a proper decision-making process to improve outcomes. In organizations, constraints in decision-making ability impacts executive effectiveness as well as employee performance. Bounded Rationality, developed by Nobel Prize winning economist Herbert Simon, states that human beings have limitations on their abilities to make decisions within given circumstances. We are limited by our cognitive abilities, the information they have and the amount of time we need to make a decision. When under pressure to act people inaccurately make decisions that lead to poor outcomes. The study of bounded rationality is important for anyone who needs to make important decisions. Wh

Report Shows Americans Need Help Avoiding Financial Ruin

Fancy cars and designer clothing make us look great but hide a deeper problem of little personal savings and poor fiscal management habits. We think everyone is doing better than us, but according to a Bankrate.com study, 63% percent of Americans haven't set aside even $1,000 to cover emergencies. To avoid future financial ruin and get on the right fiscal track you should consider a budget overhaul based on your needs. We as Americans can be too focused on how we look today without balancing out the needs of tomorrow. A chart by the Organization for Economic Co-operation and Development shows that the average household savings rate is 4% which is lower than other many other countries. Making changes can help you overcome problems and begin to save money while living a more genuine life. Risks of Low Emergency Savings If you are drowning in bills and debt, you might consider adjusting your habits to encourage higher levels of savings. You never know when an emergency occurs

How Emotions Enhance Leadership Skill

All great achievements in society start with a conversation. As ideas spread they take on a life of their own. Leaders put themselves at the center of these conversations by influencing the direction of discussion. National, local, business, personal and just about every other type of leader share similar traits. Those who can define events and use emotion to encourage greater action carry the unique traits of great leaders. Effective communication is intertwined with the ability to motivate people through the use of emotions. Positive and negative emotional communication styles influence how followers feel (Bono & Ilies, 2006). Leaders ability to influence the mood of a crowd can motivate them to act in ways that leads to successfully overcoming challenges. The Leader can help followers understand and frame ideas in a way that can contribute to better future group performance. Events are socially constructed based on the explanations that are brought forward and don'

CEO Traits Influence Short and Long-Term Company Performance

Successful CEO's have some common traits that help them improve the organizations they lead. CEOs are subject to their stable personality traits influence how they see the world and overcome challenges. Strategic actions are based in CEO personality and impacts the financial performance of the firm. Knowing which traits to look for can have an impact on the long-term performance of the firm. It wasn't long ago that gruff, emotionally unattached and perceptually powerful CEOs were desirable. They demanded short-term results which could be seen immediately in stock price their benchmarks which leads to increasing compensation. Lifespan at any particular organization was between two and four years leaving the long-term consequences for the next leader to handle. Research supports the idea that the CEO's personality influences a firm's financial performance and its longevity. A study conducted at Stanford University discovered that CEO's personality impacted culture

How Going Zen Increases Your Workplace Communication Skills

Communication is as much about how we feel as it is about how we think. Thinking and feeling are connected in a way where one impacts the other. If you having a tough day and someone comes to you with a problem then you are likely to make a snappy response. This reflects on you within the workplace and can impact your perception. Taking a few minutes to get perspective and relax can help you get the emotional balance you need to achieve your goals. When someone comes with a problem take a moment and relax before acting. This will help to ensure that your responses are well thought out and appropriate. This means getting a little zen in your life. Take time to relax, think about what is important to you and learn to respond to problems appropriately. This requires the ability to not let stress cause an overreaction or an inappropriate response. Get grounded so you are working from a place of "you". You may need to make some changes so that you feel that you are fulfill

Intuition and Math as Methods of Picking Stocks

If people acted rationally the stock market would be one of the easiest places to make money. Simple mathematical formulas could tell us just about everything we need to know. Fortunately, people do not always act rationally and the mystery of the stock market is alive. The use of intuition and mathematics may just balance out our selection needs for better outcomes.  No one has a golden formula that predicts outcomes. Some of the best investment firms use complex software, tools, and formulas and at times still get it wrong. They hedge their offerings in a way that helps ensure risk is minimized.  Most of us do not have the ability to use these systems for our personal uses. They are expensive and complex. However, most people can use their intuition and follow up with a more concrete analysis to help determine when to buy and sell stocks.  Intuition isn't about blindly picking any stock you want without consideration to market principles. It is about studying differe

Ethics and the "Power of Being"

Ethics is a stand for the power of being. It is not for the weak, feeble minded, or the faint of heart. It requires a belief and strength few can muster from deep within to make a stand for something greater then themselves. When entire social and business networks have bought into lower values and the need for self-gratification it can be difficult to make a stand for something more important. The problem has been realized over and over in almost every great ethics case. People are subject to their social networks and must follow the rules set forth by society. There are higher order values that represent ideals in society and there are lower order expectations that create day-by-day rules of social engagement. Look back at ethics cases where major foul play occurred and you will find a network of people who found it was easier to keep their mouth shut, play by the rules, and live by the expectations. They have almost no incentive to stand up for anything beyond what was offered f