Case Study: Analyzing Reliance Jio's Business Decisions (MGT602)

This case study analyzes Reliance Jio's strategic decisions in the Indian telecom market, focusing on the application of the Bounded Rationality model. It examines the company's investment of ₹1,50,000 crore and its strategy of market penetration through free services, highlighting the cognitive limitations and time constraints that influenced decision-making. The study explores how Jio evaluated market needs, the impact of existing market players, and the influence of group alliances. It also discusses the limitations of the Bounded Rationality model in this context, particularly concerning the lack of comprehensive market research and the saturation of the telecom sector. Despite these limitations, the analysis emphasizes how Jio's strategic decisions, driven by factors like affordable propositions and increased market demand, provided a competitive edge in the Indian telecom market. The case study references relevant academic sources to support its findings.

Running head: BUSINESS DECISION ANALTYICS
BUSINESS DECISION ANALTYICS
Name of the student
Name of the university
Author note

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The Bounded Rationality model of decision making aims at identification of the decision
problem, the cognitive limitations of the decision making capabilities and time available for
making the decision. Reliance Jio undertook the initiative of making an investment of 1,50,000₹
crore with the objective of supporting the business strategy of making a dynamic market
penetration in the telecom sector (JyothiSankar & Chandrasekar, 2019). The provision of free
calls, data and messages to the customers easily enabled the organization in empowering the
buying interests of the customers. On the other hand, it has been noted that the organization
created the largest only 4G and LTE networks along with 90,000 eco-friendly 4G towers for
providing improved 4G coverage to around 22 telecom circles in India (Joy & Bahl, 2018).
The application of the Bounded Rationality model in the organizational case,
significantly developed an idea of the different factors which restricted the rational thinking
capacity of the venture. In this relation, the organization managed to access complete and
accurate information of the telecom markets in India. The organization took the initiative of
evaluating the market needs and the issues that are being faced by the customers while shifting
to digitalization. Initially, around 24.3% of the Indian population accessed the internet through
mobile devices in the year 2016 which would grow to 37.4% in the year 2021 (Joy & Bahl,
2018). However, it was impossible for the organization to evaluate all the sources of market
information before taking the decision due to the absence of tools. Harrison (2016) opined that
the cognitive limitations of the mind restricts the decision making process of an organization. In
this relation, Jio had little knowledge of the applicability of the strategy of providing free calling,
data and message facilities to the Indian customers.
According to the Bounded Rationality model the humans are not rational in many cases,
which might restrict the capability of the organization in making effective decisions (Dutta,

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2018). In this relation, the presence of telecom service providers like Airtel and Vodafone, being
the market leaders, made Jio’s decision more irrational. The Indian Telecom sector was already
saturated through the presence of market players making huge investments in the market. In this
relation, the application of the bounded rationality model restricted the capability of the
organization in making effective decisions.
However, it has been noted that the affordability of the propositions and the increased
market demand for improved services permitted the venture in developing the market position of
the same. The decision taken by Jio was primarily influenced by the group of alliance
companies like British Telecom, Deutsche Telecom, Millicom, MTS and Orange. On the other
hand, the influence of Vodafone and Airtel has been intricate in the decision making process of
Jio. The decision of developing the VoLTE network in India has been one of the critical factors
that influenced the rate of operations of the venture while operating in the Indian markets.
However, it might be noted that the lack of specific and realistic market research limited the
knowledge of the organization while commercializing the value propositions that are being made
by the same due to the time constraint.
Therefore, from the above assessment it might be stated that the imposition of the
bounded rationality model of decision making on the organizational situation of Reliance Jio in
the Indian markets limited their knowledge on the markets. However, the strategic decision that
was initiated by the organization provided the same with a competitive vantage point over the
existing players in the saturated Indian telecom sector.

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References
Dutta, S. (2018). Economic Development and Growth under Telecommunication Sector in
India–An Empirical Case Study. International Journal of Research, 5(16), 1214-1237.
Harrison, N. (2016). Student choices under uncertainty: bounded rationality and behavioural
economics. In Access to Higher Education (pp. 99-114). Routledge.
Joy, T., & Bahl, S. (2018). Disruption by Reliance Jio in Telecom Industry. International
Journal of Pure and Applied Mathematics, 118(20), 43-49.
JyothiSankar, S., & Chandrasekar, K. S. (2019). Impact of Innovations in Telecommunication on
Green Economy & Sustainable Development. Journal of the Gujarat Research
Society, 21(8), 202-211.

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