I am going to write about the Bhopal disaster, which happened in India in 1984.   The involved company was UCIL – Union Carbide India Limited -, a subsidiary of  Union Carbide Corporation, with the Indian public having the 49.1 % of the UCIL.  It is considered as one of the greatest industrial catastrophes, since thousands of people died and many are still affected by what happened so many years ago.  It all happened when somehow water entered one of the tanks leading to uncontrolled reactions and chain exposure of chemicals mainly to the atmosphere in the form of a dense cloud (“heavy”, being near the ground), causing the immediate death of thousands of people living in the close area.

The factors in this case are too many, since it was a global market company administrated from the main company being far away and with many employees.

  • A rational explanation of why this disaster happened is that the majority of the employees were not well educated and probably ignorant of the situation.  The managers ordering the cuts had no idea about the consequenses and the high risk situation.   It could be that the indian government was badly organized and didn’t realize what was happening at the plant.
  • A bounded rationality explanation is that blue collar workers or simple workers conscious of the risks taken working there under the circumstances, continued to do so because they knew
  1. their oppinion wouldn’t matter to high position employees and/or
  2. because they needed the money

Still, these explanations show that they didn’t care about the long term consequenses and in the end this decision was irrational.  Also, high position employees, such as managers insisted in having cuts since the company was not profitable any longer.  This could be either because they identified with the institution, neglecting about safety rules and focusing on profit or even because this was their company’s principle, which is also irrational, since in long term they lost much more than if they had preserved their safety rules and well work conditions.  After all, this decision was bad for the company.