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In this chapter, it is demonstrated that the concepts of leadership and organization are closely linked. A leader should initially get to know the organizational culture as well as possible. Such a culture can for example be authoritarian and conformist or innovative and progressive in nature. The assumption is that leaders are influenced by their own culture. Strategic decisions are characterized by the fact that they are new, complex and open in nature, and being able to develop a strategy is one of the most difficult tasks for a leader. Traditionally, it is primarily the top leadership in an organization that works with strategic decisions, and thus it is common that strategic issues are handled by top leadership teams. This is related to the globalization of business and to the fact that the pace of work has increased significantly. In order to exercise leadership, a leader must have access to power. A power base can be created through networking as well as by using different political tactics. However, it is important to use political tactics in order to promote the organization's interests. When a leader has built up a power base, it is essential that power is used properly. The decisions that leaders make must be ethically correct and not violate universal human values. For instance, they should not lead to negative consequences for others within or outside the organization. Evidence suggests that most leaders have the potential to develop as ethical decision makers.

Bounded rationality theory, first developed by Herbert Simon (1947), is one of the first contributions to political science that explicitly focuses on decision processes and links cognitive science to research on decision processes at the level of both the individual and organisations. In line with more recent behavioral research, bounded rationality theory holds that public policy design should build on a realistic model of human behavior. The article analyzes the decision processes of Danish farmers against their responses to two versions of pesticide taxes implemented in Denmark, one in 1998 and the other in 2013. The two taxes achieved different success rates, although neither version achieved the pesticide reductions predicted by ex-ante models that built on the assumption of farmers as economically rational. We find that farmers' decision processes are consistent with features of bounded rationality, which may partially explain why the taxes were not as effective as predicted. However, with the second version of the tax adopted in 2013, the tax rate was doubled, which may have prompted farmers to give higher priority to economic objectives, possibly explaining why this recent version of the tax has been more successful.

Bounded rationality theory, first developed by Herbert Simon (1947), is one of the first contributions to political science that explicitly focuses on decision processes and links cognitive science to research on decision processes at the level of both the individual and organisations. In line with more recent behavioral research, bounded rationality theory holds that public policy design should build on a realistic model of human behavior. The article analyzes the decision processes of Danish farmers against their responses to two versions of pesticide taxes implemented in Denmark, one in 1998 and the other in 2013. The two taxes achieved different success rates, although neither version achieved the pesticide reductions predicted by ex-ante models that built on the assumption of farmers as economically rational. We find that farmers' decision processes are consistent with features of bounded rationality, which may partially explain why the taxes were not as effective as predicted. However, with the second version of the tax adopted in 2013, the tax rate was doubled, which may have prompted farmers to give higher priority to economic objectives, possibly explaining why this recent version of the tax has been more successful.

AbstractA review is presented of the development over the years of the theory and practical use of Markov decision processes. To this purpose three periods are considered: before 1966, from 1966 till 1972, and after 1973. In all 3 periods there has been some contribution from the Netherlands, but particularly in the last period the research in the Netherlands on the subject has become a major stream. In this review particular emphasis is given to the work which has been done in the Netherlands, but the main line of the paper is determined by the development of the applicability of the available theory.

This chapter includes a discussion of leadership decisions and stress. Many leaders are daily exposed to stress when they must make decisions, and there are often social reasons for this. Social standards suggest that a leader must be proactive and make decisions and not flee the situation. Conflict often creates stress in decision-making situations. It is important for leaders to understand that it is not stress in itself that leads to bad decisions, rather, bad decisions may be the result of time pressure in the sense that leaders have not been able to gather enough relevant information. Thus, it is worthwhile for leaders to be able to prioritize properly in order to cope with stressful situations. In some situations, a leader chooses to delegate the decisions to his/her team and then it is important to guard against «groupthink», a phenomenon where members of a team put consensus before anything else as a result of the peer pressure. A number of methods are presented that enable leaders to avoid this phenomenon. Often leaders are involved in decision-making situations where they are forced to navigate between objectives that are in strong conflict with each other. We are talking about "decision dilemmas". These are characterized by the existence of a conflict between the top leadership's desire to control the activities and their wish to give autonomy and independence to the various units. It is important for leaders to be able to strike a balance in different dilemma situations and understand how to best manage conflicts when they arise.