Why is it important to look at alternatives, trade off, uncertainties, and risk tolerance when making most decisions? Can you think of a personal decision you might be making. Share experience with class.
Hard decisions have to be taken all the time in everyday personal as well as professional lives. In order to make the best possible decision, we have to approach the issue from all possible angles and foresee all possible consequences. A decision taken based on just one factor has a higher probability of being the wrong decision. It is paramount to look for alternatives, maybe what seems as the only option is not an only option with risk analysis of the other option it might turn out that the second option is much more profitable.
At work, we had to choose between building some circuit boards in house or buying them from the market. Buying them from the market had the risk of competitors getting the wind of our new project while building them in house had a higher risk of faulty circuits that could cause damage as the in house engineers would be doing it for the first time. All the factors that needs to be kept in mind before making a decision were, the total cost of buying from market and building in house, maximum damage in terms of financial value if the competitors got hold of the idea, risk in the form of damage to the machinery if the in house circuit turns out to be faulty. After crunching numbers , it turned out the risk of competitors finding out the formula was higher than the risk of internal damage and cost of in house building in terms of finance.
What does it mean to be pro active in decision making
Process of being pro active in decision making means that we look at our assumptions again, we seek even more alternatives and re-assess parameters that can even remotely affect the outcome. A better decision can be achieved if we increase the number of options. For example, in the above example, if we add in the option getting the circuit boards built from an overseas vendor, which will eliminate the risk of idea leaking in market and also eliminate the risk of damages in case of in house building. Further the assumption in the scenario is that the engineers haven’t done this kind of work in house and it might lead to damages, maybe if we interview a few more engineers for this specific task that has these particular expertise, it will reduce the risk of damages. Pro active questioning of everything we already know about the problem can lead to a better decision making.
What are some of the issues Bob should have considered when he lost his job?
The only thing Bob wanted was to stay at the same company and get his job back. Bob should have considered that he has marketable skills and that as he has two children, he can’t just move the city. However, based on his good relations with the Ex he could get her to babysit on weekend and negotiate all children related chores to suite his work schedule. He could have looked for another job in the same area and due to his financial Analyst experience could have landed a better job where he could see his children on weekdays or weekends.
What does some of the issues Darlene and Drew should consider when making the decision to remodel or move?
When expecting another baby Darlene and Drew decided to remodel the house to build a tiny little nursery for the baby. However, they should have considered, whether they are going to have more babies because if yes they could build another nursery in that house. Would it be better to remodel or move to bigger house? Another factor to consider was the cost of remodeling versus the cost of moving to a bigger house. If the commute to work would become a hassle, any job options in the new area. What area has better schools for the children? All these factors considered together would have resulted in an informed well thought out decision.
