14 Questions
True or false: The Ben Franklin Decision Model only considers economic factors when making a decision.
False
True or false: Managers should spend their energy on things that are beyond their control.
False
True or false: The ROI approach is solely focused on direct monetary rewards and costs.
True
True or false: Steven Covey has not provided any guidance on how to deal with situations that are beyond control.
False
True or false: All parties involved in a business decision have the same perspective on "What's in it for me?"
False
True or false: Managers should focus their efforts on activities that produce maximum results.
True
True or false: When evaluating a decision, it is important to consider both economic and non-economic factors.
True
True or false: Obstacles that are beyond the locus of control can be changed or altered.
False
True or false: The impact of risks should not be carefully considered, as they do not have major long-term implications.
False
True or false: Effective decision-making requires considering only two levels of performance: personal and team.
False
True or false: The model used by the manager in the case study involves listing pros and cons of a decision and choosing the option with the most items listed.
True
True or false: Top management makes big-picture decisions, while frontline employees determine workflows and resource allocations.
False
True or false: The guiding principle for changing performance is to address the symptom of the problem rather than the root cause.
False
True or false: The text provides a clear recommendation for whether Ralph should leave his job and open a shop.
False
Study Notes
- The concern for all parties involved in a business decision is "What's in it for me?"
- The owner, manager, and technician all have different perspectives on this question.
- The proper analysis tool for decisions based on economic reward is the return on investment.
- Logical decision tools, such as the Ben Franklin Decision Model, may be used for decisions without direct economic benefit.
- Some decisions may have both economic and non-economic benefits.
- ROI can be calculated using a formula to determine if an investment is worthwhile.
- All factors, monetary or nonmonetary, should be considered when determining the true ROI of a decision.
- A case study is presented about a manager considering starting his own shop.
- The manager calculates the benefits of his current position and the potential income if he opens his own shop.
- The owner of the current shop has earned a net profit of $150,000 each of the past three years.
- The Ben Franklin Decision Model involves listing pros and cons of a decision and choosing the option with the most items listed.
- The model forces you to consider both sides of an issue and uncover the impact of a decision.
- Evaluating decisions should involve weighing risk versus reward, considering both economic and non-economic factors.
- Risk is what you potentially stand to lose if the action does not work out as planned.
- Looking at decisions by weighing risk against reward helps to assure that you consider the entire situation.
- The indirect consequences of a hastily executed decision may have extreme costs.
- The ROI approach focuses on direct monetary rewards, benefits, and costs.
- Risk versus reward approach asks you to also consider the intangible factors that are not easily directly measured.
- It takes time and thought to identify all the things that might be changed by a decision.
- The impact of risks should be carefully considered, as they can have major long-term implications.
- Ralph wants to leave his job and open a shop
- He is 35 years old, in good health, and has a wife and three children
- They moved into a larger home in the suburbs a year ago
- Peggy, his wife, stays at home to raise the children
- They have a mortgage of $150,000 on their home
- Their finances are tight but manageable with Ralph's current income
- Risks of opening a shop include financial instability and uncertainty
- Rewards could include pursuing a dream and potentially higher income
- Decision ultimately depends on weighing risks and rewards
- No clear recommendation given by the text.
This quiz will test your understanding of decision-making in business. From analyzing return on investment to weighing risks versus rewards, you'll gain insight into the factors that go into making sound business decisions. With a case study presented, you'll have the opportunity to apply your knowledge to a real-world scenario. Take this quiz to see if you have what it takes to make strategic and informed decisions in the business world.
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