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There is 1 Graduate Level Assignments of Quantitative Analysis for Managers. Please
give your options, show your ethics, and discuss deeply.
PS:These topics are Discussion Board questions not essay.
Please write the following assignments on docx document, do not just reply the
message to me.
Topic 1 - Reading 6: What does it mean to be pro-active in decision making?:
Read (Reading 6 - Pro-Active.pdf), then respond to the following questions before
looking at the solutions.
Question 1: What are some of the issues Bob should have considered when he
lost his job? (Reading 6 - Bob Solution.pdf)
Question 2: What are some of the issues Darlene and Drew should consider when
making the decision to remodel or move? (Reading 6 - Drew and Darlene
Solution.pdf)
Reading 6: Pro-Active Decision Making
1
(File012r reference only)
Pro-Active Decision Making
As we look at the process of decision-making, it is probably best to look at many
different approaches. We have just completed a reasonably complex process as
we looked at Decision Theory as reflected in the Thompson case.
Let’s look at some other examples:
Potomac Manors is an 1,100 acre track of gradually sloping land located near
Washington, DC. As a land developer we want to determine if we should
purchase the track and develop it, or if the risks are too great to make it a
profitable possibility. Some of the facts of the case are:
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Zoning is correct at R3 that permits low-density residential housing.
Zoning requires a minimum of 3-acre lot sizes.
Other city requirements include lot dimensions, roads, septic systems, and
designation of public spaces.
Preliminary design shows 300 sites of three acres each have been
identified.
This covers 900 acres of the 1,100.
Balance of 200 acres is to be used for roads and public space.
Lots should sell for $150,000 (Total of $ 45,000,000 in revenues which is
$150,000 times 300 lots).
Development and Selling Cost are $8,000 per acre. (Total of 1,100 acres
times $8,000 = $8,800,000)
Miscellaneous Expenses are $400,000 (permits and fees).
Price tag is $23,000 per acre with $250,000 earnest money. (1,100 times
$23,000 = 25,300,000 in land cost)
A simple proforma of the expected profits based on the above numbers follows:
Revenues
Cost of Land
Gross Profits
$45,000,000
$25,300,000
$19,700,000
Less: Development / Selling Costs
Less: Miscellaneous Expense
$ 8,800,000
$ 400,000
Net Profit
$10,500,000
What are the two propositions facing the development company?
Decision Node:
Do we buy the 1,100 acres?
Measurement or Performance Node: Is there a profit in the development?
Reading 6: Pro-Active Decision Making
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Based on this proforma, it looks like a deal.
Let’s buy it.
But wait, you say.
Are there other considerations? Is this as far as we need to go?
Remember we are interested in being Pro-active in our decision making process.
Process of Being Pro-Active:
Before we make the decision, perhaps we should look for more detailed,
richer sets of alternatives than those initially presented.
Perhaps we should begin questioning our assumptions regarding the
structure of the relationships between alternatives and performance
(usually profit maximization or cost minimization).
Perhaps we should assess other important parameters.
Should we consider diverse measures of performance that incorporate
the perspectives of the various stakeholders?
Alternatives:
First remember that the alternatives presented so far are very preliminary.
One of the assumptions is to maximize the number of lots. Is this
reasonable?
Should the property be divided into larger lots with a larger price per lot?
The reason we chose 3 acre lots is because that is the minimum per the
zoning, but perhaps our thinking should be outside of the box. Should we
consider 4 acres per lot? Should there be a mixture of 3 or 4 acre lots?
Should there be a mixture of 4 and 5 acre lots?
This would create an upscale neighborhood, so lot prices might be raised
accordingly.
Could part be split off for commercial development?
Exploring more alternatives presents more complexity, but may mean
better performance results.
Reading 6: Pro-Active Decision Making
3
(File012r reference only)
Assumptions – Structure:
Remember that part of the initial information was that the sewer system
would be septic. Septic systems require percolation tests to make sure
the earth will properly disperse the water from the system. Some earth
does not lend itself to proper percolation; therefore, the developer needs
to know for sure if the site passes the percolation testing. The initial
assumption, though unstated, was that all lots would meet the percolation
test. Before you do the deal, you really need to know the answer to that
question.
We must stop and test our assumption about percolation. We need to
check out the linkages between the assumption and the performance.
Assumption: All lots will meet the percolation test. Performance: Can all
of the lots as designed pass the percolation test?
If we find that some will not meet the requirement, then this changes the
structure of our proforma.
Another question: Although R3 zoning prevents connection to the City
Sewer, would the city supervisors allow connection to the sewer system?
This too would result in a structural change in the calculation of our
proforma.
There might be an infinite number of possibilities, but consider three
options (alternatives) for the purpose of continuing our analysis.
Item
Number of Lots Passing Test
Approval of Sewer Connect
Number of Lots Developed
Options
I
II
III
300
200
200
N/A
No
Yes
300
200
300
Revenues (millions)
$45
$30
$45
Land Costs
$25.3 $25.3 $25.3
Development & Selling Costs $8.8
$8.8
$8.8
Miscellaneous Expense
$0.4
$0.4
$0.4
Sewer Connection Costs
$1.7
Profits Before Tax
$10.5 ($4.5)
$8.8
While there is a possibility some of the development costs might change
and the sale price of the lots could go up considerably under Option II. To
re-price lots would depend on the location of those lots passing the
Reading 6: Pro-Active Decision Making
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percolation test and this exercise would not initially be feasible. To test
the percolation of the soil, more study would be necessary including soil
samples at various intervals creating a percolation map of the entire 1,100
acres. This is too time consuming, thus adjustments in pricing will not be
part of the Option II study.
As we look at the possibility of sewer connection for some of the lots, we
are well aware that involving the City in any decision will lead to time
delays. Should we take out an option for 90 or 120 days while we do the
due diligence with the city and perhaps with some mapping of the
acreage? Perhaps this option would make more sense rather than
proceed with the deal and end up losing $4.5 million (Option II).
Assumptions – Assessments:
The sales price of the lots is estimated at $ 150,000 per lot. But what
happens if the economy slows down enough to affect the sales prices?
Lot prices might also drop if the project has a low acceptance. However,
the other side of the coin is that the sales prices may go up on the last
one-half of the lots if the project takes off and becomes trendy.
To have a reasonable set of assumptions, the company needs to consider
these possibilities. Rather than address these issues for all three options,
we will use Option III as our base. To that base, we will make pricing
adjustments to see what happens if we re-price the lots up or down.
Using Option III, we should assume the average sales price is $120,000
per lot to see the impact on profit assuming the project is poorly accepted.
If, however, we make a second assumption that we have excellent
acceptance of our lots, we might find that the average lot price rises to as
much as $160,000 per lot.
Using Option III, we need to determine what will happen to revenues if our
lot prices drop to $120,000 each and what will happen to revenues if the
lot prices increase to $160,000 each.
Let’s begin with the profit change when we change the price to $120,000
per lot. Remember the base price for Option III is being used and that
price is $150,000 per lot.
Reading 6: Pro-Active Decision Making
5
(File012r reference only)
Scenario One: Decrease Average Lot Sales Price by $30,000 (price
declines from $150,000 to $120,000). The incremental approach is
used.
Profit at $150,000 per lot.
$ 8,800,000
Decrease in Profits at $120,000
$30,000 times 300 lots = $9,000,000
($9,000,000)
Adjusted Profit or (Loss)
($ 200,000)
Scenario Two: Increase Average Lot Sales Price by $10,000. (price
increases from $150,000 to $160,000). The incremental approach is
used.
Profit at $150,000 per lot
$ 8,800,000
Increase in Profits at $160,000
$10,000 times 300 lots = $ 3,000,000
Adjusted Profit or (Loss)
$ 3,000,000
$11,800,000
This brings up another important value – breakeven. Given the costs in
option III are accurate, the breakeven is $ 120,667 per lot. ($200,000
loss divided by 300 lots is $666.67 or rounded to $667. Next add this to
the $120,000 sales price of the lots to get $120,667.). This can also be
developed by adding the total cost from the proforma (25.3 + 8.8 + 0.4 +
1.7 = 36.2 which is then divided by 300 lots for $120,667).
One word of warning: No set of profit performance outcomes should
depend on a single estimate of the revenues. This is especially true when
forces outside your control can materially affect your profit performance.
Performance:
In the Potomac Manor Case, profitability is the current measure of
performance, but is it the only one available? For the Potomac Manor
Case, profitability is the best, but there may be times when long-term
benefits outweigh profits.
Long-term benefits might be an over-riding benefit as in the development
of a drug to cure a deadly but rare disease. You might lose money or
Reading 6: Pro-Active Decision Making
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6
breakeven, but to Pfizer or Merck, there might be humanitarian benefits
that reach far beyond profit. Of course you would expect the drug
company to capitalize on the positive publicity, which would in the long-run
work to the benefit of the drug company.
Perhaps Potomac Manor should undertake a study of cash required and
the timing of sales of the 300 lots. How long will their cash be tied up?
Will it require foregoing others projects while this one is in the
development and sales phases? When can you consider other deals?
What is the forecast of the interest rates? What is the forecast of the
economy in general 12 to 18 months from now?
Other alternatives: Have you evaluated the need for the seller of the
1,100 acres to sell the property? Could you affect a tax-free exchange, so
the seller could defer his taxes? This might allow you to purchase the
property for less money. Could you leave the seller in an ownership
position by forming a limited partnership with him? This might reduce the
cash required, thus reducing the interest that must be paid on the loan.
Proactive decision-making should look at and evaluate more than just the
initial proforma decision.
Summary:
Routine or no-brainer decisions can be made without much effort or by
seeking a range of alternatives.
Complex decisions, however, require one to evaluate a full range of
alternatives. One should address these complex decisions on a pro-active
basis by exploring the many alternatives, evaluating the assumptions
underlying the alternatives, and looking at the structure of the
relationships between alternatives and performance. Performance may
be more than profit issues.
Let’s look at some other case examples:
Problem:
Making a logical decision may be wrong if you start from the wrong decision
problem. Stating a problem decision in the most obvious way may be wrong.
Stating the problem the same way it has been stated before may be wrong. The
definition of lunacy is to keep doing something the same way, yet expect different
results.
Reading 6: Pro-Active Decision Making
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Example #1:
There was a major West Coast Union who negotiated a new contract
every three years with the management of a West Coast Port. The work
rules had become progressively more restrictive during each negotiation.
The hands of management were absolutely tied, which prevented them
from adopting newer technology for loading and unloading ships. This
had become an important issue because the business of the Port was
falling off and competitors with better advancements and newer equipment
were taking business from the Port.
The management bargaining committee saw the problem as getting
the union to relax some of the more restrictive rules in exchange for
more wages and benefits to the workers. For purposes of illustrating
outside the box thinking, we will ignore OSHA imposed rules and assume
they would be in place for all competitive ports in a similar manner.
But is this the correct problem?
What was their box? Think about it before reading on in the case example
on the next page.
The Box:
They were framing everything inside the box of existing work rules.
One member of the committee began by asking a question completely
outside the box.
The question:
“What could management afford to pay the union
workers in a one-time settlement to have ALL work rules dropped?”
Of course the answer depended on how the port could operate if the port
was free from ALL work rules. To determine this, a study was
commissioned to determine the benefits and cost of such a move. The
conclusion was that the changes would be revolutionary and the savings
would be enormous.
Business projections of revenues increased
markedly.
Management proposed it to the Union and offered a one-time buyout
prices that was very generous, but in reality was only a fraction of the
forecasted savings in the years to follow.
Union negotiators and members bought into the new strategy since they
too could see the loss of business to competitors. The Port completely
Reading 6: Pro-Active Decision Making
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overhauled operations and was able to effectively handle containerized
cargo. The results were benefits to all:
Ship Owners Benefit
Turn around time of the ship was cut from days to hours.
Ships became more productive to Owners.
Costs for the Ship Owners dropped drastically.
Consumers Benefit
Perishable fruit from Hawaii was cheaper and more plentiful.
Port Benefit
Traffic to the Port grew.
Workers Benefit
The one time settlement was generous.
Instead of losing jobs because of the decline in business, job
security increased.
More skilled workers were required thus higher paying jobs were
created.
This was a win-win situation. It developed because someone had the creativity
of thinking outside the box. (Smart Choices)
Example #2:
In WWII there was a think-tank group who were responsible for developing
solutions to tough combat situations. One such situation they were asked
to evaluate was the following: You are on a ship. The ship is dead in the
water with no engines working. Floating directly toward the ship in the
current was a mine. The ship cannot move out of the way. After much
discussion, one member of the group came up with an oversimplified
suggestion. “Why don’t we all go to one side of the boat and inhale at the
same time then exhale together to create an air-flow that will blow the
mine away from the boat?”
Was this a silly suggestion? Yes, but this led to the actual solution.
Someone else suggested that the crew take the fire hoses, turn them on
full blast and create a water stream to gently push the mine around the
boat. Positive brainstorming leads to many alternative suggestions where
all participating gain from the experience. Problems do not mean failures.
Problems lead us to learn to directly deal with the difficult and complicated
issues. Problems lead to opportunities.
Albert Einstein: “In the middle of difficulty lies opportunity.”
Reading 6: Pro-Active Decision Making
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The question is what can you gain from these difficulties or this situation?
We should all learn to ask that in our daily life. What are the
opportunities? What are the alternatives? What can be done differently?
Example #3:
Congress passed a new law through the EPA. The law told manufacturing
companies what steps to follow in getting rid of toxic materials and byproducts. What do you think the initial reaction from the companies was?
Oh, no another unfunded Federal mandate. Good grief, more paperwork.
This will mean further loss of production. This will lead to more cost. This
is doomed to more disruptions and more government interference.
These are all negatives.
What was the box?
Think about the box before reading more on the case.
The Box:
How will we get rid of toxic waste and by-products?
Some of the manufactures who were creative began re-thinking. How can
we get rid of the toxic materials BEFORE they go into the product. This
created a new way of thinking outside of the box. They were going to
explore ways to make the product without some of the toxic
materials in the first place.
Results: There were several real break-through processes that positively
affected the production process and actually lowered the production costs.
The company gained a real competitive advantage over their less savvy
competitors. (Smart Choices)
Trigger Points:
One of the keys to thinking is to think about the trigger points that cause
you to begin thinking outside the box.
In this last example, the new law acted as the trigger point.
Most triggers come from others. This is due in part to the phenomena of
comfort zones.
Reading 6: Pro-Active Decision Making
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Comfort Zone: We all get comfortable in certain zones. Those zones will
be different for different people. Some examples are money, popularity or
our desire to be the boss. The key to all good supervision is to challenge
the worker to move beyond their comfort zone.
A personal experience about the Jimmy Carter Presidency years and
my opportunities:
I was in the construction business when the interest rates were about 9%
during the early years of the Jimmy Carter presidency. The interest rates
began rising over a period of about a year to a prime of about 22%. At 9%
I had about $1.3 million of construction on the ground in various stages of
construction. By the time I got the projects (houses) completed, I could
not sell the houses at 22% interest. I also could not make the interest
payments to the bank on the houses.
The trigger point for me was the 22% interest rate.
The box: Selling the houses at 22% interest rates.
Outside the Box Thinking: I made a deal with the bank to take the
properties back. I convinced them that they could sell the properties at a
profit while offering a 12% interest rate. The profits I would give up would
be gained by the bank at the front end, thus offsetting the losses they
would experience by reducing the interest rates. I got out of $1.3 million in
debt with no liability. I avoided bankruptcy and the stigma in the business
world that goes with it. The bank made the money they desired to satisfy
the owners of the bank. This was a win-win situation for both of us. I do
not have fond memories of the Jimmy Carter presidency, needless to say.
You can wait on the triggers or you can be pro-active in seeking out the
opportunities. You may seek the opportunities before the trigger occurs.
You must learn to re-frame the problem decisions statement.
Defining the Decision Problem:
Start:
Simply write the decision problem down. Convert your initial
impression into words.
Next:
Re-define the decision problem.
Re-think it from a different perspective.
State the trigger.
Reading 6: Pro-Active Decision Making
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(File012r reference only)
The trigger is your essential link to the real problem.
Example #4:
The boss says to you “We need new mailing label software”.
What is she really saying? Implicit in her statement is what unstated
comment.
“What is the best software mailing label package to
purchase?”
What kind of thinking is this? Inside the box thinking is prevalent, if not
predominate.
What was the box? We need some new software that is faster so our
mailing system will improve. Implicit is the thought that something is
wrong with our current mailing label software, because we aren’t
getting the best results we want.
What is outside the box thinking?
Think about it before reading on in the example.
Outside the box thinking:
What if the real question had been phrased this way: “What’s the best
way to manage our company’s direct-mail program?”
Or it could have been:
inquiries?”
“What criteria do I use in making direct mail
Or it could have been: “Should I look at an outside company to take over
the mailing program?”
As you re-frame the question from a different perspective, you begin
seeing that there may be a trigger that will catch your attention.
Constraints in Your Decision Process:
Your manager asks a group of mid-level, cross-functional managers a
question that becomes a problem decision statement.
“When should we conduct the 3-month test of our new credit card offering
in the Mid-West?”
Are there any assumptions implicit in the question? Of course there are.
Reading 6: Pro-Active Decision Making
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1)
2)
3)
4)
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There will be a market test.
It will last 3-months.
It will be in the Mid-West.
The offering has been developed and aimed toward the Mid-West
consumer.
Constraints are sometimes good. They keep us from wasting time on
irrelevant options. Sometimes they put blinders on us.
Example #5:
A West Coast snowboard manufacturer was getting ready to make a big
push into the northeastern U.S. market. To craft its strategy, it appointed
a team of three people, one from Berkeley (home office) and one from
Vancouver, BC (manufacturing) and one from Denver (sales office). The
head of the team was the VP of Marketing in the home office in Berkeley.
He suggested a face-to-face meeting of the three team members to
finalize their strategy.
The trigger: After many emails and telephone calls the VP’s assistant
could find no good dates for the meeting anytime in the next three months.
This would result in an unacceptable delay given the season was fast
approaching.
The constraint: A face-to-face meeting.
The re-definition of the problem: Was a three-day meeting necessary or
could two-days do? Were all three individuals needed for the full time or
just part of the time? Why are we considering meeting face-to-face at all?
The re-statement of the problem: How else can we finalize our market
entry strategy?
He was in effect recasting the decision problem from “When do we
meet?” to “How can we finish the strategy?”
The solution: The VP decided to outline the steps needed to complete the
strategy and would then assign tasks to himself and his two associates.
Using email or a chat room the team members would update one another
on the outcomes of the tasks. Then they would hold three two-hour
conference calls over the next two weeks to bring it all together.
The result: The plan worked and the strategy was in place and ready for
release in a three-week period of time. (Smart Choices)
Reading 6: Pro-Active Decision Making
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Re-examine Your Decision Problem Often:
Initially do the best job you can in identifying the decision node. Your
perception may change as you uncover more facts about the decision you
need to make. Most often the first impression is not the best decision, but
does provide a starting point for the determining the best decision. Select
several possible decisions and as you gather more information be
continually alert to pause and re-examine your decision problem.
Example #6:
You own a company that provides video conferencing technology. A
competitor has made a 29% improvement in the clarity of the video
conferencing picture.
First Response: How do we match that clarity as quickly as possible?
Does this create a box?
What is it?
Think about it before reading on in the example.
The Box: Matching the improvement is the box.
After you look more into the opportunity, you find you may want to recast
your decision problem to “What technological innovation would allow us to
leapfrog the competition by achieving a 100% improvement in clarity?”
Is this ambitious? Yes.
Is this possible? Perhaps it is.
Reality Check: There might be stages of the developments if the 100%
can’t be reached quickly. First, get the 29%, then retrofit all units sold at
29% as you develop the technology to 100%.
Is there danger? Yes. The longer we take to develop the technology the
longer we languish under the improvement made by the competitor. This
will lead to market share erosion, which could lead to falling profits.
From these examples, it is easy to see that from time to time we should be
asking “Are we working on the right problem decision?”
Be alert to rapidly changing conditions and new information and check
your problem decision often to see if it should be updated.
Reading 6: Pro-Active Decision Making
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Let’s take a look at a couple of discussion cases.
Bob Lost His Job Case
Darlene and Drew: House Remodeling Case
Bob Lost His Job Case
Bob lost his job in Portland, Oregon--well, sort of. His company was acquired by
a larger one and his position as a financial analyst was eliminated. The new
owners were eager to keep Bob, so they offered him his choice of financial
analyst positions at other subsidiary companies they owned – all in states other
than Oregon.
Relocating was problematic because Bob was just concluding a divorce. The
divorce agreement, an amicable one, would give him custody of the couple’s two
young children, while his wife, a lawyer, would pitch in with emergency child care
and take the kids on the weekends. .
Bob could have defined his decision problem in various ways, but he never
stopped to think about it. Instead, even though his skills were highly marketable,
he proceeded as if his problem were “How do I stay with my current
employer?” As a result he chose one of the open analyst positions with a
subsidiary in Seattle, Washington, the closest option to Portland.
Now, however, Bob’s life is a nightmare whenever a child is sick, because his exwife is too far away to baby-sit. And the five-hour round-trip drives to Portland
every weekend aren’t much fun either. To add insult to injury, the job itself isn’t
as good as his old one.
What was Bob’s box?
What were the critical issues?
What was the decision problem?
Was there a trigger to begin the questioning process?
What were some of his alternatives?
Reading 6: Pro-Active Decision Making
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Darlene and Drew: House Remodeling Case
Darlene and Drew have run out of space in their two bedroom, one and a half bath,
finished basement home, and they must decided what to do because Darlene is
pregnant with their second child.
Eight years ago the couple bought a modest house on School Street in an urban
residential neighborhood. At that time, Darlene was pregnant with their first child, John.
They moved from their tiny, typical new bride and groom, apartment.
At first Darlene and Drew tried to figure out how they might accommodate the new baby
in the existing house. Could John share his room with the baby? They knew he would
quickly grow tired of this arrangement. Could they divide their own bedroom? This
seemed to be a temporary solution, but they wanted a permanent one. Anyway their
bedroom was already over crowded. They quickly came to see that they would not be
able to do with the space they had.
They decided to add on to the house. For the past two months, they had been reviewing
and pricing their renovation options. A bedroom off the end of their one story house
would cost $25,000 and would take away a huge chunk of the back yard. Adding a
second story would save the yard but cost $40,000.
Having bought the house when they did, the have reaped the benefits of a doubling in
prices in the local real estate market over the past years. A close friend and realtor told
them that their house would sell now for $155,000, which was a pretty good deal since
they only paid $77,750 for the house when they purchased it. They had a remaining
mortgage of $57,000 which resulted in an equity of $98,000. Their job situations were
stable. Darlene worked full time as a nurse in a local hospital, though she plans to work
only part time for a couple of years after the baby is born. Drew works as a salesman
and has a secure, solid joy. Their joint income before taxes is about $75,000 per year.
They feel confident they can afford the renovation. They could, in fact, use the equity in
their house to finance it and they feel confident they can meet the monthly payments.
One evening after dinner as they are putting away the dishes, Darlene recounts a
conversation that she and John, their eight-year old son, had earlier in the day. “Drew”
she began, “John really got me thinking today. You know Jimmy, his friend down the
block? Well, Jimmy’s family is going to move, so John asked me why people move and
when were we going to move? At first I thought he was apprehensive that we might
move. But he was actually excited about the possibility. We had a long conversation
about why people move, and the more we talked, the more I thought. Why don’t we
consider moving?”
Drew’s response was predictable. “Are you serious? Move in today’s market?”
Darlene responded, “This is a new idea for me, too. But when I rattled off to John the
reasons why people move, and he offered reasons too, like more room to play, being
able to ride his bike in the street, being closer to school, I half convinced myself that this
might not be such a wild idea. Sure, prices are high, but we’ve built up a lot of equity in
our house and if we sold it we would be able to afford a down payment on a bigger one.
We would also avoid $25,000 or more in renovation costs.”
Part of Reading 6: Bob Lost His Job Case Solutions
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1
Bob Lost His Job Case: Some Solutions
The box:
Bob’s box was his desire to stay with the company.
He did not think through his decision problem.
The critical issues were:
Financial Analyst Background.
Marketable Skills.
Divorce.
Custody of 2 Small Children.
Wife to Take Children on Weekends.
Wife to Provide Emergency Baby-sitting.
His solution never took any of these issued into consideration. Bob narrowed his
choices to one choice that did not consider any of the critical issues. Bob’s first
impression was his only impression. Nothing acted as a trigger to begin the
questioning process. Since he had an amicable relationship with his EX, could
he not have talked to her about possibilities? Hopefully a measured discussion
would have led to a trigger which would have brought about an examination of
other options.
Possible Solution: What if Bob had changed the decision problem to be “What
is the best financial analyst job I can get in Portland?” Bob may have well
ended up in a better job with a different employer, would not have moved, and
would have solved the problem of emergency child care and weekend visits.
What a difference a correct framing of the question makes.
Too often people are so ready for instant gratification and instant solutions, that
the plunge into their first impression without taking a look at the other
possibilities.
Why not try framing the question as if you had all of the resources and could
accomplish anything your mind could achieve. This removes the boxes that so
often constrain our decision formation.
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Part of Reading 6: Darlene and Drew: House Remodeling Case Solutions
(File015r reference only)
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Darlene and Drew: House Remodeling Case Solutions
How had they framed their initial decision problem? What was their box?
How should we remodel?
else was considered.
The box was remodeling and nothing
What should their decision problem have been framed?
How do we get a better home for our growing family?
What was the trigger that changed their focus?
Darlene’s conversation with their 8-year old son, John.
Their original trigger was “How do we get more room to accommodate the
new baby.”
Their original decision problem flowed from the first trigger. They jumped
to the conclusion that remodeling was the only option. Is this manner of
thinking limiting?
What other thing might affect their decision?
How would a move to the suburbs affect their quality of life?
Are they going to have a third child?
Is there a possibility an aging relative might have to live with them?
If they move would being further away from Darlene’s or Drew’s family
matter?
Would a move jeopardize their jobs?
If yes, then could they find better jobs in the area into which they move?
This would broaden their geographic area of interest.
Expansive thinking generates better problem definitions. Better problem
definitions open up a broader range of creative solutions.