Leading Entrepreneurship

The current economic crisis has reminded us all of exactly how the implications of our seemingly small decisions can impact everyone around us. This concerns me as much as I have heard it concerns much of you. An unintentional bad decision is something most of us can live with; a bad decision made and justified with bad intentions is unacceptable. In my experience, most bad decisions are made and justified solely using cost benefit analysis.

For the next seven posts (or six, not including this one), I will attempt to evaluate the cost-benefit analysis as we follow it’s justification, criticism, standardization, and even distortions as a decision-making and decision-justifying tool.

Rather than needlessly paraphrasing, or simply reiterating, the experts that have devoted countless hours of research and analysis to the topic, these posts will allow them to speak through their own words – only encumbered by careful editorial placement into each post.

To that end, the next and last appearance of this author’s own words will appear again only in the concluding post.

As you read, please allow these experts to speak directly to you, though they may express opinions for or against your own personal point of view. These posts are meant to provide a brief enough overview of the topic for the reader to understand the basic concept, the pros and cons, and to be able to synthesize the matter with a heightened sensitivity when confronted with it as an entrepreneurial business leader, decision-maker, and/or decision-implementer. Each of these posts will be found, now and into the future, on this site under the category “Cost Benefit Analysis.”

With that being said, and without further adieu, let’s start by taking a look at how film has viewed this decision making process.

“I’m a recall coordinator. My job is to apply the formula. It’s a story problem… Take the number of vehicles in the field, (A), and multiply it by the probable rate of failure, (B), then multiply the result by the average out-of-court settlement, (C). A times B times C equals X. If X is less than the cost of a recall, we don’t do one.

On a long enough time line, the survival rate for everyone drops to zero.”

Jack, Fight Club by Jim Uhls (1999)

“We are at that point in this country, where we kill something because at the moment it’s worth more dead than alive… On Wall Street, they call it ‘maximizing share-holder value’ and they call it ‘legal.’ And they substitute dollar bills where a conscience should be.”

Andrew Jorgenson, Other People’s Money by Alvin Sargent (1991)

“The point is, ladies and gentleman, that greed — for lack of a better word — is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind.”

Gordon Gekko, Wall Street by Oliver Stone & Stanley Weiser (1987)

“This great nation has long been a great commercial power. Now it seems there exists a growing compulsion to use that power merely to beget more power. Money merely to beget more money, irrespective of the true cost to the nation’s soul. And it is this sickness, a kind of moral blindness, commerce without conscience, which threatens to strike at the very soul of this nation.”

Sir Robert Chiltern, An Ideal Husband by Oscar Wilde (1999)