Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
Part ii mgt 350
1. PARADISE PART II
1
Paradise Part II
MGT350
Nik’s organization is going into the project a little deeper and need to decide if Kava is
the right thing to do. In Decisions in Paradise Part I, issues facing by Nik’s organization both
internal and external were identified and also possible solutions were addressed. Decision-
2. PARADISE PART I 2
making is an important process to effectively decide if Kava has potential. This paper will
discuss the following topics: decision-making techniques, steps used in applying the techniques,
and an examination of the decision-making model chosen with an explanation of how it
influences and/or the proposed solution
Decision-Making Techniques
Decision making is a necessary skill that a leader should master. Nik and Alex need to
master it so that they can make timely, well-considered decisions. If Nik and Alex make poor
decisions, the project in Kava will come to end and they will have failed the company, the island
of Kava and the stakeholders. The decision making techniques that Nik and Alex should consider
to master the decision making process are making the choice in advance, compare similar
options, avoid decisions under pressure, and finally used commitment devices.
If Nik and Alex make decisions in advance it will make Nik and Alex in charge of the
situation. Even though Nik and Alex have to overcome many obstacles, making the decision in
advance will likely cut down on detrimental outcomes. This will also assist in the finishing well
ahead of time and if something goes wrong they have time to fix whatever comes in their way.
Nik and Alex need to compare the options of decisions. Without comparing them, this
will justify for bad decision. By comparing options, Nik and Alex will be able to make the
choice in their long-term interests which that is seen the Kava project come a reality.
Even though Kava has many obstacles, Nik and Alex need to find their peace and not
make decisions under pressure. They should try to avoid making decisions under pressure so that
they can consider what they should do and not make mistakes. If they give time to think, they are
much more likely to reach the right decision.
3. PARADISE PART I 3
The technique to use commitment devices is a terrific tool for decision making. For
example, stay dedicated to the people of Kava, the long-term goal and the stakeholders as well. If
they stay committed the decisions will come easy and will not get off track of their project.
Step-by-Step
The first step that Nik and Alex would need to take is complete a cost benefit analysis
and determine the advantages and disadvantages of the project of Kava by using this decision-
making process and the techniques mention before. Using the cost benefit analysis may help
identify any unexpected costs that may be needed. The second step would be to identify the
perspective, limitations, and timelines. It is helpful when knowing the timeline and extent of the
project to help determine the cost of the project. The third step would be to assign the costs.
During this step it is important to classify and allocate the costs likely to be acquiring when
starting this project. The fourth step in this process is to assign financial values to the benefits.
The fifth step is to consider the longer-term effects. If the project were to go on longer than
expected, it is important to make sure that the future value is calculated. In the last step it is
important to beware of assumptions. During this step it is necessary to make sure that Nik and
Alex are attentive of the statements that have been made to arrive at all the numbers that have
been used in the cost/benefit analysis.
Decision-Making Model
After Nik completes the step-by-step of cost benefit analysis, he should use the nine-step
decision-making model to reach his decision. The first step that should be taken is identifying the
problem. Once the problem is identified a successful decision can be made. If the problem is not
4. PARADISE PART I 4
identified correctly then the correct decision will not be made. The second step is to identify the
decision criteria. The third step of this process is to evaluate the effect of the problem. The fourth
step is to identify causes of the problem and the fifth step in the process is to frame alternatives.
During this step it is important to try to think of other solutions that can help resolve the problem
at hand. The sixth step of the rational decision-making model is to evaluate impacts of
alternatives. This step is important so that the decision maker can determine the advantages and
disadvantages of each alternative. The seventh step in this process is to choose the best decision.
However, it does not end here. The last two steps are implement decision and measure impacts.
Using this decision-making process will allow Nik to go through and determine which
alternatives have the best advantages and disadvantages. This will allow him to make his
decision without possessing a bias opinion or thinks is best.
Conclusion
The cost benefit analysis will be useful to help Nik determine if it is cost worthy of
adding this organization to Kava. If all works out well the decision making techniques and the
nine-step decision process model will help Nik make the best decision. The decision-making
process could take some time, but it will be worth it when Nik makes the correct decision and the
organization sees the dream come true.
Reference
University of Phoenix. (2013). Decisions in Paradise Business Scenario. Retrieved from
University of Phoenix, MGT 350 website