You and I must make tough decisions with imperfect knowledge. That is what business leaders and investors do every day. The world is an uncertain place, and according to many people, it is an unknowable future. Yet paradoxically, most of us at times assume that current trends, be they financial, cultural, or political, will last into the future. This latter assumption presupposes that we can see the future. It is into the vortex of trends, uncertainties, and risk that we all plunge daily.
You address major decisions regularly. Sixty-five percent of businesses in America employ more than 100 people. We chose the word people and this approach over a discussion on labor as a factor of production because the latter is more sterile and would eliminate the often gut-wrenching nature of the decisions you make. Talking about people emphasizes the importance of those decisions and the risk involved in making the wrong decision. The decisions you make will have a direct impact on people's lives.
You are also likely directly or indirectly responsible for the decision making involved in the $875.1 billion in nondefense capital goods shipments made last year or the $117.8 billion in capital goods shipments related to the defense industry. Should you make the capital commitment that could potentially make or break the future of the company?
All decisions involve risk to the health of the firm, to the ...