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Posted: Sun Jan 19, 2025 4:19 am
However, Motorola's decision makers at the time had fallen into the "sunk cost fallacy", thinking that too much cost had been invested in the early stages, and that it would be a pity to give up if the project was abandoned halfway. So the project continued.
Later facts told us that the "Iridium Project" was a complete failure!
Considering "sunk costs" when making decisions is very disadvantageous for enterprises!
2. How can enterprises reduce the “sunk costs” caused by wrong decisions?
Rand's Law states that 85% of every 100 large companies that go bankrupt in the world are caused by careless decisions made by their managers.
This shows the importance of making the right decision.
Handshake Decision
Image source: pixabay.com
The "sunk costs" mentioned in our article today are costs that are not suitable for decision-making analysis.
First, ignore “sunk costs”.
This is indeed very difficult to do. After all, many business decision makers have a mentality of not admitting defeat, or they know but cannot do it, and are unwilling to admit their mistakes. It is human nature and difficult to avoid. However, this is very detrimental to the development of a company.
Another key point is that in order to avoid the "sunk costs" caused by antigua and barbuda b2b leads wrong decisions, companies must have a scientific investment decision-making system.
Be cautious when making decisions at the beginning. Decision makers need to make accurate judgments on the project from multiple aspects, such as technical issues, whether the company's finances allow, market prospects, and industry development.
Image source: unsplash
Of course, the market changes quickly, and if you make a wrong decision, don’t just let it go and dream of a “turnaround” one day. You must learn to stop losses in time!
Later facts told us that the "Iridium Project" was a complete failure!
Considering "sunk costs" when making decisions is very disadvantageous for enterprises!
2. How can enterprises reduce the “sunk costs” caused by wrong decisions?
Rand's Law states that 85% of every 100 large companies that go bankrupt in the world are caused by careless decisions made by their managers.
This shows the importance of making the right decision.
Handshake Decision
Image source: pixabay.com
The "sunk costs" mentioned in our article today are costs that are not suitable for decision-making analysis.
First, ignore “sunk costs”.
This is indeed very difficult to do. After all, many business decision makers have a mentality of not admitting defeat, or they know but cannot do it, and are unwilling to admit their mistakes. It is human nature and difficult to avoid. However, this is very detrimental to the development of a company.
Another key point is that in order to avoid the "sunk costs" caused by antigua and barbuda b2b leads wrong decisions, companies must have a scientific investment decision-making system.
Be cautious when making decisions at the beginning. Decision makers need to make accurate judgments on the project from multiple aspects, such as technical issues, whether the company's finances allow, market prospects, and industry development.
Image source: unsplash
Of course, the market changes quickly, and if you make a wrong decision, don’t just let it go and dream of a “turnaround” one day. You must learn to stop losses in time!