ABSTRACT
This chapter examines the interaction between decisions and risk by setting out theoretical elements of decisions, and then introducing practical decision-making tools including real options and strategic foresight. The intuitive, qualitative and quantitative elements of decision making have been combined into models that can be crudely divided into three by their principal driver: the psychological, behavioural or empirical attributes of the decision and its associated risks. Zaleskiewicz describes instrumental risk taking as goal oriented in seeking future profit, and as a deliberate, cerebral process following expected utility type analysis is directed at achievement. A good structure for decision making involves Six Sigma which targets measurable improvements to business and financial results by a quantitative focus on customers and strategy. It takes a project-level perspective, insists on metrics and has aggressive targets. Rational decision making is all about optimizing future cash flows: the only value of historical expenditures or efforts is in their current realizable value.
