M Fiqri Rihyawan

DAVE ARMSTRONG JOB DECISION 29316056

THE SITUATION
Dave Armstrong, President of subsidiary company and also a chief salesman
complained about his job position that can be considered as a one man band that
whenever he took a day off, the entire sales process came to a screeching halt.
Dave Armstrong decide to go to Harvard Business School and still got renewal
income from his policyholders
Three months before graduation, Dave need to consider taking one of the three
jobs prospect which is Job A, Job B, and Job D
In SMART implementation stages, Dave Armstrong will be the decision maker
PROBLEMS
1. Job A:

A. Up front personal investment = $1 million to start ($300 for equipment; $700 for a years operating expense).

2. Job B:

A. $100.000 up front (1/3 of the equity)

B. Short term (oil and gas glut might cease in 2 years)

C. Business attractiveness might disappear in 2 years.

3. Job C:

A. Low opening salary $45,000.

B. Much Safer than other 2 Jobs but not desirable

C. Position doesnt open up for another 6-12 months.

D. Temporary position as a securities analyst.

E. Lack of desire to work a conventional job

 VALUE TREE

Cost Benefits

Monetary Non-Monetary

Initial Financial Business Sustain

Salary Equity
investment Incentive Relation ability
 COST ASSOCIATED
Initial Investment Total Cost
Job A $1.000.000 $1.000.000
Job B $100.000 $100.000
Job C $0 $0
 ASSIGNING VALUE SCALE
Financial Incentives Salary Business Relation Equity Sustainability
100 B 100 B 100 B 100 A 100 C

80 A 80 A

60 C 60 A

40 A

20 B

10 C 10 B

0C 0B
ORIGINAL TO WEIGHTED
Attributes Original Weighted
Financial Incentives 100 25
Salary 90 22
Business Relation 80 20
Equity 70 18
Sustainability 60 15
Total 400 100
VALUES & WEIGHT
Location
Attributes Original A B C
Financial 25 40 100 0
Incentives
Salary 22 80 100 60
Business 20 60 100 10
Relation
Equity 18 100 20 0
Sustainability 15 80 10 100
Aggregate 100 69,6 61,6 30,2
Benefits
 SWING HEIGHTS
Financial Incentives Salary Business Relation Equity Sustainability
100 Best

90 Best

80 Best

70 Best

60
Best

Worst Worst Worst Worst Worst

 TRADING BENEFITS AGAINST COST

Effective Frontier

A
B
Benefit

Cost/Early investment
SENSITIVITY ANALYSIS (1)
SENSITIVITY ANALYSIS (2)
CONCLUSION
3 choices (trading benefit cost) :
-Job A
-Job B
-Job C
-The most possible : Job A WHY?
Main reason that the investment will become as a long term investment that have high
sustainability