Question

Making decisions often involves financial and nonfinancial factors. Provide a hypothetical example from your personal life of a situation in which you would consider both financial and nonfinancial factors. What factors would be considered?

Answer 1

Financial is generally considered the primary factor in personal life. Anything that is not financially transactional is usually a negative approach to doing. In this case, businesses are first looking to increase the shareholders' wealth.

It is necessary to accept the proposal / decision that is not expected for some time, as such it benefits from non-financial competitive advantages such as increasing customer satisfaction, financial satisfaction such as employee satisfaction. The dreaded decision of the economic point of view has a negative impact on the individual business. Therefore, the business has non-financial implications and therefore should always be taken into consideration when making personal business decisions.

Focusing on the economic outlook can benefit more in the short-term. In contrast, non-financial matters can potentially help your businesses succeed in the long run. For example, if a business spends less on the education of its stakeholders, it will save money in the short term. But this can have a negative impact on the quality of work, so your business is likely to fall behind.