Earth Buddy Decision Making Essay

Decision making is the act of determining the best choice while examining a range of options. Decisions are made within one of the following decision environments: uncertainty, risk or certainty. Ronnen Harary, Anton Rabie and Ben Varadi, three university students, wanted to demonstrate that they were capable of growing a global corporation (Spin Master). Consequently, in the start-up of their company they had to face decisions from all three environments. The first major decision the entrepreneurs had to make was to figure out a way to market their new product, called, Earth Buddy. Rabie suggested Roots Canada Ltd., as it was a well-known Canadian company, sustained a positive reputation and vaguely shared the same environmental views as Earth Buddy. Proposing
their new product to Roots Canada Ltd., was a gamble. In fact, because this was the first major decision that the entrepreneurs were going to make, they had very few facts and information to predict the possible outcomes of their decision. This undoubtedly placed the three entrepreneurs in the uncertain decision environment, thus, making the decision that they made non-programmed. Non-programmed decisions are derived from unusual circumstances, with no proven answers to use as a guide, consequently entailing subjective judgments.
The students demonstrated a non-programmed decision with the development of Earth Buddy. The development of Earth Buddy was not based on any precedents, but solely from the innovative minds of the students. The second major decision the entrepreneurs had to make was whether or not they should expand their operations from Harary’s kitchen in order to fund the high demand for their innovative product from K-Mart. Relocating operations did not guarantee a positive outcome for the company – the soaring number of sales for the product in Canada did not indicate that there would be a similar outcome in the United-States. However, because the two countries are demographically similar, there was a possibility that the United-States would mirror the sales in Canada. This kind of probability allowed the entrepreneurs to determine the likelihood of particular outcomes. Since the entrepreneurs were in the risk environment, the decision that they made was non-programmed (there were no past experiences to use as a guide, their only useful tool was their personal
judgments). The last type of decision environment is the certain environment – under this condition, factual information about the possible alternative courses of action and their outcomes are readily available. Since factual information is provided, and there is no sense of ambiguity in this type of environment, decisions made in these environments are programmable. Programmable decisions are very simple as solutions to problems already exist from previous events. Spin Master exemplified programmable decisions in the certain environment by consistently using the same marketing method for every successive product they created.
Spin Master has undoubtedly gained continuous success throughout the years. As a result of their success, the company may face scenarios where there exists limited time, information or energy, which could lead them into decision errors and traps (also known as heuristics). The first circumstance where Spin Master illustrated the potential for a heuristic was when they released the “Mighty Beanz” product. The company consistently used the same marketing strategy for each successive product that they launched. Assuming and relying on the same strategy to always work merely from past experiences or similar situations could lead to a potential downfall. This scenario illustrates the availability heuristic (making future decisions based on past events) as well as the representativeness heuristic (basing a decision from similarities between the situation at hand and stereotypes of similar occurrences). Additionally, another decision error Spin Master could encounter would be by producing an unsuccessful product and excessively marketing it, rather than discontinuing it. This scenario depicts the escalating commitment heuristic; the continuation of the course of action even if it is not working. If Harary, Rabie and Varadi are capable of avoiding these kind of heuristics, their company, Spin Master will continue its path of success.