The Decision Examination shown in this statement is dependant on the case of Medical Equipment Inc. and your choice that the Sales Profile Administrator Ankur Grover has to take while aiming to seal a medical equipment offer with Prince Khalid Specialist Medical center and Research Centre in Jeddah, KSA.
This report entails the following analysis that we did for this case.
- A Brief Explanation of the situation and how did it arise, the context of Decision making, Primary Overview of situation in conditions of Alternatives Available, and an intuitive experience what the right choices would be.
- Informal Analysis of all the alternatives that we have and the consequences, uncertainties associated with all of them.
- Decision Research (without calculating the probabilities) using 1. Positive 2. Conventional and 3. Regret Approaches with which we figured the best decision that he may take is to not offer him a bribe.
- Decision Tree Evaluation using expected value methodology.
Ankur Grover is a US-trained sales account supervisor who works at Medical Equipment Inc. He recently got sent to work in the companys office in Saudi Arabia where he was raised. Ankur is a 25 calendar year old Indian who comes from a Hindu track record. He is striving to produce a sale of medical equipment to the Prince Khalid Specialist Medical center and Research Center in Jeddah, KSA.
Our chosen situation for your choice Analysis assignment is due to bribery and if it should be found in the below situation:
Ankur is working against competition from another medical equipment company called Wilsons which includes already developed a rapport with the Hospital. Wilsons has been the company from which they may have become their medical equipment from in the past and the Hospitals purchasing director is comfortable with using Wilsons. Also, it seems that there may be bribes going between Wilson's and the Hospital.
The challenge arose once Ankur was aware that there is bribery mixed up in Wilson's-Hospital trades. He will not want to be left out of the running for an opportunity to land the offer, but at the same time feels that bribery is unethical and could result in very negative implications.
Ankur is now facing a problem for the reason that he desires to land the bill but does not want to get associated with bribing the purchasing director. However, perhaps it might be the only path to land the accounts and open the door for possible future orders between the two companies.
The ultimate goal which Ankur is trying to accomplish is to close the deal between his company and a healthcare facility for the deal of USD$725, 000 in medical equipment. The options Ankur has is either to try bribery in order to land the deal, not involve himself in bribery and risk dropping the deal altogether, or offer some incentives apart from an outright bribe in order to develop some sort of any rapport with the Hospital and preferably encourage the deal forward.
Your options open to Ankur here are
- Giving him the bribe money
- Not Bribing him
- Offer a trip to France
- Offer a discount
- Offer both Trip and Discount
An informal analysis of every of the alternatives mentioned here's available in the next section.
Our intuition makes us feel that taking a "middle road" is the best solution. This might involve the last amount of risk from a rational viewpoint because there is on unethical action being performed. At exactly the same time, it isn't a complacent action where Ankur would need to sit and expect the offer to close by some wonder. By offering bonuses, Ankur would be offering benefits to the Hospital while keeping within legal limitations. This might also show the Hospital that Medical Equipment Inc. is committed to doing what it can to close the deal and perhaps place the seed in the Hospital's mind that future handles Medical Equipment Inc. would bring them even more benefits.
The discussion for not presenting a bribe is that it's ethically wrong to do so to be able to get the deal. On top of that, if Ankur is available out, there may be negative legal implications. Plus, it is not completely guaranteed that if the bribe is given than Ankur would close the deal. The debate for giving a bribe would be that the probability of closing the offer would increase greatly.
The argument for providing the bribe is that the likelihood for him to close the offer and gain the USD$725, 000 bill rises significantly. Plus, once this package was closed, it could open the door for other, more profitable offers between the two organizations in the foreseeable future. The discussion against paying the bribe is that it is not with 100% certainty that after the bribe is given, Ankur would close the offer. Additionally, giving the bribe is known as wrong on honest grounds and there may be legal effects with this action is Ankur is found out to have paid a bribe.
The debate for supplying a trip to a Medical Equipment Office/manufacturer in France is the fact that Ankur is not participating in bribery practices; rather he is promoting the product by appealing the purchasing manager to have a look at the production facility.
The argument for not providing a bribe but offering incentives would be that Ankur would be operating in a much more ethical manner. On top of that, the probability of closing the offer compared to not presenting anything raises greatly. The discussion against this is that even though he may offer these incentives, it is not with 100% certainty that he would be receiving the deal.
Another alternate for Ankur is always to offer both discount on the product as well as request the purchasing director to a stock trip in France. This can also allow Ankur to avoid unethical practice of bribery however, the cost associated with this kind of offer would be very high and still you will see an opportunity that the purchasing administrator might not choose the equipment from Medical Machines because of his good ties with Wilson, the rival of Medical equipment.
Before formulating the possibilities and then review the alternatives predicated on the decision tree produced, we used the three widely used conditions for decision making when probability information regarding the likelihood of claims of dynamics are unavailable.
The Payoff stand for our decision making is shown below.
We then concluded what's the best alternate from each of the techniques and what can be inferred from them.
This methodology would be chosen by an optimistic decision maker. From the pay-off stand we are choosing an alternative that provides us the entire major pay-off.
The highest pay-off available in this case is 725, 000. So the best decision that Ankur can make is "Usually do not Bribe" where-in his chance of getting the offer becomes great as well.
This procedure would be chosen with a conservative decision manufacturer. For every of the alternatives, only the main one with the least payoffs is determined. So our pay-off desk, after eliminating all other pay-off alternatives appears like the one below.
Then we decide that corresponds to the maximum of these bare minimum payoffs. In order a conservative decision machine, we recommend a choice to 'not offer him a bribe'.
This way requires the construction of an regret table or a chance loss table. That is done by determining for each status of character, the difference between each pay off and the major payoff for that state of nature.
Your choice table below shows that the largest payoff in each express of character is whenever we get the offer (outlined in yellow).
The difference between each payoff and greatest payoff to the state of characteristics is shown in the Regret stand below
Using the regret stand above, we've listed the utmost regret for each possible decision in the table below.
The decision corresponding to the the least these maximum regrets is chosen, which again in cases like this is 'Do Not Bribe' gives the minimum of the maximum regrets that we have chosen.
From the aforementioned three methods we get a decision 'Not to Bribe him'. Since Ankur operates a high risk of losing a profitable deal by not offering him a bribe, we can not positively conclude that it's a great decision not to offer him a bribe. So we have to proceed with determining the probabilities of every of the alternatives and then execute a decision tree examination to come with a specific decision
We use the Expected Value method of arrive at a final result for decision making. We drew a conclusion tree (please see figure within the next site) by estimating the possibilities of occurrence of every of the alternatives (assumptions that people made). We then computed the full total expected value of every of the alternatives (shown as Total EMV in the physique).
Total Expected Value for each of the alternatives is also shown in the table below.
We see that the choice of "Offering him a vacation to France" gets the highest expected value of 371, 250.
From the decision tree evaluation we conclude that Ankur offer him a vacation to France where in we abide by the legal guidelines of the company as well as behave ethically by not offering him a bribe. Ankur thus heightens his probability for getting the deal by offering him an option that the manager long craved for.
- Firsthand knowledge of the problem is missing. Our company is taking decisions and formulating probabilities predicated on what Ankur could have done and by adding ourselves in Ankur's shoes.
- All our calculations are based on the assumptions of the possibilities that are brought up in your choice tree. The probabilities might be still wrong since we don't have an example data to effectively estimate them.
In this circumstance we did a conclusion research first without estimating the possibilities using optimistic, traditional and regret strategies by formulating a payoff desk. From the examination all the techniques led to one finish that 'Do not offer him a bribe'. But this didn't appear realistic, since Ankur runs into a risk of losing a very lucrative deal and didn't take into account the probabilities of event of each of the situations.
So we estimated the probabilities of every of the alternatives and used your choice tree method of reach a summary that Ankur should offer the Purchasing Director of a healthcare facility a trip to France gives him the maximum payoff as well as win him the offer.