Efficient Decision Making

For people overwhelmed by choices…solutions for fast and confident decision makers.

Small organizations tend to be more efficient than large ones because in a large group it is easier to separate decisions from their consequences. In general we make better decisions when the consequences affect us and we make poorer decisions when they don’t.

When I buy a car for myself, I have many reasons to do a good job. If I get a car that breaks down too much I’m inconvenienced. If I negotiate poorly then I spend more money. If I don’t get the features I need then I won’t be able to use those features.

When I buy a car with someone else’s money for someone else to use I have less reason to do my homework. Maybe I’ll buy whatever my buddy the used car salesman suggests. Maybe I won’t haggle. Maybe I won’t bother to take a test drive.

People have a right to make bad decisions. Maybe you’d rather buy a Corvette than a Corolla; people legitimately disagree about things like that. Companies can make bad decisions too; it’s their money to waste. Government, though, is a special case, because it doesn’t spend its own money.

Inefficiency in GM, or AT&T, or Microsoft, or any other big company doesn’t bother me much. I’m free to not give them my money. But if I tried that with the government, sooner or later unhappy men with guns would show up at my door.

What’s the solution? I don’t know. It’s easy to say “government should be as small as possible” but it’s not that simple. Nothing’s simple.

Source: Nothing’s Simple

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