Cost Benefit Analysis (3)

The price/cost/benefit grid is useful in every area life, but it should never dictate all our decisions.

Prices bring together information about costs, usefulness and value to other people in an imperfect but informative way. Money is a scale that allows us make comparisons between vastly different objects. How do you compare the value of a rose with a computer? Having a common value scale that allows us to make and approximate comparison between disparate things in away that helps us to make decisions. This scale is never perfect, so it should never be the only factor that feeds into decisions.

This grid is useful in every sphere of life. If a friend who lives 20 miles away asks you for pastoral care, you will drive to see him, because you care. If he lives a hundred thousand miles away, you would first find out the cost of the airfare. You might decide that you could not help the person enough to justify spending the money it would cost. You might suggest he get help from someone who lived closer. On the other hand, if the person was really close to you and think you could really make a difference, you might go regardless of the cost. The money/price grid must not dictate your decision, but it should inform it.

The same is true in business. A person will not buy a new business just because the benefits outweigh the costs. They will need to have an affinity for it. It will need to fit in with what they think is an important. Very few people can devote their life energy to something they do not value. Many factors other than cost benefit will affect the decision. Other values will be important in most decisions that are made. Price/cost is just one factor to that will feed into a decision making process. A business person will often put some business the way of a friend who is struggling, because he cares, even if the cost/benefit does not add up.

Business people should not become cost benefit machines, and I doubt that there are many that are. Certainly, they are not portrayed that way in business biographies that I have read. The cost/benefit driven business person is mostly a straw man set up by envious Christians. People in business know that life is much more complicated than that.

The price/money grid is useful for all of life, but it is just a tool. It must not be our supreme guide. Only God can take that role, whether we are a pastor or a plumber.

None of our decisions should be made solely on the basis of the price/money grid. That would be foolish. On the other hand saying that there are areas of life where it is irrelevant is equally foolish.