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University of Nevada of Las Vegas

TCA 103-1003

Zihao Yu

Aperil 10, 2016

How to make decision

The third person who came to our class and gave the presentations was called Bill Werner. He is one of the professors in UNLV hospitality major and he gives lesson about hospitality law, security and risk management. Before he became a professor in UNLV, he used to be a lawyer and worked as assistant general counsel for Mirage Resort and Boyd Gaming Corporation. Through his presentation, he talks about ethics and responsibilities in either hospitability industry or other business area. In addition, he also talked about how to make a decision which I think the idea benefited me the most.

To make a decision can be a very important part of our daily routine. There are so many things that happened around us can have multiple solutions. In which, to know how to make a good decision or not can affect our life a lot. People need to make decision all the time, even some very basic daily activities. For example, we could make choice between eat at home in order to save money and eat at restaurant in order to have better service. However, every decision leads to a consequence. If we decide to eat at home, we can save some money but we will need to do the dishes; on the other hand, if we decided to eat at restaurant, we will spend at least ten dollars or more but we do not need to worry about cleaning work. How to make a good and right decision is really important. In some cases, a decision would have a great affect with the situation. The timing of buying in and selling out stocks is a good example in our daily life, some people become rich because they have made a right decision, but some people quickly lost their money due to their wrong decision.

Speaking of how to make decision, it will have great relation with risk management, which Bill Werner had talked about during the class. Before making decisions, the risk that takes from the decision is one of the most important things that need to be kept in mind. There are four aspects that need to take into the calculation of risk management, which are potential loss, probability of loss, potential gain and probability gain. Through the calculation of risk management, the risk that it may need to take for the decision that going to make can be found of which kind of risk it may be. The risk can be either positive or negative. If there is a result of positive risk, it means that there is a risk to put that decision into action; however the possibility and percentage of winning from the action will be a lot higher than the possibility and percentage of losing the game. On the opposite, if there is a result of negative risk, that means there is a more possible chance of loss than gain. According to this calculation, the decision which has a positive risk will be a good decision to make even there is a certain percentage of risk taking. That is the risk management Bill Werner talked about in class that day. There is a certain risk that people always need to take when making a decision; however, to determine the risk is positive or negative will help with the decision making process. This leads to the Golden Rule of risk management that has been talked about in class. Bill Werner gives us a golden rule of risk management, which is “A good decision is not always right; A bad decision is not always wrong”. From the equation of risk management and the Golden Rule by Bill Werner, there is a connection can be found between those two. A good decision can sound doable but has a negative risk which will lead to profit loss. At the same time, a bad decision is not always wrong if there is positive risk that can bring to profit. There is no absolute right or wrong, we always want to think about a decision from multiple aspects before it putting the decision into action.

The other thing that has been talked about in the presentation was the causes of errors. Because of the human nature and some basic psychology, there are some mistakes we usual have when making a decision. For example, people will make a decision when they think everyone else will do the same choice. When people think that this thing has always been done in a certain way, they will follow the action like others do to avoid mistakes. At the same time, people will normally underestimate the bad things may occur to them. Therefore, those thoughts will hold people back from making the right decision for themselves. What everyone choose to do may not be suitable for the situation, and there can be worse things happen that people may want to take into considerations. If people fail to do so, it will causes errors in the decision making process.

Overall, I think there are many good ideas from Bill Werner’s presentation can benefit my daily life. The useful points about decision making that I learned will definitely help me in the future.