Chapter 5
The Ultimate Management Metric?
What Is Decision Equity?
While we can discuss the notion of decision equity at many levels, let us begin with a simple definition that will capture its essence. At a fundamental level, we define decision equity as the net present value of the direct and indirect cash flows associated with revenue and margin increments or cost savings that result from the implementation of a strategic decision. In other words, the metric of decision equity captures the long-term financial consequences associated with the identification, selection, and implementation of a higher order strategic choice versus the status quo or an alternate option. One can see that the computational foundations of the concept draw upon the ...
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