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Saturday, March 16, 2013

The Measure: Post #10--Ful vs Marginal Thinking

Full vs. Marginal Thinking Theory (how to stay out of jail): Small daily decisions can take us down a path—either good or bad. A loss of integrity, the author argues, is rarely a sudden thing, rather a daily compromise. Companies that ignore integrity do so at their own peril. Ask Jeff Skillings, former CEO of Enron, and a string of other very smart folks who gradually, incomprehensibly found their way to jail. Sometimes it feels easier and cheaper to take one course of action instead of “paying the full price” to do the harder but better thing. Thus, the marginal cost of leveraging overcomes the full-cost argument. “Thinking on a marginal basis can be very, very dangerous,” notes Christensen, a classmate of Skillings and others who’ve slid down this slippery slope. The same is true in our own lives. The author warns us that the way to avoid making compromising moral decisions is to avoid putting yourself in such a situation.

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