Harvard Business Review: Carter Racing Case. A management communication analysis.

This is a really tough decision and the mind is constantly changing against to the conclusion. But after a thorough consideration, I don't think the team should race this time. John should get more data and information for the engine failure until he decides to race again for the next season. There are numerous ways to decide to race or not for John Carter when it comes to decision making. He can make the decision based on either his fellow chief mechanic Tom's view, or the engine expert Paul's assumption. However, regardless either way, the conclusion should be reached by some sort of quantitative analysis.

At the first glance at the scenario, the immediate reaction was to throw all the numbers provided into the opportunity cost calculation, and compare the pros and cons between the options. However, in order to come up with the most accurate prediction on the expected value of the outcome, it is necessary to gather the all of the associated costs in dollars.

Paul Walker

Paul Stang

[Portrait of Les Paul, Fat Tuesday, New York, N.Y....

John can easily calculate the cost to withdraw by adding up the fees from the data that was provided in the case. Yet, for the other options: race and win, race and fail, it is impossible for us to calculate the precise cost of "winning" and "failure" since there are no price tags for fames and sponsorship possibilities if the team wins the race, as well as the risks that might happen in relation of gasket failure such as life, and destructing in team reputation. Thus, without the inclusion of all the necessary factors, the result of calculated the expected value would be useless in measuring losses and gains.

The second reason that I think John should wait for the race is due to insufficient information provided in the case. In addition...