Example one 
      Problem: The Phantasian Government has increased the royalty rate on copper concentrate produced in the company's mine, making production only marginally viable. 

      Alternatives

        Threaten to close operations

        Reduce operations so that the net royalty payment remains the same

        Provide financial support to the Phantasian opposition party, and hope for an early vote of non-confidence

        Bribe the Minister of Mines and Energy

        : 

        :

        Do nothing

 

 

       Example two 

          Problem: The Phantasian Government has increased the royalty rate on copper concentrate produced in the company's mine, making production only marginally viable. 

       

Alternatives      

Advantages              

Disadvantages         

 

Threaten to close operations * Will alert the Phantasians of the consequences of their decision without forcing a shut-down * Possible loss of goodwill 

* May cause government to over-react 

* They may call our bluff  

* May be seen as a breach of contract

         

Reduce operations so that the net royalty payment remains the same * Will probably avoid direct reaction from government 

* Will effectively reduce economic rent, hopefully resulting in reduced royalties 

* May increase world copper prices, hence the value of our stockpile

* Will disrupt deliveries to smelter, hence possible customer dissatisfaction

         

Provide financial support to the Phantasian opposition party, and hope for an early vote of non-confidence * May result in royalty reduction if opposition wins * Loss of goodwill 

* Increased political risk 

* Against company policy

         

Bribe the Minister of Mines and Energy * May result in royalty reduction * Against law in host country 

* Against law in home country 

* Against company policy 

* We might get caught

         

: :

         

Do nothing (always an option!) * No additional negative consequences * We would have to live with increased royalties

 

 

      Example 3: A decision grid - matching fit of objectives

Objective

      Alternative (weighting in brackets)

"A"(.25)

"B"(.45)

"C"(.30)

Total weighted score    

(1 is low, 10 high, X impossible)

      Threaten to close operations

2.00

1.00

2.00

1.55

      Reduce operations so that the net royalty payment remains the same                                                 

5.00

3.00

3.00

3.50

      Provide financial support to the Phantasian opposition party, and hope for an early vote of non-confidence

6.00

1.00

3.00

2.85

      Bribe the Minister of Mines and Energy

9.00

4.00

X

Impossible

        : 

        :

      Do nothing

1.00

2.00

1.00

1.45