An article in the Asia Pacific Journal of Management discusses the importance for firms to invest in social ties. A company is considering paying $150,000 for social activities over one year, hoping that productivity for the year will rise. Estimates are that there is a 50% chance that productivity would not change; there is a 20% chance that the company's profits would rise by $300,000; and there is a 10% chance of a rise of $500,000. There is also a 20% chance that employees will learn to waste time and that profits would fall by $50,000. Construct a decision tree and recommend a course of action.

  • CreatedJune 04, 2015
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