4.

Organisations are required to make ongoing decisions to

maximise opportunities, to adapt and change with the internal

and external environments, to remain relevant with the aim of

attracting and maintaining a customer base, whilst ensuring

that the wealth of the owners is maximised (Atrill & Mclaney,

2021).

Decisions are made at multiple levels throughout an

organisation and are often grouped into one of the following

categories: strategic, tactical, operational (Anon, ND).

Gogo Airlines' decision to establish a low budget airline would

involve decisions at all levels.

Strategic - The board of directors would make the initial

decision to establish the new airline.

Tactical - Senior and Middle management would take the

decision on which locations the airline should travel to.

Operational-Lower-level management would take the

decision on areas such as staff employment and hours.

The CEO of the organisation would have worked with other

stakeholders to take the decision to establish the airline, many

risks would have been involved when taking this decision as

there is a large reliance on the future external micro and

macro environment, which is often beyond the control of the

organisation (Blyth & Martin, 2019). Scenarios such as the

global pandemic, albeit a rare occurrence are areas that are

difficult to predict and would have a large impact on any

organisation.

One common technique used to minimise the risk of taking

financial decisions is the use of the Net Present Value (NPV).

The NPV will look at projected income of an investment

against the initial investment cost, whilst taking into

consideration the time value of money (Atrill & Mclaney, 2019).

Would you suggest any alternative financial technique that

may provide a better judgement when making a financial

decision?