Business judgment exercises.

How to use the exercises

These are fictional teaching situations, not client cases. Read one scenario, write an individual answer, then compare it with the group's answers before reading the sample discussion.

Use this blank record for each exercise: choice; facts supporting it; assumptions; alternative explanation; next evidence; decision owner; next action. An assumption is something you are treating as true without sufficient confirmation. Evidence is what supports or challenges it.

There is no score. The aim is to make the reasoning understandable and to notice what remains unresolved. “Business judgment” here means ordinary business decision-making, not the legal business judgment rule.

Exercise 1: add a second supplier?

The situation. A supplier has missed two delivery dates. Several customer orders depend on its component. A second supplier offers a lower unit price but requires advance payment and has not passed a normal-production test. Your team also placed one of the late orders after the agreed ordering date.

Work through it. Would you move volume, test the backup or first change the ordering process? Which customer promise is exposed? What changes in cash, quality and team workload? What would distinguish supplier unreliability from a planning problem inside the company?

Write the next step. Name one test, the evidence it must produce and who can approve it. Include how existing customers will be protected while the question is investigated.

Possible answer A. Check the cause and keep current volume in place while qualifying a limited backup. This can be reasonable if dependence is material and the business can afford and control a small test. A lower quote and a good sample are insufficient evidence for moving everything.

Possible answer B. Correct ordering timing first and monitor comparable on-time orders. This can be reasonable if the late internal order explains the disruption. It does not establish that all supplier risk has disappeared.

Debrief. If a component has technical or safety requirements the team cannot assess, obtain qualified help before testing or moving production. Discuss which missing fact changed your answer. Continue with when to add a second supplier and manufacturer verification.

Exercise 2: is the backup ready?

The situation. The owner plans to be away. A manager is named as the backup and has written instructions for customer exceptions. The manager has never used the required system access and has not handled an exception without the owner checking it first.

Work through it. What is transferred already: information, authority, access or demonstrated capability? Which part remains untested? Does the planned absence require every possible exception to be delegated, or a clear boundary and escalation path?

Write the next step. Select one representative task. Name the manager's actual authority, approved access, information needed, escalation limit and evidence of completion.

Possible answer A. Run a planned test before the absence and record where the work returns to the owner. If the manager can complete it within the agreed limits, expand the test appropriately. A written backup assignment alone does not prove that result.

Possible answer B. If the manager lacks necessary experience or the decision cannot be delegated under the company's arrangements, choose a different backup or change the absence plan. Merely giving a password does not solve either problem; access must be approved and appropriate.

Debrief. A test may reveal missing information, training, authority or access. Do not label every return to the owner a confidence problem. Use the key-person dependency map for the wider check and decision rights for the authority distinction.

Exercise 3: the job you have not started

The situation. You accepted a job you know how to do and have the resources to complete. You keep postponing it because you dislike the task. When the customer asked, you said it was underway. It was not. Another update is now due.

Work through it. What does the customer currently believe? What decision might that belief prevent them from making? What can you truthfully commit to now? Keep today's accepted job separate from whether you should accept the next one.

Write the next step. Draft a truthful update, a deliverable you can actually complete and a realistic time. Then write the boundary you would state before accepting similar work again.

Possible answer A. Correct the false impression and complete the work within a commitment you can meet: “I said it was underway. I had not started. That was wrong. I can deliver the agreed piece by [time].” Finishing the work does not make the earlier update true.

Possible answer B, if the facts change. If you discover you cannot deliver, explain that promptly and agree a handover or changed commitment while the customer can still make another arrangement. Quietly abandoning the work is not a handover.

Debrief. In this scenario, capability and resources are already present. The immediate task is to close the commitment honestly. If unwanted work repeatedly enters the business, examine the task, operating arrangements and business model separately before changing what you sell or accept. One unpleasant task is not a diagnosis.

The two source essays carry those distinct questions: the unfinished promise and when procrastination points to the business model.

Finish the discussion

Ask each person: Which fact mattered most? Which assumption did you initially treat as fact? What would make another answer reasonable? What would you check before acting?

For an actual company matter, confirm the decision-maker and required professional input before treating a practice answer as an instruction. A useful exercise can end with a better question or a decision to obtain specialist evidence.

Use the material as written for your own discussion, or explore a company workshop with Stan. Any adaptation, preparation and follow-up would be agreed for that work.