MDI, GURGAON

The recent rise of density in research on business decisions signifies a shift in paradigm. More than five decades ago, Friedman’s shareholder theory, which holds that increasing profit by maximising shareholder value is the corporate main duty, stands still. The rise and fall of business in the 21st century has settled the debate over whether profit as a goal and means coexist. What has shifted the decision paradigm is that, while profit is a goal to attain, it can only sustain by the decision it adopts. The dilemma in business decisions arises in the search for ‘profit as a means.’

According to a McKinsey study, on average, nearly 40 percent of the time is spent searching for an appropriate decision, leading to decision fatigue. The survey conducted by McKinsey of 1,200 global business leaders illustrate, inefficient decision-making costs managers of Fortune 500 companies 530,000 days every year. An estimated loss of $250 million in annual wages. This makes it evident that decision-making is deeply embedded in balancing three means of profit maximisation: the employment of resources, the efficient allocation of resources, and equity in the distribution of business products and services. Thus, decision-making in business is ultimately about aligning internal measures and managing external demands to produce, acquire, conserve, and dispense business assets.

Though some of these external factors were also critical business dilemmas in the past, the limited external sphere of influence on profits had insulated businesses from risk. The globalisation of business standards to improve risk appetite in 21st-century governance has increased the influence of the external sphere on business. In the contemporary paradigm, the non-financial external sphere of influence shapes business risks. Driving a new arena of decision-making landscape. The global risks report by Deutsche Bank AG in 2020 highlights that in 2010, the five critical risks, i.e., asset price collapse, deglobalisation, oil price spikes, fiscal crisis, and chronic diseases, had drastically shifted to climate action failure, biodiversity loss, extreme weather, water crisis, and weapons of mass destruction. This transforms 21stcentury business paradigm decision-making to balances external determinants of risks, revenue, and replenishment. The critical outcome in decision making rests on anticipating these three “Rs” and their interdependence. Unlike in the past, the rise in the external risks of nonfinancial externalities, such as environment and geopolitics around it makes difficult in predicting profits and preventing losses.

Does this transform the utilitarian approach to decision-making as propounded by John Stuart Mill into a broader ethical framework that benefits a wider range of outcomes? OrIn this context, the role of public policy is to equip decision makers with a pragmatic approach that works in the dynamic real world. The contemporary business world is evolving faster than ever. The speed, scale, and scope of decision-making are geared towards the adoption of cutting-edge technology, the increasing regulatory demands for transparency, and the globalisation of sustainable development goals, all of which demand a response to the negotiation of dilemma between profit-planetpeople in decision making. This creates a need to incorporate a strategic decision that explains what it is and why it works. And tactical decision: how, when, and where it would work. The tactical and strategic insights emanate from the understanding of business and public policy. Public policy provides decision-makers with a means to align with government visions and citizens¡¦ values by incorporating five critical perspectives ¡V society, technology, organisation, regulatory, and market.

While it is contemporary to reaffirm the role of public policy in business decision-making, Indian wisdom has, over the ages, recognized the pivotal role of policy in creating wealth. In Arthashastra ¡V the scripture of wealth, Chanakya¡¦s literary work on the relationship between moral duty and wealth asserts that prescribe action ultimately to extends from narrowly defined profit into prosperity. Probably the global realisation of this limitations of ¡¥profit-centric¡¦ decision making has transformed into a preamble of SDGs that replaced profit with prosperity, along with another four ¡§P¡¨- planet, people, partnership, and peace. These five Ps phenomena arise more frequently in resolving dilemmas in business decisions through policy and business practices.

Policy overrides individuals¡¦ biases, forming a set of collective decision-making frameworks to mitigate external risks and manage internal resources toward sustained revenue in business. Thus, in a complex business paradigm, the purpose of policy in the hands of decision makers is implicit: to provide a better tool for balancing risks, revenue, and replenishing of diminishing resources that feed prosperity beyond profit. ƒÞ to integrate utilitarianism with the deontology of Immanuel Kant. To succeed in a business footprint, an idea grounded in deontology often creates an expectation gap when such decisions are projected but not internalised. These influences include global governance, such as the Sustainable Development Goals (SDGs), as well as regulatory and legal requirements. The business commits to SDGs principles, such as net zero despite its inverse correlation with profit. This idea of deontology in decision-making is more a matter of external influence.