Faculty of Business and Economics

Department of Business Administration and Marketing

First Semester 2019/2020

BUSA333 Organizational Behavior

Case Chapter 9

Submission Date: 28/1/2020

Student ID #: 1150169

Student Name: Izzat Hamdan

Instructor: Mr. Omar Omran

 Case Incident 1
If Two Heads Are Better Than One, Are Four Even Better?

Maggie Becker, 24, is a marketing manager for Kavu, a small chain of coffee shops in eastern
Ohio. Recently, Maggie’s wealthy uncle passed away and left to Maggie, his only niece,
$100,000. Maggie considers her current salary to be adequate to meet her current living
expenses, so she’d like to invest the money so that when she buys a house, she’ll have a nice
nest egg on which to draw.

One of Maggie’s neighbors, Brian, is a financial advisor. Brian told Maggie there was a virtually
endless array of investment options. She asked him to present her with two of the best options,
and this is what he came up with:

1. A very low-risk AAA municipal bond fund With this option, based on the information
Brian provided, Maggie estimates that after 5 years, she stands virtually zero chance of
losing money, with an expected gain of approximately $7,000.
2. A moderate-risk mutual fund Based on the information Brian provided her, Maggie
estimates that with this option, she stands a 50 percent chance of making $40,000 but
also a 50 percent chance of losing $20,000.

Maggie prides herself on being rational and objective in her thinking. However, she’s unsure of
what to do in this case. Brian refuses to help her, telling her that she’s already limited herself
by asking for only two options. While driving to her parents’ house for the weekend, Maggie
finds herself vacillating between the two options. Her older brother is also visiting the folks this
weekend, so Maggie decides to gather her family around the table after dinner, lay out the two
options, and go with their decision. “You know the old saying—two heads are better than one,”
she says to herself, “so four heads should be even better.”

Questions

1. Has Maggie made a good decision about the way she is going to make the decision?

As indicated by me she isn't taking acceptable choice, since I feel that she can counsel
with her relatives in taking their experience and guidance however the choice should
just from her side. She needs to have Practical, Rational, and Personal methodology in
taking her own choice while deciding on better speculation. Also, she should study it
hard without take of her family opinion and in my opinion I agree what Maggie told
that – Too Many Cooks Spoils the Broth-.
2. Which investment would you choose? Why?
At the primary spot, I won't limit myself with just two choices, in the event that I
would have been in Maggie's place, at that point I would have mentioned my
monetary guide to give at any rate speculation plans. pick one among the most elite
venture which will be reasonable for my age, pay and market condition.

In any case, on the off chance that I have to look over the above given two speculation
plans than I will go with - A Very generally safe common store. – Zero possibility of
losing cash, and an increase of 30% around, Because it is the first investment for
Maggie so I advise her to take a plan with low risk.
3. Which investment do you think most people would choose?
It depends of type of investor, If the investor turns away from the risks and wants to
guarantee the largest percentage of the profit, he will choose the first option. On the
contrary, if the investor wants the largest profit and does not care about the risk,
whatever it is, he will choose the second option.
4. Based on what you have learned about groupshift, which investment do you think
Maggie’s family will choose?
I expect that she will choose a very low risk mutual fund.