Only business

Something dawned upon me today. Just now. In class.

I'm taking the ACCA's F5 paper this semester - Performance Management.

In class today, I was given a question on the topic 'Make or Buy Decision'. The requirement of the question is pretty simple - determine whether a company should make a certain product by themselves or to buy it from a third party. Both of the options have their own pros and cons. The goal of the exercise is simple, maximise profit.

Upon calculations, I have determined that buying the product from the third party will be more profitable compared to making it, as the contribution per unit is much higher. Therefore, I chose that option for my final answer. As a result, that company will forgo 72 people from its production line as they were no longer needed to make the product. A redundancy of $4000 is paid to each of them as a compensation for such action. With that, the company can increase its profit by 37.56% compared to the previous year. I get the answer correct, and my analysis is spot on.

Then, this occurred to me - by making calculations within 15 minutes, I have come to the conclusion that I will fire 72 people from the company. In order to maximise profit. Those 72 people's fate is in my hand for 15 minutes, and eventually I decided to let them go. Even though a compensation will be given, it is still quite terrifying. Although this was only an example, I'm beginning to think what accountants can do in real life. Simply cutting workers to maximise profit. Within 15 minutes. I know there a lot more considerations that will be put before making such decisions. But still, it can and must be done to ensure the company meet such objectives.

It's scary.

For this, I believe that The Godfather says it the best
"It's not personal. It's only business"