Decision Making For Dummies book cover

Decision Making For Dummies

By: Dawna Jones Published: 10-06-2014

Discover the best approaches for making business decisions

Today's business leaders have to face the facts—you can't separate leadership from decision making. The importance of making decisions, no matter how big or small, cannot be overstated. Decision Making For Dummies is a candid resource that helps leaders understand the impact of their choices, not only on business, but also on their credibility and reputation. Designed for managers, business owners, and anyone else who makes tough decisions on a daily basis, this guide helps you figure out if the decisions you're making are the right ones.

In addition to helping you explore how to evaluate your choices, Decision Making For Dummies covers ways to receive support for decision making, delves into various decision-making styles, reviews the importance of sifting through data and information, and includes information on ways to engage others and make decisions collectively. Being in charge can be challenging, but with this guide, you don't have to go it alone.

  • Discusses the effects of decision making and outlines the considerations that must be made to gain trust and confidence
  • Demonstrates ways to communicate particularly sensitive decisions, and offers approaches for making bold decisions that challenge the status quo
  • Delves into the risks and benefits of certain decisions, and shows readers the best ways to evaluate choices
  • Outlines smart strategies for engaging others and drawing them into the decision-making process

Crucial decisions need to be made every day in the business world, so there's no time to waste. Make Decision Making For Dummies your primary resource for learning to choose your actions wisely and confidently.

Articles From Decision Making For Dummies

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75 results
Decision Making For Dummies Cheat Sheet

Cheat Sheet / Updated 04-27-2022

In a business environment of complexity and uncertainty, excellent decision-making skills are paramount. Employees, customers, and others touched by a company's actions respond to what they trust — ethical decision-making in business has become a strategic asset. Learn how to communicate decisions effectively, how to make faster and more informed decisions on the fly, and how to incorporate your core values into your decision-making.

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5 Ways Managers and Executives Can Collaborate in Times of Change

Article / Updated 08-13-2019

Management styles are undergoing a total overhaul as the "tell, sell, and make-it-so" approach gives way to co-creating solutions horizontally across and vertically up levels of authority. The impetus for this change is high levels of employee disengagement. This crisis of disengagement is the opening you need to convert your workplace into a better climate for decision-making and creative innovation. Although many may focus on the question, "Who takes the lead — managers or executives?" a better question is, "What if managers and executives worked together to transform a business's capacity for innovation?" Such a collaboration means these kinds of interactions, behaviors, and approaches: Conversations engage top-level executives, middle management, and frontline workers to identify opportunities to do things differently. Rather than relying on authority to dictate direction, solutions would emerge out of the necessary conversations. Rather than those in the executive level having all the answers, all levels share responsibility and accountability for coming up with innovative solutions. Instead of managing as if the business environment is predictable, you accept that it isn't. Facilitating persistent learning and innovation gives your company and its employees a distinct advantage because you rely on your collective creativity rather than try to control circumstances. And yes, relying on creativity means you'll need to become more comfortable with not knowing the answer to everything. Creativity is a process that takes advantage of uncertainty. Information is shared and openly transparent across the entire organization to so that decisions are based on accurate information rather than assumptions. Having conversations aimed at learning how the operational perspective supports strategic thinking is one way to dismantle barriers to transformation. Developing conversational intelligence, the capacity to be aware of how your conversations internally build or break trust, is essential. When creating solutions for the future, you set conventional thinking aside and agree to work with unexpected consequences to make further adjustments. If expectations are based on the past, creative and innovative approaches are likely to fail to meet those expectations. Agreeing to work collaboratively, leaving the ego at the door to focus on creating the future, can help you overcome unexpected surprises. Managers are leaders because the work environment rewards leadership. When the staff has to face fear of retribution or punitive action, it oppresses leadership. Rather than senior management negatively reacting to unexpected surprises, senior, middle, and frontline management agree to use errors and surprises to pave the way to collective leadership. Employee disengagement is powering a workplace revolution that asks all levels of management to see where control can give way to trust. It represents a shift from working in isolation to closing the gaps between top, middle, and bottom levels in a hierarchically structured company. Although not easy, this change is necessary if you want to foster higher levels of leadership in each person. After all, no single level of authority can come up with the creative and innovate solutions required to transform the business culture. The benefits of engaging in this revolution in your workplace? You access more talent and use the resources you have to far greater advantage. Achieving employee and customer engagement, retention, and loyalty, or increasing profitability requires that all levels work together.

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Incorporating Core Values into Decision-Making

Article / Updated 05-13-2016

Core values reflect what is important to your company. They serve as the unshakeable foundation for what your company stands for in good and bad times. When integrated into decision-making, core values are part of decision-makers' mindsets at every level in the company. Consider core values the nonnegotiable part of your company's reputation, sustained by the commitment of executives and employees at every level to live those values in their decision-making and in their relationships with company personnel, customers, suppliers, and communities. Core values express your company's core priorities and its commitment to, for example, making the environment and social health integral parts of management and operational thinking and perspectives. To identify your core values, ask questions such as the following: To gain clarity on what you feel is critical: What does your company stand for? What values express what is important and essential to how you operate and why your company exists? To gain insight on how your values permeate internal relationships: How do your employees describe your company's core values? Why do they work for you and not the competitor down the street? To gain clarity on how your customers view your integrity and how your values are expressed through your action: How would your suppliers or customers describe your values? To become a company that uses value-based decision-making to anchor decisions, you need to reflect on and identify what your company's core values are. To do so, take a close look at what is going on in your company. Core values — whether they were thoughtfully created or not — are embedded in your company's priorities, actions, and management decisions, and in its relationships with employees, customers, suppliers, communities, and the environment. When you incorporate your core values into your decision-making, you enjoy these benefits: In a business climate where customer testimonials define your reputation and attract loyalty, integrating your core values with decision-making and action offers stability, particularly when conditions are chaotic. Novo Nordisk, for example, one of the world's largest pharmaceutical companies, has a list of core values, as many companies do. It includes words accountable, responsible, and ready for change. That's all well and good, but the important thing about core values isn't what's on the poster in the hall of a company; it's how they're applied. When Novo Nordisk makes decisions, the final check is, "Is the decision financially, environmentally, and socially responsible?" Simply put, the company's commitment to core values — the health of the economy, environment, and society — is a recognized part of its long-term success. Unilever is another company that connects core values to priorities. Recognizing that the company is a part of a wider fabric of existence, its decision-makers actively engage a wider view, one that embraces the company but also extends beyond company boundaries into the health of society, communities, and the environment. When your company's decisions are aligned with its core values, you streamline decision-making. When used for decision-making, core values take a complex set of conditions and run them through a simple filter so that financial and nonfinancial measure of success are intertwined. In a complex, fast-changing business environment, decision-making needs to be streamlined and progressive, and decision-makers need to look ahead rather than rely solely on past beliefs and practices. The solution isn't to get rid of past practices altogether (although it may mean that); it's to be aware of what guided decision-making in the past so that you can select faster, more effective approaches to meet today's needs.

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5 Steps to Faster, More Informed Decisions

Article / Updated 03-26-2016

Can you make decisions swiftly and confidently when vast amounts of data cross your desk and inbox every day? How do you prioritize and rapidly respond in the midst of changing conditions? Well, you use the skills you already possess but may not be tapping into. Here's an interesting correlation: The way you process information as you drive a vehicle works for making an informed decision, as well. If you drive well enough to be 98 percent accident-free, chances are you're already a master of processing tons of data at high speed: You select pertinent information almost automatically and then use the information quickly and accurately. If you apply that innate skill to your decision-making, you can make informed business decisions without second guessing yourself. To sort from a sea of information, do these things: Focus on the outcome. Being clear about the end point does two things: Provides guidance for your intuition, enabling you to sift through all the available information to select what's important for the decision you need to make Gives you a solid anchor for your decisions that can accommodate opposing facts and perspectives If, for example, the end point is to stay under budget, then your decision and the data you use to inform your decision will be filtered based on that. If the end point is to produce a product that meets customers' unstated needs, then all the available information will be filtered using that criterion. The outcome anchors your decision making. Stop mentally concentrating on the issues and let your subconscious do the work for you. Your subconscious is faster than your conscious mind, and it works automatically when your focus is clear. When you turn the issue over to your subconscious, you gain speed and accuracy. Question and expose the beliefs you use to interpret how the world works. Beliefs, otherwise known as mental models — things you believe to be true but that may not actually reflect a widened view of reality — filter reality to confirm your previous experiences. Questioning your beliefs permits you to improve the accuracy of your analysis, jettison past connotations, and open up new possibilities. Observe your emotions. Step back to gain perspective and quiet the mental chatter so that you can accurately hear your inner voice. You'll gain a wider view of the situation and be able to see alternatives. It's really easy to fall prey to doubt or to rationalize your decision. If you're feeling fearful, you may think you have only one option or no options. In climates of high fear, when the rational dominates, making an informed decision requires that you achieve a calmer state of mind so that you can access your higher mental and intuitive functioning. After you analyze and review your options, select your decision, but before you commit, check in on how you feel about the option you've selected. Call it a heart check. Even when the solution is a totally new approach, you need to feel at peace with it. Making an informed decision requires that you work with both facts (actual data) and emotional information, and that you take steps to mitigate the effect of ingrained bias. Doing so requires that you commit to mastering all your senses and intelligences so that, in chaotic decision-making environments, you'll be able to balance data with open-minded experimentation and stay sensitive to cues that other decision-makers will miss.

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11 Questions that Help You Communicate Decisions Effectively

Article / Updated 03-26-2016

When you're communicating a decision, you need to know that you have successfully communicated the basic message. You also want everyone on the team to share an understanding of what the target results are so that, in the event that something unexpected happens, everyone knows what to do. The worst time to find out that you and your team are not on the same page is after you've communicated a decision and tasked your team with implementing that decision. Communication failures take place when The aim of the decision, its purpose, and what is to be accomplished aren't clearly communicated. Expectations aren't made clear. You have expectations for how it should be done and what it should look like, but you fail to take into account your employees' and other stakeholders' views and concerns. The words you use mean different things to different people and are easily misinterpreted. (As the communicators, it's your responsibility to learn what words work and what don't.) Communication doesn't happen often enough, so course corrections are presumed to take place but get missed. You and everyone else assume that the communication has been effective. Getting your message across effectively is a matter of confirming that all understand the aim or purpose of the decision, as well as what's expected. It's especially important when you're communicating the implementation of an important decision. To offer clear direction to your team, start with gaining clarity on what's going on inside your brain. Answering these 11 questions enables you to deliver a clear message: These 11 Questions . . . . . . Elicit these Benefits 1. What is to be accomplished? 2. What is the result and why? Knowing the answers to these questions enables you to communicate the message effectively to your team. By doing so, you enable them (1) to improvise independently when there's a need to adapt, and (2) to incorporate new opportunities for attaining the goal as those opportunities arise — without having to gain your permission, which slows things down. 3. What are your expectations for what happens next? 4. Is there anything you don't want your team to do? 5. Is there anything you specifically want your team to do? Outlining the parameters helps clarify both the expectations and the boundaries for independent or creative thinking. 6. What could possibly go wrong? Or 'What if" . . . this or that happened? 7. If something were to go wrong, what would you expect team members to do? By anticipating the unexpected, you reduce the risk while simultaneously preparing for it. 8. When do you expect your team, staff, and anyone else involved in the implementation process to communicate to you? 9. What feedback do you need in order to stay abreast of what is happening? 10. How do you want to hear about unexpected surprises — through a phone call or email, or at project update meetings? Keep your team apprised of new developments so that they aren't working in the dark. Agree on when they need to keep you informed on how implementation is proceeding, whether it's good or bad news. 11. If you were the one listening to your message rather than delivering it, what else would you want to know? Putting yourself in your team's shoes allows you to take a vague bit of direction and make it more clear and specific. You can also identify relevant information you need to communicate throughout the project.

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10 Secrets to Making Successful Decisions

Article / Updated 03-26-2016

In a complex decision-making world, you can have every matrix, software program, or technology tool at your disposal, yet the most powerful element in your decision-making is you. And the best way to improve your decision-making is to just do it. In fact, making decisions is a lot like riding a bicycle. You cruise along until you hit a rock and fall down — and then, like any good rider, you get back up, shake yourself off, and ride on! The key to getting the results you hope for — or better — is to do what good decision-makers do. Here are ten secrets to great decision-making: Describe what you want to accomplish and why. Basically, you want to know how the outcome will achieve the company's goals or meet customers' needs, while engaging employees. If the idea is half-baked (which is essential to know before you try to communicate the decision to staff or customers), it will become crystal clear as you try to nail down the specifics. Know what is motivating your decision. Be clear about the focus: Are you seeking to get rid of pain or achieve a goal? Remember, focusing on what you don't want rather than what's needed leads to a different result. Avoid making a quick decision out of desperation. Give yourself enough time to reflect to ensure that you aren't selecting a "quick fix" solution instead of taking the time to find a more lasting solution. Consider more than one workable alternative — if possible, look at two to three at minimum. More than one workable alternative frees you from becoming attached to a favorite option and seeing too narrowly. You gain flexibility since, as new information arises, you can more easily integrate additional considerations into your thinking while simultaneously widening the range of possibilities. In addition, the diversity of alternatives under consideration allows you to consider a wider range of elements crucial to accomplishing the desired results, without looking for them in a single solution. You'll make your decisions faster and with greater confidence. Keep your options open for as long as possible. When conditions are uncertain and dynamically changing, fixing on a solution too early increases risk exposure while decreasing ability to adjust to changing requirements. If you keep options open as long as they are viable, you'll gain more flexibility. Notice your mindset. As a rule, people either want to avoid negative results (fixed mindset), or they want to pursue positive outcomes (growth mindset). Your social and emotional environment, plus the situation you're in influences your outlook. Trust your intuition. Although it's fuzzy and intangible and may fail you from time to time, your intuition handles decisions in high stakes, rapid-fire, dynamically changing conditions in milliseconds. In fact, it can process volumes of information at speeds that make your intellect look like it's on training wheels. Your intuition also captures what isn't being said, which is often more telling than facts and figures. Knowing when you've tapped into your intuition helps you when you handle very complex decisions. You'll be less inclined to second guess yourself because you'll know what to trust. Step back to reflect on the results you're seeing. When unexpected results occur, ask, "How did this happen?" Unexpected results come in two forms: awesome and awful. If your results are stellar, you maintain vigilance to sustain continued success. If the results are negative, as in legal issues, communication breakdowns, or troubles in your business's cash flow, it's time to reflect on and improve your decision-making process. You can't avert every mistake, but you can learn from the one's you've made. When things go from bad to worse, you can always decide to stop doing what you're doing and to switch to a different approach. Ask yourself," What do I need to stop doing, maintain, or improve?" The answers will help you be more selective about where you're putting your valuable time and energy. Invest in your personal growth. Although often written off as a soft skill, investing in personal growth is fundamental to effective decision-making, especially in unpredictable circumstances. It has spin-off benefits for other key personal and professional relationships in your life. Your ability to regulate your emotions and restore a sense of calm is your most valued asset in decision-making. In addition, the more you can rigorously illuminate limiting beliefs that influence your interpretation , the more accurately you'll be able to assess the situation and make decisions. Pay attention to ideas or signals on the fringe of regular thought. Rather than rationalizing unexpected or abnormal data, look more closely, and allow your thinking to be disrupted. When you pay attention to irregularities, you find insights and see what isn't immediately apparent long before it becomes a crisis or missed opportunity. Insights are the source of breakthroughs. Trust in your capacity to expand your perspective, flex your thinking muscles, and broaden your decision-making know-how. How? By making decisions in differing conditions — the more, the better!

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5 Ways Managers Can Also Be Leaders

Article / Updated 03-26-2016

A question that is often asked in business is, "What is the difference between managers and leaders?" It's an important question because the role of the manager as an agent of change has never been more important to business performance and a company's ability to adapt. Following are five factors that foster manager-leaders: The company rewards leadership. Many companies reward achieving targets over teamwork or decreasing costs over customer satisfaction or employee engagement — goals that adhere to the conventional meaning of a manager's role: to control performance, direct staff, find the resources, and deliver results. In these companies, the workplace doesn't reward leadership. It rewards conformity and, as a result, creates highly stressed managers and passive employees who wait to be told what to do. In this kind of environment, some managers pass the panic and pressure to perform directly onto staff as a command. As a result, the primary focus is on self-preservation as the managers look out for themselves (who wouldn't?) and try to do the best for their staff, before the toll of the stress takes over. Naturally lousy managers advance because the rewards support poor leadership. Managers are willing to break free from the status quo. You won't hear one say, "This is the way we've always done it!" as a reason to not listen to new ideas or to overlook new opportunities. Sticking to the status quo while the world — and workplaces — is changing is high risk. Managers who believe that conforming to the norm is a viable management strategy have been successfully trained to be passive; they wait to be told, and leadership is out of reach. Managers actively facilitate leadership development by giving control away. They actively give control away to staff by asking them for solutions and asking them to actively lead and find answers to problems that arise. In this environment, all staff see themselves as actively responsible and accountable for sustaining performance without needing to be told how to do. Initiative is rewarded. Shared understanding of the goals is enough to ignite collaboration. The manager steps out of the way so that team members can use their expertise to advantage. Managers ask questions long before reaching conclusions. As a result, employees don't expect the boss to have all the answers; instead they can participate in creating solutions. Rather than feed their ego's need to feel important, managers reward employees for taking the initiative. Then, collectively, the team steps back to celebrate the results. Managing change in business requires managers who lead and engage the leadership skills and creative contribution of their staff. As business realizes how creating great places to work positively impacts the bottom line, managers who act as leaders become important change agents.

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4 Ways to Control Your Ego for Better Decision-Making

Article / Updated 03-26-2016

Your relationship with your ego is an essential part of your decision-making expertise. Everyone has an ego — composed of your self-esteem, self-worth, and personal sense of security — and it's the ego's job is to look after your safety and security in the big world. When your fundamental emotional need to feel safe isn't met, you'll fill in the gaps, sometimes in ways that undermine your ability to make sound decisions. An ego that's in a sad state of health is behind nearly every poor business decision: Failing to report bad news, putting personal career interests ahead of the company, telling the boss what she wants to hear rather than what she needs to hear . . . all expose your company to greater risk, and all are manifestations of an ego that's looking to protect itself. To assess how powerful your ego is and ensure that it doesn't undermine your ability to make sound decisions, answer these four questions and then follow the suggested recommendations: Do you say yes to everything you're asked to do, regardless of the implications on your personal life? If the answer is yes, you likely seek approval, or you fear conflict. Gain greater confidence by strengthening your self-worth. Do you put other people down in order to feel more important? If you answer yes, your relationship with power is based on use of authority instead of your self-value. Trust your value and extend the same trust to your coworkers. Do you seek to avoid conflict at any cost? If you answer yes, you'll sacrifice truth to sustain a false sense of harmony. When you don't alert leaders to bad news, the company is exposed to more risk. Exercise your leadership abilities. Find the courage to speak your truth. Are you afraid of making a mistake or letting people down? If you answer yes, work to strengthen confidence in your abilities and let go of the need to be perfect. Trust in your creativity and ability to adapt. How secure you feel — financially, emotionally, ethically, and personally — contributes to the strength of your decisions. By looking after your emotional needs, you look after your ego. When you have a strong relationship with your ego, you can function at a high level.

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Is Crowdfunding Right for You? A Spreadsheet to Help You Decide

Article / Updated 03-26-2016

In crowdfunding, customers or investors provide direct financing for a product or service. Crowdfunding uses the web to collaboratively fund projects, company growth, or expansion. Kickstarter and Indiegogo are two of the best known project-funding platforms in North America. Crowdfunding is an off-shoot of crowdsourcing where many people collaborate (by contributing ideas, labor, testing) to help make or improve a product. Crowdfunding, which is divided into two models, is used for a variety of purposes: Donation-based crowdfunding does more than enable project financing, it also supports companies dedicated to solving bigger problems. For example, To raise funds for non-profits seeking support for a cause. Kiva.org is one such crowdfunding site dedicated to funding microloans for developing countries. In this structure, the business owner pays back the principal and interest. To garner interest in a product or idea by rewarding contributors or investors. Each funding level returns a different reward in the form of product or sponsorship promotion. Ouya, for example, is an open source gaming console that raised $8.5 million in 29 days. Ten months later its backers received their game consoles. Investment-based crowdfunding is used by companies seeking equity funds and to gain access to investors and is facilitated by sites like SeedUps in Canada or Bondora by isePankur in Europe. For example, To find investors to grow a company or increase production. Start-up Soccket is the brainchild of CEO and founder Jessica Matthews. It's a soccer ball that gathers and stores kinetic energy as players kick the ball around, then you can plug in its small light and the stored energy powers an emergency lamp. Soccket raised $475,000 in a recent funding campaign. To raise equity in return for shares in the company. CrowdCube is one example of an equity site that small businesses can use to issue shares to authorized investors who want to make small investments. If your company needs a financial shot in the arm to facilitate growth and conventional forms of financing don't meet your needs, crowdfunding may be the answer. How do you decide whether crowd-funding is right for you? To find out, download this interactive spreadsheet developed by Lyn Blanchard at Creekstone Consulting Inc. How did all of this web-based financing evolve? Due to the banking fraud of 2008 that led financial institutions to retreat into risk-averse decision-making, small and medium-sized companies had real difficulty securing funding. Companies in different stages of growth, from start-ups to those expanding their businesses, scrambled to find working capital or project-related financing. Enter crowdfunding, which can be a boon to cash-strapped entrepreneurs.

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Pay Attention to Invisible Forces in Your Company Culture

Article / Updated 03-26-2016

Over time, business cultures become second nature. So does business decision-making. After you have the workplace culture or the decision-making dynamics firmly established, the business virtually steers itself. As helpful as this phenomenon is most of the time (it lets your brain concentrate on things that need your attention), there is a downside: Your busy mind stops paying attention to whether the habits you’ve formed are good ones or not. A business has two minds, just as a human does. Think about it. When you are a new driver, you consciously pay attention to everything: You look ahead, look in the rearview and side mirrors, check your speed, pay attention to your distance from the curb, count the number of seconds between you and the car ahead, consciously decide when to activate the turn signal, place your hands on the wheel just so, and so on. All your attention is focused on how to drive. After you’ve been driving for a while, however, most of those actions are second nature. Think of the times you’ve driven to a destination but, because you were engrossed in conversation or thinking deep thoughts, didn’t actually remember the trip there. This happens because the human mind stores details in your subconscious so that you can do certain things without consciously thinking about them. It’s energy efficient! It takes a crisis to get your attention. In a car, it may be an accident or a near miss; in business, it may be that you’re overwhelmed and stressed out. You’re under pressure but can’t see what to change. The point and purpose is to observe how the business culture creates the character of the company, which in turn influences the character of its leaders and, subsequently, its decision-making. Here are some ways you can target your observations: Look closely at how you reward effort or inspire contribution, and include metrics. Doing so lets you see whether the processes and procedures are helping or hindering what you hope to achieve. Do you reward inside targets over customer-centered actions? Are you measuring time spent on a project or actual results? Ask staff and your customers. They’ll know. Observe how mistakes are handled. Doing so gives you insight on your company’s relationship with risk: Is it something to be avoided or viewed as an opportunity to learn? Is the company asking for innovation but then punishing mistakes? Watch for patterns in decision-making. When you notice definite patterns, find out why your company does things the way it does. If the answer is, “That is the way things are done around here,” you know that the invisible beliefs are running the show unchallenged. Asking “Why?” also lets you explore how effectively the relevant assumptions fit the current conditions. Then, after you see the consequences of those assumptions, you can update the underlying belief. Many companies don’t take the time to learn how they are creating issues that result in the loss of talent or impaired decision-making. To avoid joining their ranks, step back to observe your company from a higher vantage point. Look at your company with fresh eyes, as though you knew nothing about it. Or observe it through your customer’s perception: How would a customer describe your company’s character? When you try to observe your company from a different perspective, think of the company’s culture as its personality and then ask yourself whether you would enter into a relationship with this company and or trust this company when dealing with it.

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