Christensen: Marginal cost thinking traps established companies facing disruption
Clayton Christensen · a16z Podcast | Competing Against Luck · Jan 2, 2019 · at 17:22
Clayton Christensen, Harvard Business School professor and author of The Innovator's Dilemma, discusses corporate decision-making frameworks on the a16z Podcast.
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“In accounting, we teach people that you should ignore fixed and sunk costs and only look at the marginal cost and marginal revenue Associated with the proposal that you're making a decision about. And that idea that you should ignore sunk costs, and just look at the marginal cost, creates real problems for the management team.”
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