Assad is a baker who lives in a small village in Herat. He owns a small shop together with his brother, Hamid, and his nephew Rajibullah. The three of them worked well together—Assad did all of the baking in the kitchen, Rajibullah attended to the customers, and Hamid delivered flour every day from the small flour mill that he owned nearby. Assad relied on both his brother and his nephew in order to keep the bakery running. He was glad that he did not need to rely on strangers to run his business. One day, however, Hamid decided that he wanted to move back to his home village in Kandahar. He sold his flourmill and used the money to buy a house in Kandahar for him and Rajibullah to live in. Because it would be impossible for him to keep running the shop all on his own, Assad was faced with a decision—he had to either find a new flour supplier and a new person to work in his shop, or he would be forced to close it altogether. He decides to try to find a new supplier of flour. Hamid refers him to Abdul, who is the new owner of the flourmill. Because Assad does not know Abdul, he does not know whether he is reliable. Failure to make a delivery could mean severe damage to his business, forcing him to lose a day’s business and angering his customers. Although Abdul insists that he is a trustworthy and honest merchant, Assad still has some reservations about entering into business with a complete stranger. Imagine that you are Assad. Think of at least five concerns that you would have about entering into business with Abdul. If you were in Assad’s position, what would you do to protect yourself in this transaction?

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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Assad is a baker who lives in a small village in Herat. He owns a small shop together with his brother, Hamid, and his nephew Rajibullah. The three of them worked well together—Assad did all of the baking in the kitchen, Rajibullah attended to the customers, and Hamid delivered flour every day from the small flour mill that he owned nearby. Assad relied on both his brother and his nephew in order to keep the bakery running. He was glad that he did not need to rely on strangers to run his business. One day, however, Hamid decided that he wanted to move back to his home village in Kandahar. He sold his flourmill and used the money to buy a house in Kandahar for him and Rajibullah to live in. Because it would be impossible for him to keep running the shop all on his own, Assad was faced with a decision—he had to either find a new flour supplier and a new person to work in his shop, or he would be forced to close it altogether. He decides to try to find a new supplier of flour. Hamid refers him to Abdul, who is the new owner of the flourmill. Because Assad does not know Abdul, he does not know whether he is reliable. Failure to make a delivery could mean severe damage to his business, forcing him to lose a day’s business and angering his customers. Although Abdul insists that he is a trustworthy and honest merchant, Assad still has some reservations about entering into business with a complete stranger.

Imagine that you are Assad. Think of at least five concerns that you would have about entering into business with Abdul. If you were in Assad’s position, what would you do to protect yourself in this transaction?

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