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LeadershipStrategyTime Management

Opportunity Cost: The Hidden Price of Every Decision

Harvard Business ReviewHarvard Business Review9 min readJanuary 1, 2023
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Summary

Every choice has a shadow cost — the value of the best alternative you did not choose. This fundamental economic concept is systematically underweighted in business decisions because opportunity costs are invisible. This article shows how ignoring opportunity costs leads to sunk cost fallacy, overcommitment to mediocre projects, and misallocation of talent. It provides practical frameworks for making opportunity costs visible: time audits, portfolio reviews, and the 'hell yes or no' decision filter.

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