A critical viewpoint on Cost Benefit Analysis

Cost benefit analysis, with this term we actually understand, analyzing any cost benefit which we can achieve after investing a certain amount of cost in a particular investment. CBA is an effective tool for decision-making in organizations where it can help in analyzing the strategies to implement an idea and also how will that negatively or positively affect the strategies/ideas.being a cost -effective method or rather a cost conscious method to be implemented, it still remains a debatable topic to be considered for various other issues.

firstly, CBA takes into consideration financial benefits but over looks the intangible benefits that can be derived over a time period like the satisfaction of the sales or the feedback. CBA completely ignores the intangible effects which are at times more necessary and important than just the tangible ones.moreover, it can provide estimates about the benefits and cost of a program before implementing it but provide no information about its impact on other ideas/ programs which is a big risk. Risk is an important factor and its effects cannot be quantified. so the accuracy level is not defined and cant be trusted as well.

also if CBA is connected with advertising, with my view point they cannot go hand-in-hand.it isn't necessary that a cost effective ad will only work out well.an expensive ad campaign can yield out a big business.also on the other side, putting in a lot of money in an ad campaign and the ad not working out well doesn't prove it to be a bad idea as well.it could be just on of the best.

CBA is an effective business tool if applied with a proper research and implementation for desired goals and results.