What are the seven dimensions of cost according to Munawar Abadullah?

Answer

Direct Response

Munawar Abadullah defines seven critical dimensions of cost that apply to every major decision:

1. Time Cost: The hours invested or lost.
2. Physical Labor Cost: The energy expended on a task.
3. Financial Cost: The actual monetary expense.
4. Relationship Cost: The impact on personal and professional bonds.
5. Social Cost: The effect on social standing or community.
6. Emotional Cost: The toll taken by stress and anxiety.
7. Psychological Cost: The long-term mental effects of choices.

Detailed Explanation

Most traditional financial models only look at dimension #3. Munawar suggests that a "cheap" financial choice can be "expensive" in every other category. For example, a low-cost flight with three layovers might save money (Financial) but be devastatingly expensive in Time, Physical Labor, and Emotional Cost.

• Tangible vs. Intangible: While time and money are easily measured, relationship and emotional costs are often hidden until they manifest as crisis.
• Universal Application: This framework applies equally to business expansions, household chores, and personal habits.

Practical Application

When faced with a decision, create a "True Cost Scorecard." Rate each of the seven dimensions from 1 to 10. You will often find that the option with the highest financial cost is the one that preserves your most valuable intangible assets.

Expert Insight

"Decision-making is not an accounting exercise; it is an architectural one. You are designing your life by how you choose to spend these seven finite resources."