- March 9, 2013
- Posted by: essay
- Category: Term paper writing
There is no doubt that numbers and statistics are vitally important for organizations. In the modern globalized society the information received in time may be considered a huge competitive advantage! (Williams, n.d.)
Of course, major conditions for the statistics in decision making are its reliability and timeliness. In the case if these conditions are fulfilled, the importance of statistics and quantitative information in company’s decision making becomes crucial.
Successful managers in order to make a right decision should understand statistics correctly and try not to manipulate information, and not to abuse it.
Crucial thing in decision making is a basic understanding of statistics.
Companies effectively use statistics not only internally, but also they use it for external goals, for example in order to inform the society and its customers about the successes of the company’s activities (it can be market or sale achievements, etc.) via media.
In any case, public has a general trust in statistics because it believes that statistics doesn’t lie.
Also we need to mention that an important characteristic of statistics is its reliability. Manager needs to be sure in reliability of statistics and he/she has to answer a number of questions about these data in order to check it.
For example, it is required to understand who provided the research, is this organization a reputable enough?
Secondly, manager has to understand the period of research and the target of research. Also he needs to check the sample size, is it projectable. There are a few other issues that need to be examined and the conclusion of the research has to be taken into account only when manager is confident about certain statistics research. Manager also may try to look for another similar research and compare findings.
The decision making may be improved by statistic. As an example, I would like to mention Diageo, a famous producer of spirits that operates worldwide.
Diageo ensures that its management’s decisions are based on statistics findings. For example, company examines the sales results per region, even per sales point, and in the case if they show a decrease in sales, it focuses on weak places and provides a marketing support (ATL, BTL activities etc.).
Statistics also helps company to keep the best quality of the products by providing the production processes control and helps to achieve a consistency throughout the production. This way the company’s budget is effectively spent, because it results in reducing the materials, etc..
Another example may be the fact, that company also makes an important decision of entering a new market by studying all the available statistics on local consumer behavior, market capacity, presence of competitors and their sales volumes, local economic climate that is characterized by various indexes, like average income, etc.
Statistic is also used by professionals not only on the global decision making scale but also on the daily basis in order to make an improvement in decision making results. Managers deal large with large volumes of data and the quality and speed of data processing are substantial for organization’s success.
Statistics helps that managers become more confident in their decisions and actions. A good base for statistics is Excel computer program and other statistical software, as it provides an access to variety of statistical tools.
Williams J.T. (n.d.), The Importance of Statistics in Management Decision Making