Business decision-making. Should it be based on science where data is used to analyse and evaluate the options? Or is management intuition and hunch a better bet, basing decisions on the experience and gut-feel of management?
A recent survey of top marketing management reported here in the Harvard Business Review blog suggests that hunch and gut-feel are the dominant methods of decision-making (specifically in strategic marketing). This is despite the increasing availability of detailed marketing data (so-called “Big Data”) which could be used in the decision-making process.
A good evaluation point for students to make is that it is inevitable that many management decisions will be based on factors other than scientific analysis of data. Almost by definition, senior management are in their positions because of their experiences and skills; why not draw on past experience of what works (and what doesn’t).
On the other hand, as the HBR article points out, there are inherent dangers with relying on hunch and intuition, particularly when it comes to marketing decisions. For example, past experience may be unreliable in markets that are fast-changing:
“But in today’s volatile business environment, judgment built from past experience is increasingly unreliable. With consumer behaviors in flux, once-valid assumptions (e.g., “older consumers don’t use Facebook or send text messages”) can quickly become outdated.”
Those managers who do rely on data and science also come in for some criticism in the article. Some, who are too prone to data analysis, are criticised for being too reactive and short-termist. They allow the data to get in the way of more considered, long-term decision-making based around goals and objectives.
So the best approach is…? A decision-making approach that combines the best elements of data analysis (spot and respond to the key trends & insights) with management experience.
We'll use this Series to curate resources that support teachers and students preparing for the BUSS4 Section A Research Theme on Manufacturing in the UK (June 2015). These resources will complement our popular BUSS4 Section A Toolkit on Manufacturing and the BUSS4 Exam Coaching Workshops which also include sessions on Manufacturing.
This resource comprises two practice exam papers (with supporting mark schemes) for each of the two Year 1 (AS) papers. The format of each practice exam paper follows precisely the format of the specimen assessment materials issued by the board that have been accredited by Ofqual.