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Strategic Decision-Making Still Based on Hunch, Not Data
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in flux, once-valid assumptions (e.g., “older consumers don’t use Facebook or send text messages”) can quickly become outdated.”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.
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Big Data: Retail is Detail! [21 Feb 2013]
Big Data - How Product Design & Innovation Needs to Work in Harmony [27 Dec 2012]
Revision Presentation - Centralised & Decentralised Decision-Making [26 Dec 2012]
Revision Presentation - Analysing Marketing Data [24 Dec 2012]
How Dominos Pizza Uses IT to Power Sales Around the Globe [10 Nov 2012]
Big Data - Helping to Offer a Personalised Product Offer [10 Nov 2012]
Big Data - the Shift from Intuition and Hunch to Scientific Strategic Decision-making [10 Nov 2012]
Kraft & Cadbury ” Everything we hoped it would be…and More” [20 Aug 2012]
Growth and Complexity Go Together - So Keep it Simple! [16 Aug 2012]
Leadership - what qualities does an effective leader and manager have? [29 Jan 2012]
Evaluation in business essays? Its just like going on a date… [22 Aug 2011]
Women’s effect on corporate decision making [19 Jul 2011]
Strategic decision-making: hunch, science, tankers and speedboats [25 Feb 2011]
Culture & Change - The Challenge Facing Nokia [27 Sep 2010]
Lesson Worksheet - Opportunity Cost [13 Aug 2010]
AQA BUSS4 Section B Practice Question - Starbucks [15 Jun 2010]
Business strategies as we emerge from the recession [7 Feb 2010]
Leadership sets the culture for a thriving retail brand [31 Jan 2010]
Q&A - What is Leadership? [30 Oct 2009]
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Business Studies Revision / Exam Coaching Workshops Coming Up:
GCSE Business (AQA Unit 2 & Edexcel Unit 3)
Thursday 24 April 2014 - Birmingham
Friday 25 April 2014 - London (Stratford City)
AQA AS & A2 Business (BUSS1 & BUSS3)
Monday 20 January 2014 - London (Stratford City)
Tuesday 21 January 2014 - London (Fulham Broadway)
Wednesday 22 January 2014 - Bristol (Cribbs Causeway)
Thursday 23 January 2014 - Birmingham (Star City)
Friday 24 January 2014 - Manchester (Salford Quays)
AQA AS & A2 Business (BUSS2 & BUSS4)
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Wednesday 26 March 2014 - London (Fulham Broadway)
Thursday 27 March 2014 - Bristol (Cribbs Causeway)
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Post-Easter (BUSS1/BUSS2 Combined & BUSS4)
Monday 28 April 2014 - London (Stratford City)
Tuesday 29 April 2014 - London (Fulham Broadway)
Wednesday 30 April 2014 - Bristol (Cribbs Causeway)
Thursday 1 May 2014 - Birmingham (Star City)
Friday 2 May 2014 - Manchester (Salford Quays)
Try some of these superb starter activities for Business Studies:
- Anagram Countdown
- Beat the Teacher
- Bellwork
- Budget Basket
- Memory Challenge
- Loop Cards
- I'm the Question
- Catchphrase - Say What You See!
- Consider All Possibilities (C.A.P)
- i-Teach
- Teacher Talkabout
- Perfect Recall
- Pass the Buck
- What would you have invented?
- These are a few of my favourite things
- Set Your Students the 15 Word Challenge
- Topic Tennis
- What Why Depends - Developing Thinking Skills
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