RESEARCH STATISTICS AND BUSINESS DECISIONS THE RELEVANCE OF

RESEARCH, STATISTICS AND BUSINESS DECISIONS THE RELEVANCE OF RESEARCH AND STATISTICS TO MANAGEMENT AND BUSINESS

THE RELEVANCE OF RESEARCH AND STATISTICS TO MANAGEMENT AND BUSINESS Statistics and research methods can help to reduce uncertainty and lead to more effective planning and decision making in the business and management fields.

What is research? Bennet (1991): ‘. . a systematic, careful inquiry or examination to discover new information or relationships and to expand/verify existing knowledge for some specified purpose. ’

What are Statistics ? – the actual data; – characteristics of data such as an average (mean) or percentage; – techniques for the collection, presentation, analysis and interpretation of data for decision making and – the science of developing and applying such techniques.

• Statistics and research methods are used to conduct systematic investigations to find answers to a problem or test a hypothesis. • Statistics helps us to make sense out of variability

Using Research in Business decision makers conduct research using relevant data and applying statistics to plan, control, and reduce the uncertainty involved in business decisions.

Example • An investment advisor calculates the current rate of return on a specific kind of investment and compares this with rates obtained on the same investment in other years. He also compares this rate with the current rates on other investments to provide reliable advice.

Example • The chief buyer for a large chain store has to place an order for men’s suits and women’s dresses. The buyer needs to know how many items of each type to order, and within each type how many at each particular size and design, based on analysis of previous customer buying habits.

Example • The personnel manager uses data on the proportion of handicapped persons in various job categories to determine compliance with affirmative action legislation and what recommendations need to be made to the CEO on this issue.

Classifying Statistics • Descriptive Statistics • Inferential Statistics

Classifying statistics • Descriptive statistics - summary data describing what is rather than providing an explanation, e. g. average weekly wage; number of unemployed persons per month in 2007. Often conducted on a regular basis to monitor social and economic change. E. g. census, government statistics on unemployed persons or import-export data.

DESCRIPTIVE STATISTICS We use descriptive statistics in two ways: 1. They provide a description of our sample. This could be a summary of the demographic items (e. g. gender, age, income, number of employees in organization etc. ) 2. They provide statistics for variables in the sample which will be later used as the estimates of the parameters of the population when we conduct inferential statistics.

INFERENTIAL STATISTICS • Inferential statistics – used when we try to extrapolate our findings from a sample (shown by descriptive statistics) to a population. Essentially they provide an estimate of the probability that a pattern found in the sample will also be found in the larger population.

Inferential Statistics For example, they allow the manager to draw better inferences as to whether a phenomenon such as work satisfaction, or relative demand among competing brands, measured in a sample, can be legitimately generalized to a population.

Classifying research • Applied research – carried out with the intention of finding and applying solutions to specific problems in the business organization. • Basic research – carried out to enhance the understanding of problems or develop theory that commonly apply across a range of organizations. Often new and original findings.

Who should carry out research in an organization? • In-house researcher – no extra cost and understands the organization. Relationship problems likely with other employees and managers in seeking information. • External consultant – costly to buy in and takes time to understand organization. Accepted by employees as neutral. Less chance of implementation of report on leaving organization.