The Importance Of Statistics In Business Decision Making

Statistics is an important facet of modern business decision making. Statistics is defined as “The science of collecting, organizing, presenting, analyzing, and interpreting data to assist in making more effective decisions” (Lind, Marchal, & Wathen, 2011). The data collected during research must be accurately analyzed and this is the role of statistics. There are many business situations where statistics are used in decision making. Perhaps the most needed area of statistics is in marketing. The gathering of marketing data for decision making is a tremendous problem for most companies. The failure rate of products and service as a result of poor decision making and marketing analysis is as a high as 75% (Cooper , 2014). One of the major issues with data gathering is that there are numerous methods such as customer surveys and focus groups which not all may be useful depending on the situation or circumstance. For this reason, business research needs to be understood from the point of statistical analysis as well as proper procedures. This need is further driven by the fact that companies today are larger and more complex than in the past. Gut feelings and experience are not effective methods for decision making and mangers must rely on business research to a larger degree than in the past. This problem highlights the need for business research since most companies utilize poor methods of analysis or data collection.

References

Cooper , D. R. (2014). Business research methods (12ed.). New York, NY: McGraw-Hill/Irwin.

Lind, D. A., Marchal, W. G., & Wathen, S. A. (2011). Basic statistics for business and economics (7th ed.). New York, NY: McGraw-Hill/Irwin.

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