The best business decisions are always based on hard facts
Scientific decision making, using the marketing model, is a good way to plan how to make a decision. Setting objectives, gathering and analysing data and then developing and implementing a strategy is important when making decisions. However, by just using the marketing model to make a decision may not be the best way to go about making decisions. There are a number of different factors which need to be looked at to benefit the most from making a certain decision and instinct and also be used.
By using the marketing model the business is reducing risk in the making the decision. However this way costs a lot of money especially the research so it may not be effective to use it. Instead a ‘hunch’, or gut instinct, may be better to use to base the decision on. For smaller decisions, such as day-to-day choices, it may be more useful to the company to not use the marketing model because it would take much longer to make decisions.
If, for instance, a business was trying to decide how many pencils it bought, as this is a small, relatively insignificant decision, there is no need for an analysis of how many people use. Someone
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If, however, the decision to be made has a much larger time scale, such as development of a product, then the marketing model can be used. When the marketing model is used it forces managers to investigate a number of issues. If, for example, a company is trying to decide whether or not to make a product it may have to take into account whether the company has the facilities to make the product and if not how much it will cost to make the machinery to make the product.
The manager may well have to see whether the different sections within the company are ready for the decision to be made, for instance the personnel department may need to recruit more people or the marketing department may need more time to research the problem. Business decisions which are based purely on hard facts may not be the best way to come to a conclusion. Having reliable data is important, such as qualitative and quantitative data, because it allows the manager to make a decision based on good data.
However, this may not be possible in a company which is developing a new project because data about it will not exist, therefore the company cannot use extrapolation or see if there are any correlations. The only research the company can do after the product is made and it may be too late. Therefore in this circumstance it may be better for a manager to use a hunch, even though it is risky. When a manager has to make a decision, whether it is best to use only hard facts or rely on instinct, it depends of the particular situation.
If the nature of the decision makes it less important then obviously less time should be taken on it and instinct may be a more appropriate means to come to a decisions about it. However, when making an important decision then hard facts may be more useful. In my opinion, however, a balance can be met where hard facts are used along side initiative and instinct. This provides the best of both worlds as the decision is based on data yet there is still a degree of flexibility because at the end of the day it’s a manager making the decision, not the data.