Decision Making

Question 1

What is the scientific approach?

Answer 1

Logical approach based on research

Question 2

Why use a scientific approach?

Answer 2

• setting SMART objectives gives the business a clear sense of direction
• decisions are based on research and logic
• more than one person will be involved so less bias
• decisions are monitored after they’re put into action to make sure they’re always the best option
• based on logic more likely to be right
• Easier to defend decision generated through detailed consideration

Question 3

What is an intuitive approach?

Answer 3

• decision based on gut feeling of hunch of manager
• more likely to be used by small businesses, sole trader, partners
• decisions not based on evidence may be influenced by bias

Question 4

Why use an intuitive approach?

Answer 4

• for manager w/ experience m, appropriate and lead to more creative decision making
• doesn’t require time and effort to collect large amount of data
• scientific decisions based on past, instincts based on current and future conditions

Question 5

Summarise the scientific vs intuitive approach

Answer 5

• speed of decision, if quick is needed then hunch
• info available, if it’s detailed then make a scientific
• size of business - larger businesses use scientific approaches
• predictability, more unpredictable a situation the better the hunch option
• character of manager/culture of company - a manger more willing to take risks will be intuitive while risk averse will use science