The Power of Statistics in Management Decisions - Essay Sample

Introduction

Statistics is crucial in management decision making. There is greater confidence while making decisions when managers use statistics in businesses. Statistical analyses provide more accurate information upon which companies can make decisions. Several statistical tests are used in analyzing differences between groups. The following paper will reflect on the importance of statistics in management decision making.

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Based on the review materials, the following are the main points. Statistics constitute a crucial part of the decision making in the modern world where businesses have massive data at their disposal. But huge data with no accurate analyses are just useless. However, researchers have to make the right selection in the statistical test to use. The statistical test selected depends on various factors such as experimental design, variables in the research, and the treatment levels applied in the research.

Further, a statistical test is used in testing a null hypothesis to either accept it or reject it. Several statistical analyses can be performed in testing the difference between means. The standard test compares means in two groups, and the paired test examines the difference in before and after experiments. The one-way ANOVA measures the difference in means from more than two groups. In contrast, a two-way ANOVA measures the difference between two or more groups in two different independent variables.

The readings and the videos provided relate to my personal experience in various ways. For example, the Video by Milgram (2014), "Why smart statistics are the key to fighting crime," resonates well with the contemporary issues in the society and indicates some truth in the fact the rate of incarceration in the US is alarming. The readings relate to personal experience in that it indicates daily occurrences and data within the environment, which I was not aware that statistics test could be used in decision making.

The readings reaffirm my previous assumptions in that it enlightens on the broad spectrum in which the statistical test is applicable. This is beyond the business world to the criminal justice system. Further, such as in the case of criminal justice, I would have argued that criminal knowledge would be just enough for judges and the court system to make decisions in case of crime. However, this has been proved wrong, and Video affirms that statistical use offers much more help when applied in areas such as the criminal justice system.

The reading materials and videos have been vital since they enlighten on the importance of statistical tests in decision making. Besides, there are different statistics to use, and research design must be matched with the right analysis to perform to obtain the desired results and, ultimately, the right decision making. According to TheRMUoHP Biostatistics Resource Channel. (2013), in selecting the right statistic to use, the research question, type, and the number of variables to be analyzed, and the type of data has to be considered.

As a leader, I would utilize this information in my organization by identifying a problem that the organization faces and applying statistics in decision making alongside other business knowledge. I would collect data from historical information to test a null hypothesis and make a decision on a problem that the organization is facing. I believe that applying scientific and objective tests would reduce the risks of poor decision making resulting from subjective decision-making routine.

Conclusion

In conclusion, the one thing that surprised me is the power of statistics in business and other areas such as criminal justice. It is evident that many organizations are not aware of the power of statistics and depend solely on theoretical knowledge in their field. However, applying statistics such as in the case of criminal justice by Anne Milgram has such amazing results in the criminal justice system and was successful in fighting crime. As such, it is evident that statistics is crucial in management decision making.

References

Milgram, A. (2014). Why smart statistics are the key to fighting crime [Video]. Retrieved from https://www.youtube.com/watch?v=ZJNESMhIxQ0

TheRMUoHP Biostatistics Resource Channel. (2013). How to Use SPSS: Choosing the Appropriate Statistical Test [Image]. Retrieved from https://www.youtube.com/watch?v=DcS6_I63PHs