Transcript Slide 1

Research and Analysis
for Management
MGMT 6272
Aug 25 – Nov 7, 2014
Dr. Dennis E. Clayson
The class can be found online at
www.business.uni.edu/clayson/mba
A business manager must be able to make decisions
To make good decisions a manager must have
information
To use information to make decisions, a manager
must know what
information is!
To use information to make decisions, a manager
must know what information is
And how information is created
To use information to make decisions, a manager
must know what information is
And how information is created
And used
Mistake: Not
knowing what information is!
Managers should not act like this……….
Mistake: Not
knowing what to do with information!
Or like this….
Mistake:
Not seeking
Information!
Much of the information that is utilized for management decisions
comes from numbers….
OR is calculated from numbers, OR is explained
by numbers….
Most people are, however,
Inumerate…
Most people are, however,
Inumerate…
i.e.
They are illiterate with numbers.
Numerical concepts to them are very confusing….
Some Americans were very impressed when the
government
promised to cut $100 million in spending from
$2 trillion in spending.
Why?
Because $100 is larger than $2.
They are not quite sure what to do with numbers
when they get them……
How tall is
the Sears Tower?
How tall is
the International
Finance Centre
in Hong Kong?
Never been there….
No problem….
How fast does your
hair grow in MPH?
Logic and Research
For example:
What does your experience
tell you about this person?
What do statistics tell us
about this person?
Would you change your
mind if the statistics tell a
different story than your
impressions?
What is knowing?
What are we doing when we are knowing?
Everything we
KNOW about the
outside world comes
from our own brains.
There is no exception
to this!
Everything we KNOW has to come from a perception formed by our
own mind.
Descartes wrote:
Rene Descartes
(1596 – 1650)
“Our inquires should be directed
not to what others have thought,
not to what we ourselves conjecture,
but to what we can clearly
and perspicuously behold
and with certainty deduce;
for knowledge is not won in any other way.”
Vico states:
“The criterion
and rule of the true is to have
made it.”
Giambattista Vico
(1668 – 1744)
The principle states that truth is
verified through creation or invention
and not through observation.
The difference:
1. Knowing something….
The difference:
1. Knowing something….
or
2. Knowing how to do
something….
1. Knowing something: implies that we know facts.
There are three bones in the inner ear.
The equatorial radius of the earth is 6,378.14 meters.
The value of pi is 3.14159….
2. Knowing how to do something:
Suppose a student “knew that”
the value of pi was 3.14159…,
does the student know what
the circumference of a circle
is which has a radius of 4.0 meters?
2. Knowing how to do something:
Suppose a student “knew that”
the value of pi was 3.14159…,
does the student know what
the circumference of a circle
is which has a radius of 4.0 meters?
Not necessarily.
Vico made the argument that the student’s knowledge
was incomplete until he or she could use that
knowledge to
create something.
In business, it could be argued that both types
of knowledge are valuable.
Emphasis on one without the other leads
to problems when people get lazy.
In business, it could be argued that both types
of knowledge are valuable.
Emphasis on one without the other leads
to problems when people get lazy.
“Knowing something” tends to rely on ideology.
In business, it could be argued that both types
of knowledge are valuable.
Emphasis on one without the other leads
to problems when people get lazy.
“Knowing something” tends to rely on ideology.
“Knowing how to do something” tends to put
more trust in tradition.
For example, “How should people be paid?”
“Knowing something” would encourage a company
or government officer to insist that there be
“equal pay for equal work.” This is ideology.
It could guide or correct very little,
because there are many things which determine salary
including other ideologies.
For example:
Should experienced workers make more than new
workers?
Should workers with better social skills be paid more?
Should someone with a special need be paid more?
“How should people be paid?”
“Knowing how to do something,” on the other hand,
may predispose a company to pay workers in a traditional
fashion that has worked well in the past,
but which should be replaced by a better system.
Knowledge creates knowledge
Knowledge creates knowledge
because proper knowing creates more knowing!
Logic and Research
Opinion
=
Belief
or
Guess
Logic and Research
Opinion
=
Belief
or
Guess
Are all opinions equal?
What is this?
Knowledge creates knowledge
because proper knowing creates more knowing!
Yes! In that everyone can have them.
No! In that every opinion has to be based on
something.
Whose opinion would you trust if your automobile needed repair?
Opinions about my car needing repair are NOT equal.
Some persons’ opinion about the stock market are
more valuable than others!!
Logic and Research
Opinion
=
Hypothesis =
Belief
or
Guess
Opinion that
can be tested
Hypo
=
Under
Thesis
=
Idea or thought
Hypothesis
=
Underlying idea
Logic and Research
Opinion
Hypothesis =
Statistic
= Method of calculating
probability
Logic and Research
Opinion
Hypothesis =
Statistic
= Method of calculating
probability
Characteristic of a
sample
A statistic is a characteristic of
a group.
It tells you nothing about an individual
except for a probability.
Men are taller
than women…
This is statistically true….
Asian Americans have an average IQ higher than African Americans
What does this tell you about Thomas Sowell?
What do statistics tell us
about this person?
She is 40 years old.
She is 40 years old.
She has a MD degree.
She is 40 years old.
She has a MD degree.
She works in Vancouver.
Can you now make a good guess about
her income and position?
Statistic: Education majors have the lowest standardized scores
(ACT, Iowa Basic, etc.) of any majors on campus.
Statistic: Education majors have the lowest standardized scores
(ACT, Iowa Basic, etc.) of any majors on campus.
An education major says, “That can’t be true. Both my friend
and I had the highest ACT scores in my high school and we are
both education majors. I am highly offended by your slur.”
Statistic: Education majors have the lowest standardized scores
(ACT, Iowa Basic, etc.) of any majors on campus.
An education major says, “That can’t be true. Both my friend
and I had the highest ACT scores in my high school and we are
both education majors. I am highly offended by your slur.”
What is wrong with this logic?
Logic and Research
Opinion
Hypothesis =
Statistic
= Method of calculating
probability
Characteristic of a
sample
Research findings
= Results of controlled
research procedures
Be careful here…..
Research findings do not mean that something
is true!
They simply increases the probability….
Fact
=
Reality
An unmarried women with a child has
an average income of X Dollars.
An married woman with a child has
an average income of 10X Dollars.
An unmarried women with a child has
an average income of X Dollars.
An married woman with a child has
an average income of 10X Dollars.
What are these statements?
What can you tell me
about this woman?
What can you tell me
for sure?
Is this woman poor?
How would you
wager?
Now I tell you that she
has a husband.
How would you
wager now?
Logic and statistics are sometimes
difficult in the real world….
The ratio of Afro-American to Euro-Americans
in the NBA is about 4:1
The ratio of Afro-Americans to Euro-Americans
in the USA is about 1:6
The probability of an Afro-American child becomes a NBA
star is 24 times larger than an Euro-American child….
Why?
Theory is fun…
Reality can be very hard and messy….
American Social Security
When to Start Collecting?
At 66, you will get about $2,200/month…
At 70, you will get about $3,000/month…
But you would have to give up $2,200/month
for 4 years, or $105,600….
After 70, it would take 132 months (11 years) to make up
the difference …
So, if you thought you would die before you are 81…
take the money now….
What decision will you make??
But……….
How long do people actually live?
http://www.ssa.gov/OACT/STATS/table4c6.html
Unemployment by County 2008
http://www.goiam.org/images/articles/news/iam-news/multimedia.htm
Global Warming
Co2
Temp
Sun Spot
Number
“Al Gore Not Worried About Sea Level Rising: Buys
8.8 Million Dollar Ocean-View Villa: News 4/49/10
Decision makers follow the data……
http://www.youtube.com/watch?v=VgVDugSuPOo