Data-Driven Business Decisions

Preface

Quantitative methods are part of the core course for attaining a Master's in Business Administration (MBA) at virtually every reputable business school, and for good reason. Most business decisions involve uncertainty, trade-offs, and ultimately monetary values. These kinds of problems require something more than judgment and qualitative generalities. They require numbers and frameworks for dealing with uncertainty. Otherwise you are just guessing.

There is broad consensus among business academics on what main topics should be covered in an MBA quantitative methods course. Keeping in mind that the MBA aims to produce better managers rather than mathematical technocrats, there are four general areas that managers need to know about.

1. Data Handling and Excel There are a lot of data out there and the standard platform is Excel. Excel also has some special features that make it especially suitable for business management.
2. Uncertainty There is statistical uncertainty in business data that needs to be acknowledged and measured wherever possible. This is an important mind-set. Maybe if more people had this mind-set there would not have been a global financial crisis.
3. Relationship between Inputs and Outputs The relationship between business outputs and the main drivers cannot be discovered only with tables and plots. Most managers let themselves down with primitive and misleading summaries of their data. Even basic data analysis requires the now widely available tool of multiple ...