Question

Discuss the different roles played by the qualitative and quantitative approaches to managerial decision making. Why is it important for a manager or decision maker to have a good understanding of both of these approaches to decision making? Give an example of when the qualitative approach might be more appropriate and another example of when the quantitative approach might be more appropriate.

Answer 1

Explanation:

Regarding the management decision-making process, there are two different approaches that the manager must know and know how to use in certain situations.

The qualitative approach is one that is based on experimental knowledge of various factors involved in decision making, such as interpersonal connections that occur in the work environment, in this approach it is necessary that the manager has an intuition and accurate perception of the organization as a whole before making an important decision

The quantitative approach is one that uses mathematical statistics for decision making, generally works best for solving measurable problems, and for this reason can be used by a manager without much direct experience.

The qualitative approach may be more appropriate in a situation where a manager needs to solve problems related to situations of conflict between organizational departments, because in this scenario it is necessary to have knowledge of factors that generate the complex interaction between people.

The quantitative approach can be more useful in a scenario where it needs to analyze which are the most profitable departments in the organization and what is the probability of each department generating profits in the company, because in this case accounting data are used to support decision making.