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Planning is the part of management concerned with creating procedures,

rules and guidelines for achieving a stated objective. Planning is carried out
at both the macro and micro level. Managers need to create broad objectives
and mission statements as well as look after the day to day running of the
company.

Below, we take a look at the three types of plans in management and how
they are used within an organizational framework:

I. Strategic Plan
A strategic plan is a high-level overview of the entire business, its vision,
objectives, and value. This plan is the foundational basis of the organization
and will dictate decisions in the long-term. The scope of the plan can be two,
three, five, or even ten years.

Managers at every level will turn to the strategic plan to guide their
decisions. It will also influence the culture within an organization and how it
interacts with customers and the media. Thus, the strategic plan must be
forward looking, robust but flexible, with a keen focus on accommodating
future growth.

The crucial components of a strategic plan are:

1. Vision

Where does the organization want to be five years from now? How does it
want to influence the world?

These are some of the questions you must ask when you delineate your
organization’s vision. It’s okay if this vision is grandiose and idealistic. If
there is any room to wax poetic within a plan, it is here. Holding ambitions to
“make a dent in the Universe” (Apple/Steve Jobs) is acceptable, as is a more
realistic vision to create the most “customer-centric company on Earth”
(Amazon).

Get a bird’s eye view of management with this introduction to

management course!
2. Mission

The mission statement is a more realistic overview of the company’s aim and
ambitions. Why does the company exist? What does it aim to achieve
through its existence? A clothing company might want to “bring high street
fashion to the masses”, while a non-profit might want to “eradicate polio”.

3. Values

“Inspire. Go above & beyond. Innovate. Exude passion. Stay humble. Make it
fun”

These aren’t fragments from a motivational speech, but Fab.com’s values.

Like Fab, each organization has its own values. These values will guide
managers and influence the kind of employees you hire. There is no template
to follow when jotting down the values. You can write a 1,000 page essay, or
something as simple as Google’s “Don’t be Evil” – it’s all up to you.

As you can see, there are really no rules to writing the perfect strategic plan.
This is an open-ended, living document that grows with the organization.
You can write whatever you want in it, as long as it dictates the future of your
organization.

For inspiration, just search for the value/mission/vision statement of your

favorite companies on Google. Or, consider taking this course on business
planning for average people.

II. Tactical Plan

The tactical plan describes the tactics the organization plans to use to achieve
the ambitions outlined in the strategic plan. It is a short range (i.e. with a
scope of less than one year), low-level document that breaks down the
broader mission statements into smaller, actionable chunks. If the strategic
plan is a response to “What?”, the tactical plan responds to “How?”.

Creating tactical plans is usually handled by mid-level managers.

The tactical plan is a very flexible document; it can hold anything and
everything required to achieve the organization’s goals. That said, there are
some components shared by most tactical plans:

1. Specific Goals with Fixed Deadlines

Suppose your organization’s aim is to become the largest shoe retailer in the
city. The tactical plan will break down this broad ambition into smaller,
actionable goals. The goal(s) should be highly specific and have fixed
deadlines to spur action – expand to two stores within three months, grow at
25% per quarter, or increase revenues to $1mn within six months, and so on.

2. Budgets

The tactical plan should list budgetary requirements to achieve the aims
specified in the strategic plan. This should include the budget for hiring
personnel, marketing, sourcing, manufacturing, and running the day-to-day
operations of the company. Listing the revenue outflow/inflow is also a
recommended practice.

3. Resources

The tactical plan should list all the resources you can muster to achieve the
organization’s aims. This should include human resources, IP, cash
resources, etc. Again, being highly specific is encouraged.

4. Marketing, Funding, etc.

Finally, the tactical plan should list the organization’s immediate marketing,
sourcing, funding, manufacturing, retailing, and PR strategy. Their scope
should be aligned with the goals outlined above.

If you’re struggling to create a strong tactical plan, this course on drafting

great business plans will point you in the right direction.

III. Operational Plan

The operational plan describes the day to day running of the company. The
operational plan charts out a roadmap to achieve the tactical goals within a
realistic timeframe. This plan is highly specific with an emphasis on short-
term objectives. “Increase sales to 150 units/day”, or “hire 50 new
employees” are both examples of operational plan objectives.

Creating the operational plan is the responsibility of low-level managers and

supervisors.

Operational plans can be either single use, or ongoing, as described below:

1. Single Use Plans

These plans are created for events/activities with a single occurrence. This
can be a one-time sales program, a marketing campaign, a recruitment drive,
etc. Single use plans tend to be highly specific.

2. Ongoing Plans

These plans can be used in multiple settings on an ongoing basis. Ongoing

plans can be of different types, such as:

 Policy: A policy is a general document that dictates how managers

should approach a problem. It influences decision making at the micro
level. Specific plans on hiring employees, terminating contractors, etc.
are examples of policies.
 Rule: Rules are specific regulations according to which an
organization functions. The rules are meant to be hard coded and
should be enforced stringently. “No smoking within premises”, or
“Employees must report by 9 a.m.”, are two examples of rules.
 Procedure: A procedure describes a step-by-step process to
accomplish a particular objective. For example: most organizations
have detailed guidelines on hiring and training employees, or sourcing
raw materials. These guidelines can be called procedures.

Ongoing plans are created on an ad-hoc basis but can be repeated and
changed as required.

Operational plans align the company’s strategic plan with the actual day to
day running of the company. This is where the macro meets the micro.
Running a successful company requires paying an equal attention to now just
the broad objectives, but also how the objectives are being met on an
everyday basis, hence the need for such intricate planning.

Struggling with operations management? This free course will

lead you on the right path.
Types of Management

Management Levels: A Hierarchical View

An organization can have many different managers, across many different titles,
authority levels, and levels of the management hierarchy.

LEARNING OBJECTIVES

Recognize the difference between low-level, middle-level and top-level management

KEY TAKEAWAYS

Key Points

 The three levels of management typically found in an organization are low-level

management, middle-level management, and top-level management.
 Top-level managers are responsible for controlling and overseeing the entire organization.
 Middle-level managers are responsible for executing organizational plans which comply
with the company’s policies. These managers act at an intermediary between top-level
management and low-level management.
 Low-level managers focus on controlling and directing. They serve as role models for the
employees they supervise.

Key Terms

 hierarchy: Any group of objects ranked so that every one but the topmost is subordinate
to a specified one above it.
 manager: A person whose job is to manage something, such as a business, a restaurant,
or a sports team.
 board of directors: A group of people, elected by stockholders, to establish corporate
policies, and make management decisions.
 top management: company employees responsible for controlling and overseeing the
entire organization
 middle management: company employees that are accountable for controlling and
overseeing a department

Management Levels: An Overview

Most organizations have three management levels:

 Low-level managers;
 Middle-level managers; and
  Top-level managers.

These managers are classified in a hierarchy of authority, and perform different tasks. In
many organizations, the number of managers in every level resembles a pyramid.

Below, you’ll find the specifications of each level’s different responsibilities and their
likely job titles.

Top-level managers

The board of directors, president, vice-president, and CEO are all examples of top-level
managers.

These managers are responsible for controlling and overseeing the entire organization.
They develop goals, strategic plans, company policies, and make decisions on the
direction of the business.

In addition, top-level managers play a significant role in the mobilization of outside

resources.

Top-level managers are accountable to the shareholders and general public.

Middle-level managers

General managers, branch managers, and department managers are all examples of
middle-level managers. They are accountable to the top management for their
department’s function.

Middle-level managers devote more time to organizational and directional functions than
top-level managers. Their roles can be emphasized as:

 Executing organizational plans in conformance with the company’s policies and the
objectives of the top management;
 Defining and discussing information and policies from top management to lower
management; and most importantly
 Inspiring and providing guidance to low-level managers towards better performance.

Some of their functions are as follows:

 Designing and implementing effective group and intergroup work and information
systems;
 Defining and monitoring group-level performance indicators;
 Diagnosing and resolving problems within and among work groups;
 Designing and implementing reward systems supporting cooperative behavior.
Low-level managers

Supervisors, section leads, and foremen are examples of low-level management titles.
These managers focus on controlling and directing.

Low-level managers usually have the responsibility of:

 Assigning employees tasks;

 Guiding and supervising employees on day-to-day activities;
 Ensuring the quality and quantity of production;
 Making recommendations and suggestions; and
 Upchanneling employee problems.

Also referred to as first-level managers, low-level managers are role models for
employees. These managers provide:

 Basic supervision;
 Motivation;
 Career planning;
 Performance feedback; and
 Staff supervision.

Management Levels: Hierarchical view of management in organizations

Management Areas: A Functional View

Organizational management is often approached by identifying business functions and
assigning leadership to those functions.

LEARNING OBJECTIVES

Understand management areas and why they are often viewed from a functional perspective

KEY TAKEAWAYS

Key Points

 Organizations are essentially a group of different functions, aligned to create a specific

product or service. Assigning managers to different functional areas is a popular approach
to business management.
 Viewing organizational management from this perspective is useful in ensuring each
function has a specialist in place with the knowledge and expertise to make sound
decisions.
 Some common management areas include marketing, finance, IT, sales, human
resources, and legal.
 Taking a look at an organizational chart is useful in understanding how management
areas are commonly identified from a functional view.

Key Terms

 best practices: The specific professional activities that produce near optimal results.
 organizational chart: A chart outlining the structure of an organization and the way in
which the different roles, functions, and departments interact with one another.

Understanding Functional Management Areas

Businesses are comprised of a variety of different tasks which, when coordinated

properly, create value through producing products and/or services. Each of these
different tasks, or functions, require management and alignment. One approach to
management is assigning leadership roles with authority and accountability over these
different tasks, or management areas.

This view creates management positions with authority over a given functional
department. These management areas can span a wide variety of skills and functions,
but the most recognizable and common include marketing, finance, human resources,
operations, software development, and IT.

This functional view emphasizes managers who are specialists in their fields who are
also capable of leading teams, balancing budgets, and thinking tactically (and
sometimes strategically, at the upper levels).
The Role of a Functional Management

Functional management is focused on the execution of a specific organizational task

within functional areas, through organizing and leading an organization’s talent in a
given field. Functional managers have a high level of technical knowledge and skills
relative to the area they manage and focus their efforts on achieving best practices.

Let’s quickly explore an example of a functional manager to clarify the role and
responsibilities. A human resources manager in an organization would be expected to
oversee all operations within the scope of human resources. At a medium or larger
sized organization, this could include managing specialists in payroll, recruitment, talent
development, legal, and a variety of other specializations within the scope of a human
resources team.

The manager shouldn’t execute each specific task, but instead understand what is
required to complete these tasks. The manager must have the broad technical
knowledge required to ensure each individual within that functional team has the skills,
resources, and alignment necessary to effectively carry out these functions.

Illustrating Functional Management

A simple way to understand how this all plays out in an organization is a simple
organizational chart (org chart, as they are commonly referred to). By taking a look at
how the departments are divided, it becomes fairly easy to assume what types of
management areas exist from a functional view. As a result, it’s fairly common to
receive an org chart when you start a job (particularly at larger companies), to
understand who reports to whom, and regarding what tasks.
Organizational Chart: This is a simple example of an organizational chart, in this case at an advertising agency.
By looking at each functional area, and considering how it relates to broader functional areas, it becomes clear
how management areas are divided from a functional perspective.

Each day we are faced with situations in life that require us to make choices. Some of these choices
are easy, and at times, some of them can be difficult. Easy decisions consist of things like what
clothing you should wear; most people choose what to wear based on the season of the year, the
weather of the day, and where they might be going. Other easy decisions consist of things like what
to eat, what movie to see, and what television programs to watch. Decisions that seem to be the most
difficult are those that require a deeper level of thought. Examples of difficult decisions consist of
things like where to attend college, what career path would be best, and/or whether or not to marry
and start a family. These types of decisions are difficult because they are life changing decisions;
they shape who we are, and they shape our future.

Making good decisions is a method that must be learned. It is not something with which we are
innately born, but merely a step by step process that is usually ascertained from life experience. Most
adults know that experience can be a costly, ineffective teacher that teaches more bad habits than
good; and because decisions can vary so obviously from one situation to the next, the experience
gained from making one important decision is often times of little or no use when another decision-
making problem arises.

When decision making, there are many steps that can be taken; but when making good decisions
there are really only five steps that need to be considered. These steps are as follows:

Step 1: Identify Your Goal

One of the most effective decision making strategies is to keep an eye on your goal. This simply
means identifying the purpose of your decision by asking yourself what exactly is the problem that
needs to be solved? And why does this problem need to be solved?

Figuring out what’s most important to you will help you make good decisions. When you know the
reason why you have making a particular decision; it will better serve you in staying with it, and
defending it.

Step 2: Gather Information for Weighing Your

Options
When making good decisions it is best to gather necessary information that is directly related to the
problem. Doing this will help you to better understand what needs to be done in solving the problem,
and will also help to generate ideas for a possible solution.

When gathering information it is best to make a list of every possible alternative; even ones that may
initially sound silly or seem unrealistic. Always seek the opinions of people that you trust or speak to
experts and professionals, because it will help you to come up with a variety of solutions when
weighing all your options for a final decision. You will want to gather as many resources as possible
in order to make the best decision.

Step 3: Consider the Consequences

This step can be just as important as step one because it will help you determine how your final
decision will impact yourself, and/or others involved. In this step, you will be asking yourself what
is likely to be the results of your decision. How will it affect you now? And how will it affect your
future?

This is an essential step because it allows you to review the pros and cons of the different options that
you listed in the previous step. It is also important because you want to feel comfortable with all
your options and the possible outcome of whichever one you choose.

Step 4: Make Your Decision

Now that you have identified your goal, gathered all necessary information, and weighed the
consequences, it is time to make a choice and actually execute your final decision. Understanding
that this step can cause some people a lot of anxiety is important because this is where you have to
trust your instincts. Although you may still be slightly indecisive about your final decision, you have
to take into account how this makes you feel. Ask yourself, does it feel right? And does this decision
work best for you now, and in the future? When you answer those questions back, you should feel
good about the result.

Step 5: Evaluate Your Decision

Once you have made your final decision and put it into action, it is necessary to evaluate the decision
and the steps you have taken to ensure that it works. This final step is probably just as important as
step one, if not more important, because it will help you to further develop your decision making
skills for future problems. This step is also fundamental because it may require you to seek out new
information and make some changes along the way.

Remember, this step requires some patience and it can also encourage perseverance. Why? Because
it may take some time to see the final outcome. Recognizing that if the first decision is not working,
you may have to go back to step two and choose another option. Always looking for and anticipating
unexpected problems will help alleviate undue stress, if and when a problem occurs.

Although these five steps can help assist in simplifying the decision-making process, there are some
common drawbacks that you must also take into account. Consider these:

► Misidentifying The Problem

Many times the problem will be obvious; but there may come a time when identifying the main
problem is not that easy. When this issue arises, figuring out exactly what it is, and where you need
to focus your efforts will save you a lot of time and energy in the long run.

► Having a Single Source

When considering the consequences, you must be open to a broad choice of alternatives in order to
find the best solution. This can become a problem if you rely solely on a single source of
information because that one source may not b reliable, or may not be completely inline with the
problem; thus altering your chances of making the best decision.

► Having Too Many Sources

Having a variety of sources is usually not a bad thing; but not in every situation. Collecting as much
information as possible can be very helpful at arriving to a decision, but an overload of information
can leave you confused and misguided, and prevents you from following your intuition. Remember,
trusting your gut instincts is a major key to making good decisions.

► Overestimating the Outcome

When making a decision and putting your plan into action you should have taken care to weigh all
your valid options. Making a decision based upon an outcome that may not be plausible will not help
you solve the problem.

► Poor Timing
Time can be a futile friend. Sometimes it is good, and sometimes it is not. When making major
decisions, it beneficial to take your time in order to make the best choice from your options. But
understanding the timing process is crucial because sometimes it is best to delay a decision, and other
times delaying a response can cause more problems. There are also times when making a quick
decision is advantageous because it allows you more time to make necessary changes should
problems arise.

In summary we all have to make many decisions throughout our daily lives. Some of these decisions
require little effort, while others require more time and deeper thought before coming to a final
solution. Remember, there are five basic steps to good decision making. Why is those five the ideal
number? Because a significant part of decision making skills is understanding and knowing a simple
technique; and also regularly practicing that technique. When there are more steps than we can count
on one hand, most people tend to either forget a step, or misconstrue the order in which the steps
must be taken.

If you follow these five steps, and also remember the common pitfalls previously addressed, you will
be well on your way to making good decisions for yourself.

For more information on decision making skills, you can read: Smart Choices: A Practical Guide to
Making Better Decisions by Hammond, J.S., Keeney, R.L., and Raiffa, H., The Right Decision Every
Time: How to Reach Perfect Clarity on Tough Decisions by Kopeikina, L., or How We Decide by
Lehrer, J.

About the Author

Kescia D. Gray, RN, MS, PHN, CHES is the owner and president of GrayKo
Clinical Consultants, LLC. Previously published in Corporate Wellness
Magazine, she is also an international author and speaker. Some of her
most recent works includes co-author of Raising Healthy Children in an
Unhealthy World, The Teen Handbook for Self-Confidence, and
Transformation: Reinventing the Woman Within.

About GrayKo Clinical Consultants, LLC

GrayKo Clinical Consultants, LLC is a health and wellness education company dedicated to
providing quality education programs, workshops, in-services, and seminars tailored to
individuals, groups, and corporate clients. Their detail-specific program plans can be customized
to fit your needs in order to foster success at meeting your goals of better health, increased
productivity, job satisfaction, health safety, and more. Subject content related your needs and the
needs of your company may include, but is not limited to stress management, emotional wellness,
personal development, diet, and exercise. To contact Kescia Gray, please call (866) 653-2570, or
go to www.graykoclinicalconsultants.com.
Decision making is the process of making choices by identifying a decision, gathering
information, and assessing alternative resolutions.

Using a step-by-step decision-making process can help you make more deliberate, thoughtful
decisions by organizing relevant information and defining alternatives. This approach increases
the chances that you will choose the most satisfying alternative possible.
Download the PDF
Step 1: Identify the decision
You realize that you need to make a decision. Try to clearly define the nature of the decision you
must make. This first step is very important.

Step 2: Gather relevant information

Collect some pertinent information before you make your decision: what information is needed,
the best sources of information, and how to get it. This step involves both internal and external
“work.” Some information is internal: you’ll seek it through a process of self -assessment. Other
information is external: you’ll find it online, in books, from other people, and from other sources.

Step 3: Identify the alternatives

As you collect information, you will probably identify several possible paths of action, or
alternatives. You can also use your imagination and additional information to construct new
alternatives. In this step, you will list all possible and desirable alternatives.

Step 4: Weigh the evidence

Draw on your information and emotions to imagine what it would be like if you carried out each
of the alternatives to the end. Evaluate whether the need identified in Step 1 would be met or
resolved through the use of each alternative. As you go through this difficult internal process,
you’ll begin to favor certain alternatives: those that seem to have a higher potential for reaching
your goal. Finally, place the alternatives in a priority order, based upon your own value system.

Step 5: Choose among alternatives

Once you have weighed all the evidence, you are ready to select the alternative that seems to
be best one for you. You may even choose a combination of alternatives. Your choice in Step 5
may very likely be the same or similar to the alternative you placed at the top of your list at the
end of Step 4.

Step 6: Take action

You’re now ready to take some positive action by beginning to implement the alternative you
chose in Step 5.

Step 7: Review your decision & its consequences

In this final step, consider the results of your decision and evaluate whether or not it has
resolved the need you identified in Step 1. If the decision has not met the identified need, you
may want to repeat certain steps of the process to make a new decision. For example, you might
want to gather more detailed or somewhat different information or explore additional
alternatives.

Decision Making with Quantitative Tools

Quantitative techniques help a manager improve the overall quality of decision making. These
techniques are most commonly used in the rational/logical decision model, but they can apply in any of
the other models as well. Among the most common techniques are decision trees, payback analysis, and
simulations.

Decision trees

A decision tree shows a complete picture of a potential decision and allows a manager
to graph alternative decision paths. Decision trees are a useful way to analyze hiring,
marketing, investments, equipment purchases, pricing, and similar decisions that
involve a progression of smaller decisions. Generally, decision trees are used to
evaluate decisions under conditions of risk.

The term decision tree comes from the graphic appearance of the technique that starts
with the initial decision shown as the base. The various alternatives, based upon
possible future environmental conditions, and the payoffs associated with each of the
decisions branch from the trunk.

Decision trees force a manager to be explicit in analyzing conditions associated with

future decisions and in determining the outcome of different alternatives. The decision
tree is a flexible method. It can be used for many situations in which emphasis can be
placed on sequential decisions, the probability of various conditions, or the highlighting
of alternatives.

Payback analysis

Payback analysis comes in handy if a manager needs to decide whether to purchase a

piece of equipment. Say, for example, that a manager is purchasing cars for a rental car
company. Although a less‐expensive car may take less time to pay off, some clients
may want more luxurious models. To decide which cars to purchase, a manager should
consider some factors, such as the expected useful life of the car, its warranty and
repair record, its cost of insurance, and, of course, the rental demand for the car. Based
on the information gathered, a manager can then rank alternatives based on the cost of
each car. A higher‐priced car may be more appropriate because of its longer life and
customer rental demand. The strategy, of course, is for the manager to choose the
alternative that has the quickest payback of the initial cost.

Many individuals use payback analysis when they decide whether they should continue
their education. They determine how much courses will cost, how much salary they will
earn as a result of each course completed and perhaps, degree earned, and how long it
will take to recoup the investment. If the benefits outweigh the costs, the payback is
worthwhile.

Simulations

Simulation is a broad term indicating any type of activity that attempts to imitate an
existing system or situation in a simplified manner. Simulation is basically model
building, in which the simulator is trying to gain understanding by replicating something
and then manipulating it by adjusting the variables used to build the model.

Simulations have great potential in decision making. In the basic decision‐making steps,
Step 4 is the evaluation of alternatives. If a manager could simulate alternatives and
predict their outcomes at this point in the decision process, he or she would eliminate
much of the guesswork from decision making.
Decision making is a tough process especially if the issue on hand is
complicated and the significance of the outcome has major consequences to
the stakeholders. Decision making is a five step process: recognition of a
situation that requires a decision; identification and development of
alternative courses of action; evaluation of the alternatives; choice of one of
the alternatives, and implementation of the selected course of action.

Quantitative decisions are mostly based on statistical analysis of collected

data whereas qualitative decisions are based on many algorithms like type
and quality of data, factors that influence collected data, risk assessments etc.
It is a more in-depth evaluation of information taking into account all
possible factors that affect a given scenario not just the numerical data value
to reach a decision.

Quantitative factors are numerical basis for decision making; effect of

decision on stakeholders and their response; investment appraisal; break-even
analysis; market research; sales forecasting; critical path analysis an decision
trees. Qualitative factors take into account other issues that may influence
outcome of a decision like SWOT analysis (Strength Weakness Opportunities
Threats); Human Resource Management issues like motivation, morale,
retention etc; PEST (Political Economic Social Technological); Publicity and
public image; long term survival/development issues and stakeholder
analysis.

In conclusion, quantitative decision is based on clear numerical statistical and

quantifiable data without consideration to any other factors. Qualitative
decision is more subjective not just based on the numerical statistical data but
other associated factors that may have some or major influence on the
collected data. It is a more in-depth analysis of all possible factors that can
affect the decision making process. It has the comprehensive understanding
of the analyst who is an active participant compared to quantitative decision
where the analyst is the mere dispassionate investigator of discrete variables.
Difference Between Qualitative & Quantitative Analysis for
Managerial Decision Making
When you make business decisions as a manager, you take into account qualitative factors like
reputations, brand strength and employee morale, as well as quantifiable data such as sales figures,
profitability and return on investment. Both qualitative analysis and quantitative methods can be
used to make decisions. The decisions that most often result in the desired outcomes use one
method to check whether the predictions of the other method are reasonable. Essentially, it's a
system of checks and balances.

Differences in Inputs

While qualitative and quantitative analysis may use information about the same characteristic,
qualitative methods rely on information that is not easily measurable while quantitative methods deal
with data. For example, if you want to analyze how positively customers view one of your products,
you might interview a cross-section of your customers and ask for feedback. This qualitative
information is hard to express as numbers. Instead, you might analyze objective data such as how
many customers buy the product again, how many make complaints, how many have warranty
claims and how many return the product. You can express this quantitative information
mathematically.

Analytical Differences

Once you have your input information, you analyze qualitative and quantitative material differently.
For qualitative information such as interview transcripts, texts and pictures, you have to study the
material to get insights about what it means. If you want to judge how positively your customers feel
about a product, you have to analyze what they say carefully, paying attention to the positive words
they use. Your analysis results in a qualitative judgement, such as your conclusion that most
customers like your product very much.

A quantitative analysis relies on statistical methods and mathematical evaluation. For example, you
can calculate what percentage of customers experienced problems with a product, what percentage
plan to buy another product and how many will recommend the product. Your can use that
information to conclude how many products you are likely to sell.

Different Outputs

The results of your qualitative analysis often are ambiguous but may contain additional information,
while the quantitative results tend to be decisive. For example, your customer interviews might
indicate that customers like your product but would appreciate faster deliveries. Your quantitative
analysis has no such extra information because it is focused narrowly on a particular characteristic,
such as customer satisfaction. The different outputs of your analysis let you use the qualitative
output to check what the quantitative data says and to keep the extra information for additional
action.

How To Make A Decision

Combining your analysis of both qualitative and quantitative information helps you make the
appropriate decision. For example, you may have analyzed how much your customers like a product
so you can decide whether to increase production. You may find from your customer interviews that
your customers like the product and your quantitative analysis may indicate that 73 percent of
customers would purchase the product again or recommend it. You can use the quantitative result to
justify increasing production, since it reinforces the qualitative result. If the two methods had
produced different results, you would need to do more analysis.

Quantitative Decision Making

Quantitative decision making methods can be used when:

1. There is a clearly stated objective.

2. There are several alternative courses of action.
3. There is a calculable measure of the benefit or worth of the various alternatives.

Uncertainties for which allowance must be made or probabilities calculated may include

1. Events beyond the control of the decision maker.

2. Uncertainty concerning which outcome (or external events) will actually happen.

Given the above conditions, standard statistical techniques using normal distribution data and
probability calculation can be used to inform decision making.

References

 Levin, Richard. I., 1984, "Statistics for Management", Prentice-Hall, New Jersey. (Prentice-hall
International Series in Management)