Quantitative Analysis

for Management
Decision Making

Instructor: Mulachew
Haile
 Management Thoughts
 A collection of ideas which set forth
general rules on how to manage a
business or organization.
 Management theory addresses how
managers and supervisors relate to their
organizations in the knowledge of its
goals, the implementation of effective
means to get the goals accomplished and
how to motivate employees to perform to
the highest standard.
Evolution of management thoughts
Domino effect vs System’s view
 Classic Management
thought
 Scientific management focused on
improving the efficiency of manufacturing
facilities and their workers;
 Scientific management, also called
Taylorism after its founder F. Taylor, was
fashionable for its contributions.
 This movement made some worthwhile
contributions, such as time-and-motion
studies, but it was coupled with dreadful
labor relations practices.
 Cont’d
 The symbol of the movement was the
efficiency expert policing the shop
floor with stopwatch and clipboard.
 After Taylorism waned, interest
shifted more to making efficient use
of labor and other factors than
making employees work harder.
 Cont’d...
 Bureaucratic management focused on
using knowledge, fairness, and logical
rules and procedures to increase the
efficiency of the entire organization; and
 Administrative management focused on
how and what managers should do in
their jobs.
 In contrast, the human relations approach
to management focused on the
psychological and social aspects of work.
 Management science/ Quantitative
perspective
 A management science perspective that emerged after
World War II and applied mathematics, statistics, and
other quantitative techniques to managerial problems.
 Application of operational research to operational
problems was surprisingly successful in both the British
and American military, partly because members of the
professional class who had not previously "dirtied their
hands" had their first opportunity to apply their training
to operational problems.
 Cont’d...
 Their success attracted attention,
and operations research spread to
industry during the fifties.
Contributing Factors for fast growth of
OR
 Industrial boom after WWII
 Successful continued research effort
of Operations team after the war
 Invention of computers with high
analytical power.
 Cont’d...
 After its first few years, operations research
focused almost exclusively on mathematical
modeling.
 There is little communication between people
in quantitative fields and those in such "soft"
fields as organizational science and general
management.
 Though there is no single theory coined to
accommodate both, the aspects should be
considered in decision making process.
 Despite the limitations of the quantitative
methods discussed , in many specific areas
they are quite useful.