The ground breaking advancements made in the field of information technology has made the global competition for quality product manufacturing and prompt service providing pretty steep. The needs and wants of consumers are constantly changing; as a result the companies are also evolving their business operations and methods of management in accordance with the latest trends. So, today’s business managers are experiencing more pressure than ever. Massive amounts of data are generated daily from various digital sources and the precise evaluation of this raw data is a daunting task. The only way for a business manager to collect, analyze and interpret data relevant to decision making is through statistical thinking.
Statistical thinking involves the understanding of how models are used to emulate random phenomena, the proper use of existing inferential tools, and being able to understand and grasp and utilize the context of a problem and plan an investigation accordingly. The basic principle of statistics is that data vary. Statistical reasoning helps in capturing the variation in data by organizing and examining the data. This allows managers to make smarter decisions more quickly and provide stable support to their subordinates. Here are some aspects where statistical analysis has shown its impact in making data-driven decisions:
- Statistical analysis provides an unbiased outlook of the market. So it can be used for the precise and cost-effective evaluation of a target group of customers.
- Statistics helps in making the production process efficient and economic. It eliminates all kind of redundancies and maintains consistency throughout the process.
- It helps managers to evaluate employee productivity and find ways to improve employee performance.
- Marketing mix modeling is the identification of the right combination of marketing communication channels to reach the target market and provide the best return on investment. Statistical regression can be used to unearth this crucial link.
- This method of thinking enables a manager to make joint decision with other managers. It helps the managers to compare alternative scenarios and select the most feasible option.
- Statistics allow business managers to convince other people to take risks by providing them with empirical evidence.
- It can also be used to map relationships between two variables which will in turn lead to more control over customer satisfaction and subsequent sales volume.
Therefore, statistical thinking can be used in all sectors of a business organization and in all job functions. It enhances the proficiency and competency of a manager as a researcher and provides an extra edge in business decision making.