05-Sep-20
COMPANY
LOGO
BUSINESS DECISION MAKING
Nguyen Minh Thu
Faculty of Statistics – National Economics University
Email: nmthu@neu.edu.vn
What are we going to learn?
• Introduction to Business Decision Making
• The collection of data
• Techniques to analyse data:
– Descriptive analysis
– Inferential analysis
– Modeling interactions between variables
– Time series analysis
Business Decision Making – Nguyen Minh Thu – nmthu@neu.edu.vn
Contents
Semester 1 Semester 2
1. Introduction to 1. Techniques to analyse data:
Business Decision Making Inferential analysis
2. Techniques to analyse data:
2. The collection of data
Modeling interactions between variables
3. Techniques to analyse 3. Techniques to analyse data: Time
data: Descriptive analysis series analysis
4. Probability and
sampling distribution
Business Decision Making – Nguyen Minh Thu – nmthu@neu.edu.vn
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05-Sep-20
Learning Outcomes
• Be able to use a variety of sources to collect data,
both primary and secondary
• Understand a range of techniques to analyse data
effectively for business purposes
• Be able to produce information in appropriate formats
for decision making in an organisational context
• Be able to use software generated information to
make decisions in an organisation
Business Decision Making – Nguyen Minh Thu – nmthu@neu.edu.vn
Materials
▪ Microsoft Excel - Data Analysis Toolpak
▪ IBM SPSS Package
Business Decision Making – Nguyen Minh Thu – nmthu@neu.edu.vn
Assessment
• Participation: 10%, including 5 small quizzes (Moodle)
• Group assignment: 30%, including 2 presentations
(15% each)
• Mid-term test: 10%
• Final exam: 50%
Students should achieve an overall mark of 4.5/10
in order to successfully pass the module!
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Why did they fail?
• Absent for the lessons
• Don’t put attention on the lessons
• Don’t do home assignments
✓ Spend less time to archive more
✓ Understand the issue
✓ Write notes in class
✓ Welcome all discussion
Business Decision Making – Nguyen Minh Thu – nmthu@neu.edu.vn
Some regulations
• All acts that affect the teaching and learning process are
strictly prohibited.
• Students who are late for more than 10 minutes after class
starting time will not be allowed to attend the class.
• Laptops and tablets are only allowed for the learning
purpose (calculating and serving lectures and exercises).
Business Decision Making – Nguyen Minh Thu – nmthu@neu.edu.vn
References
1. BPP Professional Education (2004), Business Decision Making,
Course book
2. Anderson, Sweeney, Williams, Camm, Cochran (2018), Statistics for
Business and Economics, 13th Edition, South-Western.
3. Linda H., John F. (2013), Applied Statistics for Business and
Management using Microsoft Excel, Springer.
4. Verma J.P. (2013), Data Analysis in Management with SPSS
Software, Springer.
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Warm up
Kahoot.it
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BUSINESS DECISION MAKING
Week 1:
INTRODUCTION TO
BUSINESS DECISION MAKING
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Outline
▪ Overview of business decision making
▪ The decision making process
▪ The need of statistics
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Some common questions
• What time did you get up this morning?
• Why did you choose to study BBAE?
• Why did you choose to wear these clothes today?
• What will you have for lunch?
• Which motorbike model did you buy?
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Decision
• A choice from two or more alternatives
• Two types of decisions:
- Routine
- Major
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Routine Decisions
• Are made on a day-to-day basis
• Don’t require a lot of time to think through
• Become even a habit in daily life
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Major Decisions
• Have long-term effects on life
• Should be made very carefully
• Need a lot of though
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Types of Decisions
• What time did you get up this morning?
• Why did you choose to study BBAE?
• Why did you choose to wear these clothes today?
• What will you have for lunch?
• Which motorbike model did you buy?
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Your Decisions
• Think about some decisions you have made
• Are they routine or major decisions?
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Facts and Figures
THE AVERAGE PERSON MAKES A MINIMUM
OF FIVE DECISIONS PER MINUTE
WHEN ENGAGED IN THOUGHT!!!
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Business Decisions
• Decisions made by business people aim to the
achievement of business objectives in a manner of
satisfying business needs and expectations.
• Two main type of business decisions:
- Operational decisions
- Strategic decisions
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Business Decisions
Features Operational Decisions Strategic Decisions
Objective
Target
Usage
Implications
Level of
management
Judgement
Happening
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Group discussion
• Create groups of 5
• Problem: you have a cafe and it’s one of three in
your neighborhood.
Identify some challenges, make strategic and
operational decisions corresponding to each challenge
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Business Decision Making
• Business decision making is central to all the
managerial activities, be it planning, organizing,
staffing, directing or controlling.
• An intellectual process
Aimed to achieve
• A selective process
organizational goals
• A continuous process
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The decision making process
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Step 1: Identify a Problem or a Goal
▪ A problem exist when there’s a difference between
an existing and a desirable state or a standard.
▪ The standard can be:
• Past performance
• Previously set goals
• The performance of some other unit within the
organization or some other organization
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Step 1: Identify a Problem or a Goal
▪ Example:
• Revenue decreases due to the fierce competition
• The product has not attracted customers
• The market expansion has not achieved the expected
effect
• Start-up companies want to launch new products
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Step 2: Generate Options
▪ List all the alternatives that could succeed in
solving the problem
▪ The wider the options you explore, the better your
final decision is likely to be
▪ Only list, without evaluating
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Step 2: Generate Options
▪ Some methods:
• Brainstorming (Crawford Slip Writing Method, Round-
Robin Brainstorming,…)
• Ask outsiders to join the discussion
▪ Example:
A start-up company want to launch a new product
→ Some options for them?
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Step 3: Analyze Options
▪ Identify decision criteria
Example: Some criteria for a new product?
- Own interest and passion
- Experience
- Trends
- Market demands
- Competitive landscape
- Cost
-…
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Step 3: Analyze Options
▪ Allocate weights to criteria
▪ Evaluate the feasibility, risks and implications of each
option
• Risk analysis
• Cost - Benefit Analysis
• Weight potential pitfalls against the possible rewards
• Analyze the pros and cons, strengths and weaknesses
for all the possible choices
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Example
• Important criteria and weights for car-buying decision
Criterion Weight
Price 10
Interior Comfort 8
Durability 5
Repair Record 5
Performance 3
Handling 1
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Example
Important criteria and weights for franchise decision
Criterion Weight
Start-up costs 10
Franchisor Support 8
Financial qualifications 6
Open geographical locations 4
Franchise history 3
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Example: Franchise decision
Start-up Franchise Financial Open Franchise
Alternatives
costs Support qualifications locations history
Curves for
10 3 10 8 5
Women
Second Cup 8 7 7 8 7
Jani-King 8 5 7 10 10
Liberty Tax
8 7 7 8 7
Service
McDonald’s 4 10 4 8 10
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Discussion
Generate and analyse some options in selecting
the location of headquarters/bank branch/…
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Step 4: Select the best option
Choosing the best alternative which have
the highest score!!!
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Step 5: Implement the decision
• Putting the decision into action
• Conveying the decision to and gaining commitment
from those who will carry out the decision
• Develop a plan to make the decision tangible and
achievable
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Step 5: Implement the decision
Writing a business plan
correlated with
increased success in
every one of the
business goals
included in the study
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Step 6: Evaluate the Decision
▪ The decision is evaluated by its outcomes.
• Evaluation the outcomes based on the desired goal and
criteria
• Assessing the effectiveness and efficiency of the
outcome or the entire process
▪ In case of any undesired results, each step of the
process is carefully reviewed to trace the root
causes.
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The Decision Making Process
IDENTIFY GENERATE ANALYZE SELECT THE IMPLEMENT EVALUATE AND
PROBLEM OPTIONS OPTIONS BEST OPTION DECISION LEARN FROM
DECISION
Need information
STATISTICS is a way to get information from data
and make decisions under uncertainty
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The Need of Statistics
GOOD DECISIONS ARE BASED ON FACTS
AND RESEARCH AND ARE OF HUGE VALUE TO
ANY ORGANIZATION
STATISTICS
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What is Statistics?
Statistics is everywhere
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What is Statistics?
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What is Statistics?
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What is Statistics?
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What is Statistics?
Statistics helps you make decisions
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What is Statistics?
The science of collecting, organizing,
presenting, analyzing and interpreting data
to assist in making more effective decisions.
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What is Statistics?
Making decisions
Interpret data
Analyze data
Present data
Organize data
Collect data
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Types of Statistics
Descriptive Statistics:
Summarizing Data with • Collect data (Survey,...)
numbers or pictures • Present data (Tables and graphs,...)
• Summarize data (Sample mean,...)
Inferential Statistics:
Making conclusions, decisions • Estimation (Estimate the population
mean weight using the sample mean
or predict based on data
weight,...)
• Hypothesis testing (Test the claim that
the population mean weight is 65kg)
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Types of Statistics
Descriptive Inferential
Statistics Statistics
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Some concepts
• Population vs Sample
• Parameters vs Statistics
• Data: Observation – Variable - Value
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Population vs Sample
Population:
A set of all interested elements
N represents the population size, maybe infinite
Sample:
A part of the population that is selected to represent
the entire group
n represents the sample size, finite
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Population vs Sample
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Parameters - Statistics
Population Sample
a b cd b c
ef gh i jk l m n gi n
o p q rs t u v w o r u
x y z y
Values calculated using Values computed from
population data are called sample data are called
parameters statistics
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Parameters - Statistics
Values Parameters Statistics
Size N n
Mean µ xത
Proportion p f
Variance σ2 S2
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