QUANTITATIVE AND QUALITATIVE FACTORS IN DECISION MAKING

Quantitative factors

Provide a numerical basis for decision making – reduces decisions to looking at a monetary value placed on different choices, e.g. (Forecasted sales figures for the next 3 years; The cost of a series of redundancies against the longer term financial benefits to the firm of this process);

But: such data provides only part of the story

Other factors need to be taken into account, particularly the effects of decisions on stakeholder groups and their response to such decisions, e.g. (The takeover of Manchester United by Malcolm Glazer might make financial sense but the reaction of the supporters might make the move unworkable).

Qualitative factors

Qualitative factors look to take account of these other issues that may influence the outcome of a decision;
Can be wide ranging and especially need to consider the impact on human resources and their response to decisions.

SWOT

SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture or in any other situation of an organization or individual requiring a decision in pursuit of an objective. It involves monitoring the marketing environment internal and external to the organization or individual.

PEST

Might also need to factor in other external issues that might influence the decision making process which can be summarised as:
–Political
–Economic
–Sociocultural
–Technological
Political could be in its widest sense, e.g. the internal politics of a firm as well as the national and international political effect.

Human Resources Management

Impact on a firm’s human resources is essential to consider, in particular the effects on:
–Motivation
–Morale
–Recruitment and Retention
–May be difficulty to assess and measure
–May need to distinguish between short term effects and long term.

Decision Making

Decision making is the cognitive process leading to the selection of a course of action among alternatives. Every decision making process produces a final choice. It can be an action or an opinion. It begins when we need to do something but we do not know what.

• Eventual decision may rest on the balance between the perceived effects of quantitative and qualitative.
• If the long term effect on the workforce for example was to reduce productivity or increase absence because of the impact on motivation and morale, the fact that a decision makes financial sense may be shelved!
• Qualitative by its nature, therefore, is very subjective.