Business Decision Making: What Are We Going To Learn?

05-Sep-20
COMPANY
LOGO
BUSINESS DECISION MAKING
Nguyen Minh Thu
Faculty of Statistics – National Economics University
Email: [email protected]
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 – [email protected]
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
1
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
Materials
▪ Microsoft Excel - Data Analysis Toolpak
▪ IBM SPSS Package
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!
2
05-Sep-20
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
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).
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.
3
05-Sep-20
Warm up
Kahoot.it
10
Week 1:
INTRODUCTION TO
11
Outline
▪ Overview of business decision making
▪ The decision making process
▪ The need of statistics
12
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05-Sep-20
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?
13
Decision
• A choice from two or more alternatives
• Two types of decisions:
- Routine
- Major
14
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
15
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05-Sep-20
Major Decisions
• Have long-term effects on life
• Should be made very carefully
• Need a lot of though
16
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?
17
Your Decisions
• Think about some decisions you have made
• Are they routine or major decisions?
18
6
05-Sep-20
Facts and Figures
THE AVERAGE PERSON MAKES A MINIMUM
OF FIVE DECISIONS PER MINUTE
WHEN ENGAGED IN THOUGHT!!!
19
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
20
Business Decisions
Features Operational Decisions Strategic Decisions
Objective
Target
Usage
Implications
Level of
management
Judgement
Happening
21
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05-Sep-20
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
22
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
23
The decision making process
24
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05-Sep-20
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
25
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
26
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
27
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05-Sep-20
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?
28
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
-…
29
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
30
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05-Sep-20
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
31
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
32
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
33
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05-Sep-20
Discussion
Generate and analyse some options in selecting
the location of headquarters/bank branch/…
34
Step 4: Select the best option
Choosing the best alternative which have
the highest score!!!
35
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
36
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05-Sep-20
Step 5: Implement the decision
Writing a business plan

correlated with
increased success in
every one of the
business goals
included in the study
37
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.
38
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
39
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05-Sep-20
The Need of Statistics
GOOD DECISIONS ARE BASED ON FACTS

AND RESEARCH AND ARE OF HUGE VALUE TO
ANY ORGANIZATION
STATISTICS
40
What is Statistics?
Statistics is everywhere
41
What is Statistics?
42
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05-Sep-20
What is Statistics?
43
What is Statistics?
44
What is Statistics?
Statistics helps you make decisions

45
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05-Sep-20
What is Statistics?
The science of collecting, organizing,
presenting, analyzing and interpreting data
to assist in making more effective decisions.
46
What is Statistics?
Making decisions
Interpret data
Analyze data
Present data
Organize data
Collect data
47
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)
48
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05-Sep-20
Types of Statistics
Descriptive Inferential
Statistics Statistics
49
Some concepts
• Population vs Sample
• Parameters vs Statistics
• Data: Observation – Variable - Value
50
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
51
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05-Sep-20
Population vs Sample
52
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
53
Parameters - Statistics
Values Parameters Statistics
Size N n
Mean µ xത
Proportion p f
Variance σ2 S2
54
18

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05-Sep-20

BUSINESS DECISION MAKING

Nguyen Minh Thu

Faculty of Statistics – National Economics University

What are we going to learn?

• Introduction to Business Decision Making

Business Decision Making – Nguyen Minh Thu – [email protected]

1. Introduction to 1. Techniques to analyse data:

2. Techniques to analyse data:

3. Techniques to analyse 3. Techniques to analyse data: Time

Business Decision Making – Nguyen Minh Thu – [email protected]

• Be able to use a variety of sources to collect data,

• Understand a range of techniques to analyse data

• Be able to produce information in appropriate formats

• Be able to use software generated information to

Business Decision Making – Nguyen Minh Thu – [email protected]

▪ Microsoft Excel - Data Analysis Toolpak

▪ IBM SPSS Package

Business Decision Making – Nguyen Minh Thu – [email protected]

• Participation: 10%, including 5 small quizzes (Moodle)

• Group assignment: 30%, including 2 presentations

• Mid-term test: 10%

• Final exam: 50%

Students should achieve an overall mark of 4.5/10

Business Decision Making – Nguyen Minh Thu – [email protected]

Why did they fail?

• Absent for the lessons

✓ Spend less time to archive more

Business Decision Making – Nguyen Minh Thu – [email protected]

1. BPP Professional Education (2004), Business Decision Making,

2. Anderson, Sweeney, Williams, Camm, Cochran (2018), Statistics for

3. Linda H., John F. (2013), Applied Statistics for Business and

4. Verma J.P. (2013), Data Analysis in Management with SPSS

Business Decision Making – Nguyen Minh Thu – [email protected]

Business Decision Making – Nguyen Minh Thu – [email protected]

BUSINESS DECISION MAKING

BUSINESS DECISION MAKING

Business Decision Making – Nguyen Minh Thu – [email protected]

▪ Overview of business decision making

▪ The decision making process

▪ The need of statistics

Business Decision Making – Nguyen Minh Thu – [email protected]

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?

Business Decision Making – Nguyen Minh Thu – [email protected]

• A choice from two or more alternatives

• Two types of decisions:

Business Decision Making – Nguyen Minh Thu – [email protected]

• 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

Business Decision Making – Nguyen Minh Thu – [email protected]

• Have long-term effects on life

• Should be made very carefully

• Need a lot of though