Introduction to Data,

Information and Business

Decision Making
Lecture 1-Class Discussion Notes
BM & EBL Year 2
Kelebogile Kenalemang
Introductory Terms
Statistics
• It is the collection, organization, analysis and interpretation of data in
order to derive relevant information for the purpose of decision making.

• It deals with all aspects of this, including the planning of data collection in
terms of the design of surveys and experiments.

• The focus of this module will be the application of statistical analysis in

business/organizational decision making.
• For a layman, ‘Statistics’ means numerical information
expressed in quantitative terms. This information may relate
to objects, subjects, activities, phenomena, or regions of
space. E.g. Average age of students in a class
• At the macro level, these are data on Gross National Product
and shares of agriculture, manufacturing, and services in
GDP (Gross Domestic Product).
• At the micro level, we are looking at individual firms,
households and individuals.
• Regardless of size, each of the above-mentioned entities
produce extensive statistics on their operations.
• For example, the annual reports of companies contain
variety of data on sales, production, expenditure,
inventories, capital employed, and other activities.
• These data are often field data, collected by employing
statistical survey techniques.
Data
• Data are the basic raw material of statistics. Data may relate to
an activity of our interest, a phenomenon, or a problem situation
under study. Examples of data include, financial data, census
data, football/tennis player data

• Data is derived through the process of measuring, counting

and/or observing. Statistical data, therefore, refer to those
aspects of a problem situation that can be measured, quantified,
counted, or classified, analyzed and interpreted to help inform
decision making.
Types of Data

• Knowing which category/type your data falls into is very important as

it determines what type of statistical analysis you will have to perform
on your data
• There are two main types of data
1. Quantitative Data
2. Qualitative Data
Quantitative Data
• Quantitative data are used when a researcher is trying to quantify a problem
or address the "what" or "how many" aspects of a research question.

• It is data that can either be counted or compared on a numeric scale, that is,
data that can be measured and written down with numbers.

• Some examples of quantitative data are your height, your shoe size, or it
could be the number of first year students at BAC, or the ratings on a scale of
1-10 of the quality of food served at the FFC Cafeteria.
Quantitative Data
• This data are usually gathered using instruments, such as a
questionnaire which includes a ratings scale or a thermometer to
collect weather data.

• Statistical analysis software, such as Excel, SPSS, are often used to

analyze quantitative data.
Qualitative Data
• Qualitative data describes qualities or characteristics. It is data that
can't be measured.

• Some examples of qualitative data are the softness of your skin, the
grace with which you run, and the color of your eyes, etc.

• It is collected using questionnaires, interviews, or observation, and

frequently appears in narrative form.
Qualitative Data
• For example, it could be notes taken during a focus group on the
quality of the food at FFC Cafeteria, or responses from an open-ended
questionnaire.
• Qualitative data may be difficult to precisely measure and analyze.
• The data may be in the form of descriptive words that can be
examined for patterns or meaning, sometimes by coding.
• Coding allows the researcher to categorize qualitative data to identify
themes that correspond with the research questions and to perform
quantitative analysis.
Class Activity 1
• How would you categorize the following sets of data?
1. Weekly earnings of employees at a factory
2. Level of education of participants in a study
3. Number of students doing a data analysis module
4. Market research survey into customer reaction to a new product
Types of Sources of Data Collection
1.Primary Data
2. Secondary Data

• Primary data will be the data that you gather particularly with the end
goal of your research venture. Leverage of Primary data is that it is
particularly customized to your analysis needs.
• Primary data is an original and unique data, which is directly collected
by the researcher from a source such as observations, surveys,
questionnaires, case studies and interviews according to the
researcher’s research requirements.
Methods of Primary Data Collection

• Personal investigation: The surveyor collects the data himself/herself.

The data collected is reliable but is suited for small projects.
• Collection by research assistants: Trained data collectors are employed
to contact the respondents to collect data.
• Questionnaires: Questionnaires may be used to ask specific questions
that suit the study and get responses from the respondents. These
questionnaires may be mailed as well.
• Telephonic Investigation: The collection of data is done through asking
questions over the telephone.to give quick and accurate information.
Advantages of Using Primary Data
• There is no doubt about the quality of the data collected (for the
investigator).
• Resolve specific research issues. Performing your own research allows
you to address and resolve issues specific to your own business
situation.
• Better accuracy.
• Higher level of control.
• Up-to-date information.
• You are the owner of the information.
Disadvantages of using Primary Data
• Cost. Compared to secondary research, primary data may be very
expensive since there is a great deal of researcher involvement and
the expense in preparing and carrying out research can be high.
• Time Consuming.
• Not Always Feasible.
• Involves a lot of ethical considerations
Secondary Data
• Secondary data is the data that have been already collected for
another purpose but has some relevance to your research needs. In
addition, the data is collected by someone else instead of the
researcher himself.
• Secondary data is a second-hand information. It is not used for the
first time. That is why it is called secondary.
Sources of Secondary Data

• Government reports
• Official statistics
• Letters
• Diaries
• Web information
• Historical data
• Journal articles
• Dissertations
• Financial sources such as profit and loss statements balance sheets,
inventory records, sales records.
Advantages of Secondary Data
• Ease of Access
The secondary data sources are very easy to access. The internet world changed how the
secondary research exist.
• Low Cost or Free
Most secondary sources are absolutely free for use or at very low costs.
• Time-saving
You can perform a secondary research in no time. Sometimes it is a matter of a few
Google searches to find a credible source of information.
• Generating new insights and understandings from previous analysis
• Reanalyzing old data can bring unexpected new understandings and point of views or
even new relevant conclusions.
• Larger sample size
• Big datasets often use a larger sample than those that can be gathered by primary data
collection. Larger samples mean that final inference becomes much more
Disadvantages of Using Secondary Data
• Not specific to your needs
Here is the main difference with the primary method. Secondary data is not specific to the
researcher’s need because it was collected in the past for another reason. That is why the
secondary data might be unreliable and not useful and, in many business, and marketing
cases.
• Lack of control over data quality
You have no control of the data quality at all. In comparison, with primary methods which
are largely controlled by the researcher, secondary data might lack quality. Relying on
secondary data for your decision-making process, you must evaluate the reliability of the
information by finding out how the information was collected and analyzed.
• Biasness
As the secondary data is collected by someone else than you, typically the data is biased in
favor of the person who gathered it. This might not cover your requirements as a researcher.
Disadvantages of Using Secondary Data
• Not timely
Secondary data is collected in the past which means it might be out-of-
date. This issue can be crucial in many different situations.
• Not proprietary Information
Generally, secondary data is not collected specifically for your company.
Instead, it is available to many companies and people either for free or
for a little fee. So this is not exactly an “information advantage” for you
and your competitors also have access to the data.
Information
• When data are processed, interpreted, organized, structured or
presented to make them meaningful or useful, they are called
information. Information provides context for data.
• 78, 49, 30, 25 Ages of employees of an organisation
• Information assigns meaning and improves the reliability of the data.
It helps to ensure undesirability and reduces uncertainty. So, when
the data is transformed into information, it never has any useless
details.
Characteristics of Good Information
• Accurate
Information should be fair and free from bias. It should not have any arithmetical and
grammatical errors. Information comes directly or in written form likely to be more reliable
than it comes from indirectly (from hands to hands) or verbally which can be later retracted.
• Complete
Accuracy of information is just not enough. It should also be complete which means facts
and figures should not be missing or concealed. Telling the truth but not wholly is of no use.
• Cost-beneficial
Information should be analysed for its benefits against the cost of obtaining it. In business
context, it is not worthwhile to spend money on information that even cannot recover its
costs leading to loss each time that information is obtained.
• User-targeted
Information should be communicated in the style, format, detail and
complexity which address the needs of users of the information. Example
senior managers need brief reports which enable them to understand the
position and performance of the business at a glance, while operational
managers need detailed information which enable them to make day to
day decisions.
• Relevant
Information should be communicated to the right person. It means person
which has some control over decisions expected to come out from
obtaining the information.
Information vs Data
• Data is not very informative, we cannot learn about the situation from
it or draw conclusions from it.
• After it has been sorted and analysed, data becomes information that
is understandable and useful.
• The word data means facts. Data consists of numbers, letters,
symbols, raw facts, events and transactions which have been
recorded but not yet processed into a form which is suitable for
making decisions
• Information is data which has been processed in such a way that it
has meaning to the person who receives it.
Decision Making
• Running a business or any complex organization involves making
choices. Every day and every minute of the day someone will be
making a decision that will affect some aspect of the business and its
customers, suppliers, staff or shareholders.
• Managers within businesses are charged with undertaking a number
of roles, many of which involve making decisions.
• In general, decision making involves making a choice between a set of
optional courses of action according to a set of criteria or decision
rules.
Examples of Decisions in an Organization
• Decisions are made at different levels within the organization: e.g.
operational or tactical decisions or strategic decisions
• Operational decisions are made by junior managers or operatives and
they affect the immediate running of the organization (or section)
• Here problems of a recurring nature are dealt with. For example:
· weekly staff schedule for a production line
· weekly machine maintenance schedule
· daily raw material inventory check
The information required is precise, usually not financial and usually
related to a policy prescribed by a higher level of management.
Tactical Decisions
• Tactical decisions are usually made by middle managers, and they affect the
medium term running of the organization (or department)
• This middle level of management is concerned with decisions which are
made on a regular or periodic basis (annually, quarterly, monthly).
• Tactical decisions will usually be short-range, covering planning cycles of a
year or so. These decisions primarily require information of a historical (i.e.
company records) or financial nature which is generated within the
organization. For example:
· the budget for personnel recruitment in the next financial year
· expenditure on advertising in the next quarter
· monthly sales targets for the next quarter
Strategic Decisions
• Strategic decisions are made by senior managers, and they affect the longer-
term development of the organization.
• This is the executive or top level of management which is concerned largely
with issues of long-range planning. For example:
· how large should the organization be in 10 years time?
· how many production lines should there be in 5 years time?
· what kind of research and development policy should be adopted?
· how should the product range be developed over the next 20 years?
• For this type of decision-making, management will require access to all
internal information, as well as all relevant external information. The
information is used irregularly i.e. the decisions made are not routine.
What is Data Driven Decision Making?
• This is a process that involves collecting data based on measurable
goals or KPIs, analyzing patterns and facts from these insights, and
utilizing them to develop strategies and activities that benefit the
business in various areas of the business.
• The importance of data in decision making lies in consistency and
continual growth. It enables companies to create new business
opportunities, generate more revenue, predict future trends, optimize
current operational efforts, and produce actionable insights.
• That way, you stand to grow and evolve your empire over time,
making your organization more adaptable as a result.
• The digital world is in a constant state of flux, and to move with the
ever-changing landscape around you, you must leverage data to make
more informed and powerful data driven business decisions.

• In an increasingly customer-oriented era, organizations have amassed

wealth of consumer information and data. In order to remain
competitive, it is imperative for organizations to use these consumer
insights to shape their products, solutions and buying experiences
Data Driven Decision Making in Business
Things you Stand to Gain by Becoming a
Data-driven Organization
• Remain competitive among forward-thinking companies that do use
data to their advantage.
• Data-driven companies are more customer focused and enjoy a
deeper insight into the customer and their journey.
• Cost-effective – it can be costly to store large volumes of data,
especially if you only use it for compliance purposes.
• Detect new or missed opportunities, helping your company grow and
improve regularly.
• Become more agile and better able to respond to markets.