Evidence-based Versus Subjective Decision Making

Evidence based (Scientific):

A systematic and rational approach to researching and analysing all the available information before a conclusion is reached.

1. Setting / identifying objectives.

2. Gathering information and ideas.

3. Analysing information and ideas.

4. Making a decision.

5. Implementing the decision.

6. Monitoring and evaluation.  

Scientific decision-making involves the use of:

Data mining and big data to source relevant data to inform decisions

Pizza Hut using 'big data'. Click on the picture:

Quite a few of the models you explore as a business student can be linked to scientific decision-making (although they also involve some qualitative judgement), including:

• Decision trees
• Investment appraisal
• Sales forecasting
• Critical path / Network analysis 

Subjective decision making (Hunch?):

Personal opinions of the key decision maker strongly influence the course of action chosen.

May be appropriate if there is a lack of data to analyse.

Some businesses may be dominated by a powerful and persuasive leader.

In some industries this might be a normal way of making decisions eg fashion.

There may be times when quick decisions have to be made.

Kodak did not enter the digital camera market. Was this a subjective decision?

Nice link to this topic here.