It's Not All About the Numbers

Modern executives make business decisions based primarily on quantitative methods, with less emphasis on other factors, however, the situation in the world economy can teach us that the numbers are not everything.

Tuesday, February 7, 2012

Since the 1950’s, the use of quantitative methods has been widespread in business schools, becoming absolute in business practice, Guillermo Edelberg writes in an opinion piece in ElFinanciero.cr.com.

The author quotes R. Martin, dean of the Rotman School of Management at the University of Toronto who says, "We are governed by approaches such as 'show me the numbers' or ' whatever can not be measured does not matter'. which has not taken us very far. Economists are consistently wrong. None of the leading macroeconomists of organizations dedicated to forecasting expected that by mid-2008 the economy would grow much less let alone that it would explode. Meanwhile, CEOs are still making mistakes while offering up quarterly guides based on their sophisticated financial planning and they are still punished, not for poor performance but for not predicting outcomes several months in advance. "

"So what can be expected in the near future? Perhaps a better balance between quantitative and qualitative analysis in decision-making. As one scholar put it: 'not everything that matters can be measured and not everything that can be measured matters'," said Edelberg.



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