Scientific thinking/management is based on data

Scientific thinking/management refers to decision making and problem solving based on gathering the necessary information and data, and then analysing this, in order to make well-informed choices. It is based on managers being objective, rational, and logical rather than being instinctive or subjective.

Topics in the Business Management course that support scientific thinking/management include:

The scientific decision-making process involves numerous steps:

• Where are we now? - Identifying the issue (or opportunity) or problem, i.e., determining where the organization currently is.

• Where do we want to be? - Deciding what is important for the organization in relations to its business objectives and mission or vision, i.e., determining where the business wants to be.

• How do we get there? - Using available data and information to compare alternative options in order to choose and implement a plan of action to achieve these goals, i.e., determining how the business will get to where it wants to be.

Unlike intuitive decision making, scientific decision making is based on available qualitative data and quantitative information. Whilst this approach takes more time and can be more costly, it can help to minimize the risks of decision making and problem solving, especially if major strategic decision need to be made. For example, a diversification growth strategy is highly unlikely to rely on intuition (such as gut feelings and emotions). Instead, managers will need to use a range of primary and secondary sources of data and information in order to make an objective and well-informed decision.

Data and information to support scientific decision-making can be gathered from numerous sources. These include primary market research methods such as interviews, surveys, observations, and focus groups. Secondary market research methods can also be used, such as company financial reports, market analyses, and government sources. Internet and mobile technologies have made it easier and cheaper for businesses to collect, collate, and analyse data to support scientific thinking/management.

Aspects of the Business Management Toolkit (BMT) that can help with scientific thinking/management include:

However, it is important to remember that scientific decision-making is not flawless and that past empirical evidence might be unreliable or unrepresentative of current situations. In addition, the cost and time required can also be prohibitive for smaller businesses, such as sole traders and new start-ups. As attributed to Albert Einstein (1879 - 1955), "not everything that can be counted counts, and not everything that counts can be counted."

Daniel Kahneman, author of Thinking Fast, Thinking Slow (2011), stated that intuition is "thinking that you know without knowing why you do.”, i.e., it is based on a hunch. Intuitive thinking/management refers to decision making and problem solving that are based on instinct and experiences, rather than scientific methods such as logic, empirical evidence, and data. It is based on people's knowledge, insights, gut feelings, instinct, an inner voice, or faith. Quite often, managers use intuitive decision making when tackling ethical dilemmas, for example. An everyday example is using intuition when playing chess at a competitive level.

Intuitive thinking is far more than just using common sense to make decisions (common sense is not always common!) It involves additional sensory perceptions and emotions to make more informed choices. After all, not all decisions require scientific knowledge or logical deductions, especially when a quick decision needs to be made. In fact, decisions are often based on subjective judgements so rational reasoning becomes difficult to apply (see ATL Activity 1 below). In addition, intuitive thinking/management is suitable when reliable facts and data are not readily available, such as during an emergency or crisis situation.

However, intuition and wisdom are not the same as truth. Irrespective of the level of experience of the decision maker, relying only on intuitive thinking has its limitations. This could lead to mistakes, especially when data and information are available to support fact-based decisions.

In reality, entrepreneur and managers are likely to rely on both scientific and intuitive thinking/management to make important decisions. Context is important when discussing the relative merits of scientific and intuitive thinking/management. For example, in the medical and healthcare industry, managers and healthcare professionals will rely on both scientific and intuitive methods in order to make the best decisions to safeguard their patients.

• Intuitive thinking/management refers to decision making and problem solving that are based on instinct and experience, rather than scientific methods such as logic, empirical evidence, and data.

• Scientific thinking/management refers to decision making and problem solving based on gathering the necessary information and data to make well-informed choices.