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Why a Manager Needs To Know Statistics2

The document emphasizes the importance of statistics in modern business management for informed decision-making amidst uncertainty. It outlines various types of variables, including independent, dependent, intervening, moderator, control, and extraneous variables, along with types of data such as categorical, nominal, ordinal, discrete, and continuous data. Understanding these concepts enables managers to apply scientific methods effectively in their forecasting, planning, and organizational activities.

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12 views3 pages

Why a Manager Needs To Know Statistics2

The document emphasizes the importance of statistics in modern business management for informed decision-making amidst uncertainty. It outlines various types of variables, including independent, dependent, intervening, moderator, control, and extraneous variables, along with types of data such as categorical, nominal, ordinal, discrete, and continuous data. Understanding these concepts enables managers to apply scientific methods effectively in their forecasting, planning, and organizational activities.

Uploaded by

kzohaib273
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Why a Manager Needs To Know Statistics

Modern business management is more a Science than an Art. Ever increasing global
competition mandates business managers to address uncertainty by using scientific methods and
be Objective decision makers. Forecasting, planning, organizing and decision making; some of
the key activities of a manager intend better future for the business. The only certainty about the
future is its ‘uncertainty’. Even though one cannot eliminate uncertainty, it is possible to measure
uncertainty using Statistics: manager can make informed decisions by using Statistical methods
and Statistical thinking. This calls for unraveling the power of Statistics for managers.

Types of Variable
There are six common variable types:
• INDEPENDENT VARIABLES.
The values that can be changed or controlled in a given
model or equation. They provide the "input" which is modified by the model to change the
"output."

• DEPENDENT VARIABLES.
The values that result from the independent variables

Examples of INDEPENDENT & DEPENDENT Variable:


i. In a study to determine whether how long a student sleeps affects test scores the
independent variable is the length of time spent sleeping while the dependent variable
is the test score.
ii. You want to compare brands of paper towels, to see which holds the most liquid. The
independent variable in your experiment would be the brand of paper towel. The
dependent variable would be the amount of liquid absorbed by the paper towel.
iii. If you want to know whether caffeine affects your appetite, the presence/absence of a
given amount of caffeine would be the independent variable. How hungry you are would
be the dependent variable.
iv. In an experiment to determine how far people can see into the infrared part of the
spectrum, the wavelength of light is the independent variable and whether the light is
observed (the response) is the dependent variable.

• INTERVENING VARIABLES.
An intervening variable is a hypothetical variable used to explain
causal links between other variables.
• MODERATOR VARIABLES.

A moderating variable, changes the strength or direction of an effect between two variables x
and y. In other words, it affects the relationship between the independent variable and
a dependent variable.

For example, suppose buying pizza for a work party leads to positive morale and to the work
being done in half the time.

• Pizza is the independent variable,


• Work speed is the dependent variable,
• The moderator, the middle man without which there would be no connection

• CONTROL VARIABLES.
An experiment has several types of variables, including a control variable (sometimes called a
controlled variable). Variables are just values that can change; a good experiment only has two
changing variables: the independent variable and dependent variable.

• EXTRANEOUS VARIABLES.
Extraneous variables are any variables that you are not intentionally studying in your experiment
or test.

Types of Data:
CATEGORICAL DATA:

Categorical data represents characteristics. Therefore it can represent things like a person’s
gender, language etc.

Nominal Data:

Nominal values represent discrete units and are used to label variables, that have no quantitative
value. Just think of them as labels. Note that nominal data that has no order. Therefore if you
would change the order of its values, the meaning would not change.

Ordinal Data:

Ordinal values represent discrete and ordered units. It is therefore nearly the same as nominal
data, except that it’s ordering matters.
Discrete Data:

We speak of discrete data if its values are distinct and separate. In other words: We speak of
discrete data if the data can only take on certain values. This type of data can’t be measured but
it can be counted.

Continuous Data:

Continuous Data represents measurements and therefore their values can’t be counted but they
can be measured.

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