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Presentation 5B1. Statistical Thinking for Effective Management

J A John (New Zealand)
D G Johnson (UK)


Presentation Abstract

This paper discusses the issues involved in designing and presenting an effective course in statistics for managers and business students. Most managers do not instinctively think statistically, partly because they do not have an affinity with the language of mathematics, but mainly because they are not convinced that statistical thinking adds any value to management and decision-making. Traditional business statistics books and courses tend to reinforce this view by concentrating on mathematical detail and computation, and largely fail to address the key issue of why a manager or business student should have any need to understand such a difficult and technical subject. Without the ability to think statistically, and to understand and interpret data, managers have to resort to gut reactions, which are invariably misguided and unreliable. Many students find economic, accounting and financial concepts equally difficult to understand, but there is no question in their minds that these are necessary skills for effective management. Teachers of statistics must first convince their students that statistics is equally valuable. One way of achieving this is to use a problem centred approach based on meaningful situations, rather than the obviously contrived and unrealistic examples that are common in most business statistics books. It is also necessary to involve students thoroughly in the learning process, with significant time devoted to discussing statistical ideas and concepts and teasing out the key issues. A course in statistical thinking must involve significant interaction both between student and teacher and also, more importantly, between the students themselves. Students should also be encouraged to discover for themselves the meaning, importance and relevance of statistical concepts. In addition to interaction and discovery, many concepts can be made much more relevant by engaging students in carefully designed exercises and activities that illustrate fundamental ideas.


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