Research and Analysis for Management MGMT 6272 Fall 2017 Dr. Dennis E. Clayson

The class can be found online at www.business.uni.edu/clayson/MBA

We will learn in this module: What information is Why information is created in certain ways How to evaluate information How to do business research

The second half will be more practical than other classes. The first part of this class will be more philosophical than others. The second half will be more practical than other classes.

A business manager must make decisions

To make good decisions a manager must have: information

To use information to make decisions, a manager must know what information is!

And Used ! To use information to make decisions, a manager must know what information is And how information is created And Used !

Managers typically make four mistakes….

Mistake 1: Not knowing what information is!

Not seeking Information! Mistake 2: Not seeking Information!

Mistake 3: Not knowing what to do with information!

Mistake 4: Not knowing when information is good or bad!

Mistake 1: Not knowing what information is! Many come to believe that: Data is information or Presentation is information Complexity Format Confidence of source

Mistake 1: Not knowing what information is! Mistake 2: Not seeking Information! How does a person become a leader or manager? They probably have a history of correct decision making, or they believe they do.

Bureaucrats are interested in PROCESS Mistake 1: Not knowing what information is! Mistake 2: Not seeking Information! Mistake 3: Not knowing what to do with information! Bureaucrats are interested in PROCESS not in OUTCOMES.

Bureaucrats are interested in PROCESS not in OUTCOMES. It has become almost universal that almost all organizations are being taken over by bureaucrats, and bureaucratical structures. Bureaucrats are interested in PROCESS not in OUTCOMES.

Mistake 1: Not knowing what information is! Mistake 2: Not seeking Information! Mistake 3: Not knowing what to do with information! Mistake 4: Not knowing when information is good or bad!

This is where we will spend most our time! Mistake 3: Not knowing what to do with information! Mistake 4: Not knowing when information is good or bad! This is where we will spend most our time!

Much of the information that is utilized for management decisions comes from numbers….

Much of the information that is utilized for management decisions comes from numbers…. OR is calculated from numbers, OR is explained by numbers….

They are illiterate with numbers. This, however, creates a fundamental problem! Many people are: Inumerate… i.e. They are illiterate with numbers.

Numerical concepts for them are very confusing….

Actual Examples When I asked my undergraduate    Actual Examples When I asked my undergraduate students what the population of the United States is, the answers ranged from 1.5 million to 300 billion. The average was 13.6 billion!

Actual Examples We had to have the garage door repaired. The Sears repairman told us that one of our problems was that we did not have a 'large' enough motor on the opener. I thought for a minute, and said that we had the largest one Sears made at that time, a 1/2 horsepower. He shook his head and said, 'Lady, you need a  1/4 horsepower.' I responded that 1/2 was larger than 1/4. He said, 'NO, it's  not..' Four is larger than two.'         My daughter and I went through the McDonald's take-out window and I gave the clerk a $5 bill. Our total was $4.25, so I also handed her a quarter. She said, 'you gave me too much money.' I said, 'Yes I know, but this way you can just give me a dollar bill back.  She sighed and went  to get the manager, who asked me to repeat my request. I did so, and he handed me back the quarter, and said 'We're sorry but we could not do that kind of thing.' The clerk then proceeded to give me back $1 and 75 cents in change. 

Some Americans were very impressed when the government promised to cut $100 million in spending from $2 trillion in spending.

Because $100 is larger than $2. Why? Because $100 is larger than $2.

Innumeracy Test 1. A person produces about a liter of urine/day (0.04 cubic feet), how big a cube (dimensions) would contain all the urine produced in the U.S. in one day?

Innumeracy Test 1. A person produces about a liter of urine/day (0.04 cubic feet), how big a cube would contain all the urine produced in Hong Kong in one day? 2. How tall is the Sears Tower (Chicago) in feet?

Innumeracy Test The answer: Approximately 0.000000012 MPH 1. A person produces about a liter of urine/day (0.04 cubic feet), how big a cube would contain all the urine produced in Hong Kong in one day? 2. How tall is the Sears Tower (Chicago) in feet? 3. How fast does hair grow in MPH? The answer: Approximately 0.000000012 MPH

Innumeracy Test 1. A person produces about a liter of urine/day (0.04 cubic feet), how big a cube would contain all the urine produced in Hong Kong in one day? 2. How tall is the Sears Tower (Chicago) in feet? 3. How fast does hair grow in MPH? 4. Last year (2016) the federal government spent $3.54 trillion. There are 324 million Americans. If there was no deficit and every person had to pay the same amount of federal tax, what would be the tax per person?

Innumeracy Test 1. A person produces about a liter of urine/day (0.04 cubic feet), how big a cube would contain all the urine produced in Hong Kong in one day? 2. How tall is the Sears Tower (Chicago) in feet? 3. How fast does hair grow in MPH? 4. The American federal debt is now $20.1 trillion. a) If everyone in the US that had an income of a million had to pay 100% of their entire income to the government, how many millionaires would it take to pay off the debt?

Innumeracy Test 1. A person produces about a liter of urine/day (0.04 cubic feet), how big a cube would contain all the urine produced in Hong Kong in one day? 2. How tall is the Sears Tower (Chicago) in feet? 3. How fast does hair grow in MPH? 4. The American federal debt is now $20.1 trillion. a) If everyone in the US that had an income of a million had to pay 100% of their entire income to the government, how many millionaires would it take to pay off the debt? 5. An increase of dopamine will decrease the tremors of Parkinson disease. True or False; an decrease of dopamine will cause Parkinson?

Even worse, they are not quite sure what to do with numbers when they get them……

Introduction What is knowing?

What are we doing when we are knowing?

Phrenology: A science? based on the shape of your head.

What is color?

no exception KNOW about the Everything we outside world comes from our own brains. It is very important to remember that there is no exception to this!

Everything we KNOW has to come from a perception formed by our own mind.

Illusions https://en.wikipedia.org/wiki/Optical_illusion http://www.moillusions.com/spinning-girl-illusion-explanation https://en.wikipedia.org/wiki/Optical_illusion

So… can we trust our senses?

Logic Galileo Galilei 1564 -1642

Evidence Galileo Galilei 1564 -1642

“Our inquires should be directed not to what others have thought, Descartes wrote: “Our inquires should be directed not to what others have thought, not to what we ourselves conjecture, but to what we can clearly and perspicuously behold and with certainty deduce; for knowledge is not won in any other way.” Rene Descartes (1596 – 1650)

and rule of the true is to have made it.” Vico states: “The criterion and rule of the true is to have made it.” The principle states that truth is verified through creation or invention and not through observation. Giambattista Vico (1668 – 1744)

Knowledge creates knowledge because proper knowing creates more knowing!

What is this?

But there are no volcanoes or lava flows in the Olympic Mountains!

Logic and Research

Logic and Research are related Opinion = Belief or Guess

Logic and Research are related Opinion = Belief or Guess Hypothesis = Opinion that can be tested

Hypo = Under Thesis = Idea or thought Hypothesis = Underlying idea

Logic and Research are related Opinion = Belief or Guess Hypothesis = Opinion that can be tested Statistic = Method of calculating probability

Logic and Research are related Opinion = Belief or Guess Hypothesis = Opinion that can be tested Statistic = A characteristic of a sample

A statistic is a characteristic of a group. It tells you nothing about an individual except for a probability.

This is a VERY important concept and one that many people get wrong! A statistic is a characteristic of a group. It tells you nothing about an individual except for a probability.

Men are taller than women… This is statistically true….

Asian Americans have an average IQ higher than African Americans In the U.S. Asian Americans have an average IQ higher than African Americans

What does this tell you about Thomas Sowell?

What do statistics tell us about this person? What information do we have?

She is 40 years old. She has a MD degree. She works in Vancouver. Can you now make a better guess about her income and position?

She is 40 years old. She has a MD degree. She works in Vancouver. Can you make a good guess about whether she is married?

Statistic: Education majors have the lowest standardized scores (ACT, Iowa Basic, etc.) of any majors on campus.

Statistic: Education majors have the lowest standardized scores (ACT, Iowa Basic, etc.) of any majors on campus. An education major says, “That can’t be true. Both my friend and I had the highest ACT scores in my high school and we are both education majors. I am highly offended by your slur.”

Statistic: Education majors have the lowest standardized scores (ACT, Iowa Basic, etc.) of any majors on campus. An education major says, “That can’t be true. Both my friend and I had the highest ACT scores in my high school and we are both education majors. I am highly offended by your slur.” What is wrong with this logic?

Logic and Research are related Opinion = Belief or Guess Hypothesis = Opinion that an be tested Statistic = A characteristic of a sample Research findings = Results of controlled research procedures

Research findings do not mean that something Be careful here….. Research findings do not mean that something is true! They simply increase the probability….

Facts and Reality

Logic and statistics are sometimes difficult in the real world….

Take the NBA as an example!

The ratio of Afro-American to Euro-Americans in the NBA is about 4:1

The ratio of Afro-Americans to Euro-Americans in the USA is about 1:6

Why? The probability of an Afro-American child becomes a NBA player is 24 times larger than an Euro-American child…. Why?

Reality can be very hard and messy…. Theory is fun… Reality can be very hard and messy….

When to Start Collecting? Social Security When to Start Collecting?

How much you collect in SS in a month depends on when you start to collect your funds.

What decision will you make?? At 66, you will get about $2,200/month… At 70, you will get about $3,000/month… But you would have to give up $2,200/month for 4 years, or $105,600…. After 70, it would take 132 months (11 years) to make up the difference … So, if you thought you would die before you are 81… take the money now…. What decision will you make??

What decision will you make?? What information do you want At 66, you will get about $2,200/month… At 70, you will get about $3,000/month… What decision will you make?? What information do you want before you make this decision?

How long do people actually live? But………. How long do people actually live? http://www.ssa.gov/OACT/STATS/table4c6.html

http://www. huffingtonpost http://www.huffingtonpost.com/2014/08/31/america-unemployment-map_n_5744656.html

Global Warming

Co2 Temp Sun Spot Number

1,122 Record Cold Temps in the U.S. in one week July in the USA ends on a frigid note as record cold outpaces warmth nearly 10 to 1 71% Of The US Below Normal Temperature in 2013 Headlines: 2016 Was the Hottest Year Ever. It's the Third Year in a Row of Record-High Heat Time Former Obama Official Mocks “Hottest year on Record” Temps within Margin of Error http://www.climatedepot.com/

The Australian Bureau of Meteorology has been caught red-handed manipulating temperature data to show "global warming" where none actually exists. Source: Breitbart Date: Aug. 15, 2014 Writer: James Delingpole British writer and Oxford grad Libertarian Conservative

http://www.climatedepot.com/