BUS5PB Principles of Business Analytics

Apply knowledge and skills acquired in this subject, Principles of Business Analytics, to explore the role of analytics and data-driven decisions in advancing/supporting/guiding human cognition in decision-making

 

Consider the role of analytics in business scenarios from topics 1-4, function of self-style analytics solutions from initial tutorials, purpose of descriptive, inferential techniques and probability theory in formulating decisions (topics 5-7) and also expectations of performance management from topics.

According to Croskerry (2013), the cognitive function of the brain plays an important part in all the decision making process of an individual. It is common for an individual to face different scenarios where decision making process based on the different type of choices that are available needs to be made with the help of better cognitive skills. There are many pre-existing theories that helps to understand the cognitive function of brain that are involved in major decision making process of everyday life. Vlaev et al. (2011) have highlighted about the value based theory which is regarded as one of the main important model that is used to understand the cognitive decision making skills of the brain.

According to this particular theory it is assume that the brain adds value to all types of options that are available to an individual in a particular scenario and the brain chooses the best option by calculating upon the best value. Hence, the ultimate value and consequence of each choice is an important part of decision making process according to this theory.  there are real numbers there are represented with the help of this theory and the brain uses this feedback in order to make effective decision making by evaluating the highest value of each choice that is available in a particular scenario. Subconscious decision making skill plays an important part in the value based theory.

On the other hand, there is also comparison based decision making that helps the brain to compare and compute the values of each decision and its consequence. This model is mainly based on the context of individual mode of decision making skill. The cognitive function of the brain uses all possible options in order to compare the benefit and disadvantages of every decision that are taken. This theory can also directly contradicts the elements of value based theory by predicting that the values of the individual decision making is not an important part that helps to identify the consequence. Moreover it is also not possible for the brain to calculate and evaluate the value of each decision without using any proper rational and also providing the perfect reason.

It has been a matter of dispute among psychologist to understand the importance of both value based and comparison based theory according to each individual situation. The value based theory is believed to be more classical version of expected utility theory which believes that each expected result of every decision making skills is based on individual value and also the final consequence. However Varma (2015), argued that it may be challenging situation for every individual in order to decide upon the value and consequence of every decision from the very initial stage and hence this theory cannot be applied in every situations. It is also important to highlight about the fact in this context that there are various environmental and external factors that affect the decision making skills of an individual and also provide the values of each decision that are made by individual depending upon a particular situation. The value based theory can also help the individual to understand the impact on the change on every decision making skill depending upon the environmental changes.

There is also the cumulative prospect theory that decides upon the stability of every decision making process based on their values. It is also important note that it is not possible to escape the consequence of every scenario that is present in the reality and the decision making skill of the individual can highly affect the lifestyle and choices depending upon individual rank in the society.

The inequity aversion model suggested by Fehr and Schmidt is also regarded as an important part in the decision making process of the brain. The ranking system is also regarded as the inevitable consequence that is caused due to the value based opinion. With the help of the decision making skills, every individual can deal with the overall consequence of the neuroscientific data that is available in each of the cases. The psychologists have also argued upon the fact that it is highly challenging for the brain to compare the values of individual decisions based on the scale ranking system. Moreover, in challenging situation of everyday life the decisions that are made by subconscious part of the brain, it may not be possible to predict and calculate the exact value and consequence of each decision making process.

There is also the Bayesian inference model, which suggest that in spite of the fact that it is possible for the brain to predict the exact value and consequence of every decision it may not be possible to have accurate decision making capability due to the fact that there are many prevalence of noise and inherent uncertainty that can effective decision making skills. Nevertheless the prevalence of the noise and other uncertainty is regarded as one of the major impact of all type of comparative decision making skills that is a part of individual decisions depending upon every situation (Zadeh et al. 2014).

On the other hand the class three of decision theory is totally based on the concept of comparison between the consequences of his decisions that is done without adding any extra elemental value of computation. The psychologists however believe that this class of theories completely eliminate all possibility of ranking and value based decision making that is present within the cognitive area of the brain. This theory also has lost focus in the scenario that is caused due to lack of stable value based Association and also on the choice of equity balance that is an inevitable consequence of cognitive decision making skills of the brain. All the important theories and decision making skills of the brain depends upon individual situation of everyday life and also capability of every individual and their ability to react.

According to Axelrod (2015), the different theories of decision making skills plays an important part in the principles of business analytics. In a business organisation every decision making skills of an individual decides upon the success and also the professional skills that are possessed by an individual. Without properly evaluating the consequence of every decision taken at corporate level it is never possible to have effective management system. Based on the different theories that include the value theories and comparison based theories it is important for every corporate individuals to decide upon the final consequence and effect of all managerial decisions. The use of descriptive statistical data is an important part of all decision making process that can help an individual in order to deal with every challenging situation of the corporate field.

Corporate decision making however, is also associated with cognitive powers of the brain as well. Alike any kind of decision making, in case of the corporate decision making as well, the bran engages in comparison based decision making coupled with value computation. It has to be understood that in case of any corporate professional individual will need to make critical decisions, that has the potential to not only harm his or her own career but also the reputation and financial standing of the business organization. Hence the importance of the critical judgments is paramount and personal indecisiveness and bias can affect the neutrality of the corporate decisions often (Croskerry 2013).

It must not escape notice that the cognitive decision making process in our brains aligns the different options and compares them with one another, and then ranks them based on their value in the comparison. Now this value based ranking depends on the perception of the particular individual, hence can be heavily biased. In order to avoid personal misconceptions and bias affecting the corporate decision making, there are different analytical tools and models that can help the business professional to evaluate the prospect associated with the different options and allow the individual o take the most appropriate decision that will be most profitable to the organization (Axelrod 2015).

    Hence, in the overall concluding note, it can be said that with the help of the decision making skills, it is possible to deal with the every challenge situations of the everyday life and also in the corporate world scenario.

Reference

Vlaev, I., Chater, N., Stewart, N. and Brown, G.D., 2011. Does the brain calculate value?. Trends in cognitive sciences, 15(11), pp.546-554.

Zadeh, L.A., Fu, K.S. and Tanaka, K. eds., 2014. Fuzzy sets and their applications to cognitive and decision processes: Proceedings of the us–japan seminar on fuzzy sets and their applications, held at the university of california, berkeley, california, july 1-4, 1974. Academic press.

Axelrod, R. ed., 2015. Structure of decision: The cognitive maps of political elites. Princeton university press.

Zsambok, C.E. and Klein, G., 2014. Naturalistic decision making. Psychology Press.

Croskerry, P., 2013. From mindless to mindful practice—cognitive bias and clinical decision making. N Engl J Med, 368(26), pp.2445-2448.

Varma, T., 2015. Understanding Decision Making During a Crisis An Axiomatic Model of Cognitive Decision Choices. International Journal of Business Communication, p.2329488415612477.