Active learning ideas
Decision making is at the heart of business management. This topic contrasts scientific decision making, using data, models, and systematic processes, with intuitive decision making based on experience and 'gut feeling'. Students learn to construct and interpret decision trees, calculating expected values and net gains to determine the most financially viable path.
Activity 01
Groups are given a scenario (e.g., launching a new product vs. expanding an existing one). They must research potential costs and probabilities to build a physical decision tree on the classroom wall, calculating the expected value for each branch.
What is scientific decision making?
Activity 02
Present a case study where the data suggests one path, but a successful entrepreneur chose another. Students individually decide which approach they would take, then pair up to discuss the risks of ignoring data versus the value of experience.
How do decision trees help managers?
Activity 03
Use dice or cards to represent the probabilities in a decision tree. Students 'play' through their decision trees to see if the 'expected value' actually matches the outcome, helping them understand the difference between theoretical and actual results.
What role does intuition play in business choices?
A few notes on teaching this unit
Watch Out for These Misconceptions
The 'Expected Value' is the amount of profit the business will definitely make.
Expected value is a weighted average of all possible outcomes; it's a tool for comparison, not a guaranteed figure. Peer-led 'What If' scenarios help students see how a single bad outcome can still happen even if the expected value is high.
Scientific decision making is always better than intuition.
Data can be outdated or biased, and in fast-moving markets, intuition can be faster and more flexible. A debate on 'The Limits of Big Data' helps students appreciate that a balance of both is often the most effective approach.
Methods used in this brief
Management and Leadership Styles
Differentiate between management and leadership whilst exploring various leadership styles. Students will debate the effectiveness of autocratic versus laissez-faire approaches in different business contexts.
8 methodologies
Stakeholder Management
Identify key internal and external stakeholders and understand their varying objectives. Students will analyse how businesses manage conflicting stakeholder interests to maintain positive relationships.
8 methodologies