We will be solving practical challenges through MBA concepts. No theory only applications !
What is the thresh-hold on your hiring spree ?
Q: As a manager, have you asked yourself- what is the ‘good’ number of members in my team ?
A: Micro-economics answers this question through marginal utility curve. Don’t get hassled if you haven't ever studied Micro-Economics. Have a look at the graph below:
In economics, the law of diminishing marginal utility states that the marginal utility of a good or service declines as its available supply increases. Similarly, if you keep on hiring (input), the overall output of goods/services will increase until a point. Post that, the utility will start stagnating and infact might decrease. The primary reason is that too many people will eventually create chaos among themselves, making teams and organisations ineffective.
This might sound intuitive ! Well yes, MBA is common sense but it helps to put a foundational reasoning behind the intuition. So are you expanding your venture ? Are on a hiring spree ? Be mindful before you later lay-off and reduce your credibility in the market.
2. How to define sample in a survey ?
Q: So your manager asked you to conduct a sample survey to get consumer insights or assess market situation ?
A: Statistics beautifully answers this question. First and foremost, lets put down typical pitfalls in sample selection
Collecting data only from volunteers (voluntary response sample) — e.g. online reviews (yelp.com, maps.google.com, tripadvisor.com)Picking easily available respondents (convenience sample) — e.g. choosing to survey in In-Orbit mallA high rate of non-response (more than 70%) — e.g. CEO / CIO surveys on some industry trends
Now let’s put down the correct way of doing it. While taking a simple random sample (SRS), you need to make sure of below 2 golden pointers:
Unbiased: Each unit has equal chance of being chosen in the sample
Independent: Selection of one unit has no influence on selection of other units
Again, very simple and intuitive. But many managers miss out on the fundamentals to get quick results only to realize later that the actions based on previous survey results are not increasing sales. We can extend the topic further to Central Limit Theorem but that might get very technical. CLT comes extremely handy to quickly compute population parameters like mean etc. For those who are interested in this segment, can refer to it here.
This brings to The End of Lesson 1.
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