Corporate Influences - Evidence-based versus subjective decision making - 3.4.1

Evidence-based (scientific-based) decision making - where a business makes strategic decisions after analysing and evaluating relevant evidence. Businesses will make full use of quantitative sales forecasting, decision trees, investment appraisals and other methods that help quantify any decision being made.

Subjective decision making - is less structured and more about the experience and intuition of the business's owners and managers. Decisions from this perspective may require a more entrepreneurial, risk-taking managerial approach.

Subjective	Evidence-Based
Based on intuition, hunch, gut feeling and experience	Based on evidence and data
Quicker decisions can be made	Outcomes can be simulated or tested in advance
May be necessary in a fast moving environment or to avoid missing opportunities	Decisions are objective
Dominant leaders may push decisions forward, leading to a democratic environment	Only reduces risk, will not eliminate it
Hard to justify this type of decision making for business decisions that involve high risk	Time-consuming and costly; no guarantee of the right decision