The different statistical methodologies help to determine what a researcher is attempting to measure. Descriptive statistics is often used to gain demographic information. This further helps the researcher to determine whom the sample is reflective of. For example, a manager may want to gain the customer’s perception of the customer service his associates have been offering. However, in reviewing the descriptive statistics he may find that the results of the study are only reflective of women between the ages of 18-24. Therefore, the results cannot be generalized towards other populations.
Statistical inference places a strong emphasis on the sampling distribution present in the study (Frankfort-Nachmias & Leon-Guerrero, 2010). This method assumes that individuals with certain characteristics will behave in a certain manner. In applying this to management, it could be argued that individuals with higher socio-economic statuses are more likely to shop at certain luxury retailers. Under this assumption, individuals with high socio-economic statuses are less likely to shop at retailers such as Wal-Mart or Target. Although there may be some research validating this, it is unlikely that this is complete true. However, statistical inference relies heavily on generalizations within a certain group.
Predictive statistics is another method that is often used in business. After analyzing data, the researcher makes predictions based on the results. This helps to determine how certain people will behave in the future. For example, a manager may ask customers to complete a short survey about their holiday shopping, including how many times they plan to shop at the store. This helps the manager in forecasting the upcoming holiday season in terms of sales. Although this is a popularized method, there are a few limitations to predictive statistics. The use of predictive statistics may change based on other factors that arrise. For example, a manager finds that most of his customers are planning on spending around $500 on goods at the store during the upcoming holiday season.
However, an economic downturn leaves many of the people that took this survey unemployed. As a result, these individuals are not the financial capacity that would be necessitated in order to spend this much money. This helps to examplify one of the main problems in using predictive statistics.
- Fankfort-Nachamiases C., Leon-Guerrero A. (2010) Social Statistics for a Diverse Society. New Jersey: Prentice Hall.