Wed. Jul 6th, 2022

Introduction: What is the Role of Management Science?

Management science, the application of quantitative approaches to decision making, has been around for centuries. In recent years, methods have been developed which go further than ever before in terms of complexity and detail. This new sophistication has led to several questions being asked – why was this new scientific discipline needed? Why are we taking on complex tasks, which were once performed in a more straightforward way? And where does management science fit within the wider discipline of management studies?
One answer is that management science offers a degree of abstraction from the complexities of the real world. At its simplest, management science offers a degree of predictability – in other words, a means to successfully understand complex behaviour. However, some have suggested that management should be seen not just as an abstract model but one which could influence the way we manage “in the real world.
The original definition of management science was that of Frank Knight in the 1930s, which included no reference to technology or efficiency. Although the original definition may have been obscure and difficult to understand, a number of other definitions have been proposed – most notably that of Roger Fisher and William Ury in their “Getting to Yes”, which has become the standard. This definition was also adopted by the American Management Science Association.

an introduction to management science: quantitative approaches to decision making
an introduction to management science: quantitative approaches to decision making

Management Models and How They are Applied in the Real World

We can see the typical activities of a management firm through the lens of a management model. This is both a useful thing to do, and also highly misleading. We cannot use the models to make accurate predictions about the future, because we do not know enough about the detailed workings of the model. But it is useful because we can use models to show that certain problems are very complicated but potentially solvable, and that this complexity means that a scientific approach is needed. For example, Arthur Andersen have developed a model called Management By Value Chain which helps us to understand the problem of how to do business in a way that will be efficient and productive. The model leads us to a simple conclusion – you can only identify and solve a problem if we know its boundary; had we gone for the solution with insufficient boundary knowledge, we would have ended up wasting time on pointless work.
The fundamental principle behind Management By Value Chain is that business processes should be structured so that the most valuable part is at the start. In other words, management should focus on creating value rather than on the value of what they already have. For example:

an introduction to management science: quantitative approaches to decision making
an introduction to management science: quantitative approaches to decision making

Management Science and Analytical Tools for Decision Making

The aim of management science is to assist in decision making. This makes it a powerful tool for managers, and also explains why it has grown so much in the last few decades. It can be used by firms to make decisions on what strategy they want to take, and how they will implement it. It can also be used to make decisions on what kind of organisation to set up, or to make decisions on the future of a business. The analytical tools are also used in other fields. Although they originated in businesses, they are now being used just as widely in scientific research, governmental departments and organisations such as the United Nations – wherever there is a need to make decisions.
Management science uses the principles of mathematics, along with statistical analysis and forecasting, in order to provide information for decision making. It does this in three ways:
These links have been compiled as a practical introduction to management science, and can be used either by businesses or by students of management science who want an insight into its concepts. Their aim is simply to illustrate the way management science works and how it can help with decision making in a range of business situations. There is no claim that this article is complete or comprehensive. It’s comprehensiveness can be displayed by the number of articles written on each topic.
Management science is used in a wide variety of situations, and sometimes competes with other fields. Some areas where it is often used include:

an introduction to management science: quantitative approaches to decision making
an introduction to management science: quantitative approaches to decision making

Conclusion: The Importance of Quantitative Decisions in Management Science

Science and business both have a strong emphasis on quantifying, mathematics is everywhere and yet many managers like to make decisions without using numbers. Is this really the best way to make decisions? In my view, yes, it is. There are so many factors that can affect a decision that to not use mathematical models to predict future results would be futile. We can’t know enough details about the future to make the predictions, but we don’t need to. We can come up with a model that gives us an efficient way to predict results, and then we can use it. The thing that makes management science so important is that it allows us to take on tasks that would be too difficult for humans. We can create models with as many variables as we like, and test our model by creating a computer simulation that gives us real-world results. It also helps us to make better decisions. When we predict results using mathematical models, the only input we have to worry about is accuracy.

an introduction to management science: quantitative approaches to decision making
an introduction to management science: quantitative approaches to decision making