Statistics in Business to What

Statistics in Business

To What Extent Does Statistics Influence Organizational Decisions?

From the book Basic Statistics: Tales of Distributions (Spatz, 2008) the applicability of statistics to organizational decisions can be seen throughout marketing, sales, product management, product quality and services. In short, every aspect of a company's value chain is influenced and made more accurate through the use of statistics. As the book illustrates through its use of descriptive and predictive statistics (Spatz, 2008) the ability to measure processes to a given level of statistical significance can also be achieved. The intent of this paper is to discuss how statistics can be used in the context of Total Quality Management (TQM).

Statistics in Quality Control and Management

For any company their reputation for quality is inextricably linked to their brand reputation and future sales (Su, Li, Song, Chen, 2008). Quality then has become as much of an indicator of a company's identity as their branding, messaging, or product experiences delivered.

As a result of the level of product quality being integral to how a company is perceived, statistical process control techniques including Six Sigma, t-square analyses of statistical significance and advanced analysis using factor and discriminant analysis are all used for providing greater insight into product quality (Bergquist, Albing, 2006). Often statistical process control is used as part of the Six Sigma initiatives and programs to define upper and lower limits of product quality, including bands of product and process performance over time, which gives quality engineers feedback on if their goals are being achieved or not (Elshennawy, 2004). Statistics are also used as a critical part of the product audit process, where manufacturing processes are evaluated for their level of consistency of performance and managed to minimize the level of variability. Managing to a significant reduction in variably is a key aspect of Six Sigma, which explains why statistics are used extensively throughout the quality management strategies of services companies and manufacturers alike (Bergquist, Albing, 2006).