Quantitative school of management: what it is, and its characteristics

This is the organizational management model known as the quantitative school of management.

Business management is one of the most current topics we can find, although some of its models come from long ago.

One of the most important is the quantitative school of management. With this article we are going to be able to know better which is its origin, which are its main characteristics and which are the advantages that it contributes to us in front of other models.

What is the quantitative school of management?

Within all the models of business management, the quantitative school of management is the one that is based on statistical models and computational simulations as a method for making decisions.It does so by relying on quantifiable data, seeking greater precision and objectivity. Therefore, it is a model entirely based on rational thinking.

The creation of the quantitative school of management dates back to the middle of the 20th century, in the midst of World War II. In this context, Great Britain, on the side of the Allies, was studying new ways of establishing strategies based on totally rational reasoning.. To this end, experts from different areas were brought together, and what would eventually become known as the quantitative school of management was born.

The model proved so successful that numerous nations followed suit. And not only that, but after the end of the war, this methodology continued to be used in another series of contexts away from belligerence, such as industry itself. Thus, companies sought to rebuild themselves by taking advantage of the benefits that the quantitative school of management gave them.

How is it possible that a method that was useful for war strategies is also useful for business strategies? Because, although the goals are very different, the fundamentals remain the same: to achieve the best results based on objective data. And the fact is that the key to this model is the key to this model is quantitative, i.e., measurable and verifiablea characteristic that other methods lack.

Characteristics of this management model

Although we have already anticipated some of them, we will now look in more detail at the main characteristics that make the quantitative administrative school so special, and which differentiate it from other methodological approaches.

Rational thinking

As we have seen, the key that defines the quantitative administrative school is the constant use of rational thinking. All problems must be analyzed under an objective point of view, which allows to quantify all variables in a measurable and analyzable way.The quantitative school of thought is based on an objective point of view, which allows us to quantify all variables in a measurable and analyzable way. Moreover, following this dynamic, we can compare some situations with others and evaluate the effectiveness of the results in an objective way.

2. Different disciplines

Another of the hallmarks of the quantitative administrative school is the use of very diverse perspectives, depending on the area of the discipline used for the approach at any given time. In this way we can different visions, all of them based on statistical data, in order to be able to make a decision with the maximum and most reliable information. and also the most reliable.

3. Prediction

In business, as in many other areas, there are a huge number of variables that must always be taken into account when looking for the best strategy to achieve our objectives. The quantitative school of management has the advantage of providing us with a prediction in the form of a probability of occurrence of each of these variables, which is of vital importance to achieve our objectives.This is of vital importance in order to have vital statistical information that will help us to take one path or another.

Techniques used

We have seen the general lines that define the quantitative school of management. Now let's get to know better what are the techniques most frequently used within the framework of this methodology.

1. Econometrics

This tool is based on the use of statistics, which gives us the standardization we are looking for to better understand the market in which our organization operates. Thanks to econometrics, predictions can be made based on concrete data that support them.

2. Probability

The probability index is another of the most powerful tools of this school. By obtaining the probabilities of occurrence of each variable we handle in the model, we can decide the strategies to follow with the model.We can decide the strategies to follow with the confidence of having followed an objective reasoning process.

3. Waiting

The waiting queue is a mechanism by which we take into account the cost of carrying out the production and the cost of waiting to carry it out, in order to achieve the most favorable equilibrium point. to achieve the most favorable break-even point that helps us to decide the best moment to start producing the goods or services that our company offers.

4. Dynamism

Another tool used in the quantitative school of management is dynamic scheduling. It is designed to be used in cases where, having previously established a final goal, this goal has been altered at some stage of production, so that dynamic approach is used to update our goal and thus adapt quickly to the new situation. to the new situation.

5. Linear production

Linear programming can also be used for the production system. The objective of this method is to to make it economically the lowest cost that the system allows, and thus to be more efficient and to achieve higher profits by offering the same product, but produced throughand thus be more efficient and achieve higher profits by offering the same product, but produced through fully optimized resources.

6. Game theory

Game theory is the cornerstone of the quantitative school of management. Thanks to it, it is possible to deal with any problem that we find in the organization and face it in a mathematical way and therefore with the highest possible precision, so that the solution chosen will always be given by the results matrix obtained. the chosen solution will always be given by the matrix of results obtained, and we will have a statistical support behind it.and we will have a statistical support behind it.

Mathematical models

It has become clear that the basis of the quantitative school of management is its statistical foundations for making rational decisions. Let us now get to know some of the mathematical models on which they are based.

1. Operations research

The first model we find is operations research, which helps to make decisions under very exhaustive analysis. This model is part of the branch of applied mathematics, and is one of the most popular models used for the search for optimal decisions.. Like the quantitative school of management itself, its birth was also the result of research conducted in the United Kingdom during World War II.

2. Decision theories

Decision theories, another model that, in this case, draws from different disciplines, such as psychology, economics and management, are also taken into account. In this way they have different perspectives to achieve the most complete decision support.

3. Electronic data processing

Of course, the quantitative school of management also relies on electronic data processing, or EDP. Thanks to this system Thanks to this system, enormous amounts of data can be processed quickly and easily, and statistical data can beThis makes it possible to process huge amounts of data quickly and easily, and to obtain valuable statistical data to establish our objectives and strategies for achieving them.

4. Administrative science

As is evident, since it is part of its own nomenclature, administration or administrative science is another of the pillars of this school. And the fact is that all the standardized methodology that is behind in terms of planning, organizing, directing and controlling each resource of the company, is nourished directly from the methodology of this science.. Only in this way can we achieve the optimization and efficiency levels that we seek with the quantitative school of management.

5. Statistical methods

Finally, the statistical mathematical model is essential for the development of the mechanisms of this school, an issue that we have already developed in the different points of this article. And the fact is that statistics is the basis and the main weapon of this methodology.This is the model that allows us to carry out all the functions we have seen and lead to the rationally based decisions we saw earlier.

Conclusion

Having developed the characteristics, the techniques used and the mathematical models on which the quantitative school of management is based, we can now establish the overall idea of its foundations and objectives. What should be clear is the mathematical basis, especially statistical that brings to this model the strength of standardization and quantification with which we will be able to face the issues that affect our company making the optimal decisions to solve them.

Bibliographical references:

• Franklin, S.G., Terry, G.R. (2000). Principles of administration. Compania Editorial Continental.
• MacNamara, M., Meyler, M., Arnold, A. (1990). Management education and the challenge of action learning. Higher Education. Springer.
• Racines, J.F. (2005). Bogotá. Centro nacional de medios para el aprendizaje.
• Rana, M.M., Ali, M.J., Saha, A. (2016). Contemporary Theory of Management: A Comparative Study on Quantitative Approach, System Approach, and Contingency Approach. International Journal of Business and Management Invention.