Volume 16, Number 2 Article by Ishwar Murthy June, 2004
Empowering Managers to Think with Spreadsheets :
The past decade has witnessed a proliferation of personal computers in the workplace, accompanied by an equally impressive spread in the use of the electronic spreadsheet. While most managers are comfortable with its basic functions, they remain 'passive' users of the spreadsheet, and its potential to become an integral part of managerial analysis and the strategic decision making process has remained unexplored, avers Ishwar Murthy, Professor of Quantitative Methods and Information Systems at IIMB.
A manager faced with a decision problem either outsources the analysis to a consultant or resorts to the old-fashioned back-of-the-envelope analysis. A strong deterrent for managers to do any form of quantitative analysis themselves is the daunting task of having to grapple with mathematically oriented topics
Ishwar Murthy demonstrates, step by step, how spreadsheet tools such as Data Tables along with Goal Seek and Pivot Tables can help managers deal with the uncertainty in the decision making process and perform what-if analyses, generally considered the domain of the consultant. With the ease and flexibility that is built into the spreadsheet, data can be manipulated, transformed and turned around to provide views from different angles. Graphs of the resulting tables are easily and quickly generated. Through spreadsheets some of the more 'mathematical' models are easily comprehended and applied by the manager.
Business schools, particularly in India, Murthy adds, are partly to blame for the knee-jerk reaction of managers to quantitative models. Topics such as probabilities, regression and linear programming are currently taught in a technique driven manner, with a view towards training students to be functional experts or consultants.This approach must be complemented with some focus on formulating the right decision questions and the skill of abstraction.
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