Quantitative school of administration: what it is, and characteristics

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

One of the most important is the quantitative school of administration. With this article we will be able to better know its origin, what its main characteristics are and what are the advantages it gives us compared to other models.

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What is the quantitative school of management?

Within all business management models, the quantitative school of administration is the one that relies on statistical models and computer simulations as a decision-making method, in such a way that it does so by relying on quantifiable data, seeking greater precision and objectivity. Therefore, it is a model totally based on rational thinking.

The creation of the quantitative school of administration dates back to the middle of the 20th century, in the midst of World War II. In this context, Britain, on the side of the Allies, was studying new ways of establishing strategies based on totally rational reasoning.

. For this purpose they brought together experts from different areas, and that was how what would finally become known as the quantitative school of administration was created.

The model proved so successful that many nations followed suit. And not only that, but after the war ended, this methodology continued to be used, already in another series of contexts far from belligerence, such as the industry itself. Thus, companies sought to rebuild by taking advantage of the advantages that the quantitative school of administration gave them.

How is it possible that a method that was useful for war strategies is also useful for business strategies? Because, although the aims are very different, the fundamentals remain the same: to achieve the best results based on objective data. And is that the key to this model is the quantitative sense, that is, measurable and verifiable, a feature that other methods suffer from.

Characteristics of this management model

Although we have already anticipated some of them, we are now going to see in more detail the main characteristics that make so special to the quantitative administrative school, and that differentiate it from other series of approaches methodological.

1. Rational thinking

As we have seen, the key that defines the quantitative administrative school is the constant use of rational thought. All problems must be analyzed from an objective point of view, which allows all variables to be quantified in a measurable and analyzable way. In addition, following this dynamic, we can compare some situations with others and assess 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 ​​discipline that is used for the approach at all times. In this way we can obtain different views, all of them based on statistical data, to be able to make a decision with the maximum information and also the most reliable.

3. Prediction

Both in the business field and in many others, there is a huge number of variables that we must always take into account when looking for the best strategy that allows us to achieve our objectives. The quantitative school of administration has the advantage of providing us with a prediction in the form of the probability of appearance of each of these variables, which is vitally important to have vital statistical information that will help us take one path or another.

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Techniques used

We have seen the general lines that define the quantitative school of administration. Now we are going to know better which are the most frequently used techniques within the framework of this methodology.

1. Econometrics

This tool is based on the use of statistics that gives us the standardization that we seek 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 getting the probabilities of occurrence of each variable that we handle in 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 the cost of carrying out production is taken into account and the cost of waiting until it is done, in order to achieve the most favorable balance point to help us decide the best time to start producing the goods or services that our company offers.

4. Dynamism

Another tool used in the quantitative school of administration is scheduling according to dynamism. It is intended to be used in cases where, having previously established a final objective, it has been altered in any of the stages of production, therefore the dynamic approach is used to update our goal and thus adapt quickly to the new situation.

5. Linear production

Linear programming can also be used for the production system. The goal of this method is make it economically lower costs than the system allows, and thus be more efficient and achieve greater benefits by offering the same product, but produced through fully optimized resources.

6. Games theory

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

Mathematical models

It has become clear that the basis of the quantitative school of administration is its statistical foundations to be able to make rational decisions. We are now going to know some of the mathematical models on which they are based.

1. Operative investigation

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

2. Decision theories

Decision theories are also taken into account, another model that, in this case, draws on different disciplines, such as Psychology, Economics and Administration. In this way, they have different perspectives to support the decision in the most complete way.

3. Electronic data processing

Of course, the quantitative school of management also relies on electronic data processing, or PED. Thanks to this system, huge amounts of data can be processed easily and quickly, and obtain statistical data of great value to establish our objectives and strategies to carry them out.

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 is that all the standardized methodology behind in terms of planning, organizing, directing and controlling each resource of the company, is directly nourished by 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 administration.

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 is that statistics is the basis and the main weapon of this methodologyIt is the model that allows us to carry out all the functions that we have seen and lead to the rationally based decisions that we saw previously.

Conclution

After developing the characteristics, the techniques it uses and the mathematical models on which the quantitative school of administration, we can already establish the global idea of ​​its foundations and objectives. What should be clear is the mathematical, especially statistical, basis that contributes to this model the strength of standardization and quantification with which we can face the issues that affect our company making the optimal decisions to solve them.

Bibliographic references:

• Franklin, S.G., Terry, G.R. (2000). Principles of administration. Continental Editorial Company.
• MacNamara, M., Meyler, M., Arnold, A. (1990). Management education and the challenge of action learning. Higher Education. Springer.
• Racines, J.F. (2005). Bogota National Media Center for Learning.
• 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.