Question

Qualitative factors are non-financial in nature but are important for management to consider when making decisions. Reflecting on a company for which you have worked (or are otherwise familiar), describe three qualitative factors that would be important for management decision-making. Then, assess each of them in order of importance. Given your assessment, justify a situation where the qualitative factors would outweigh the quantitative results. Be specific. As portfolio activities are to be self-reflective, please make sure to connect the portfolio assignment to: Your personal experiences. Reflect on how this assignment topic is applicable to and will benefit you. Course readings and any external readings. Discussion forum posts or other course objectives.

Answer 1

Qualitative factors are those that can not be measured in numerical terms. They are the opposite of quantitative factors. However, they can significantly affect the decision making process.

The first qualitative factor is the impact on employees. Business will need to consider the impact of its decision on the motivational level of the workers. For example, if the business is planning to switch from labor intensive operations to capital intensive then this will have a negative impact on the motivational level of the workforce as workers will be made redundant.

The second qualitative factor is the impact on community. For example if the business wants to open a factory that is close to residential area then it will have to take into account the impact of this on community. There will be an increase in pollution level and an increase in traffic congestion. This will turn the community against the business and in future the community will not give the business the permission to expand further.

The third qualitative factor is the brand image and reputation of the business. For example business might encounter a situation where it can use child labor to save cost. However the impact of this on the brand image of the business will be adverse. When customers will get to knows they will boycott the goods of the business and this will generate a lot of negative publicity.

In certain situation qualitative factors outweigh the quantitative results. For example, business has the opportunity to locate in an area where it can easily deplete natural resources, exploit labor and damage environment. Quantitative factors may support this as this will result in huge cost saving and significant increase in profit. However, qualitative factors don\'t support as this will tarnish the brand image of the business. Customers will lose trust in the business and in future this business will not be able to attract good quality candidates as well. Hence the qualitative factors outweigh the quantitative results and business should not go for this opportunity.