Intuition comes as an outcome of, very often, experience. When those experiences (pieces of unrelated decisions) accumulate in your mind (not in the brain) it analyzes solutions for problems that you come across. When you are short of needed information to make a decision, intuition gives a decision different from a statistical analysis. Neither analysis is complete since statistics are also based on some assumptions.

If your mind can generate secondary information, deduced from primary information, institution will make more accurate decisions than statistical analysis. Most stat packages do not possess that ability of mind to deduce information.

An efficient leader makes his/her decision depending on facts, which resulted from statistical analysis.

Assuming that business decision has to be taken with sparse information (which is often the case), and assuming you are an expert in your area (see Outliers by Malcom Gladwell), you should generally follow your intuition. While statistical analysis is a powerfull methodology, it can only beat your intuition if you have access to a representative data sample, and if you are able to avoid bias, which is rarely the case. with a high degree of uncertainty, my guess is therefore that statistical analysis will most often give you some directions at best, but that nothing will replace expertise and ability to handle huge amount of complex data built from experience (yours and others).

Just like in any research, mixed methods is the best. If you have data, you need to use it. But if your gut says something else, try to reconcile the data with your gut. Perhaps the data is not capturing something (i,e. social or psychological factors). This is especially true in something like market research or strategic planning. On the other hand, a decision without any data may mean you aren't ready to make the decision. I think the answer is somewhere in between.

Whenever management types enter negotiations for biotech/pharma partnerships. They typically have the data to support any comments they make, but ultimately negotiations are not based on the numbers but on other "intangibles."

Numbers will be used to tell a brilliant story or play a convincing role, but business has to do a lot with relationships and legalese.

But the real question is, what type of statistical analysis are you talking about? [market forecasting?] How confident are you that the data source is accurate? How convincing is the data? (to you? to others?)

Thank you very much for the answer and the refferences you recommended. I will analyze the books you listed.

I absolutely concur with those who say that it depends on the experience of the manager, the specific situation - or both. Like Virginia, I am a mixed-methodist by nature; however, I do tend to depend more on quantitative data when it comes to business decisions. I prefer to use intuition in personal matters, and data in business matters :)

Dear Ruth,

Thanks for understanding my reply from a different point of view. Otherwise you will not disclose your religion. Institution, is outcome of accumulated essences of past experience (Perhaps past lives, if you believe in rebirth). This also has been a life saving devise (some people hare reported that they escape from fatal accidents due to decisions taken on intuition). According to our belief, it is a third sense we developed over past generations.

Business decisions, however, are not life threatnening, and could be reverse with or without your efforts (e.g., market conditions). What ever decisions you taken on statistical evidence, you cannot exactly make a judgment on factors beyond market's control.

I agree with Shafig. When business decisions are taken, both intuition and results of statistical analysis are important.