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.

Answer 1

Explanation:

Three qualitative factors important for management decision-making include:

• customer satisfaction
• new technology
• current legal issues

Assuming these qualitative factors are faced by a soft drink manufacturing company, in terms of their order of importance,

Current legal issues need to be addressed first by management when making decisions in other to avoid having a bad reputation among potential investors.

Next, their customer satisfaction for their product; the soft drink, if left unchecked can result in reduced demand in the future; which management needs to consider when making decisions.

And finally, if there's any introduction of new technology into the industry then management would need to determine its effect on company profit.

For example, In a situation where this company is experiencing an increase in assets which is a quantitative factor while having a decline in customer satisfaction for their products. In the long term, the benefits of having increased customer satisfaction would become evident when demand and profit declines.