Determinants of analytics-based managerial decisionmaking

Abstract

This study investigates how managerial decision-making is influenced by Big Data analytics, analysts’ interaction skills and quantitative skills of senior and middle managers. The results of a cross-sectional survey of senior IT managers reveal that Big Data analytics (BDA) creates an incentive for managers to base more of their decisions on analytic insights. However, we also find that interaction skills of analysts and – even more so – managers’ quantitative skills are stronger drivers of analytics-based decision-making. Finally, our analysis reveals that, contrary to mainstream perceptions, managers in smaller organizations are more capable in terms of quantitative skills, and they are significantly more likely to base their decisions on analytics than managers in large organizations. Considering the important role of managers’ quantitative skills in leveraging analytic decision support, our findings suggest that smaller firms may owe some of their analytic advantages to the fact that they have managers who are closer to their analysts – and analytics more generally.