MANAGEMENT SCIENCE

Management science is the application of the scientific method to address problems and decisions that arise in the business community and other organizations, such as government and military institutions. This field of study, which is also commonly known as operations research (OR), operates on the understanding that business managers can make informed decisions only when they have access to scientifically acquired knowledge. To gain such knowledge, practitioners of management science undertake the major steps of scientific inquiry: (1) identify the issue or problem, (2) formulate a hypothesis (theory) about possible solutions to the problem, (3) construct appropriate models to test the hypothesis, (4) collect and analyze the results of the tests, and (5) determine the best way to resolve the issue or address the problem based on the final results.

J. C. Hsiao and David S. Cleaver commented in Management Science that "mathematical models that show interrelationships among decision variables are indispensable to management science. In particular, mathematical models facilitate analysis of the overall structure of the problem and help the decision maker predict the relative effects of alternative courses of action." As computers have grown more sophisticated and powerful, they have been used with increasing frequency by those undertaking such complex analysis. By the 1990s, computers were well established as integral tools in the execution of management science methods.

Proponents of management science note that the practice and implementation of its information-gathering methods are not intended to replace the valuable insights that people can bring to business decisions based on their own personal experiences. As Shiv K. Gupta and John M. Cozzolino wrote in Fundamentals of Operations Research for Management, "the need for insight and intuition will always be present." They point out, however, that a full understanding of all aspects of a business is increasingly difficult to accomplish in a technologically advanced world of diverse industrial enterprises.

Some scholars admit that management science/operations research is often misunderstood. As R. Nichols Hazelwood observed in International Science and Technology: "OR defies easy definition because it is a way of using some of the tools of scientific research to study things that often are not conventionally the province of scientists. As its techniques become accepted they become part of everyone's way of research. Then there is a tendency to dismiss OR as simply plain 'horse sense.' True. But such fancy horses!" Indeed, efforts to use management science to find a quantitative basis for making optimal business decisions has become a fundamental cornerstone of corporate and industrial strategy over the past 50 years.

THE EMERGENCE OF MANAGEMENT
SCIENCE

Modern management science, declared Hsiao and Cleaver, "was born during World War II when the British military management called a group of scientists together to study the strategies and tactics of various military operations. The goal was efficient allocation of scarce resources for the war effort. The name operations research came directly from the context in which it was used and developed: research on (military) operations."

Hsiao and Cleaver noted that the efforts of the British scientific community prompted the United States to initiate similar research activities. Use of the military technology required the knowledge of American scientists. "After many successes during that war," wrote Gupta and Cozzolino, "operations research began to be transplanted to the industrial environment." The post-World War II period was one wherein the private sector of the United States and other nations experienced explosive growth in technology and economic wealth. Armed with capital and scientific advances, corporations expanded the size of their operations. "The new business opportunities set the stage for scientific methods to augment the personal experiences of the business managers," according to Gupta and Cozzolino.

Management science continued to grow during the 1950s and 1960s as business managers discovered that its use could help reduce problems of huge scale to manageable dimensions. Robert Hayes contended in 1969 in the Harvard Business Review that" quantitative analysis is facilitating communication where it never existed before. When a problem has been stated quantitatively, one can often see that it is structurally similar to other problems … And once a common structure has been identified, insights and predictions can be transferred from one situation to another, and the quantitative approach can actually increase communication."

By the 1990s, management science/operations research was well established as a useful tool in all areas of the business community. It was entrenched in government institutions as well, and continues to be used in attacking problems associated with municipal and regional planning, mass transit routes such as highways and airports, and crime prevention and investigation.