Beyond Central Tendency: Helping Students Understand the Concept of Variation

Getting business students to fully understand the concept of variation is often a major challenge for instructors of statistics/quantitative methods courses. As a result, it is all too common to see practicing managers placing too much emphasis on measures of central tendency (e.g., the mean and median) and not giving adequate attention to the variation inherent in the situation. Fundamentally, variation equates to the uncertainty associated with a particular decision. Without a full understanding and appreciation of the concept of variation, decision makers are ill-equipped to assess the risk associated with a given decision.