What is managing by the numbers? Explain whether this is beneficial and support your position

What will be an ideal response?

Managing by the numbers is a term used to describe an overreliance on easily quantifiable courses of action that typically are realizable in the short-term (i.e., will produce results that are reflected in quarterly reports). The precision and analytical detachment that come from using the NPV, IRR, or payback method can be deceiving. U.S. business has been accused of managing by the numbers, with a preference for short-term results from low-risk projects. Part of the problem lies with managers who are on the fast track to the top of their organizations. They occupy a rung on the ladder for a short time and then move up, and so they perceive it to be in their career interests to favor investments that give quick results. They establish short paybacks and high hurdle rates. They ignore or forgo long-term benefits from technological advances, innovative product plans, and strategic capacity additions. Over the long run, this narrow vision jeopardizes the firm's competitive advantage—and even its survival.

Managing by the numbers has a second cause. Projects with the greatest strategic impact are likely
to be riskier and have qualitative benefits that cannot be easily quantified. The mistake is to ignore these less-quantifiable benefits simply because they cannot be easily reported or justified. Including risks and qualitative factors as part of the analysis is far better than ignoring them.