Portfolio Activity Unit 4

A company’s success depends on how well management analyses relevant information in

order to make sound decisions that can lead to the growth of the company. Management can

use both quantitative and qualitative factors to make those sound decisions. Qualitative

factors are non - financial in nature, that is they cannot be measured, yet they are very

important for management to consider them when making company’s decisions

(Investopedia, n.d.). These qualitative factors are difficult to measure or quantify with hard

data. Even though numerical data is not used to measure them, these factors are influential as

they represent the way the public regard or perceive the business and its operations (Walther

& Skousen, 2009). Examples of qualitative factors include brand reputation, employee

morale, customers’ opinions and satisfaction with the company’s products, product quality,

company’s relationship with key vendors, investors, competitive advantage, community,

relationship between management, employees and customers, community and relevance

(Indeed, n.d.). A company’s brand makes it stand out or market itself. Thus decision making

that reflects positively on the brand can increase trust in products thus growth of the

company. Investors: Investors are most influential stakeholders hence their opinion help in

directing the company. Their opinion helps to direct the growth of the company. Having a

product with a competitive advantage helps the product makes it to stand out. What the

business does and how it operates in a community can influence the community perception of

the company and its reputation. For example, corporate social responsibility can have an

impact on the company’s reputation in a community. Relationships between management

teams and employees are very influential (Chron, n.d.). They can make or destroy a company.

Health relationships between management, employees and customers can foster trust on

company products. Interactions with other businesses, vendors or stakeholders can foster

stronger linkages thus increasing reputation. Prioritizing and maintain relevance helps to the
company or product in the minds of the customers. This can firmly establish consumer

loyalty. This paper intends to discuss the following qualitative factors in detail: employee

morale, product quality and customer satisfaction.

Employee morale: Employee morale is defined as the attitude, satisfaction and overall

outlook of employees during their tenure with a company. It means how the employees feel

about going to work every day, how they approach their assigned tasks and their attitude

about the direction the organisation is heading towards (Indeed, n.d.). Productivity and better

work performance are influenced by employee morale. Disgruntled employees focus less on

work hence poor performance. Poor staff morale leads to high staff turnover which causes

increased operating costs, lower productivity, production of poor quality products and

increased legal cases.

Product quality: Product quality refers to how well a product satisfies customer needs,

serves its purpose and meet the industrial standards. A product should be able to solve a

problem, work efficiently and suit customer’s needs (Indeed, n.d.). The better the quality of

the product the more likely it will attract more customers. Good quality product usually

market itself, poor product quality result in reduction in sales hence profit.

Customer satisfaction: It the measure of how products and services supplied by a company

meet or surpass customer’s expectation (Chron, n.d.). It is the overall happiness a customer

feels when interacting with a company’s products and services. It is one of the most

important indicators of purchase intentions and customer loyalty. Therefore, it helps in

business growth and revenue generation. The more the organisation is able to satisfy the

customers’ needs, the more likely the customers return again and refer the product to others.
Qualitative factors may outweigh quantitative factors, for example assuming that Bata Shoe

company is manufacturing and selling farmer shoes and there will be a decline in the market

the next season. Outsourcing the production of the farmer shoes makes it easier to quickly

reduce costs.

Qualitative factors are very important in decision making. If these are not carefully

considered, productivity and reputation of the organisation may be affected.

(664 words)

References
Chron. (n.d.). Retrieved from Chron: https://smallbusiness.chron.com/difference-between-

qualitative-and-quantitative-analysis-managerial-decision-making-77298.html

Indeed. (n.d.). Retrieved from Indeed:

www.indeed.com/career-advice/career-development/qualitative-factors

Investopedia. (n.d.). Retrieved from Investopedia:

https://investopedia.com/ask/answers/qualitative-factors-when-using-fundamendal-

analysis/

Principles of Accounting, Volume 2, Managerial Accounting. (n.d). Retrieved from

https://opentextbc.ca/principlesofaccountingV2openstax/chapter/evaluate-and

determine-whether-to-keep-or-discontinue-a-segment-or-product/

Walther, L. M., & Skousen, C. J. (2009). Managerial and cost accounting. Retrieved 02 10,

2022, from

https://library.ku.ac.ke/wp-coontent/downloads/2011/08/Bookboon/Acoounting/

managerial-cost-accounting.pdf