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This technical note outlines the process of proper experimentation in the world of business. This reading begins by describing why organizational experimentation is important and then defines a true experiment, highlighting the differences between testing and management by intuition. It then goes on to explain when it is appropriate to use experiments, outlines several different types of experiments, and provides their strengths and weaknesses. Next, the note walks through how to run an experiment, defining the components of experiments and detailing the experimental design process. Finally, it provides preliminary guidance on the analysis of experimental results, focusing on statistical significance, precision, scalability, and sustainability. Ultimately, this reading prepares MBA students and industry professionals alike to become effective designers, analyzers, and proponents of experimentation.
- Explain how experimentation can benefit an organization. - Define a true experiment and its components and demonstrate how experiments differ from management by intuition. - Identify when it makes sense to use experiments, and which type of experiment to use if experimentation is appropriate. - Outline how to plan, design, and run a proper experiment. - Explain how to correctly analyze experimental results.