Reference no: EM133212117

Case Application: The Business of Baseball

Baseball has long been called "America's national pastime" (although according to a Harris Interactive survey, the NFL has been, hands down, the favorite sport of Americans). 61 Now, the game of baseball can probably be better described as America's number crunchers. Take, for instance, Sandy Alderson, the general manager of the New York Mets. He explained the team's decision to let batting champion and free agent shortstop Jose Reyes go to the Miami Marlins. "I'm happy with the analysis we used and the strategy we pursued." As he made this announcement, three members of his baseball operations staff stood by with their laptops open and ready to provide any needed data. A baseball writer has described the sport's move to data analysis this way: "Don't overlook the increasing value of facts, figures, and other data . . . and the people who interpret them." As the 2011 film Moneyball (based on an earlier book by the same name) emphasizes, statistics-the "right" statistics-are crucial aspects of effective decision making in the sport of baseball. The central premise of Moneyball was that the collected wisdom of baseball insiders (players, managers, coaches, scouts, and the front office) had pretty much been flawed almost from the onset of the game. Commonly used statistics-such as stolen bases, runs batted in, and batting averages- that were typically used to evaluate players' abilities and performances were inadequate and poor gauges of potential. Rigorous statistical analysis showed that on-base percentages and slugging percentages were better indicators of a player's offensive potential. The goal of all this number crunching? To make better decisions. Team managers want to allocate their limited payroll in the best way possible to help the team be a winner. The move to more systematic data usage can also be seen in college baseball. At this level, coaches have long used their faces (touching their ears, noses, and chins at a "dizzying speed") to communicate pitch selection to the catcher. Now, however, hundreds of college teams at all levels have abandoned these body signals and are using a system in which the coach yells out a series of numbers. "The catcher decodes the sequence by looking at a chart tucked into a wristband-the kind football quarterbacks have worn since 1965-and then relays the information to the pitcher the way he always has." Coaches say this approach is not only faster and more efficient, it's not decipherable by "dugout spies" wanting to steal the signs. Since the method allows for many combinations that can mean many different pitches, the same number sequence won't be used for the rest of the game-and maybe not even for the rest of the season.

Guidelines for Analyzing Cases

1)The Problem or Issue Identification

2) The Analysis/ Evaluation steps (focused on generating and defending the most effective set of recommendations possible).

3) The Recommendations.

Question 1: In a general sense, what kinds of decisions are made in baseball? Would you characterize these decisions as structured or unstructured problems? Explain. What type(s) of decision-making condition would you consider this to be? Explain.

Question 2: Is it appropriate for baseball managers to use only quantitative, objective criteria in evaluating their players? What do you think? Why?

Question 3: Do some research on Sabermetrics. What is it? What does it have to do with decision making?

Question 4: Describe how baseball front office executives and college coaches could use each of the following to make better decisions: (a) rationality, (b) bounded rationality, (c) intuition, and (d) evidence-based management.

Question 5: Can there be too much information in managing the business of baseball? Discuss.