Usage of Experiences vs Knowledge vs Theory in Management Decisions

Any rational plan requires prediction concerning conditions, behavior, and comparison of performance. A statement devoid of prediction or explanation of past events conveys little knowledge. Experience only describes—it cannot be tested or validated—and alone is of little help to management. Theory, on the other hand, shows a cause and effect relationship that can be used for prediction. Methods that have sustained success are grounded in theory. This notion implies that management decisions must be based on facts and objectivity, rather than solely on instinct.