EOM-05_Problem Solving and Decision Making

7/30/2019 EOM-05_Problem Solving and Decision Making

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CHAPTER 3

Problem Solving and

Decision Making



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Learning Objectives

1 Differences between programmed and non-programmeddecisions.

2 The steps involved in making a non-programmed decision.

3 The major factors influencing decision making inorganizations.

4 The nature of creativity and its contribution to managerialwork.

5 Organizational programs for improving creativity.

6 Suggestions for becoming a more creative problem solver.

7 The value and potential limitations of group decision making.



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1. Programmed and Non-programmedDecisions: A Comparison

Programmed DecisionsNon-programmed

Decisions

Repetitive, routine, frequent;decisions made according tospecific procedures

Novel, complex, difficult,infrequent; decisions requireoriginal thinking

Depend on policies and rulesRequire creativity, intuition,tolerance for ambiguity

Types of problems

Proce-dures

Business firm : Periodicreorders of inventoryHealth care : Procedure foradmitting patientsUniversity : Necessary GPA forgood academic standing

Business firm : Diversification

into new products andmarketsHealth care : Purchase of experimental equipmentUniversity : Construction of new classrooms

Examples



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2. Six Steps in Problem Solving and DecisionMaking

“What really, reallyis our problem?”

Identify and diagnosethe problem

“Let’s dream upsome great ideas.”

Develop creativealternatives

“Some of theseideas are good;

others are wacko.”

Evaluate thealternative solutions

“How really goodwas that idea?”

Evaluate and control

“Now let’s takeaction.”

Implement the

decision

“This alternative isa winner!”

Choose one

alternative solution



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3. Factors Influencing Decision Making

Personality andcognitive intelligence

Intuition

Emotionalintelligence

Quality and accessibility

of information

Politicalconsiderations

Degree of certainty

Values

Crisis and conflict

Procrastination

“I’m great athunches.”

“I can readpeoplegreat andcontrol myemotions.”

“I like risks

and I’m reallybright.”

“The IS groupis feeding megreat stuff.”

“Let’s waitbefore

deciding.”

“I’ve gotintegrity.”

“Looks like a

sure thing.”

“Our backs areto the wall, andwe disagree.”

“What does myboss want me

to decide?”

DecisionMaker



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Decision-Making Styles

Combining the dimensions of using informationand creating options result in four decision-making styles:

1. Decisive (one option, less information)

2. Flexible (many options, less information)

3. Hierarchic (one option, more information)

4. Integrative (many options, more information)


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How Decisive Are You?



a. Conditions Necessary for Creativity

Expertise

knowledge to put facts together

Creative-thinking skills and internal motivation

Environmental need plus conflict and tension

“Necessity is the mother of invention”

Encouragement from others

Permissive atmosphere that welcomes new ideas

4. Creativity and Innovation in Managerial Work



Bui lding on the

ideas of others

Allowing

freedom

Al locating time

for innovative

thinking

Allocating

ample

resources

Establishing aCreative AtmosphereInvolves. . .

Providing

challenges

Rewards and

recogni tion for

innovative ideas

Creativity!

b. The Creative and Innovative Organization

Greater diversity

in groups

5 O i ti l P f I i



5. Organizational Programs for ImprovingCreativity and Innovation

Creativity Training

Brainstorming

Systematically gathering ideas

Appropriate physical surroundings

6 S lf l h i f i



6. Self-Help Techniques for ImprovingCreativity

6 Specific Suggestions to BuildCreativity

1. Keep an idea notebook

2. Stay current in your field and becurious about your environment

3. Improve your sense of humor

4. Adopt a risk-taking attitude

5. Identify your most creative times

6. Step back when faced with a creativity block



7. Suggestions for ImprovingGroup Problem-Solving

1. Have a specificagenda and adhere

to it

2. Rely onqualified group

members

3. Have theleader share

decision-makingauthority

4. Providesummaries for

each major point

5. Buildconsensus sothe decision is

more likely to be

implemented



The Nominal Group Technique

2. Leader presentsa problem

6. Alternatives arerated and best-

rated one is

chosen

5. Group clarifiesand evaluates all

suggestions

3. Members writedown ideasindividually

1. Small group is

assembled

4. Each participantpresents one idea

to group



Homework for group presentation

Prepare for a 15 minute grouppresentation on Case Problem 5-B: “Staples’ Invention Quest”,page 190:

Describe shortly the case problem

Answer questions 1, 2, and 3 in thecase problem

Email your files to the lecturer

EOM-05_Problem Solving and Decision Making

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