Welcome to the HKUST MBA Program!

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Welcome to the HKUST MBA Program!

RESIDENTIAL COURSE: MGTO 521

MANAGERIAL PROBLEM SOLVING

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MGTO 521: Managerial Problem Solving

Steve DeKrey

Stephen Nason & Katherine Xin

Hong Kong University of Science and Technology

[email protected]

[email protected]

[email protected]

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MGTO 521: Managerial Problem Solving

Teaching Assistants

Anindita Banerjee

Ann Fok

Cubie Lau

Michelle To

Hong Kong University of Science and Technology

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HKUST Business School

Course Objectives To understand the basic modes of decision making To experience decision making in groups and

examine the dynamics To practice problem solving skills which includes

spotting problems, framing them correctly, and implementing appropriate solutions

To receive feedback on your own style from the group

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Today! Day 1

Why this course??? Let’s get acquainted Desert survival Exercise Decision making/Problem Solving Teams: a preliminary look Minicase: SIA & Tanglin Polymers Learning with Cases (Mauffette-Leenders,

Erskine, Leenders)

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Why This Course??? Introductions & Expectations

Why managerial problem solving?? Problem solving, decision making: the

essence of management Is there a difference between “decision

making” and “problem solving”? A key role of LEADERS: the art of PROBLEM

FINDING

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- From “Smart Thinking for Crazy Times” by Ian Mitroff

Where is the true competitive edge that will separate successful individuals, organizations, societies from the also-rans?

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Focus on PROCESS,Not SOLUTIONS

Spot the right problems Frame them correctly Implement appropriate solutions

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An Experiential Learning Exercise

Participate Observe Reflect, Learn, and have fun

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Let’s Get Acquainted!!

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The Process

Meet with your group members in the designated breakout areas

Introduce yourselves Learn something about each member Introduce an interesting fact/trait What do you want to accomplish this week? Please take 45 minutes for this process

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The Presentation

Establish a team identity - a name, a symbol Introduce team members in a memorable way What are the team objectives and goals for

this class? Each team has 5 minutes!!!

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What Is an Organization?

Definition: Social entities, goal directed, deliberately structured activity systems, linked to external environment

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Organizations as Systems

Open systems Organization subsystems

boundary spanning production maintenance adaptive management

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Structural Dimensions of Organizations

Formalization Specialization Standardization Hierarchy of authority Complexity Centralization Professionalism Personnel ratios

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Levels of Analysis

Organization Departments Groups and teams Individuals

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The External Environment Task environment

Industry sector Market sector Human resource sector International sector

General environment Government and political Economic and financial Technological Socio-demographic

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Organic versus Mechanistic Low specialization More teamwork More participation Less hierarchy Less formalization More decentralization Horizontal

communication

High specialization Rigid defined areas More authority More hierarchy More formalized Centralized decision-

making Vertical communication

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Decision Making Processes

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What Is Decision Making?

The process by which members of an organization choose a specific course of action to respond to both problems and opportunities.

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Types of Decisions

Programmed Decisions: decisions made in response to recurring

problems and opportunities

Non-programmed Decisions: decisions made in response to novel

problems and opportunities

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Decision-Making Process

Rational Model of decision making

Boundedly Rational Model of Decision Making (March and Simon)

Intuition

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Rational Model of Decision Making

Based on assumption that decision maker has all necessary information and will choose the best possible solution.

Hulpke & XinHKUST Business School

The Rational Model

Define the problem Identify criteria Weight the criteria Generate alternatives Rate alternatives on each criterion Compute the optimal decision

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How managers actually make decisions (March & Simon)

People making decisions subject to Incomplete information, Psychological and sociological processes, Limited cognitive abilities

Which affect decision making such that decision makers

make boudedly rational decisions and choose satisfactory, not optimal, solutions.

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How managers actually make decisions

Satisficing: Searching for and choosing an acceptable response or solution, not necessarily the best possible one.

Bounded Rationality: An ability to reason that is constrained by the limitations of the human mind itself.

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Intuitive Model

Decisions result from an unconscious process based on intuition. Intuition is often based on accumulated

experiences which allow one to recognize patterns so not necessarily illogical

Problems with the intuitive model criteria not open to examination often intuition influenced by perceptual

biases.

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When the World Changes . . .

Creativity: decision-making process that produces novel and useful ideas

Innovation: successful implementation of creative ideas

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Desert Survival Exercise

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Desert Survival: What Did We Learn?

Group decision making: Slower but better Takes longer! MUCH longer On average, more input, more information,

thus better decisions But always some who are WORSE off in

groups Why does group not hear these people? How can groups improve?

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Advantages of Group Decision Making

Wide range of knowledge and experience Enhanced memory about facts Acceptance is high by participants Understanding by participants is high

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Disadvantages of Group Decision Making

Social pressure may create conformity Groups tend towards riskier decisions Time consuming Premature closure

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Other Consequences of Group Decision Making

Diffusion of Responsibility

Group Polarization

Potential for Conflict

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Is it a Group Decision?

Type of problem or task

Is acceptance essential?

Is quality of decision important?

Personalities and capabilities

Climate (cooperative or competitive)

Time available

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The Nature of High Performing Teams

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What Are the Properties of Effectively Functioning Teams?

Results are consistent People in effective teams KNOW the answer But this is tacit knowledge We must make it explicit

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Key Success Factors for Teams

A clear elevating goal Results driven structure Competent team members Unified commitment Collaborative climate Standards of excellence External support and recognition Principled leadership

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A Clear and Elevating Goal

What does this mean? What is a goal? Clarity: focused and non-political Elevating: worth doing and personally

challenging

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A Results Driven Structure What types of results

Problem resolution team Creativity team Tactical team

What kind of team are you? Team structure

Roles and responsibilities Effective communication Methods for monitoring and feedback Emphasis on fact-based judgments

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Competent Team Members Right people for the task

Technical competencies Personal competencies

Best matches Problem solving teams: intelligent, savvy, people

sensitive, high integrity Creative teams: cerebral, independent, tenacious Tactical teams: loyal, committed, action oriented

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Unified Commitment What does this mean?

Spirit Loss of self Unity

How to get it? Involvement Balancing Expectations Group task and maintenance behavior only

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Collaborative Climate

Meaning? Teamwork, whole > sum of parts, working

well together Four elements

Honesty, openness, consistency, respect Total trust through involvement and autonomy

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Standards of Excellence

Standards matter Standards are hard work Standards are easy to ignore No resting on past performance Standards in this class???

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External Support and Recognition

What is this? Why is it important? Why is tangible support needed?

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Principled Leadership

Consistency Courage Standards Communication skills Promotes the other 7 factors Leaders create leaders

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Learning with Cases

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Singapore Airlines & Tanglin Polymers

Discuss in your groups

Prepare a 5-minute presentation

One key: finding the right problem

You choose. possible topics follow

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Singapore Airlines: Continuing Service Improvement?

You may wish to consider the following questions: How would you answer Paul Denver’s letter? What should SIA say or do about the staff at

Denpasar? What should SIA say or do about the staff at

Changi? What suggestion would you give SIA in terms of

continuing customer service improvement?

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Tanglin Polymers Case

You may wish to consider the following questions: Is there a problem? If so, what is the problem? Who’s problem is it? How would you solve the problem?

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What Is a Case? A description of an actual situation, commonly

involving a decision, a challenge, an opportunity, a problem or an issue faced by a person (or persons) in an organization.

Allows you to step figuratively into the position of a particular decision maker.

Field-based with the visit of an organization and collection of data.

The product of a carefully thought-out process.

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Why Do We Do Cases?

Examine real life situations Practice our analytical tools Engage in discussion of issues/answers Develop professional attitudes

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Cases are frustrating!

Never enough information

But you are typically told “don’t go beyond case,” don’t use web, don’t go to library

And what is the answer? NO ONE ANSWER!

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Inventory of Skills Developed by the Case Method

Analytical skills Decision making skills Application skills Oral communication skills Time management skills Interpersonal or social skills Creative skills Written communication skills

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Analyzing the Case - 7 Steps Defining the issue Analyzing case data with focus on causes and effects

as well as constraints and opportunities Generating alternatives Selecting decision criteria Analyzing and evaluating alternatives Selecting the preferred alternative Developing an action and implementation plan

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Deliverables

Issue identification Analysis and alternatives Recommendations for action Implementation plans

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Defining the Issues

Produce a clear and comprehensive statement of the issue(s) involved in the case.

Clearly identify key concern(s), problem(s), decision(s), challenge(s) or opportunity(ies).

3 things to be considered: Immediate and basic issues Importance Urgency

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Analyzing Case Data

Look at facts, numbers Look at causes and causes of causes Recognize challenges Identify and insert opportunities

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Generating Alternatives

Be creative and think widely Consider constraints and opportunities Be realistic and plausible

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Selecting Decision Criteria Provide the basis for evaluation or assessment measures Common decision criteria:

Quantitative: profit, cost, return on investment, market share,

capacity, delivery time, risk, cash flow, inventory turnover, productivity, staff turnover, time to complete, growth rate, quantity

Qualitative: competitive advantage, customer satisfaction,

employee morale, corporate image, ease of implementation, synergy, ethics, flexibility, safety, visual appeal, obsolescence, cultural sensitivity, motivation, goodwill

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Analyzing and Evaluating Alternatives

List the key advantages and disadvantages of each alternative.

Compare and contrast each alternative against the selected criteria by Alternative Analysis Matrix.

Short vs long term Predicting outcomes Quantitative vs qualitative analysis

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Make a Decision

Don’t be timid or weak. Decide Explain your rationale Be ready to argue against alternatives you

didn't select

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Developing an Action and Implementation Plan

Be specific Focus to produce the advantages and

minimize the disadvantages Planning the implementation

Provide a schedule and milestones for the action plan

Provide measures or signals for progress

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SMART Action Plan

Specific Measurable Action-oriented (not statement) Realistic Time-anchored

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Airline Industry

Mistakes in this industry can lead to business failure

Some of yesterday’s leaders are GONE Think strategically and tactically Many models can help analysis, but . . . Problem finding: part science, part art Possible leading questions

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Cathay Pacific: Service Straight From the Heart What were the most important forces promoting

change for Cathay ISD during Bueckling’s term? What were the most important forces promoting

change for Cathay ISD during Wright’s term? What forces impeded these changes? What worked well? Less well? Why? What is the one most important thing Wright should

do in the next 24 months?

(Note: Do not answer all of these. In fact, you may ask an entirely different question)

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Cathay Pacific: A View from the Top

What internal problems has Cathay faced in the past? Might these old internal problems cause problems in the

future? What external problems has Cathay faced in the past? What external problems might impact Cathay’s future? As Phillip Chen asks, what should Cathay be ten years

in the future?

(Note: Do not answer all of these. In fact, you may ask an entirely different question)

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Format for Presentations

Each team has 10 minutes including Q&A Be concise, be precise Not every group member needs to talk Use PowerPoint

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Technical Issues

If you save your presentation on USB memory, check tonight to insure it works on our computer!

Tonight, have one team member learn all the presentation technology (visualizer, computer, microphones, etc.)

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Will this be a lot of work?

No pain, no gain!

Welcome to the HKUST MBA Program!

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