Comparing structured and unstructured problems

Well-structured Problems Unstructured Problems

Definition Can be described with a high degree of completeness

Cannot be described with a high degree of completeness

Can be solved with a high degree of certainty

Cannot be resolved with a high degree of certainty

Experts usually agree on the correction solution

Experts often disagree about the best solution

Educational goal LEARN TO REASON TO CORRECT SOLUTIONS

LEARN TO CONSTRUCT AND DEFEND REASONABLE SOLUTIONS

Complexity Ranges from very simple to very complex

Ranges from very simple to very complex

Examples Reconciling a company’s bank account

Estimating the sum of future cash flows from the use of long-lived assets

Calculating the capital gain on the sale of a building

Judging the adequacy of an argument promoting a reduction in the capital gains tax rate

Relatively simple - Compute straight-line depreciation Interpret a company’s current ratio

Relatively complex - Classify a lease as capital or operating once all necessary facts are assembled

Prepare operating budget for next 5 years

Solving Unstructured Problems

Only through exploring problems and information can we develop the skills for dealing with unstructured problems. It takes a challenging environment in which it is safe to try new ways of thinking. It also takes a lot of practice to become a better problem solver.

The payoff for the hard work is a deeper understanding of the world around us, and eventually a greater sense of independence and confidence in meeting life’s most interesting and important challenges.

Skills for Unstructured Problem Solving

1. Prerequisite accounting knowledge

Not necessarily memorized but the ability to find necessary information

2. Identifying the Nature of the Problem

If we fail to properly identify the nature of the problem, we will not explore the problem adequately -- and this will cause additional difficulties in justifying a solution to the problem.

3. Framing Unstructured Problems

You should explore the problem as thoroughly as time and other resources permit and develop a framework within which to think about the problem.

Without an adequate framework for evaluating information and possible solutions, your attempts to resolve the problem will probably be haphazard and the risk of making a poor decisions increases greatly.

4. Resolving an Unstructured Problem

Many people find it somewhat difficult to complete tasks that require strong justification for their own opinions and that also effectively counter arguments supporting the opinions of others.

See also pdf file on “Steps for Better Thinking”

The material on unstructured problem solving was derived from a workshop presented by Susan K. Wolcott and Cindy L. Lynch, at the 1996 annual meeting of the American Accounting Association in Chicago.

Reflective Judgment StagesPre-reflective Thinking (Stages 1-3)1 Knowing is limited to single concrete

observations“I know what I have seen”

2 Two categories for knowing: right answers and wrong answers. Good authorities have knowledge; bad authorities lack knowledge.

“If it is on the news, it has to be true.”“If it is in the textbook, it has to be true.”

3 In some areas, knowledge is certain and authorities have that knowledge. In other areas, knowledge is temporarily unknown

“When there is evidence that people can give to convince everybody one way or the other, then it will be knowledge; until then, it’s just a guess [opinion].”“We’ll never know for sure since no one was there.”

Quasi-Reflective Thinking (Stages 4 and 5)4 Concept that knowledge is unknown in

several specific cases leads to the abstract generalization that knowledge is uncertain

“Everyone is entitled to their own opinion.”

5 Knowledge is uncertain and must be understood within a context; thus justification is context specific

“People think differently and so they attack the problem differently. Other theories could be as good as my own, but based on different evidence.”

Reflective Thinking (Stages 6 and 7)6 Knowledge is uncertain but constructed

(rather than discovered) by comparing evidence and opinion on different sides of an issue or across contexts

“It is very difficult in this life to be sure. There are degrees of sureness. You come to a point at which you are sure enough for a personal stance on the issue.”

7 Knowledge is the outcome of a process of reasonable inquiry in which solutions to ill-structured problems are constructed. The adequacy of those solutions is evaluated in terms of what is most reasonable or probable on the basis of current evidence and reevaluated when relevant new evidence, perspectives, or tools of inquiry become available.

“One can judge an argument by how well thought-out the positions are, what kinds of reasoning and evidence are used to support it, and how consistent the way one argues on this topic is as compared with other topics.”

Based on various exhibits in Patricia M. King and Karen Strohm Kitchener, Developing Reflective Judgment, San Francisco: Jossey-Bass Publishers, 1994.

Assumptions About KnowledgeReflective Judgment Stage How certain is knowledge? How is knowledge gained? How are beliefs justified?

1 Knowing is limited to single concrete observations

Absolutely certain Obtained by direct concrete observation

Beliefs need no justification, no alternatives are perceived

2 Two categories for knowing: right answers and wrong answers. Good authorities have knowledge; bad authorities lack knowledge.

Absolutely certain or certain but not immediately available (most issues are assumed to have a right answer)

Via authority figures or through the senses. When the truth is uncertain, accepts view of authority.

Beliefs are either unexamined or justified by their correspondence with beliefs of authority figures. Evidence is not a criterion for establishing truthfulness.

3 In some areas, knowledge is certain and authorities have that knowledge. In other areas, knowledge is temporarily unknown

Absolutely certain about some things; temporarily uncertain about others

Via authorities in some areas; through one’s own feelings and biases when knowledge is uncertain

Via authorities in areas where answers exist, otherwise defended as personal opinion because the link between evidence and beliefs is unclear. Evidence can neither be evaluated nor used to reason to conclusions. Opinions and facts cannot be distinguished from factual evidence.

4 Concept that knowledge is unknown in several specific cases leads to the abstract generalization that knowledge is uncertain

Not certain because of limitations of the knower; knowing always involves an element of ambiguity (e.g., incorrect reporting of data, data lost over time, etc.)

Via one’s own and others’ biases, data, and logic. Differences in points of view exist because of people’s upbringing or because they deliberately distort information.

By giving reasons and using evidence (along with unsubstantiated opinion), but the arguments and choice of evidence are idiosyncratic (e.g., choosing evidence that fits an established belief)

5 Knowledge is uncertain and must be understood within a context; thus justification is context specific

Interpretation is inherent in all understanding; therefore, no knowledge is certain. Knowledge is contextual and subjective because it is filtered through a person’s perceptions and criteria for judgment. Only interpretations of evidence, events, or issues may be known.

Via evidence and rules of inquiry appropriate for the context. It is relative. Beliefs may be justified only within a given context or from a given perspective.

Via rules of inquiry for a particular context. Evidence can be evaluated quantitatively: within a perspective, some evidence is stronger or more relevant than other evidence. Individuals at this stage often provide a balanced picture of an issue or problem rather than offering a justification of their own beliefs.

Reflective Judgment Stage How certain is knowledge? How is knowledge gained? How are beliefs justified?5 Knowledge is uncertain and must

be understood within a context; thus justification is context specific

Interpretation is inherent in all understanding; therefore, no knowledge is certain. Knowledge is contextual and subjective because it is filtered through a person’s perceptions and criteria for judgment. Only interpretations of evidence, events, or issues may be known.

Via evidence and rules of inquiry appropriate for the context. It is relative. Beliefs may be justified only within a given context or from a given perspective.

Via rules of inquiry for a particular context. Evidence can be evaluated quantitatively: within a perspective, some evidence is stronger or more relevant than other evidence. Individuals at this stage often provide a balanced picture of an issue or problem rather than offering a justification of their own beliefs.

6 Knowledge is uncertain but constructed (rather than discovered) by comparing evidence and opinion on different sides of an issue or across contexts

Uncertain and must be understood in relationship to context and evidence. Some personal certainty about beliefs based on evaluations of evidence across different perspectives on an issue

Knowledge is constructed into individual conclusions about ill-structured problems on the basis of information from a variety of sources. Some points of view may be tentatively judged as better than others.

By comparing and evaluating evidence from different points of view Evaluation may involve criteria such as the weight of the evidence, the utility of the solution, and the pragmatic need for action

7 Knowledge is the outcome of a process of reasonable inquiry in which solutions to ill-structured problems are constructed. The adequacy of those solutions is evaluated in terms of what is most reasonable or probable on the basis of current evidence and reevaluated when relevant new evidence, perspectives, or tools of inquiry become available.

Certainty that some knowledge claims are better or more complete than others, although claims may need to be re-evaluated when new information becomes available

Via complex processes of critical inquiry or synthesis. Actively open-minded thinking where beliefs can always be improved. Openness to alternatives and to counter evidence.

As more or less reasonable conjectures about the problem based on an integration and evaluation of relevant data, evidence, and/or opinion. Conclusions are defended as representing the most complete, plausible or compelling understanding of an issue on the basis of available evidence.