Mod 2: Problem solving and decision making (Chapter 7)

Mod 2: Problem solving and decision making (Chapter 7), p.152-164

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7.1 DefinitionsProblem: a doubtful or difficult question. It can also be a situation where some relevant facts are known and others are unknown.Problem solving: involves a procedure which includes identifying matters that need to be improved or changed, and making a series of decisions aimed at improving or changing such matters.Decision: is defined as the settlement of a question, formal judgement, making up ones mind.Decision making: a deliberate act of selection (or choice) of an alternative from a set of competing alternatives, in the hope that the chosen alternative will accomplish certain goals.

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7.2 Interdependence of conceptsProblem solving and decision making these two concepts are interdependent.

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7.3 Role of comm factors which contribute to sensible decisionsN4: Can you remember? 1)Frame of reference 2) Ability to reason logically 3) Personality 4) Emotions

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7.3 Role of comm factors which contribute to sensible decisionsOther factors: (p.152)Frame of reference: adequacy of available informationFrame of reference and logical reasoning: Intelligence, education and experience of the decision-makerPersonality traits of the decision-makerPersonality: insight and intuition of the decision makerEmotional factors

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7.4 Unpredictable and uncontrollable factorsUnexpected problems can develop into opportunities in a completely unexpected and uncontrolled manner.Correct decisions are sometimes made by mere coincidence

The demand on personalised number plates increased after New York State decided to charge an additional levy on all personalised vehicle number plates. Instead of decreasing the amount of plates, it created a demand for these items.7

7.5 General decision making process(Acknowledge that a problem exists)Identify and define the problemInvestigate the problemFormulate the exact problem in writingDevelop alternative solutionsEvaluate the alternative solutionsSelect the best alternativeImplement the selected alternative/selectionEvaluate and control the implemented decision

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7.6.1 Identifying and defining the problem (p.155)Acknowledge that a problem exists; symptoms include:Previous pattern of action or performance is interrupted or brokenExpectations are not realisedComplaints are receivedExcessive rivalry could become evidentIdentify and define the problemIdentityLocation (where?)MagnitudeTiming

Investigate the problemCollect and analyse dataDetermine the origin of problem, people involved, any contributing factorsDetermine true magnitude of problem and influence on other situations

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7.6.2 Formulating the exact problem in writing p.158You gain the following when formulating the exact problem in writing:It forces one to think about and formulate the problem logically, objectively and systematicallyIt helps one to understand the problem betterIt could serve as a framework for further action, as well as a measure of control.

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7.6.3 Developing alternative solutions p. 158Theoretical aspectsApplied to exampleStandard, obvious solution

Creative solutionRelying on expertise

Drawing on past solutions

Brainstorming sessionAsk the taxi company to change their scheduleInstitute own shuttle serviceHigher productivity would neutralise cost of shuttle serviceDiscussions with taxi owners 6 months ago led to temporary solutionAllow employees to discover that caf stop wastes time and how much they can gain by cutting it out11

7.6.4 Evaluation of alternative solutions p.159Thorough investigation into each alternative solution that has been proposedProposed solution should enable the organisation to realise its objectives.The proposed solution should be affordable, in terms of the available 1) Financial resources 2) Manpower resourcesThe proposed solution should be acceptable toThose who would be affected by its implementationThose who are required to implement itEach alternative should be evaluated in terms of its consequences for the organisationEach alternative should be judged in terms of which problem it would solve, as well as which further problem it might cause.

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7.6.4 Evaluation of alternative solutions p.159 (continued)The risk factor of each alternatives should be consideredThe proposed solution should be an alternative which could improve the current situation; not one which would have worked in the pastVarious techniques can be applied during the process of evaluation:ExperimentationSimulationUsingKnowledgeExperienceObjective judgement

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7.6.5 Selection of the best alternativepage 160List the alternative solutions in order of preference Take other factors into account:Non-measurable factors like company morale and imagePsychological factors like personalitySocial and cultural factors like community values and religionIt could also mean that a compromise between two or more alternatives may have to be decided upon

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7.6.6 Implementation of the selected alternative/decision p.161A decision can only be effective if it leads to action. Once selected the implementation procedure must be explained. Employees may have to be persuaded to accept it. Tasks and resources have to be allocated and a means of monitoring it determined. The following aspects must be considered before implementing the decision:A realistic budgetA realistic timetableTasks should be delegated appropriatelyRegular feedbackMeans of detecting and counteracting possible problems

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7.6.7 Evaluation and control of the implemented decision p.162Evaluation required an objective judgement of the extent to which the implementation of the decision has solved the problem. The judgement can be based on:A set of objective, measurable goals (or standards)Subjective, non-measurable feedbackDecisions can be qualified into three categoriesOptimum decisions: lead to favourable results (maximising results)Satisfactory decisions: minimum standard of satisfaction (adequate, acceptable, passable and OKSuboptimum: lead to undesirable outcomes. Their consequences affect the organisation and its employees negatively16

NotesAlthough the judgement of a decision must be objective, economic as well as non-economic criteria should be taken into account during the evaluation process. A business venture could be an economic success, but become a major responsibility which has a negative influence on ones personal life. In addition to profit, factors such as personal satisfaction, absence of stress and social good should all be considered when evaluating a decision.

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