1. Mod 2: Problem solving and decision making (Chapter 7), p.152-164 1

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3. 7.1 Definitions Problem: a doubtful or difficult question. It can also 3 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.

4. 7.2 Interdependence of concepts Problem solving and decision making these two concepts are interdependent. 4

5. 7.3 Role of communication factors which contribute to sensible decisions N4: Can you remember? 1)Frame of reference 2) Ability to reason logically 3) Personality 4) Emotions 5

6. 7.3 Role of communication factors which contribute to sensible decisions Other factors: 1. Frame of reference: adequacy of available information 2. Frame of reference and logical reasoning: Intelligence, education and experience of the decision-maker 3. Personality traits of the decision-maker 4. Personality: insight and intuition of the decision maker 5. Emotional factors 6

7. 7.4 Unpredictable and uncontrollable factors Unexpected problems can develop into opportunities in a completely unexpected and uncontrolled manner. Correct decisions are sometimes made by mere The demand on coincidence 7 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

8. 7.5 General decision making process 1. 2. 3. 4. 5. 6. 7. 8. 8 Identify and define the problem Investigate the problem Formulate the exact problem in writing Develop alternative solutions Evaluate the alternative solutions Select the best alternative Implement the selected alternative/selection Evaluate and control the implemented decision

9. 7.6.1 Identifying and defining the problem (p.155) 1. Acknowledge that a problem exists; symptoms include: 2. 9 Previous pattern of action or performance is interrupted or broken Expectations are not realised Complaints are received Excessive rivalry could become 3. Investigate the problem evident Collect and Identify and define the problem analyse data Determine the origin of Identify problem, people involved, any Location contributing factors Magnitude Determine true magnitude of Timing problem and influence on other

10. 7.6.2 Formulating the exact problem in writing p.158 You gain the following when formulating the exact problem in writing: It forces one to think about and formulate the problem logically, objectively and systematically It helps one to understand the problem better It could serve as a framework for further action, as well as a measure of control. 10

11. 7.6.3 Developing alterative solutions p. 158 Theoretical aspects Applied to example Standard, obvious Ask the taxi company to solution Creative solution Relying on expertise Drawing on past solutions 11 Brainstorming session change their schedule Institute own shuttle service Higher productivity would neutralise cost of shuttle service Discussions with taxi owners 6 months ago led to temporary solution Allow employees to discover

12. 7.6.4 Evaluation of alternative solutions p.159 Thorough investigation into each alternative solution that has been proposed Proposed 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 resources The proposed solution should be acceptable to Those who would be affected by its implementation Those who are required to implement it Each alternative should be evaluated in terms of its consequences for the organisation 12 Each alternative should be judged in terms of which problem it would solve, as well as which further problem

13. 7.6.4 Evaluation of alternative solutions p.159 (continued) The risk factor of each alternatives should be considered The proposed solution should be an alternative which could improve the current situation; not one which would have worked in the past Various techniques can be applied during the process of evaluation: Experimentation Simulation Using Knowledge 13 Experience

14. 7.6.5 Selection of the best alternative page 160 List the alternative solutions in order of preference Take other factors into account: Non-measurable factors like company morale and image Psychological factors like personality Social and cultural factors like community values and religion It could also mean that a compromise between two or more alternatives may have to be decided upon 14

15. 7.6.6 Implementation of the selected alternative/decision p.161 15 A 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 budget A realistic timetable Tasks should be delegated appropriately Regular feedback Means of detecting and

16. 7.6.7 Evaluation and control of the implemented decision p.162 Evaluation 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 feedback Decisions can be qualified into three categories Optimum decisions: lead to favourable results (maximising results) Satisfactory decisions: minimum standard of satisfaction (adequate, acceptable, passable and OK Suboptimum: lead to undesirable outcomes. Their 16 consequences affect the organisation and its employees

17. Notes Although 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. 17

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