Problem Analysis Framework

“ DECISION ANALYSIS” CHOOSE A COURSE OF ACTIONS DECISION STATEMENT PURPOSE & LEVEL ESTABLISH OBJECTIVES RESULTS & RESOURCES CLASSIFY OBJECTIVES MUST & WANT GENERATE ALTERNATIVES NUMBER & RANGE ADVERSE CONSEQUENCES

THE THINKING PATTERN FOR MAKING CHOICES We appreciate the fact that a choice must be made We consider the specific factors that must be satisfied if the choice is to succeed We decide what kind of action will best satisfy these factors We consider what risks may be attached to our final choice of action that could jeopardize its safety and success

Good decision making, like good problem solving, depends heavily on experience and judgment

THE ELEMENTS OF A GOOD CHOICE The quality of our definition of specific factors that must be satisfied The quality of our evaluation of the available alternatives The quality of our understanding of what those alternatives can produce – for better or worse

THE MAJOR ELEMENTS OF DECISION ANALYSIS THE DECISION S TATEMENT THE O BJECTIVES FOR THE DECISION A LTERNATIVES THE CONSEQUENCES OF THE CHOICE ( P OTENTIAL RISKS)

1. THE DECISION STATEMENT We begin with decision statement or name of the decision In decision analysis, resolution will consist of an answer to the questions “to what purpose?”, “which?” and “how?” The way it is worded deserves careful attention A decision statement always indicates some kind of action and its intended result . It also indicates the level at which the decision is to be made.

2. THE OBJECTIVES FOR THE DECISION Objectives are the criteria for the decision – the specific details of what the decision is to accomplish. Decision Analysis is the antithesis of identifying a course of action and then building a case to support it. Objectives are clear measures of the ends we want to achieve, for only with clear measures can we make reasoned choices.

MUSTS & WANTS The MUST objectives are mandatory : they must be achieved to guarantee a successful decision. These objectives must be measurable because they function as a screen to eliminate failure-prone alternatives. The WANT objective may be mandatory but cannot be classified as a MUST for 2 reasons: 1. It may not be measurable 2. We may not want a ‘yes-no’ judgment A WANT objective is not necessarily less important than a MUST; it simply serves a different purpose. “ The MUSTS decide who gets to play, but the WANTS decide who wins”

WEIGHTING THE OBJECTIVES All other objectives are weighted in comparison with the first, from 10 (equally important) down to a possible 1 (not very important) The purpose of the 10-1 weighting scale was simply to make visible the relationships among these objectives: What mattered most? What could be done without, if necessary?

3. ALTERNATIVES We will have to decide which one will best fulfill our objectives with the smallest acceptable risk. We try to make a balanced choice. If there is only one alternative , we must decide whether it is good enough to accept. If we must choose between a current and a proposed course of action, then we consider both to be alternatives. If, in the absence of any alternative , we must create something new, we can usually build an alternative from available components.

GENERATING AND EVALUATING ALTERNATIVES EVALUATION OF ALTERNATIVES AGAINST MUST OBJECTIVES: “ GO” or “NO GO” EVALUATION OF ALTERNATIVES AGAINST WANT OBJECTIVES: scoring using judgment WEIGHTING THE SCORES OF ALTERNATIVES: computing the weighted scores of each alternative ( weighted score : the score of an alternative multiplied by the weight of the objective to which the score refers) THE TENTATIVE CHOICE: the total weighted score gives us a tool for selecting a tentative choice . We should explore the potential risks involved.

4. THE CONSEQUENCES OF THE ALTERNATIVES The final step in Decision Analysis is the search for possible adverse consequences of all feasible alternatives. Overlooking factors that make a choice unworkable is a fundamental mistake. Decision Analysis is a methodical, systematic process. But it is also as creative and innovative a process as its users choose to make it.

ANSWERING 5 QUESTIONS What requirements for success have we missed in the previous stages of this analysis? What factors within the organization, based on our experience, could harm its acceptance or its implementation? What kind of changes within organization could harm its long-range of success? What kind of external changes could harm its long-range success? What kind of things tend to cause problems in implementing this type of decision?

PROBABILITY & SERIOUSNESS What is the probability that this adverse consequence will occur? If it does occur, how serious will it be? Use ratings of HIGH – MEDIUM – LOW or a scale of 10 (highly probable / very serious) to 1 (unlikely / not at all serious) We can stretch our imaginations beyond the body of facts we have amassed and ask “ what did we miss ?”

The power of the process lies in the ability it gives to make productive use of all available information and judgments

case “ COMPANY X: CHOOSE THE EVENT PROPOSAL”

ALTERNATIVES MUSIC CONCERT: ARCTIC MONKEYS Venue: JCC EO: Buena Production Budget: Rp. 3 M Packages: main sponsor (banner, posters, booth, backdrop, press release, TV campaign, radio, magazine) INTERNATIONAL SEMINAR: MALCOLM GLADWELL Venue: Shangrila Hotel EO: Dyandra Promosindo Budget: Rp. 2.5 M Packages: main sponsor (banner, booth, backdrop, TV campaign, magazine)

WHAT YOU SHOULD DO: DECISION STATEMENT OBJECTIVES: MUST & WANT (WEIGHT) EVALUATING THE ALTERNATIVES: WEIGHT & SCORE POTENTIAL RISKS: PROBABILITY & SERIOUSNESS

1. DECISION STATEMENT To decide the event proposal that will increase the company’s image

2. OBJECTIVES MUST OBJECTIVES: The event is suitable for company’s target market Suitable for the budget allocation (less than 4 million rupiah) Held in December 2007

WANT OBJECTIVES: 5 Publication area target 10 5 Possibilities to open booth in venue 9 7 Optimizing the advantages of the event than the effort that have to be done 8 7 Event has social contribution to the community 7 8 Event will create positive continuity effect 6 8 Venue will increase the company’s image 5 8 Types of the event is “on the line” (trend) 4 8 Benefited sponsorship packaged 3 9 Qualified Event Organizer 2 10 Event will increase the company’s image 1 Weight Want Objectives

3. ALTERNATIVES 685 664 TOTAL 40 8 Segmented 50 10 Unlimited 5 10. Public. 45 9 Limited audiences 50 10 More audiences 5 9. Booth 70 10 More efficient 56 8 Many personnel 7 8. Value 70 10 Knowledge 42 6 Entertainment 7 7. Contrib. 80 10 Topic is headline 64 8 New 8 6. Effect 72 9 Yes 80 10 Yes 8 5. Venue 80 10 Yes 72 9 Yes 8 4. Trend 56 7 No Radio 80 10 Yes 8 3. Packages 72 8 Local event 90 10 Yes – often 9 2. EO 100 10 Yes – best seller 80 8 Yes – world artist 10 1. Image Total Score Info Total Score Info Malcolm Gladwell Arctic Monkeys Weight Want Objectives

4. ADVERSE CONSEQUENCES HIGH MEDIUM Unable to come because of the security issue HIGH LOW Chaos possibilities by the audiences Seriousness Probability Malcolm Gladwell HIGH MEDIUM Chaos possibilities by the audiences HIGH MEDIUM Unable to come because of the security issue Seriousness Probability Arctic Monkeys

Problem Analysis Framework

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Problem Analysis Framework