Problem solving series

I. THE NATURE OF PROBLEM SOLVING & DECISION MAKING

Problem → is a discrepancy between ideal and actual conditions.

Decision → is choosing among alternatives

• When we think about a problem in a homework/assignment, we are almost sure that there
is a solution and that the associated solution methods would be some of things that we
have learned in class unless professors intend to test us further

• Much of what managers do is solve problems and make decisions. Decision-making is a key
role of a manager and leader. Some managers find this to be one of the most difficult tasks
to perform. They have a fear of failure and procrastinate mainly because they have a lack of
a structured approach. One of two things usually happen, they either put off making the
decision in the hopes that someone else will bail them out, or even worse, make a decision
using a knee jerk reaction.

• New managers often try to solve problems and make decisions by reacting to them before
they fully understand all of the possible factors. They feel that the quickness of a decision is
more important than the long term outcome. There are times when a quick decision is
needed, such as dealing with a violent not in the workplace. However, most decision are not
needed immediately and you do in fact have the time to make the right decision. That is the
key, making the right decision.

DECISION MAKING → is the study of identifying and choosing alternatives based on the
values and preferences of the decision maker. Making a decision implies
that there are alternative choices to be considered, and in such a case,
we want not only to identify as many of these alternatives as possible
but to choose the one that (1) has the highest probability of success or
effectiveness (2) best fits with our goals, desires, lifestyle, values and so
on.

2 Kinds of Decision Making

1. Programmed decision → is a repetitive a routine, and made according to a specific

procedure.

Three techniques in programmed decision making:

a. Habit → the most general, the most pervasive

→ internalized (recorded in the central nervous system). Through constant
exposure to a given type of situation, the individual may automatically
formulate certain rules for procedures.

→ decisions handled are those routine, everyday decision that relate to the
day-to-day operations of the organization.

b. Standard operating procedures (SOP)

→ normal, written, recorded program

→ provides a way of examining, modifying, and improving habitual patterns.

c. Systems approach

→ more sophisticated method of programmed decision making

→ one of the elements of a relatively new discipline called operations research.
Systems analysis involves looking at the total problem rather than at one phase.

→ a computer is essential to this type of programmed decision making.

2. Non programmed Decision → is unique decision (no routine)

→ when a problem has not taken the same form in the past or
is extremely complex or significant

→ original thinking is required

II. THE DECISION MAKING PROCESS

de-sid → to arrive at a solution that ends uncertainty or dispute

decider → latin word which means to cut off

Decision-making → is one of the defining characteristics of leadership. It is core to the

job description.

→ is a distinctly human activity.

What is a Decision?

A Decision is a choice between two or more alternatives.

( if you only have one alternative, you do not have a decision)

→ from Thesaurus:

Accommodation, agreement, arrangement, choice, compromise,

declaration, determination, outcome, preference, resolution, result,

and verdict to try and give the concept of decision.

WHOSE JOB/ RESPONSIBILITY IS MAKING DECISIONS?

A Manager → plans, organizes, staffs, leads and controls her team executing

decisions. The effectiveness and quality of these decisions

determine how successful a manager will be.

MANAGERS → are constantly called up to make decisions in order to solve

problems. Decision making and problem solving are ongoing process of
evaluating situations or problems, considering alternatives, making choices and
following them up with the necessary actions. Sometimes the decision-making
process is extremely short and mental reflection is essentially instantaneous. In
other situations, the process can drag in for weeks or even months. The entire
decision-making process is dependent upon the right information being available
to the right people at the right time.

HOW CAN WE MAKE HIGH QUALITY DECISIONS?

By following PROCESS

→ without process, you are likely to drag decisions into your comfort zone,
handling “this one” in exactly the same way you handled “that one” even though
this one and that one may have little in common. Without an ORGANIZATIONAL
DECISION PROCESS, that same “ stimulus/response, stay in your comfort zone”

dynamic can easily become the predominate driver of your organization’s
culture and effectiveness.

With a process, you have the mechanism you need to warrant the quality of your
own decisions. Perhaps more importantly, you also have a common language
and set mental model that makes conversations about decisions more efficient
and effective. This common understanding of decision processes, criteria and
roles avoids many of the common organizational decision traps, allowing people
in your organization to spend their conversational energies on creating better
alternatives and validating assumptions and ultimately warranting their own
decision.

THE DECISION-MAKING PROCESS INVOLVES THE FOLLOWING STEPS:

1. Define the problem

2. Identify limiting factors

3. Develop potential alternatives

4. Analyze the alternatives

5. Select the best alternative

6. Implement the decision

7. Establish a control and evaluate system

1. DEFINE THE PROBLEM

→ the decision-making process begins when a manager identifies the real
problem. The accurate definition of the problem affects all the steps that follow;
if the problem is inaccurately defined, every step in the decision-making process
will be based on an incorrect starting point. One way that a manager can help
determine the true problem in a situation is by identifying the problem
separately from its symptoms.

2. IDENTIFY LIMITING FACTORS

→ all managers want to make the best decisions. To do so, managers need to
have the ideal resources/factors:

a. Information

b. Time

c. Personnel

d. Equipment

e. Supplies

And identify any limiting factors. Realistically, managers operate in an
environment that normally doesn’t provided ideal resources. For example, they
may lack the proper budget or may not have the most accurate information or
any extra time. So, they must choose to satisfice to make the best decision
possible with the information, resources, and time available.

3. DEVELOP POTENTIAL ALTERNATIVES

→ time pressures frequently cause a manager to move forward after considering
only the first or most obvious answers. Thus, a manager should think through and
investigate several alternative solutions to a single problem before making a quick
decision.

Brainstorming → best known methods for developing alternatives where a group

works together to generate ideas and alternative solutions.

The assumption behind brainstorming is that the group dynamic stimulates thinking
—one person’s ideas, no matter how outrageous, can generate ideas from the
others in the group. Ideally, this spawning of ideas is contagious, and before long,
lots of suggestions and ideas flow.

Rules should be followed during brainstorming session:

a. Concentrate on the problem at hand

→ this rule keeps the discussion very specific and avoids the group’s
tendency to address the events leading up to the current problem.

b. Entertain all ideas

→ in fact, the more ideas that come up, the better. In other words, there are
no bad ideas. Encouragement of the group to freely offer all thoughts on the
subject is important. Participants should be encouraged to present ideas no
matter how ridiculous they seem, because such ideas may spark a creative
thought on the part of someone else.

c. Refrain from allowing members to evaluate others’ ideas on the spot

→ all judgements should be defered until all thoughts are presented, and the
group concurs on the best ideas.

OTHER WAYS TO HELP DEVELOP SOLUTIONS:

*Nominal group technique

→ this method involves the use of a highly structured meeting, complete
with an agenda, and restricts discussion or interpersonal communication
during the decision-making process. This technique is useful because it
ensures that every group member has equal input in the decision-making
process. It also avoids some of the pitfalls, such as pressure to conform,
group dominance, hostility, and conflict, that can plague a more interactive,
spontaneous, unstructured forum such as brainstorming.

*Delphi technique

→ with this technique, participants never meet, but a group leader uses
written questionnaires to conduct the decision making.

4. ANALYZE ALTERNATIVES

→ process wherein managers must identify the advantages of each alternative
solution before making a final DECISION.

• Determine the pros and cons of each alternative

• Perform a cost-benefit analysis for each alternative

• Weigh each factor important in the decision, ranking each alternative relative to
its ability to meet each factor, and then multiply by a probability factor to
provide a final value for each alternative.

→ regardless of the method used, a manager needs to evaluate each alternative in
terms of its

• Feasibility—can it be done?

• Effectiveness—how well does it resolve the problem situation?

• Consequences—what will be its costs (financial and nonfinancial) to the
organization?

5. SELECT THE BEST ALTERNATIVE

→ is the one that produces the most advantages and the fewest serious
disadvantages.

→ (select) alternative with the highest probability of success

6. IMPLEMENT THE DECISION

→ managers are paid to make decisions, but they are also paid to get results from
these decisions. Positive results must follow decisions. Everyone involved with the
decision must know his or her role in ensuring a successful outcome. To make
certain that employees understand their roles, managers must thoughtfully devise
programs, procedures, rules, or policies to help aid them in the problem-solving
process.

7. ESTABLISH A CONTROL AND EVALUATION SYSTEM

Evaluation system → provides feedback on how well the decision is being

implemented, what the results are, and what adjustments are

necessary to get the results that were intended when the

solution was chosen.

In order for a manager to evaluate his decision, he needs to gather information to

determine its effectiveness. Was the original problem resolved? If not, is he closer to

desired situation than he was at the beginning of the decision-making process?

If a manager’s plan hasn’t resolved the problem, he needs to figure out what went

wrong. A manager may accomplish this by asking the following questions:

• Was the wrong alternative selected?

→ if so, one of the other alternatives generated in the decision-making process
may be a wiser choice.

• Was the correct alternative selected, but implemented improperly?

→ if so, a manager should focus attention solely on the implementation step to
ensure that the chosen alternative is implemented successfully.

• Was the original problem identified incorrectly?

→ if so, the decision-making process needs to begin again, starting with a
revised identification step.

• Has the implemented alternative been given enough time to be successful?

→ if not, a manager should give the process more time and re-evaluate at a later
date.

III. BEHAVIORAL INFLUENCES ON DECISION MAKING

FACTORS THAT INFLUENCE ON DECISION MAKING:

A. Intuition

→ is an experienced-based way of knowing or reasoning in which

weighting, and balancing evidence are done unconsciously and
automatically.

→ is currently recognized as an important aspect of managerial decision
making, yet has limitations.

→ for example, when the stakes are high rational analysis is important. It
is best to use one’s intuition about when to use intuition.

B. Personality and Cognitive Intelligence

→ the personality and cognitive intelligence of the decision maker
influence his or her ability to find effective solutions. Propensity for risk
taking is an important personality factor. Cautiousness and conservatism
are also related to decisiveness. Perfectionism and rigidity also influence
decision making. High cognitive intelligence generally improves decision-
making quality. Some intelligent people, however, suffer from “ analysis
paralysis”.

C. Emotional Intelligence

→ how effective you are in managing your feelings and reading other
people can affect the quality of your decision making. Emotional
intelligence refers to qualities such as understanding one’s own feelings,
empathy for others, and the regulation of emotion to enhance living.

→ five key factors are involved in emotional intelligence:

1. Self awareness

2. Self management of emotion

3. Social awareness including empathy

4. Intuition

5. Relationship management

D. Quality and Accessibility of Information

→ high-quality information improves decision making, but many decision
makers rely heavily on accessible information. A related factor is that
people are influenced by the first information they receive. Anchoring
occurs when the mind gives too much weight to the first information it
receives. Another decision-making trap is over-confidence.

E. Political Considerations

→ many decisions are based on political considerations such as
favouritism, alliances, and the desire to stay in favor with powerful
people. The status quo trap is a decision-making tied to political factors.
You fail to challenge the status quo because you worry that being critical
of how things are will invite criticism from key people. The person with
integrity is aware of not alienating people in power, yet supports what he
or she thinks is the best decision.

F. Degree of Certainty

→ the more certain the decision maker is of the outcome of a decision,
the more calmly and confidently the person will make the decision. The
three degrees of certainty are certainty, risk, and uncertainty. Risky
decisions can be difficult to implement because people may not be
confident that the steps will lead to good results. Effective managers
often accept a condition of risk.

G. Crisis and Conflict

→ in a crisis, many decision makers panic whereas as smaller number are
at their best.

→ when conflict is not overwhelming, and is directed at real issues and
not personalities, it can be an asset to decision making. It helps to

visualize crises ahead of time. Conflict relates to crisis because both can
be an emotional experience.

H. Values of the Decision Maker

→ all decisions are ultimately based on values, such as concern for profits
or concern for human welfare. Clinging to the status quo is a value and
can be a hidden trap in decision making that can prevent optimum
decision making.

I. Procrastination

→ many decision makers are poor decision makers because they
procrastinate, or delay taking action without a valid reason.
Procrastination results in indecisiveness and inaction. The problem can
often be overcome by acquiring a higher degree of self discipline.

J. Decision-Making Styles

→ a manager’s typical pattern of making decisions is his or her decision-
making style. According to the Decision Dynamic research, decision
different in terms of how information is used, and how options are
created. The four styles are (1) decisive (one option, less information), (2)
flexible (many options, less information), (3) hierarchic (one option, more
information), and (4) integrative (many options, more information). It is
helpful to be aware that such styles exist, and reflect on one’s style.

IV. INDIVIDUAL DECISION MAKING/GROUP DECISION MAKING

• Good decision making is skill to be learned and mastered, especially for leaders
who are managing a team. More importantly, individuals must also practice

being good decision makers since it is not advisable to be too dependent on
others for personal decision.

• The decision of being too dependent on others is that you might have hard time
standing on your own two feet when a situation would require you to make a
choice without anyone’s help. A better way to deal with it is to consult friends or
trusted people who can advise you on the kind of decision you are about to
make. They can give you suggestions or warnings before you implement it. This
way you are still on your own in arriving a decision.

PROS AND CONS OF INDIVIDUAL DECISION MAKING

When you make a decision on your own, you take pride in it especially if the
decision made was successful and effective yet, there are moments when it is
just difficult not to seek assistance from others.

ADVANTAGES OF INDIVIDUAL DECISION MAKING:

1. You can take immediate action and fast solution to a problem or situation

2. You are solely responsible for the kind of decision achieved whether it is
good or bad

3. You take full responsibility for the outcome of the decision and its
consequences

4. You take no arguments with your personal opinion on how to address a
problem

5. You became efficient with the use of time and effort in reaching a decision

6. There is no need to delegate role and responsibilities so you do not have to
deal with people who are hesitant to take on a responsibility

7. You are free from too much diversity in a group which tends to limit
cohesiveness and affect the decision making

DISADVANTAGES OF INDIVIDUAL DECISION MAKING:

1. You only see things based on your own perception

2. You have no one to discuss regarding the projected outcome of the decision.
there may be other people who have already gone through the kind of
situation that you are experiencing and they might be able to share whether
they were successful or not in the kind of decision made

3. You have a hard time reaching a decision especially when you have an
indecisive character

4. It can be difficult for you to tell whether you are experiencing a decision
making pitfall or not

5. The level of motivation there is in individual decision making is not as strong
as when a team is successful enough to create a motivations effect to the
members

6. There may not be so many creative solutions generated when only one
person makes the decision

GROUP DECISION MAKING

The functionality of a group in terms of performance has been known to be
effective in various aspects such as conflict situations, problem solving, and
decision making. The group takes into account the individual needs and ideas of
the members, making it a collaborative approach in dealing with just about any
kind of situation. When it comes to decisions, a group decision making style
works best for any kind of situation.

ADVANTAGES OF GROUP DECISION MAKING

1. Groups provide a broader prospective

2. Employees are more likely to be satisfied and to support the final decision

3. Opportunities for discussion help to answer questions and reduce
uncertainties for the decision makers

DISADVANTAGES OF GROUP DECISION MAKING

1. This method can be more time consuming than one individual making the
decision on his own

2. The decision reached could be a compromise rather than the optional
solution

3. Individuals become guilty of GROUPTHINK—the tendency of members of a
group to conform to the prevailing opinions of the group

4. Groups may have difficulty performing tasks because the group, rather than
a single individual, makes the decision, resulting in confusion when it comes
to implement and evaluate the decision

INDIVIDUAL VS GROUP DECISION MAKING:

Both approaches in making decisions follow the same process in decision
making. However, a decision worked out by a GROUP has a greater tendency to
be more effective than that of an individual effort because it is an outcome of
collective or cohesive minds. And results of dozens of individual vs group
performance studies indicate that groups not only tend to make better decisions
than a person acting alone, but also that groups tend to inspire star performers
to even higher levels of productivity.

INDIVIDUAL DECISION making is best left to skilled decision makers. Yet, we
might wonder what about the day-to-day small decisions that only individual
himself should make? Well, these petty situations should mold us in learning to
become independent with your decisions.

BUKIDNON STATE UNIVERSITY

External Studies Center

New Bataan, Compostela Valley

PROBLEM SOLVING & DECISION MAKING

Submitted to:

Dr. Lilian C. Calicdan

PA 205 Instructors

Submitted by:

Renato Z. Dianito

Evangeline S. Manila

Ivan Kleb Ulgasan

Juvy F. Sobrevilla

Problem solving series

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