Problem Solving and Decision Making

Problem Solving and Decision Making A Process Seven steps that provides a rational and analytical way of looking at decisions. 1 Decision Making Process * * * * * * * Identify the Problem Collect Relevant Information Develop Alternatives Evaluate each Alternative Select the Best Alternative Implement the Decision Follow-up and Evaluate 2 What is a Problem? A discrepancy between an existing and a desired state of affairs. & Identifying the real problem is no easy task. 3 Problem Identified What are the surrounding circumstances & Is there more than one way to resolve the issues ??? 4 Alternatives Developed Identify the strengths and weakness of each alternative & Select the one that best addresses the salient discrepancies 5 Make a Decision Implement the decision and take the steps necessary to ensure correct timing and execution. Follow-up and evaluate the results 6 Decision Tools * Expected Value Analysis It permits decision makers to place a monetary value on the various consequences likely to result from the selection of a particular course of action. 7 Decision Tools * Decision Tree Encompass’ expected value analysis by assigning probabilities to each possible outcome and calculating payoffs for each decision path. 8 Decision Tools * Marginal Analysis Analyzing decisions in terms of their incremental costs. * MIS A mechanism to provide the manager with needed and accurate information on a regular and timely basis. 9 Decision Making Styles Everyone brings their own unique personalities and experiences to the decisions they make. Notwithstanding however, The decision-style model outlined in your text has identified four principle styles. 10 Decision Making Styles The decision-style model assumes that people differ along two dimensions: * Their way of thinking (How they process information) * Tolerance for Ambiguity (How clear does everything have to be) 11 Directive  Low tolerance for ambiguity.  Seeks rationality.  Efficient and logical.  Makes quick decisions.  Short term focus 12 Analytic  High tolerance for ambiguity.  Requires more information.  Considers more alternatives.  Careful and adaptable. 13 Conceptual  Very broad in outlook.  Considers many alternatives.   Good at finding creative solutions. Focus long range. 14 Behavioral      Work well with others. Concerned with achievements of subordinates. Receptive to suggestions. Avoids conflict. Seeks acceptance. 15 Ethics in Decision Making Common Rationalizations * “Its not really illegal or immoral.” * “Its in my (Organization’s) best interest” * “No one will find out” * “Since it benefits the organization it will be protected” * “Everybody does it” 16 Ethics in Decision Making Different Views of Ethics * Utilitarian Decisions are made solely on the basis of their outcomes. The greatest good for the greatest number. * Rights View Decisions emphasize respecting and protecting the basic rights of individuals. 17 Ethics in Decision Making Different Views of Ethics * Justice View A view that requires individual to impose and enforce rules fairly and impartially so there is an equitable distribution of benefits and costs. 18 Group Decision Making Advantages * Provides more complete information. * Generates more alternatives. * Increases acceptance of a solution. * Increases legitimacy. 19 Group Decision Making Disadvantages * Time consuming * * * Minority domination Pressure to conform (Groupthink) Ambiguous responsibility 20 Group Decision Making Tends to be: * More accurate * * * More creative More acceptable More time consuming 21 Group Decision Making Special Techniques * Brainstorming * Nominal Group Technique * Electronic Meetings 22