Problem solving vs decision making PDF

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Problem- Gap between existing condition & desired condition/deviation from the standard Problem solving is a process used to identify the possible solutions to the situation at hand. Problem solving is the act of defining a problem; determining the cause of the problem; identifying, prioritizing, and selecting alternatives for a solution; and implementing a solution. Decision making is a choice made by using one’s judgement. The art of making sound decisions is a particularly important skill for leaders and managers. You may need to make numerous decisions as part of the problem-solving process. And, of course, leaders and managers will need to use their decision-making skills to determine which solution to pursue. They will also typically need to confirm and set into motion next steps to fix the problem.

The key difference between problem solving and decision making is that solving problems is a process, whereas making decisions is an action derived during the problem-solving process. Steps involved in problem solving 1. Define the problem Define the problem: (with input from yourself and others). Ask yourself and others, the following questions: 1. 2. 3. 4. 5.

What can you see that causes you to think there's a problem? Where is it happening? How is it happening? When is it happening? With whom is it happening? (HINT: Don't jump to "Who is causing the problem?" When we're stressed, blaming is often one of our first reactions. To be an effective manager, you need to address issues more than people.) 6. Why is it happening? 7. Write down a five-sentence description of the problem in terms of "The following should be happening, but isn't ..." As much as possible, be specific in your description, including what is happening, where, how, with whom and why. Defining complex problems: If the problem still seems overwhelming, break it down by repeating steps 1-7 until you have descriptions of several related problems.

Verifying your understanding of the problems: It helps a great deal to verify your problem analysis for conferring with a peer or someone else. Prioritize the problems: If you discover that you are looking at several related problems, then prioritize which ones you should address first.

2. Look at potential causes for the problem ● It's amazing how much you don't know about what you don't know. Therefore, in this phase, it's critical to get input from other people who notice the problem and who are affected by it. ● Write down what your opinions and what you've heard from others. ● Regarding what you think might be performance problems associated with an employee, it's often useful to seek advice from a peer or your supervisor in order to verify your impression of the problem. ● Write down a description of the cause of the problem and in terms of what is happening, where, when, how, with whom and why. 3. Identify alternatives for approaches to resolve the problem At this point, it's useful to keep others involved (unless you're facing a personal and/or employee performance problem). Brainstorm for solutions to the problem. Very simply put, brainstorming is collecting as many ideas as possible, then screening them to find the best idea. It's critical when collecting the ideas to not pass any judgment on the ideas -- just write them down as you hear them. 4. Select an approach to resolve the problem

● When selecting the best approach, consider: ● Which approach is the most likely to solve the problem for the long term? ● Which approach is the most realistic to accomplish for now? Do you have the resources? Are they affordable? Do you have enough time to implement the approach? ● What is the extent of risk associated with each alternative? (The nature of this step, in particular, in the problem solving process is why problem solving and decision making are highly integrated.) 5. Plan the implementation of the best alternative (this is your action plan) 1. Carefully consider "What will the situation look like when the problem is solved?" 2. What steps should be taken to implement the best alternative to solving the problem? What systems or processes should be changed in your organization, for example, a new policy or procedure? 3. How will you know if the steps are being followed or not? (these are your indicators of the success of your plan) 4. What resources will you need in terms of people, money and facilities? 5. How much time will you need to implement the solution? Write a schedule that includes the start and stop times, and when you expect to see certain indicators of success. 6. Who will primarily be responsible for ensuring implementation of the plan? 7. Write down the answers to the above questions and consider this as your action plan. 8. Communicate the plan to those who will involved in implementing it (An important aspect of this step in the problem-solving process is continually observation and feedback.) 6. Monitor implementation of the plan Monitor the indicators of success: 1. Are you seeing what you would expect from the indicators? 2. Will the plan be done according to schedule? 3. If the plan is not being followed as expected, then consider: Was the plan realistic? Are there sufficient resources to accomplish the plan on schedule? Should more priority be placed on various aspects of the plan? Should the plan be changed? 7. Verify if the problem has been resolved or not One of the best ways to verify if a problem has been solved or not is to resume normal operations in the organization. Still, you should consider: 1. What changes should be made to avoid this type of problem in the future? Consider changes to policies and procedures, training, etc.

2. Lastly, consider "What did you learn from this problem solving?" Consider new knowledge, understanding and/or skills. 3. Consider writing a brief memo that highlights the success of the problem solving effort, and what you learned as a result. Share it with your supervisor, peers and subordinates.

Decision strategies ❖ Rational ❖ Non rational Rational decision making strategy Rational decision making is a multi-step process, from problem identification through solution, for making logically sound decisions.Rational decision making: A logical, multistep model for choosing between alternatives that follows an orderly path from problem identification through solution.

● Involve cognitive process ● Each step follows in a logical order ● Based on thinking and weighing up the alternative come up with the best potential result ● Use a comprehensive & logical approach similar to the guidelines ● Often used when addressing large, complex matters in strategic planning ● Rational decision-making favors objective data and a formal process of analysis over subjectivity and intuition. ● The model of rational decision making assumes that the decision maker has full or perfect information about alternatives; it also assumes they have the time, cognitive ability, and resources to evaluate each choice against the others. Advantages ● Gives a strong sense of order in confused situation ● Provides a common frame which people can communicate in the situation Disadvantages ● Take long time to finish ● making model say that the model makes unrealistic assumptions, particularly about the amount of information available and an individual’s ability to process this

information when making decisions and the finite amount of time and resources they have to make a decision.

The Process of Rational Decision Making Rational decision making is a multi-step process for making choices between alternatives. The process of rational decision-making favors logic, objectivity, and analysis

The approach follows a sequential and formal path of activities. This path includes:

1. 2. 3. 4. 5.

Formulating a goal(s) Identifying the criteria for making the decision Identifying alternatives Performing analysis Making a final decision.

Non-rational decision strategy ● ● ● ● ● ● ●

No rational or logic behind the choices made Some people consider these as chances or lucky guess A conventional approach An emotional approach Random approach Does Not have alternative solution People rarely have full (or perfect) information. For example, the information might not be available, the person might not be able to access it, or it might take too much time or too many resources to acquire. More complex models rely on probability in order to describe outcomes rather than the assumption that a person will always know all outcomes. ● Individual rationality is limited by their ability to conduct analysis and think through competing alternatives. The more complex a decision, the greater the limits are to making completely rational choices.

Managerial decision types 1. Programmed decisions 2. Non-programmed decision

Programmed decisions The decisions which will be repeated and taken in managing routine production process. Taken mostly by lower level managers, many decisions regarding basic operating systems and procedures standard organizational transactions fall into this category . E.g Purchasing stocks to factory Non-programmed decisions ● Used by comparatively higher-level managers ● Mostly non-repeated decisions ● To take these types of decisions need good knowledge, experience & intelligence ● A decision made in response to a situation that is unique,(single ,only one of its kind),and has important sequences for the organization

Programmed decisions

Non-programmed decisions

Type of problem

Structured Repetitive routine

Unstructured Novel complex

Managerial level

Lower level

Upper levels

frequency

Repetitive

Unusual

Information

Readily available

Incomplete

Goals

Clear, Specific

Unclear

Time frame for solution

Short

Relatively long

Solution relies on procedure

Depending on policies & procedures

Judgment Require creativity, intuition

Decision Making Conditions Everyday a manager has to make hundreds of decisions in the organization. There are different conditions in which decisions are made. Managers sometimes have an almost perfect understanding of conditions surrounding a decision, but in other situations they may have little information about those conditions. At the same time, the decision taken by the managers at present will also have an effect on the future. For this purpose, the decisionmaking process involves the visualization of the conditions that may be present in future. So, the decision maker must know the conditions under which decisions are to be made. Generally, the decision maker makes decisions under the condition of certainty, risk and uncertainty. There are three conditions that managers may face as they make decisions. They are (1) Certainty, (2) Risk, and (3) Uncertainty. Certainty When the certainty conditions are present, it can be reasonably expected by the managers what is going to happen when a particular decision has been taken by them. Certainty is a condition under which the manager is well informed about possible alternatives and their outcomes. There is only one outcome for each choice. When the outcomes are known and their consequences are certain, the problem of decision is to compute the optimum outcome. Similarly, if there are more than one alternative they are evaluated by conducting cost studies of each alternative and then choosing the one which optimizes the utility of the resources. The condition of certainty exists in case of routine decisions such as allocation of resources for production, payment of wages and salary etc. There is a little ambiguity and relatively low chance of making impractical decision. In these situations, the managers use a deterministic model, and it is assumed that all the factors are exact and there is no role for chance. Risk In a risk situation, although the factual information may be present but it can be insufficient. Mostly the managers have to take business decisions under risk situations. A more decision making condition is a state of risk. In such a condition, managers have knowledge about alternative courses of actions but outcomes are associated with probability estimates. It is more difficult to predict future conditions without full information, so the outcome of an alternative cannot be accurately determined. Therefore, managers can guess the probable outcome on the basis of their experience, research and other available information. They can choose an alternative with the highest expected outcome. However, such decisions are largely subjective as no decision criteria are fully reliable. Decision making under conditions of risk is accompanied by moderate ambiguity and chances of an impractical decision. On the other hand, the managers may also use subjective probability that is based on their experience and

judgment. For this purpose, several tools are available to the managers that can help in taking decisions under risk conditions. Uncertainty In case of uncertainty conditions, very little information is available to the managers and the managers are not sure regarding the reliability of such information. A state of uncertainty occurs when managers are unaware of the problem they face. They do not know all the alternatives, the risk associated with them or the likely consequences of each alternative. This uncertainty arises from the complexity and dynamism of contemporary organizations and their environments. Managers have limited information to calculate the degree of risk, so statistical analysis is not possible. The condition of uncertainty arises when the organization introduces a new or innovative product or service, adopts new technology, selects a new advertising program etc. To make effective decisions in uncertain conditions, managers must acquire as much relevant information as possible and approach the situation from a logical and rational perspective. Intuition, judgment and experience always play major roles in the decision making process. However, decision under uncertainty is the most ambiguous for managers and there is more possibility of error. However, there are certain techniques that can be used by the managers for making a better decision under uncertainty conditions. For example, they may use decision trees, risk analysis and preference theory for making the right decisions in uncertainty conditions. Hence, In conclusion, we can say that greater the amount of reliable information, the more likely the manager will make a good decision. Hence, the manager should make sure that the right information is available at the right time.

The Six Step Problem Solving Model Problem solving models are used to address the many challenges that arise in the workplace. While many people regularly solve problems, there are a range of different approaches that can be used to find a solution. Complex challenges for teams, working groups and boards etc., are usually solved more quickly by using a shared, collaborative, and systematic approach to problem solving.

Advantages of Six-Step Problem Solving The Six-Step method provides a focused procedure for the problem solving (PS) group. ● It ensures consistency, as everyone understands the approach to be used. ● By using data, it helps eliminate bias and preconceptions, leading to greater objectivity. ● It helps to remove divisions and encourages collaborative working. ● It stops PS groups diverging into different problems. ● It also helps PS groups reach consensus

● It eliminates the confusion caused when people use different problem solving techniques on the same issue. ● It makes the decision making process easier. ● It provides a justifiable solution.

All six steps are followed in order – as a cycle, beginning with “1. Identify the Problem.” Each step must be completed before moving on to the next step. The steps are repeatable. At any point the group can return to an earlier step, and proceed from there. For example, once the real problem is identified – using “2. Determine the Root Cause(s) of the Problem”, the group may return to the first step to redefine the problem.

The Six Steps 1. Define the Problem 2. Determine the Root Cause(s) of the Problem 3. Develop Alternative Solutions 4. Select a Solution 5. Implement the Solution 6. Evaluate the Outcome

The process is one of continuous improvement. The goal is not to solve but to evolve, adjusting the solution continually as new challenges emerge, through repeating the Six Step Process. Step One: Define the Problem Step One is about diagnosing the problem – the context, background and symptoms of the issue. Once the group has a clear grasp of what the problem is, they investigate the wider symptoms to discover the implications of the problem, who it affects, and how urgent/important it is to resolve the symptoms.

At this stage groups will use techniques such as: ● Brainstorming ● Interviewing ● Questionnaires

As this step continues, the PS group will constantly revise the definition of the problem. As more symptoms are found, it clarifies what the real problem is. Step Two: Determine the Root Cause(s) of the Problem Once all the symptoms are found and the problem diagnosed and an initial definition agreed, the PS group begins to explore what has caused the problem. In this step the problem solving team will use tools such as: ● Fishbone diagrams

● Pareto analysis ● Affinity diagrams

These techniques help collate the information in a structured way, and focus in on the underlying causes of the problem. This is called the root cause.

At this stage, the group may return to step one to revise the definition of the problem. Step Three: Develop Alternative Solutions Analytical, creative problem solving is about creating a variety of solutions, not just one. Often the most obvious answer is not the most effective solution to the problem. The PS group focuses on: ● Finding as many solutions to the problem, no matter how outlandish they may seem. ● Looking at how each solution relates to the root cause and symptoms of the problem. ● Deciding if different solutions can be merged to give a better answer to the problem.

At this stage it is not about finding one solution, but eliminating the options that will prove less effective at dealing with both the symptoms and the root cause. Step Four: Select a Solution In the fourth step, groups evaluate all the selected, potential solutions, and narrow it down to one. This step applies two key questions. 1. Which solution is most feasible? 2. Which solution is favoured by those who will implement and use it?

Feasibility is ascertained by deciding if a solution: ● Can be implemented within an acceptable timeframe? ● Is cost effective, reliable and realistic? ● Will make resource usage more effective? ● Can adapt to conditions as they evolve and change? ● Its risks are manageable? ● Will benefit the organization/

Which solution is favoured? Acceptance by the people who will use and implement the solution is key to success. This is where the previous steps come into play. To users and implementers, a solution may seem too radical, complex or unrealistic. The previous two steps help justify the choices made by the PS group, and offer a series of different, viable solutions for users and implementers to discuss and select from.

Step Five: Implement the Solution Once the solution has been chosen, initial project planning begins and establishes: ● The project manager. ● Who else needs to be involved to implement the solution. ● When the project will start. ● The key milestones ● What actions need to be taken before implementing the solution ● What actions need to be taken during the implementing the solution ● Why are these actions necessary?

The group may use tools, such as a Gantt chart, timeline or log frame. Be...