PROBLEM SOLVING AND DECISION-MAKING

Problem-solving and decision-making are important because it is the way through which we
will understand what is happening in different situations and will help us to identify what
action needs to be taken to get the desired outcome. It acts as a support system or backbone
for any individual as well as an organization because it enables us to understand the
problems.
Basically, this process of problem-solving comprises of four different steps: integrative
thinking, problem-solving, decision making, articulation, and communication.
Every organization and individuals have their own problems and for this reason, problem-
solving skills are the most important skills. Each stage in problem-solving and decision-
making employs skills and methods that will help us to achieve goals effectively and
efficiently. It will help in fixing the problems, seize the opportunity, and help in improving
the performance by taking corrective measures. It is not only about responding and fixing
problems but it is also about innovating and creating new things. It plays a vital role for every
Manager as well as individuals in making decisions so that it will help to navigate a variety of
situations that an organization has to face to succeed.

Problem-solving and decision-making are complimentary to one another and are used at the
same time. It basically involves how to identify problems and integrate the information and
make decisions and how to think integrative, comes towards different solutions.

While doing this one should also keep in mind that the future is ambiguous and it is important
to consider this factor along with time constraints. Tasks and decisions should be made
within the stipulated time period because if the time lapses and decisions are made after that,
it will be of no use and just a wastage of resources. For example, if one wants to go for knee
replacement surgery then he/she should decide within the stipulated time period otherwise it
will be just a waste of money and other efforts if the time lapses.

Problems can be of financial, business, operations level but there can be a general template. It
also matters that the number of templates and frameworks that we can look at. So, it is very
important for organizations to have good problem-solving and decision-making skills.
Employees with experience can be baggage when it comes to solving problems as it helps to
make decisions more effectively and efficiently. Integrative thinking is also an important part
of problem-solving and decision making as a manager one needs to take many decisions and
you are accountable to the shareholders of the company. Some shareholders are part of the
management team and some are passive investors. Your role as a manager is to give returns
to the Shareholders of the company. If they are not satisfied, they have the option to pull out
the money and will send the prices back to the company. So, managers must try to make
decisions that should result in returns. Managers are expected to sort out problems at strategic
and tactical levels, put together a team and make decisions on time all in an environment of
uncertainty.

It is also a very important point to be kept in mind that while dealing with real-life problems
each and every small detail matters a lot and for that, it is not mandatory to get hundred
percent detail as only useful and relevant information must be kept in mind before proceeding
but one should not miss the key points. If all the major key points are kept in mind and then
goes for solving the problem, there will be fewer chances of errors, and problems can be
solved with less effort and more effectively and efficiently. So, problem-solving and
decision-making are the stepping stones for every organization as well as individuals.

SAVE-A-PENNY
Save-a-Penny used to be the market leader within ‘double-supermarkets’ which dedicate 50
percent of the space for food and the remaining 50 percent for non-food. The board has been
impressed by the recent profit improvements in the food department. Mr. R the CEO is under
heavy pressure for a clear recommendation on key non-food initiatives.

The first step that will help to solve the problem is defining the problem statement and this
fishbone diagram can be useful.

CONTEXT: As we can see from Exhibit A that there has been a continuous decline in
revenue from 2012 to 2020. It dropped from 100 to 96 and along with that market revenue of
CAGR decreased by 1 percent. Save-a-Penny used to be a market leader with double
supermarkets which was taken over by competitor Value4U.
CRITERIA FOR SUCCESS: There was a recent profit improvement in the food department
and because of those sales in the non-food department needs to be improved.
CONSTRAINTS: Existing stores need to be improved and the floor space for the non-food
segment is roughly around 50 percent.
STAKEHOLDERS: Mr. R and Save-a-Penny Board.
SOURCES OF INSIGHTS: Customers' survey reports and financial data.

The next step involves structuring the problem and under this, we can use an Issue tree. Save-
a-Penny can improve non-food sales by increasing the number of customers and also by
increasing the existing number of customers. It can also focus on providing easy access to
non-food items, better customers services, and better quality of products. Along with that
some rebates and discounts can also be given.
After this step, they must prioritize the tasks from the issue tree and from that must decide
which is the best way that can be helpful for the success of the company.
For example, Save-a-Penny wants to increase the number of customers then they must target
new customers and for that, they can provide online and e-commerce facilities. Old
customers can also be retained by in-store marketing campaigns and also by push marketing
campaigns. If they want to increase the sale of non-food items among the existing customers
then they must focus on changing the price for non-food items and for that cross-selling
discounts and offers can be given to the customers.
So, this is the method that I will use or apply to solve the case of Save-a-Penny after
attending the session.