Managerial Problem Solving

Truong Minh Chuong, Ph.D.

School of Industrial Management
 Contents
1. Introduction to business problem solving
2. Types of problems
3. Decision making procedure
4 . Barriers to problem solving
5. Goal setting in business problem solving
6. Problem identification and Definition
7. Thinking approach in problem solving
8. Solution design and selection
"Decision-making is only one of the tasks of an
executive. It usually takes but a small fraction
of his or her time. But to make the important
decisions is the specific executive task. Only an
executive makes such decisions."
(Drucker, 2001, p. 19).
1. Introduction to business problems
 Introduction to business problems
• Management personnel are constantly
confronted with decision problems with far-
reaching consequences.
 Survival and long-term success will often
depend on finding the right solution.
 Introduction to business problems
• To take the right decision is typically not a simple
matter, as most decision problems are highly complex
in nature.
• This complexity is due to a number of factors:
– The problem may have numerous dimensions, many of
which can only be described in qualitative terms.
– Relationships between the different dimensions may be
unclear so that the structure of the problem is obscured.
– The problem may involve more than one division or
department of the company or organization.
– The problem may have a large number of possible
alternative solutions.
– Future developments in the relevant environment may be
uncertain.
 Introduction to business problems
• Business problems are matters which
– Cause an organization to achieve a current
situation different from the target one
– Prevent an organization achieving its objectives
– Disclosure a new direction for the organization
development
 Introduction to business problems
• A problem is an unknown matter that results
from any situation in which a person seeks to
fulfill a need or accomplish a goal.
• Problems are “problems” only when there is a
"felt need" that motivates people to search for
a solution in order to eliminate discrepancies
(Arlin, 1989)
 Introduction to business problems
Problems are:
– Those involving the destruction, removal, or
containment of something that is present but not
desired
• Negatively oriented, is concerned with eliminating a source
of dissatisfaction
– Those involving the acquisition or attainment of
something that is absent but desired.
• Positively oriented, is concerned with attaining access to a
source of satisfaction
– The difference between negative and positive is
psychological
 Introduction to business problems
Five components of problem solving:
• The decision maker(s)
• Controlled variables: Courses of action
• Uncontrolled variables: The Environment
• Constraints imposed from within or without on
the possible values of the controlled and
uncontrolled variables
• Objectives: The possible outcomes produced
jointly by the decision maker's choice and the
uncontrolled variables.
 Introduction to business problem

The value of the outcome =

A specified relationship
between
the controlled variables
and
the uncontrolled variables
 Introduction to business problems
Problems are traditionally defined by:
• A problem domain
• A problem type
• A problem solving process
• And a solution
 Introduction to business problems
• The problem domain consists of the content
(concepts, rules, and principles) that defines
the problem elements.
• The problem type describes the combination
of concepts and rules and the procedures for
acting on them in order to solve the problems.
• The problem-solving process depends upon
the problem solver's understanding and
representation of the type problem, including
an understanding of the problem state and goal
state.
 Introduction to business problems
• Problem space or problem schema is a set of
operators for moving from the initial state to
the goal state (Wood, 1983)
• The problem space is "the fundamental
organizational unit of all human goal-oriented
activity" (Newell, 1980, p. 696)
 Introduction to business problems
• The solution to the problem represents the goal of the
problem solver.
• The solution may be:
– Convergent (a single, known solution), or
– Divergent (one of several acceptable solutions).
• The solution to the problem is not readily apparent or
specified in the problem statement
 The problem solver must:
– Identify the nature of the problem
– An acceptable solution,
– A process for arriving at it
Introduction to business problems