Problem Solving and

Decision Making

Lecture Dr. Bilal Anwar

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 Problem
“In a day, when you don’t come across any
problems- you can be sure that you are
traveling in a wrong path.”
-Swami Vivekananda
A problem is a situation or a state of affairs
that causes difficulties for people. It is also a
gap between a current and a desired state.
The gap may be viewed as the difference
between 'what is' and 'what should be' or
'where we are' and 'where we want to be'.

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 Problem Solving

If a problem is a gap between two

states, then problem solving is 'the
process of closing that gap, i.e.
changing the current state into the
desired one.'

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 Decision

“A decision is a judgment”
- Peter Drucker

A choice between or among

various alternatives

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 Classification of Decisions
• Personal decisions to achieve own objectives.
• Organisational decisions to fulfill the obligations of
own position in the organisation.
- Programmed – usually made at lower level and are
usually routine in nature. Made on the basis of pre-
established rules / procedures.
- Non-programmed – established rules / procedures
are inadequate to deal with the new kinds of situations, and
the decision maker has to be innovative. The risks
involved are high. Decisions made about non-recurring
problems for which there are no pre-specified courses of
action.

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 Decision Making

------ is an activity carried out in

the process of solving problems.

------ is the selection of one

behaviour alternative from two
or more possible alternatives.
-Terry

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 Reactions to Problem / Situation
• Ignore or avoid
• Act without thinking
• Positively decide to do nothing
• Take decision only when there is a crisis or
pressure
• Take action only after gathering information
and giving some thought

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Approaches to Decision Making
• Authoritarian - deciding
independently seeking no
contributions other than asking for
necessary information and passing
them down the line for
implementation.
• Democratic - jointly, as a team,
making a decision which has the
support of the whole group.
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Approaches / Styles to Decision Making
• No one style appropriate for all situations.
• Occasions when one style rather than any
other is more likely to produce better
quality decisions implemented with
greater success.
• Need to adopt a flexible approach by
varying style in response to the nature of
the decision and the context in which it is
made and ultimately implemented.
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 Process of Decision Making
Rational DM Process

Evaluate Alternatives

Develop Alternatives Choose the Best Alternative

Identify/Define Problems Implement the Decision
Sense Effects Monitor the Implementation

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 I Diagnose Problem/ Define the Objective

"A problem properly defined is a problem half solved.“

• Define the problem
• Identify the decision objectives (what will happen when the
problem has been solved)
• Identify the causes of problem
• What you are trying to achieve?
• What suggests that there is a problem?
• To who is it a problem?
• What kind of problem is it (attitude, understanding, competence)?
• Has this ever happened before?
• Is it a human performance or a technical problem?
• What is the potential magnitude of the problem if it remains
unresolved?

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 II Develop Alternatives to Solve the Problem

This is a brainstorming step to generate alternatives, not

to evaluate them. Brainstorming suggests a range of
possible solutions.
Listing options (Thinking creatively) - the alternatives to
reach Pokhara?
- Nobody says "no“
- Nobody says "That will never work“
- Nobody says "That has already been tried
before“
- Nobody says "That is a stupid idea"
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 III Evaluate Alternatives

• Realistic to Organisation Goals

• Helpful to Solve the Problem
• Timing
• Resources
• Acceptability
• Feasibility
• Risk
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 IV Choose the Best Alternatives

Solution should be satisfactory rather than ideal. There are

four criteria for choosing the best from among the possible
solutions:
1. The risk - weigh the risks of each course of action
against the expected gains.
2. Economy of effort - which will give the greatest results
with the least effort?
3. Timing- situation in the organisation.
4. Limitations of resources - vision, competence, skill,
etc. of staff who carryout decisions. Do we have
resources to carryout decisions?
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 V Implement the Decision

Putting a chosen solution into effect requires a

carefully drawn-up action plan.
SN Activities / By Required Critical
Actions Whom When Resource (s) Success
Factor (s)

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 VI Monitor the Decision

• Set dates for monitoring. Who will monitor? How and

when?
• Is the solution effective?
• Are we still satisfied? Are there parts that need
reworking? In light of new data received, do we need to
make any changes?
• Has there been any permanent improvement?
• How adequate have our problem solving procedures
been?
• Are we learning from experience?
• What new problems have we identified?
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Problems in Decision Making (Contd.)

• Which problem to solve?

• What is a right decision?
• External and internal environment
• Individual's values, capabilities,
biasness / prejudice, experience
• Time
• Conflicting information
• For some “thinking” is not “work”
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 Basic Approaches to Improve Decision Making
Ability

1. Improve analytical ability

2. Adopt systematic approach
3. Invite conflicting views
4. Consider factors influencing
decision making
5. Use imagination / Be creative
6. Implementation and follow-up
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 1. Improve analytical ability
Opinions are perfectly good starting point.
Ask questions starting with:
– What,
– Why,
– When,
– How,
– Where, and
– Who.
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 2. Adopt systematic approach

• Analyse the situation

• Identify possible courses of
action
• Weigh them up
• Decide what to do
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 3. Invite conflicting views

• One should not expect a

bland consensus view
• The best decisions emerge
from a clash of conflicting
points of view
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4. Consider factors influencing decision making

•Availability of resources
•Environment- internal / external (PEST)
•Capability, values, experience of concerned people
•Knowledge
•Time
•Biasness / prejudice
•Customs and habits of people
•Psychological factors- emotion, ethics, values…
•Future as anticipated
•Superiors and subordinates
•Interest / Pressure groups
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 5. Use imagination
Use 'lateral thinking' and 'brain-storming'.
You can develop your ability to think
creatively by:
• Breaking away from any restrictions
• Opening up your mind to generate
new ideas
• Delaying judgment until you have
thoroughly explored the alternative
ideas (for example, 'It won't work', 'It won't solve the
problem')
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6. Implementation and follow-up

A problem is not solved until the

decision is implemented. Think
carefully not only about how a
thing is to be done (who, what,
when) but also about its impact on
the people concerned and the extent
to which they will co-operate.
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