Chapter 4 Creative ProblemProblemsolving and DecisionDecisionmaking

Learning Outcomes


Learning Outcomes (cont¶d)


he did not know where he was going to. ‡ When he returned.Christopher Columbus School of Management? (1451-1506) ‡ ³When he left his port. May) 4±4 . he did not know where he was. he did not know where he had come from. ‡ When he arrived.´ (Management Today.1998:14(4).

‡ Managers need to make proficient decisions while performing the functions of management.Problem-solving and Decision-making ‡ Problem ±A situation that exists when objectives are not being met. 4±5 . ‡ Problem-solving ±The process of taking corrective action to meet objectives. ‡ Decision-making ±The process of selecting an alternative course of action that will solve a problem.

and Problem-solving ±Managers need to make proficient decisions while performing the functions of management. and Problem-solving ‡ The Relationship Among Management Functions.Management. Decision-making. 4±6 . Decision-making.

The Decisionmaking Model ‡ A six-step model that when properly utilized increases chances of success in decision-making and problemsolving. 4±7 .

4±8 .Decision-making Styles ‡ Reflexive Style ±Makes quick decisions without taking the time to get all the information that may be needed and without considering all the alternatives. gathering considerable information and analyzing several alternatives. ‡ Consistent ±Tends to make decisions without rushing or wasting time. ‡ Reflective Style ±Takes plenty of time to make decision.

Types of Decisions ‡ Programmed Decisions ±Recurring or routine situations in which the decision-maker should use decision rules or organisational policies and procedures to make the decision. ‡ Non-programmed Decisions ±Significant and non-recurring and non-routine situations in which the decision-maker should use the decision-making model. 4±9 .

Decision-making Structure 4±10 .

4±11 .Decision-making Models ‡ Rational Model (Classical Model) ±The decision-maker attempts to use optimizing. selecting the best possible alternative. ‡ The Bounded Rationality Model ±The decision-maker uses satisficing. selecting the first alternative that meets the minimal criteria for solving the problem.

Which Decision Model to Use Exhibit 4±4a 4±12 .

4±13 . ‡ Risk ±Probabilities can be assigned to each alternative. ‡ Uncertainty ±Lack of information or knowledge makes the each alternative unpredictable such that no probabilities can be determined.Decision-making Conditions ‡ Certainty ±Each alternative¶s outcome is known in advance.

Decision-making Conditions Continuum 4±14 .

Greater commitment to the decision 5. Wasted time and slower decision making 2. Improved morale and motivation 6. More information. Better quality decisions 2. Domination and goal displacement 4. creativity. Better understanding of the decision 4. alternatives. Satisficing 3.Potential Advantages and Disadvantages of Using Group Decision-making Potential Advantages 1. and innovation 3. Good training 4±15 Potential Disadvantages 1. Conformity and groupthink .

When to Use Group or Individual Decision-making Exhibit 4±4c 4±16 .

nonrecurring and nonroutine) Programmed Decision (Nonsignificant.Classifying the Opportunity or Problem Continuums Relationship among: Decision-Making Structure Nonprogrammed Decision (Significant. recurring. and routine) Decision-Making Conditions Uncertainty (Outcome of alternatives unpredictable) Risk Certainty (Outcome of alternatives predictable) Which Decision Model to Use Decision-Making Model (Optimizing) Bounded Rationality Model ( Satisficing) When to Use Group or Individual Decision-making Group Decisions Individual Decisions 4±17 .

±Determine the cause of the problem. ‡ Symptom: Customer dissatisfaction ‡ Cause: Poorly trained employees ‡ Solution: Implement customer relations training program for employees 4±18 . ±Removing the cause should cause the symptoms to disappear or cease.Define the Opportunity or Problem ‡ Distinguish Symptoms from the Cause of the Problem ±List the observable and describable occurrences (symptoms) that indicate a problem exists.

‡ Setting Criteria ±Involves setting standards that an alternative must meet to be selected as the decision that will accomplish the objective. 4±19 . ±Objectives state what the decisions should accomplish in solving a problem or taking advantage of an opportunity.Set Objectives and Criteria ‡ Setting Objectives ±Involves establishing clear objectives that will make for better decisions.

Generate Creative Alternatives ‡ Innovation ±The implementation of a new idea ‡ Product innovation (new things) ‡ Process innovation (new way of doing things) ‡ Creativity ±A way of thinking that generates new ideas ‡ The Creative Process ±Preparation ±Incubation and illumination ±Evaluation 4±20 .

evaluate the alternative to be sure it is practical. Take some time before working on the problem again to gain additional insight. generate as many alternatives as possible. Before implementing the solution.Stages in the Creative Process Become familiar with the problem. 4±21 .

Characteristics of Useful Information ‡ ‡ ‡ ‡ Timeliness Quality (Accuracy) Completeness (Amount) Relevance 4±22 .

Group Decision-making Techniques That Foster Creativity 4±23 .

‡ Synectics ±The process of generating novel alternatives through role playing and fantasizing. clarification. recording. discussion. and voting to select an alternative. ranking. 4±24 .Generating Creative Alternatives ‡ Brainstorming ±The process of suggesting many possible alternatives without evaluation. ‡ Nominal Grouping ±The process of generating and evaluating alternatives using a structured voting method that includes listing.

‡ Delphi Technique ±The process of using a series of confidential questionnaires posed to experts to refine a solution.Generating Creative Alternatives ‡ Consensus Mapping (Ringi) ±The process of developing group agreement on a solution to a problem. 4±25 .

Responses That Kill Creativity 4±26 .

Analyzing the Feasibility of Alternatives ‡ Quantitative Techniques ±Break-even analysis ±Capital budgeting ‡ Payback ‡ Discounted cash flow ±Linear programming ±Queuing theory ±Probability theory 4±27 .

Select the alternative with the highest total WS. 2. 4±28 . Rate each ³want´ criterion on a scale of 1 to 10 (10 being the most important).The Kepner-Tregoe Method 1. Compute the weighted score (WS) for each alternative. Assign a value of 1 to 10 (10 being the highest) to how well each alternative meets the ³want´ criteria. 5. Compare each alternative to the ³must´ alternative. 4. 3.

The Kepner-Tregoe Method for Analyzing Alternatives Must Criteria <R30 000 Within one week Want Criteria Economy Low km Condition Cruise control Blue Total W. NB 7x 6x 10x 2x 3x Car 1 Y Y Car 2 Y Y Meets criteria 5 = 35 6 = 36 5 = 50 1=2 10 = 3 126 7 = 49 4 = 24 6 = 60 0=0 0=0 133 8 = 56 5 = 60 8 = 80 0=0 0=0 136 4±29 Car 3 Y Y Car 4 Y N .S.

Cost-Benefit (Pros and Cons) Analysis ‡ Cost-Benefit Analysis ±A technique for comparing the cost and benefit of each alternative course of action using subjective intuition and judgment along with math. ‡ The Alternative Analysis Techniques Continuum: Exhibit 4±10 4±30 .

Implement. 4±31 . ±Avoid escalation of commitment to a bad alternative. ‡ Implement the Plan ±Communicate and delegate for direct action. ‡ Control ±Use checkpoints to determine whether the alternative is solving the problem. and Control ‡ Plan ±Develop a plan of action and a schedule of implementation.Plan.

Decision Tree Exhibit 4±11 4±32 .

Situational Management: Decision-making (1) Model 4±2a 4±33 .

Situational Management: Decision-making (2) Model 4±2b 4±34 .

· Each member of the group identifies criteria.Tutorial ‡ Use a method that applies both quantitative and qualitative techniques for your decision to study in the Postgraduate Programme of the Department of Management. · The group reaches consensus on the 10 most appropriate ³WANT´ criteria. hand in your groupwork with each student¶s details 4±35 . · Use the Kepner-Tregoe Method ‡ At the end of the Tutorial Session. ‡ Method: · Develop two ³MUST´ criteria · Identify three other tertiary institutions. UWC.

4±36 .

4±37 .

4±38 .

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.