8.creative problem solving and decision making

8/7/2019 8.Creative Problem Solving and Decision Making

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PowerPoint Presentation by Charlie CookThe University of West Alabama

Copyright 2006 Thomson Business and Economics.

All rights reserved.

Chapter 4Chapter 4

Creative ProblemCreative ProblemSolving andSolving and

Decision MakingDecision Making


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42Copyright 2006 Thomson Business and Economics. All rights reserved.

The Relationship among Objectives, Problem Solving, and Decision Making

Problem Exists whenever objectives are not being met.

What is happening vs. what is wanted to happen

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. First decision is whether to take corrective

action.


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The Decision-Making

Model

A six-step process that

when properly utilized

increases chances of

success in decisionmaking and problem

solving.

Exhibit 41


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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.

Reflective Style

Takes plenty of time to make decisions,

gathering considerable information and

analyzing several alternatives.

Consistent Style

Tends to make decisions without either rushing

or wasting time.


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Decision Making in the Global Village

U.S.-based decision-making styles are different

from the decision-making styles in other

cultures due to differences in:

Time orientation The use participative decision making

Orientation toward problem solving rather than

acceptance of the status quo


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Decision Structure

Programmed Decisions

Recurring or routine situations in which the

decision maker should use decision rules or

organizational policies and procedures to make

the decision.

Nonprogrammed Decisions

Significant and nonrecurring and nonroutine

situations in which the decision maker should

use the decision-making model.


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Decision Structure Continuum

Exhibit 42

Nonprogrammed Decision:

Significant, nonrecurring, and nonroutine

(Longer period of time to make decisions)

Nonprogrammed Decision:

Significant, nonrecurring, and nonroutine

(Longer period of time to make decisions)

Programmed Decision:

Nonsignificant, recurring, and routine

(Shorter period of time to make decisions)

Programmed Decision:

Nonsignificant, recurring, and routine

(Shorter period of time to make decisions)


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Decision-Making Conditions

Certainty

Each alternatives outcome is known in

advance.

Risk Probabilities can be assigned to each outcome.

Uncertainty

Lack of information or knowledge makes the

outcome of each alternative unpredictable suchthat no probabilities can be determined.


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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.


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Continuum of Decision-Making Conditions

Exhibit 43


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Potential Advantages and Disadvantages of Using Group Decision Making

Potential Advantages

1. Better-quality decisions

2. More information,

alternatives, creativity,

and innovation3. Better understanding of

the decision

4. Greater commitment to

the decision

5. Improved morale andmotivation

6. Good training

Potential Disadvantages

1. Wasted time and slower

2. Satisficing

3. Domination and goal

displacement4. Conformity and

groupthink

Exhibit 44


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Continua for Classifying a Problem

Exhibit 45


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Continua for Classifying a Problem (contd)

Exhibit 45 contd


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Define the Problem

Distinguish Symptoms from the Cause of theProblem List the observable and describable

occurrences (symptoms) that indicate a

problem exists. Determine the cause of the problem.

Removing the cause should cause thesymptoms to disappear or cease.

Symptom: Customer dissatisfaction

Cause: Poorly trained employees

Solution: Implement customer relations trainingprogram for employees


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Set Objectives and Criteria

Setting Objectives

Involves establishing clear objectives that will

make for better decisions.

Objectives state what the decisions should

accomplish in solving a problem or taking

advantage of an opportunity.

Setting Criteria

Involves setting standards that an alternative

must meet to be selected as the decision that

will accomplish the objective.


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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


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Stages in the

Creative Process

Exhibit 46

Become familiar with the problem; generate

as many solutions as possible.

Take some time before working on the

problem again to gain additional insight.

Before implementing the solution, evaluate

the alternative to be sure it is practical.


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Group Decision-Making Techniques That Foster Creativity

Exhibit 47


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Generating Creative Alternatives

Brainstorming The process of suggesting many possible

alternatives without evaluation.

Synectics

The process of generating novel alternativesthrough role playing and fantasizing.

Nominal Grouping The process of generating and evaluating

alternatives using a structured voting methodthat includes listing, recording, clarification,ranking, discussion, and voting to select analternative.


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Generating Creative Alternatives (contd)

Consensus Mapping (Ringi)

The process of developing group agreement on

a solution to a problem.

Delphi Technique The process of using a series of confidentialquestionnaires to refine a solution.


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Responses That Kill Creativity

It cant be done.

Weve never done it.

Has anyone else tried it?

It wont work in our department(company/industry).

It costs too much.

It isnt in the budget. Lets form a committee.


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Decision Tree

Exhibit 48


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Analyzing the Feasibility of Alternatives

Quantitative Techniques

Break-even analysis

Capital budgeting

Payback

Discounted cash flow

Linear programming

Queuing theory

Probability theory


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The Kepner-Tregoe Method

1. Assess each alternative with regard to themust criteria.

2. Rate the importance of each want criterion ona scale of 1 to 10 (10 being the most important).

3. Determine how well each alternative meets thewant criterion.

4. Compute the weighted score (WS) for each

alternative on each criterion.5. Select the alternative with the highest total

weighted score.


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The Kepner-Tregoe Method for Analyzing Alternatives

Exhibit 49


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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.

Continuum of Analysis Techniques:

Exhibit 410


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Plan, Implement, and Control

Plan

Develop a plan of action and a schedule of

implementation.

Implement the Plan Communicate and delegate for direct action.

Control

Use checkpoints to determine whether the

alternative is solving the problem. Avoid escalation ofcommitmentto a bad

alternative.


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Participative Decision-Making:

Time-Driven Model

The model is a decision tree that

works like a funnel. Define the

problem statement; then move from

left to right and answer each

question by responding either high

(H) or low (L), skipping decisions

that are not appropriate to the

situation and avoiding crossing any

horizontal lines. The last column

indicates the appropriate leadership

decision-making style for that

situation.

Exhibit 411a

Source:Adapted from Victor H. Vroom, Leadership and the

Decision-Making Process, OrganizationalDynamics 28(4),

p. 87. Copyright 2000 with permission from Elsevier.


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Participative Decision-Making:

Development-Driven Model

The model is a decision tree

that works like a funnel. Define

the problem statement; then

move from left to right and

answer each question by

responding either high (H) or

low (L), skipping decisions that

are not appropriate to the

situation and avoiding crossing

any horizontal lines. The last

column indicates the

appropriate leadership

decision-making style for that

situation.

Exhibit 411b

Source:Adapted from Victor H. Vroom, Leadership and the

Decision-Making Process, OrganizationalDynamics 28(4),

p. 87. Copyright 2000 with permission from Elsevier.


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Time-Driven versus Development-Driven Model

Making effective decisionsthrough maximum

development of groupmembers

Making effective decisionswith minimum cost

Emphasizes groupdevelopment

Emphasizes timelydecision making

Has a long-term horizon,as group developmenttakes time.

Has a short-termtime horizon

Time-Driven Development-Driven

ValueValue

OrientationOrientation

FocusFocus


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PowerPoint Presentation by Charlie CookThe University of West Alabama

Copyright 2006 Thomson Business and Economics.All rights reserved.

Chapter 4Chapter 4

Back UpBack Up

Creative ProblemCreative ProblemSolving andSolving and

Decision MakingDecision Making


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Learning Outcomes

1. Explain the relationship among objectives, problem solving, and

decision making.

2. Explain the relationship among the management functions,

decision making, and problem solving.3. List the six steps in the decision-making model.

4. Describe the differences between programmed and

nonprogrammed decisions and among the conditions of

certainty, uncertainty, and risk.

5. Describe when to use the rational decision-making model versus

the bounded rationality model and group versus individual

decision making.

After studying this chapter, you should be able to:


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Learning Outcomes (contd)

6. State the difference between an objective and must and wantcriteria.

7. State the difference between innovation and creativity.

8. List and explain the three stages in the creative process.

9. Describe the differences among quantitative techniques, theKepner-Tregoe method, and cost-benefit analysis for analyzing

and selecting an alternative.


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Learning Outcomes (contd)

10. Define the following key terms:problem innovation

problem solving creativity

decision making creative process

decision making model devils advocate

programmed decisions brainstorming

nonprogrammed decisions synectics

decision-making conditions nominal grouping

criteria consensus mapping

participative decision-makingmodel


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Ideas on Management at Nike

1. Which young NBA athlete did Nike sign to a large endorsementcontract? What was the contracts price tag? How did Nike classify and

define the problem or opportunity in making the decision to sign this

player?

2. What objectives does Nike meet through its star endorsements?

3. What product is Nike currently marketing under this athletes name?How does Nike demonstrate creativity and innovation?

4. Which techniques could Nike use to analyze the alternatives in the

contract decision? Does the amount of the contract given to the young

athlete pose a serious financial risk to Nike?

5. What unethical and socially irresponsible labor practices have criticsaccused Nike of in recent years?

6. Which decision style from Vrooms participative decision-making model

should Nike have used to make the decision to sign the athlete to a

contract?


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Problem Solving and Decision Making

The Relationship among the Management

Functions, Decision Making, and Problem

Solving

Managers need to make proficient decisions

while performing the functions of management.

8.creative problem solving and decision making

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