Problem Solving and Decision Making

Problem Solving and Decision Making

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Introduction: [/b]

Challenge to be more productive:

Most organizations face a challenge to improve quality and productivity. The pressure usually comes from rapidly rising labor cost, equipment and raw material cost in addition to keeping the prices low to remain competitive. Every organization contains the potential for improvement. This potential can be tapped when people learn to work together to bring out their knowledge, experience and creativity. Many structured groups like Quality Improvement Teams, Task Force Teams, Quality Circles, Corrective Action Teams, Product Development Teams, Value Engineering Groups are constantly engaged in making improvements in their sphere of activity. Productivity is the crucial component of our economic health. Decline in productivity can result in widespread economic problems like unemployment, rise of price index lost markets particularly to foreign competitors etc. Improved productivity helps in three levels.

1. National Level: Productivity growth is important if we are to compete with other nations and maintain a high standard of living.

2. Local Level: Improving productivity helps an organization to provide its customers with better products and services, use of resources more effectively and help improve internal operations.

3. Individual level: Productive work is psychologically and financially more rewarding. It provides opportunities for increased self- esteem and for personal advancement

There are three basic truths about productivity:

a) Every organization has the potential for improvement.

b) There are significant untapped and poorly used resources in every organization.

c) Small increase in overall productivity can have large effects on organizational performance.

A major resource for harnessing the potential existing in an organization is the improvement team concept. Every improvement team deals with the challenges through defining goals, Problem identification, problem analysis and decision making process. Why a team is better equipped to deal with a problem rather than an individual can be understood by knowing the psychological aspects of problem solving which is covered briefly later.

What is a problem?[/b]

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Problem simply means a difficult situation. In reality, it is a gap between what is expected and what actually is. Each problem has two aspects 1) A stated, implied or desired state of affairs and 2) obstacle which prevents getting things into the desired state.

Problem solving is one of the central activities of a manager. Naturally, better understanding of problem solving process can help us to become better managers. Any problem and its solutions affect people and things. So there are material aspect and people aspect. Material aspect is better addressed through logical approach and People aspect through psychological approach. Most often it is a combination of logical and psychological approach in certain ratio.

Logical Approach: Goal directed, goal oriented process that consists of a series of definite steps.

Psychological Approach: The approach that each individual affects the content and approach to problem solving. Each person is a unique combination of values, needs, sensitiveness, expectations and skills. Often Human aspect of problem solving becomes very important.

Group Phenomenon: The assumption that a group of people can solve problems better than a single individual. However, there are also some factors that might affect the problem solving process.

Logical Approach:[/b]

Problem analysis and decision making are management acts that should be consciously and systematically performed, and if necessary be recorded.

The approach is primarily divided into four parts a) Problem Identification and 2) decision making 3) Implementation 4) Evaluate performance

Various experts have broken down each into various logical steps some very detailed and some not so much detailed. However the basic steps are as follows:

Problem Identification:

1. Define problem

2. Gathering information

3. Specify the deviation

4. Develop possible causes

5. Test the causes based on the information gathered. What is and what is not. And determine the most possible cause.

Decision Making:

1. Establish Objectives and classify objectives into Musts and Wants

2. Generate alternate solutions and test the solutions against the objectives and decide on the one getting the highest score

Implementation:

1. Anticipate Potential problems

2. Anticipate possible causes of potential problems

3. Take preventive actions and contingency actions for potential problems that have been identified.

Evaluate performance:

Check whether the problem is solved and desired objectives were satisfied.

Psychological Elements of problem solving:[/b]

1. The management Grid:

A Manager achieves the objectives of an organization through people. The way in which people interact with one another and in different situations is therefore an important concern to management. There are two apparently opposing interests of management:

1) High concern for people

2) High concern for production

5 distinct management styles have evolved based on how managers react to these above to concerns. This has been put in the form of Management Grid, to consider individual management styles. The 5 positions are described as (9,1), (1,9), (1,1), (5,5) and (9,9). The elements considered in evaluating and describing management styles are:

n Decisions

n Convictions

n Conflict

n Emotions

n Humor

n Effort

The (9,1) Management Style:

There is a high concern for people coupled with a low concern for people. The (9,1) manager is an autocrat. He places high value to decisions made by him and stands up strongly for his own convictions, often stepping on toes. He tries to cut off conflict and win his position, and when he is losing he defends resists and counter argues.

People adopting (9,1) style are regarded as instrument of production. The philosophy is "Produce or perish". Human interaction and relationship is minimal. He believes in exercising authority and commanding obedience. Conflict is suppressed, and the goal is to win your point.

The long term effect of (9,1) management style is a reaction against authoritarianism, mistrust in management and unionization.

The (1,9) Management Style:

Also called Country Club Management--Here concern for production is low and concern for people is high. The belief here is that if the people are happy, they will somehow do the work. The manager places high value on maintaining good relations and prefers to accept convictions of others rather than push his own views. He tries to avoid conflict, but when it does arise he tries to soothe feelings. He reacts to people in warm and friendly way. His humor is used to shift attention away from serious matters. He rarely leads but extends help.

The work tempo is comfortable in a (1,9) environment. People are encouraged rather than driven. They are expected to work to avoid unpleasantness and out of loyalty to the company and their boss.

Little gets done in a (1,9) environment. People loose their drive and initiative because there is no pressure on them. Creative thinking is stifled and change is considered disruptive. Gradually people loose job satisfaction due to lack of challenge. People start expecting the company to do more for them without having to do anything for the company.

The (1,1) Management Style:

Concern for both production and people are low. The (1,1) manager is the hippie of the management world. He effectively drops himself out from any conflict or where decision needs to be taken. As a result he accepts decision of others and avoids taking sides. He remains neutral in order to avoid conflict and so rarely gets stirred up. He exerts just enough effort to get by. He makes sure that he remains unscathed till the end of any meeting.

There is a minimum contact and involvement in the (1,1) environment. Buck is passed as far as possible. No one likes to work for a (1,1) boss.

The (5,5) Management Style:

Here the concern for both production and people is reasonable. The two concerns are carefully balanced. Most managers and management environment are best described by this style. The (5,5) manager searches for a workable, even though not a perfect decision. He initiates middle ground position and tries to obtain equitable solution. Under pressure he is not sure where to turn. He uses his humor to sell himself or a position and he seeks to maintain a good steady pace.

Communications are good in a (5,5) environment. There is a basic assumption that people will work if you tell them why it is necessary. The (5,5) relies heavily on systems. Informal systems are readily formalized and rigid standard procedures are introduced to ensure people know what is expected of them.

Th e (9,9) Management Style:

Concern for both production and people are high. The (9,90 manager places high value on obtaining sound, creative decisions resulting in understanding and agreement. He is a good listener. He seeks out ideas, opinions, and attitudes different from his own. He has clear convictions, but responds to sound ideas by changing his mind. He expects conflict and when it arrives he tries to identify and resolve the underlying causes of the conflict. He contains his emotions and uses humor to give the situation perspective. He contains his emotions and uses humor to give the situation perspective. He exerts vigorous effort and others join in.

The basic assumption in a (9,9) environment is that people have a need to be involved and committed to production work, and that people want to think creatively. Personal goal setting is found in a (9,9) environment, and those responsible for the work are involved in the planning and execution and improvement. Individual goals are in line as much as possible with organizational goals. Human relationships are based on involvement in work and on trust.

The purpose o this Grid is for the individual to evaluate his own management style and learn how it can be improved.

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Each person, with his individual characteristics and attributes, differ from everyone else in his perception of problems and sensitivity to problems. Some of the aspects governing ones way of looking or behaving are as follows:

1. Personal Assumptions: People have got a tendency to take an egocentric view of the world. People are comfortable in assuming

a) Everyone knows what I know

b) No body knows that I do not know

c) What is important to me is important to everyone

d) Everyone learns the way I learn

e) Everyone feels the way I feel

These personal assumptions block effective problem solving. An individual comes to believe that his definition of the problem, his diagnosis and his solution is obviously shared by everyone else. That is why it is necessary to have more than one person to look at a problem.

2. Personal Needs: People have a variety of diverse psychological needs. Some of the needs are :

a) Affection, warmth and encouragement-- these people are sensitive to problems of morale and will seek solutions that increase the affection people express towards each other.

b) Aggressiveness and attack--these people are sensitive to competitors and frequently prefers direct, nonsense solutions

b) Control and master---these people sees problems in terms of who will come up on top, and favors solutions that place him in an influential position.

c) Safety and certainty of outcome--- these people sees the failure as having a high cost and tends to favor solutions with minimum risk.

The problem solving process may become an exercise in satisfying some of those personal needs.

3. Self as a competent Resource:

Most of us know 1) What we can do well 2) What we have done well 3) What we can not do well

All of us see a problem and tend to generate solutions in terms of activities we can do well. People have a tendency to pick up the solution with which we feel comfortable with either during the process of implementation or in the outcome. Some times we tend to pick up the solutions which we feel others can do well. Either way we tend to put artificial boundaries to possible solutions and limit possible alternatives.

Thus we know how psychological elements can affect individuals problem solving ability. As long as we understand the above psychological aspects we will be in a position to change our thinking process and attitude to problem solving so that these aspects do not inhibit our thoughts while looking at and finding solutions to problems.

Group Phenomena in problem solving:[/b]

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Organizations use groups structures-like Quality improvement teams, Task force teams, Committees, Quality Circles etc., to identify and solve operational problems. However, one must understand that certain group psychology and individual psychology can affect group’s decision making process. The various aspects of this feature is as given below.

1. Shared Assumptions: Groups develop assumptions that govern the behavior of all members. For example, a group may assume when just two members agree the group has a sense of direction and beginning of a consensus. Frequently, a management group assumes it should not methodically explore the resources of all the members because this might give some members higher or lower ‘Status’ than others. (Some one knows better than the boss)

2. Reaction to Deviants: A deviant is a person who persists in expressing a viewpoint or behaving in a manner that is noticeably different from the standards set by the group. The group goes through the following stages in their relations with the deviant member.

a) Logical argument

b) Offering affection

c) Veiled threats of rejection

d) Open hostility

e) Isolation

f) Expulsion

Deviants fulfil an important function of problem solving. A deviant stimulates: 1) Collaboration 2) Clarification 3) In depth exploration

A problem solving management group that develops a standard that does not tolerate deviation makes good solutions to problems impossible.

3. Assertion of Status & Competence: When people are granted “Extra Status” or “Extra Weight” the members with “Lesser Status” are not allowed to be heard. In such situations right solutions and right decisions are almost impossible.

4. Hostility: Hostility is a response from an individual when he feels that there is a negative judgement on his personal integrity, competence or knowledge. An individual should be allowed to express him adequately so that hostile feelings do not develop. In an hostile environment an individual’s problem solving capabilities decrease greatly.

Analyzing Problem:

1. Break the problem into smaller parts: Pull the problem apart into different elements, which you can understand and evaluate.

2. Know the destination and where you are: If a person does not know what port he is steering, no wind is favorable to him. And if he does not know where he is now, he can not very well set a course. No matter how hard he rows ha can not reach his destination. Hard work is often robbed of its reward because of poor planning.

3. Understand what is a problem: Defining the problem is more essential than its solution.

Behavioral Influence on Individual Decision Making:[/b]

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Several behavioral factors influence decision making process. Some influence only certain aspects of the process while others influence the entire process.

The behavioral factors are:

1) Values

2) Personality

3) Propensity for Risk

4) Potential for Dissonance.

Values: Values are acquired early in life and influence mainly in choice situations as given below.

a) In establishing Objectives--- Value judgement is required in the selection of opportunities and assignment of priorities.

b) In developing alternatives

c) In choosing alternatives

d) When implementing decisions—Value judgement is required in choosing the means for implementation.

Personality: This includes the attitudes, beliefs and needs of the individual.

The following aspects are important as regards the influence of personality on decision making process.

a) It is unlikely one person can be equally proficient in all aspects of the decision making process

b) Different characteristics (viz. Intelligence, truth seeking ability, analyzing ability etc.) are associated with different phases of decision making process.

c) The relation of personality to the decision making process may vary for different groups on the basis of such factors as sex and social status.

Propensity of Risk: Some people are risk takers and some has aversion to taking risks. This specific aspect of human quality influences a person in the decision making process and hence in establishing objectives. A person having aversion to risks will make choices where risk and uncertainty is low.

However, it has been seen how low risk takers become bolder, innovative in a group than when they work individually. Individuals are more willing to accept as members of a group.

Potential for dissonance: The occurrence of post decision anxiety is called “Cognitive Dissonance” There is often lack of consistency or harmony among an individual’s various cognitions (for example attitudes, beliefs, and so on) after a decision is made. The decision maker will have doubts and second thoughts about the choice that was made. This happens when there is a conflict between what the decision maker knows or believes and what was done.

The anxiety will be greater if the following conditions exist:

a) The decision is important one psychologically and / or financially

b) There were number of alternatives not considered

c) The foregone alternatives had many favorable features

When dissonance occurs, admitting that a mistake has been made can reduce it. Unfortunately, many individuals are reluctant to admit that they have made a wrong decision. These individuals will more likely use one or more of the following methods to reduce their dissonance.

a) Seek information that supports wisdom of their decision

b) Selectively distort information in a way to support their decision

c) Change their attitude to a less favorable view of the foregone alternatives

d) Avoid the importance of the negative aspects and enhance the positive elements

The potential for dissonance is influenced heavily by one’s personality, especially one’s self-confidence and persuasibility. Behavioral influences are closely interrelated. For example, what kind of risk taker you are and your potential for anxiety following a decision are very closely related, and are both strongly influenced by your personality, perceptions and value system.

Various definitions of Problem and its significance:[/b]

Problem is a deviation from a standard and cause is an unplanned and unexpected change. So unless the change is precisely determined all action to correct the imbalance is merely guesswork. A problem solver should sort out the relevant from the irrelevant. He should rely more heavily on skillful, rational questioning, and less and less on experience.

Problem is an unwanted effect, something to be corrected or removed

Problems are the impediments to the Goals to be achieved.

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Some facts about problem solving:[/b]

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The cost of unsystematic and irrational thinking by managers is enormous

Many managers realized that their own private system for handling problems and making decisions simply did not work well.

Any decision based on a false cause is going to be ineffective, wastefully expensive, and sometimes downright dangerous.

The pitfalls of problem analysis and decision-making are almost certain to increase whenever a manager is under pressure. Precisely at this time people are clamoring for action

A systematic way of doing something is always more efficient and less time-consuming than a disorderly approach that may require doing the same thing several times in order to get it right.

Problem solving by a group is always better than an individual approach.

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The Basic Steps to Systematic Problem Solving:

Setting or Clarifying the Goal[/b]

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Any journey begins with knowing the destination. The destination or goal is the output of the team’s effort. A team should agree on what it hopes to improve through its problem solving effort. Also what it chooses to work on must fit in the goals of the organization.

Identifying Problems[/b]

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