4 creative problem solving and decision making
- 1. CHAPTER 4: CREATIVE PROBLEM SOLVING AND DECISION MAKING CH 4 © 2015 SAGE Publications
- 2. Problem Solving and Decision Making • Problem: Exists whenever objectives are not being met • Problem Solving: Process of taking corrective action to meet objectives • Decision Making: Process of selecting a course of action that will solve a problem
- 3. Management Functions • When Planning • Make decisions about objectives, as well as when, where and how they will be met • When Organizing • Must make decisions about what to delegate and how to coordinate the department’s resources • When Staffing • Must decide whom to hire and how to train and evaluate employees • When Leading • Must decide how to influence employees
- 4. Decision Making Styles Reflexive Style Reflective Style Consistent Style Makes quick decisions. “Shooting from the hip” Takes plenty of time to make decisions gathering considerable information and analyzing several alternatives. Tend to make decisions without either rushing or wasting time.
- 5. The Six Step Decision Making Model 1. Classifying and defining the problem or opportunity 2. Setting objectives and criteria 3. Generating creative and innovative alternatives 4. Analyzing alternatives and selecting the most feasible 5. Planning and implementing the decision 6. Controlling the decision
- 7. Decision Making Conditions • Certainty: • The outcome of each alternative is known in advance • Risk: • The exact outcome of each alternative is not known in advance • Can assign probabilities to each outcome • Uncertainty: • Lack of information or knowledge makes the outcome of each alternative unpredictable • Cannot accurately determine probabilities
- 8. Decision Making Types • Rational Decision • Use optimizing • Selects best possible alternative • Bounded Rational Decision • Use satisfying • Selects the first alternative that meets the minimal criteria • Can lead to suboptimal criteria
- 9. Potential Advantages and Disadvantages of Using Group Decision Making POTENTIAL ADVANTAGES POTENTIAL DISADVANTAGES Better quality decisions: Groups usually do a better job solving complex problems than the best individual in the group Wasted tune and slower decision making: Longer for a group to make a decision, and employees are not on the job producing More information, alternatives, creativity and innovation: A group of people usually has more of these important factors Satisficing: Groups are more likely to satisfice than an individual, especially when group meetings are not run effectively Better understanding of decisions: When people participate they understand why the decision selected was the best alternative Domination and goal displacement: One group member or a subgroup may control the group decision with the goal of personal gain
- 10. POTENTIAL ADVANTAGES POTENTIAL DISADVANTAGES Greater commitment to the decision: People involved in making a decision have increased commitment to implementing the decision Conformity: Group members may feel pressured to go along with the groups decision without questioning it out of fear of not being accepted Improved morale and motivation: Participation is rewarding and personally satisfying Groupthink: It occurs when members withhold different views to appear as though they are in agreement . This nullifies the advantages of diversity Good training: Participation trains people to work in groups Social loafing: Team members may withhold their effort and fail to perform their share of the work
- 11. Setting Objectives • Helps managers make better decisions as it increases commitment • States when the decision should be accomplished • Teams are good at setting objectives and standards
- 12. Criteria • Standards that an alternative must meet to be selected as the decision that will accomplish the objective • Types of Criteria: • Must: items that must be met in order for an alternative to be acceptable • Want: items that are desirable but not necessary for the alternative to be acceptable
- 13. Creativity & Innovation • Creativity: thinking that generates new ideas • Innovation: the implementation of a new idea
- 14. Killers of Creativity & Innovation • “It’s impossible” • “it can’t be done.” • “We’ve never done it.” • “Has anyone else tried it?” • “It won’t work in our department/company/industry.” • “It costs too much.” • “It isn’t in the budget.” • “Let’s form a committee.”
- 15. Three Stages in the Creative Process • Preparation • Incubation and illumination • Evaluation
- 16. Generating Alternatives • Brainstorming: Process of suggesting many possible alternatives without evaluation • Synectics: Process of generating novel alternatives through role playing and fantasizing
- 17. Generating Alternatives • Nominal Grouping: Process of generating and evaluating alternatives using a structured voting method • Consensus Mapping: Process of developing group agreement on a solution to a problem • The Delphi Technique: Uses a series of confidential questionnaires to refine a solution
- 18. Quantitative Techniques • Break-Even Analysis: allows calculation of the volume of sales or revenue that will result in a profit • Capital Budgeting: Used to analyze alternative investments in assets, such as the make-or-buy and rent/lease/buy decisions
- 19. Quantitative Techniques • Linear Programming: Optimum allocation of resources such as time, money, space, material, equipment and employees • Queuing Theory: Focuses on waiting time • Probability Theory: Enables the user to make decisions that take into consideration conditions of risk
- 20. The Kepner-Tregoe Method • Technique for comparing alternatives using the criteria selected in step 2 of the decision making model • Step 1: Assess each alternative with regard to the “must” criteria • Step 2: Rate the importance of each “want” criterion on a scale of 1 to 10 • Step 3: Determine how well each alternative meets each “want” criterion • Step 4: Compute the weighted score for each alternative on each criterion • Step 5: Select the alternative with the highest total weighted score
- 21. Cost-Benefit, Pros & Cons, Intuition • Cost-benefit Analysis: Whether the benefit to be gained from an alternative is worth its cost • Pros and Cons: Identify the advantages which can be considered benefits and the disadvantages which can be considered the cost of each alternative • Intuition: Decision based on experience, feeling and accumulated judgment; it is unconscious reasoning
- 22. Participative Decision Model • Assists in selecting which leadership style to use in a situation • Time-driven • Development driven
- 23. Vroom’s Five Leadership Styles • Decide • As the leader of the group, make the decision alone • Consult Individuals • Describe the problem to individual group members, get information and suggestions • Consult Groups • Hold a group meeting and describe the problem to the group, get information and suggestions
- 24. Vroom’s Five Leadership Styles • Facilitate • Act as a facilitator as the group works to define the problems and the limits within which decisions must be made • Delegate • Let the group diagnose the problem and make the decision within stated limits