8.creative problem solving and decision making
TRANSCRIPT
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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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43Copyright 2006 Thomson Business and Economics. All rights reserved.
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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44Copyright 2006 Thomson Business and Economics. All rights reserved.
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45Copyright 2006 Thomson Business and Economics. All rights reserved.
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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46Copyright 2006 Thomson Business and Economics. All rights reserved.
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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48Copyright 2006 Thomson Business and Economics. All rights reserved.
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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49Copyright 2006 Thomson Business and Economics. All rights reserved.
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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410Copyright 2006 Thomson Business and Economics. All rights reserved.
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411Copyright 2006 Thomson Business and Economics. All rights reserved.
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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412Copyright 2006 Thomson Business and Economics. All rights reserved.
Continuum of Decision-Making Conditions
Exhibit 43
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413Copyright 2006 Thomson Business and Economics. All rights reserved.
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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414Copyright 2006 Thomson Business and Economics. All rights reserved.
Continua for Classifying a Problem
Exhibit 45
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415Copyright 2006 Thomson Business and Economics. All rights reserved.
Continua for Classifying a Problem (contd)
Exhibit 45 contd
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416Copyright 2006 Thomson Business and Economics. All rights reserved.
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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417Copyright 2006 Thomson Business and Economics. All rights reserved.
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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418Copyright 2006 Thomson Business and Economics. All rights reserved.
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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421Copyright 2006 Thomson Business and Economics. All rights reserved.
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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422Copyright 2006 Thomson Business and Economics. All rights reserved.
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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423Copyright 2006 Thomson Business and Economics. All rights reserved.
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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424Copyright 2006 Thomson Business and Economics. All rights reserved.
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425Copyright 2006 Thomson Business and Economics. All rights reserved.
Decision Tree
Exhibit 48
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426Copyright 2006 Thomson Business and Economics. All rights reserved.
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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427Copyright 2006 Thomson Business and Economics. All rights reserved.
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428Copyright 2006 Thomson Business and Economics. All rights reserved.
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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429Copyright 2006 Thomson Business and Economics. All rights reserved.
The Kepner-Tregoe Method for Analyzing Alternatives
Exhibit 49
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430Copyright 2006 Thomson Business and Economics. All rights reserved.
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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431Copyright 2006 Thomson Business and Economics. All rights reserved.
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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432Copyright 2006 Thomson Business and Economics. All rights reserved.
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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433Copyright 2006 Thomson Business and Economics. All rights reserved.
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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434Copyright 2006 Thomson Business and Economics. All rights reserved.
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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435Copyright 2006 Thomson Business and Economics. All rights reserved.
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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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437Copyright 2006 Thomson Business and Economics. All rights reserved.
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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438Copyright 2006 Thomson Business and Economics. All rights reserved.
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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439Copyright 2006 Thomson Business and Economics. All rights reserved.
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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440Copyright 2006 Thomson Business and Economics. All rights reserved.
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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441Copyright 2006 Thomson Business and Economics. All rights reserved.
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.