logging in or signing up Probelm Solving and Decision Making tsivasankaran Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 910 Category: Business & Fin.. License: All Rights Reserved Like it (3) Dislike it (0) Added: June 03, 2010 This Presentation is Public Favorites: 2 Presentation Description Presentation on Problem Solving Skill sets and Decision Making concepts Comments Posting comment... By: kitaene (12 month(s) ago) totallly good, and i got lot of infomations about essentioality of creative problem solving. please send me ppt on my e mail essaykorea@hotmail.com Saving..... Post Reply Close Saving..... Edit Comment Close By: anandsinghkhati (15 month(s) ago) Please send me ppt on my email anandsinghkhati@gmail.com Saving..... Post Reply Close By: tsivasankaran (14 month(s) ago) Thanks You can download this from www.advesh.com Sivasankaran Saving..... Edit Comment Close By: aungmin (15 month(s) ago) Pls send this to me via aungminni@gmail.com as it is very useful for me. Thanks Saving..... Post Reply Close By: tsivasankaran (14 month(s) ago) You can download this from www.advesh.com Saving..... Edit Comment Close By: lalitchaudhary (16 month(s) ago) please send it to lcamitchaudhary06@gmail.com Saving..... Post Reply Close By: tsivasankaran (16 month(s) ago) you can download in my website www.advesh.com Thanks Sivasankaran Saving..... Edit Comment Close By: pentairkishore (16 month(s) ago) Hello Very good presentation. How can I download this presentation. Otherwise will you email me on " kishorempatil2002@yahoo.com" thanks Kishore Saving..... Post Reply Close By: tsivasankaran (16 month(s) ago) You can get it from my website www.advesh.com Thanks Sivasankaran Saving..... Edit Comment Close loading.... See all Premium member Presentation Transcript PROBLEM SOLVING AND DECISION MAKING : 6/3/2010 Advesh Consultancy Services 1 PROBLEM SOLVING AND DECISION MAKING PROGRAMME OBJECTIVE : PROGRAMME OBJECTIVE 6/3/2010 Advesh Consultancy Services 2 To clarify and define the problem. To understand the usefulness of collaborative problem solving and decision making. To examine different decision making models. To utilize creativity in the problem solving/decision making process. To plan, practice, and problem solve with making decisions through case studies, role playing and group discussions. Slide 3: 6/3/2010 Advesh Consultancy Services 3 Please write a One Sentence Definition of PROBLEM SOLVING and DECISION MAKING. DEFINITION –PROBLEM SOLVING : DEFINITION –PROBLEM SOLVING 6/3/2010 Advesh Consultancy Services 4 A systematic approach to defining the problem and creating a vast number of possible solutions without judging these solutions. PROBLEM SOLVING : PROBLEM SOLVING 6/3/2010 Advesh Consultancy Services 5 Problem solving is a cognitive processing directed at achieving a goal where no solution method is obvious to the problem solver. Problem Solving : Problem Solving Problem Solving is ….. “….. the art of finding ways to get from where you are now to where you want to be (assuming you do not already know how). The ‘problem’, therefore, is the gap between the present situation and a more desirable one.” (Nolan 1989) Is this Problem Solving? TRIPLE CONSTRAINT PRINCIPLE : TRIPLE CONSTRAINT PRINCIPLE 6/3/2010 Advesh Consultancy Services 7 Something is a problem if: it makes you late it increases costs it degrades performance. time cost performance Slide 8: If none of these occur, it’s NOT a problem, just a hindrance. 6/3/2010 Advesh Consultancy Services 8 DEFINITION – DECISION MAKING : DEFINITION – DECISION MAKING 6/3/2010 Advesh Consultancy Services 9 The act of narrowing down the possibilities, choosing a course of action, and determining the action’s potential consequences. Slide 10: “It's not a problem that we have a problem. It's a problem if we don't deal with the problem.” --Mary Kay Utech 6/3/2010 Advesh Consultancy Services 10 WHAT DOES IT INVOLVE? : 6/3/2010 Advesh Consultancy Services 11 WHAT DOES IT INVOLVE? Slide 12: 6/3/2010 Advesh Consultancy Services 12 Problem solving is a skill, a tool and a process. It is a skill because once you have learnt it you can use it repeatedly, like the ability to ride a bicycle, add numbers or speak a language. It is a tool because it can help you solve an immediate problem or to achieve a goal. It is also a process because it involves taking a number of steps. PROBLEM SOLVING : PROBLEM SOLVING 6/3/2010 Advesh Consultancy Services 13 Skill Process Tools Slide 14: Making judgements SKILL SETS IN PROBLEM SOLVING? Analytical skills Decision making Collecting information Planning 6/3/2010 Advesh Consultancy Services 14 Problem Solving People? : Problem Solving People? 6/3/2010 Advesh Consultancy Services 15 Experts. People who know the area of knowledge thoroughly. Solving problems becomes more natural. People who can think of alternatives even when no clear solutions seems apparent. Slide 16: 6/3/2010 Advesh Consultancy Services 16 Have a better memory for relevant details in the problem. Classify problems according to their underlying principles. Use well-established procedures. Work forwards towards a goal (rather than backwards). Expert Problem Solvers Slide 17: Domain-dependent problem-solving strategies Self-monitoring Problem Solving Requirements 6/3/2010 Advesh Consultancy Services 17 Slide 18: Understanding the Process: ‘How to Solve it’ Engage: I want to and I can Read the problem (and all the information) Listen Learn about the situation that poses the problem Motivation Overcome panic 6/3/2010 Advesh Consultancy Services 18 Slide 19: Understand the problem: define Put in the time to define the problem: Discuss. Ask questions. Visualize. Restate the problem in your own words. Explain the problem to someone else. Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 19 Slide 20: Plan a procedure to solve the problem Prior experience. Data available. Content knowledge. Patterns. Estimation. Alternate solutions. Feasibility. Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 20 Slide 21: Collect data & the knowledge required A solution may be required based upon imperfect knowledge. Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 21 Slide 22: Select the preferred solution: test, use and evaluate Check each step Can you determine clearly that each step is correct? Can you prove that each step is correct? Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 22 Slide 23: Reflect on the process Are you certain you solved the problem? Can you check the result and your argument? Can use alternate solutions? What did you actually do? Can you explain this to another? Can you use the result &/or method for another problem? Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 23 PROBLEM SOLVING : PROBLEM SOLVING 6/3/2010 Advesh Consultancy Services 24 DEFINE INFORMATION/MEASURES ANALYSE GENERATE ALTERNATIVES SELECT ALTERNATIVES/DECIDE IMPLEMENT STEP 1 : STEP 1 6/3/2010 Advesh Consultancy Services 25 DEFINE Slide 26: 6/3/2010 Advesh Consultancy Services 26 Collect all the relevant information. Clarify background issues. What are the constraints? Are there sub-problems that can be dealt with separately? Can the problem now be formulated? Defining The Problem PROBLEM/OPPORTUNITY STATEMENT WORKSHEET : PROBLEM/OPPORTUNITY STATEMENT WORKSHEET 6/3/2010 Advesh Consultancy Services 27 ACTIVITY 2 : ACTIVITY 2 6/3/2010 Advesh Consultancy Services 28 Problem 1I am in the habit of coming late to office Problem 2We could not meet production targets Problem 3Take an issue in work situation. Define the problem. STEP 2 : STEP 2 6/3/2010 Advesh Consultancy Services 29 INFORMATION/MEASURES ACTIVITY : ACTIVITY 6/3/2010 Advesh Consultancy Services 30 Imagine that you were going to buy a house in a new area. List ten things that you would want to know about a house before you gave it serious consideration . Tick any of these things that you could find out from the agent’s information. How could you find out the other things? Slide 31: 6/3/2010 Advesh Consultancy Services 31 Do we have all of the information and data we need? Collect data and digest the information. TYPES OF INFORMATION : TYPES OF INFORMATION 6/3/2010 Advesh Consultancy Services 32 QUANTITATIVE QUALITATIVE Quantitative : Quantitative 6/3/2010 Advesh Consultancy Services 33 How much? How many? How frequently? How likely? How quickly? QUALITATIVE : QUALITATIVE 6/3/2010 Advesh Consultancy Services 34 What? Why? How? DATA SOURCES : DATA SOURCES 6/3/2010 Advesh Consultancy Services 35 PrimaryData gathered by you directly for your purpose SecondaryGathered by others for their purpose SECONDARY DATA : SECONDARY DATA 6/3/2010 Advesh Consultancy Services 36 Collected by other Depts Reference Books Databases Journals Published Reports Govt Statistics ACTIVITY 4A : ACTIVITY 4A 6/3/2010 Advesh Consultancy Services 37 In a production line, the output of a particular machine has come down drastically. There was a hue and cry that the operator is intentionally slowing down production. What all information need to be collected before commencing any action? ACTIVITY 4B : ACTIVITY 4B 6/3/2010 Advesh Consultancy Services 38 First batch of Vacuum Circuit Breakers supplied by a Company in India in the year 1981 failed miserably The Technical collaborators, the Manufacturers and the Customers were trying to resolve the issue What all information need to be collected? ACTIVITY 4C : ACTIVITY 4C 6/3/2010 Advesh Consultancy Services 39 On a piece of paper, draw a map of the people you know. Put yourself in the middle and connect the people you know very well in the first circle. Add people you know through these network in the next layer and connect them with spokes. Do three levels. 3.15 PM-3.3.30PM : TEA 6/3/2010 Advesh Consultancy Services 40 3.15 PM-3.3.30PM STEP 3 : STEP 3 6/3/2010 Advesh Consultancy Services 41 ANALYSE Analyze the Problem : Analyze the Problem 6/3/2010 Advesh Consultancy Services 42 Do not make the mistake of assuming you know what is causing the problem without an effort to fully investigate the problem you have defined. Try to view the problem from a variety of viewpoints, not just how it affects you. Think about how the issue affects others. It is essential to spend some time researching the problem. Questions to Ask When Analyzing the Problem: : Questions to Ask When Analyzing the Problem: 6/3/2010 Advesh Consultancy Services 43 What is the history of the problem? How long has it existed? How serious is the problem? What are the causes of the problem? What are the effects of the problem? What are the symptoms of the problem? What methods does the group already have for dealing with the problem? What are the limitations of those methods? How much freedom does the group have in gathering information and attempting to solve the problem? What obstacles keep the group from achieving the goal? Can the problem be divided into sub problems for definition and analysis Making sense of numbers : Making sense of numbers 6/3/2010 Advesh Consultancy Services 44 Averages(Mean,Median,Mode) Grouping of data Distribution Trends Correlation Pie charts ANALYSE : ANALYSE 6/3/2010 Advesh Consultancy Services 45 Data Analysis ExploringGenerating Theories about causesVerifying/eliminating causes Process Analysis Exploring Generating Theories about causes Verifying/eliminating causes ` : 6/3/2010 Advesh Consultancy Services 46 ` Use Pareto Charts to find the “Vital few” : 6/3/2010 Advesh Consultancy Services 47 Use Pareto Charts to find the “Vital few” Use run/trend charts to find “patterns over time” : 6/3/2010 Advesh Consultancy Services 48 Use run/trend charts to find “patterns over time” Cause and Effect Diagram : 6/3/2010 Advesh Consultancy Services 49 Cause and Effect Diagram When should a fishbone diagram be used? : When should a fishbone diagram be used? 6/3/2010 Advesh Consultancy Services 50 Need to study a problem/issue to determine the root cause? Want to study all the possible reasons why a process is beginning to have difficulties, problems, or breakdowns? Need to identify areas for data collection? Want to study why a process is not performing properly or producing the desired results How is a fishbone diagram constructed? : How is a fishbone diagram constructed? 6/3/2010 Advesh Consultancy Services 51 Draw the fishbone diagram.... List the problem/issue to be studied in the "head of the fish". Label each ""bone" of the "fish". The major categories typically utilized are: The 4 M’s: Methods, Machines, Materials, Manpower The 4 P’s: Place, Procedure, People, Policies The 4 S’s: Surroundings, Suppliers, Systems, Skills Note: You may use one of the four categories suggested, combine them in any fashion or make up your own. The categories are to help you organize your ideas. How To Complete The 5 Whys : How To Complete The 5 Whys 6/3/2010 Advesh Consultancy Services 52 1. Write down the specific problem. Writing the issue helps you formalize the problem and describe it completely. It also helps a team focus on the same problem.2. Ask Why the problem happens and write the answer down below the problem.3. If the answer you just provided doesn't identify the root cause of the problem that you wrote down in step 1, ask Why again and write that answer down.4. Loop back to step 3 until the team is in agreement that the problem's root cause is identified. Again, this may take fewer or more times than five Whys. 5 Whys Examples : 5 Whys Examples 6/3/2010 Advesh Consultancy Services 53 Problem Statement: Customers are unhappy because they are being shipped products that don't meet their specifications.1. Why are customers being shipped bad products? - Because manufacturing built the products to a specification that is different from what the customer and the sales person agreed to.2. Why did manufacturing build the products to a different specification than that of sales? - Because the sales person expedites work on the shop floor by calling the head of manufacturing directly to begin work. An error happened when the specifications were being communicated or written down.3. Why does the sales person call the head of manufacturing directly to start work instead of following the procedure established in the company? - Because the "start work" form requires the sales director's approval before work can begin and slows the manufacturing process (or stops it when the director is out of the office).4. Why does the form contain an approval for the sales director? - Because the sales director needs to be continually updated on sales for discussions with the CEO. Slide 54: 6/3/2010 Advesh Consultancy Services 54 Slide 55: 6/3/2010 Advesh Consultancy Services 55 Verifying Causes : Verifying Causes 6/3/2010 Advesh Consultancy Services 56 Correlation Stratification Pilot Testing Slide 57: 1/02/2007 Business Process Management 57 Types of Flow Charts Linear Flowchart Deployment Flowchart Opportunity Flowchart Slide 58: 1/02/2007 Business Process Management 58 Linear Flowchart Start Collect inputs Draft Circular Type rough Submit to A Sign(A) Retype Make Copies Distribute Type smooth OK? Yes No End Slide 59: 1/02/2007 Business Process Management 59 Deployment Flowchart Collect Input Draft Retype Submit to C Make Copies Type rough Type smooth Distribute Accept? Yes NO Sign PROCESS MAP : PROCESS MAP 6/3/2010 Advesh Consultancy Services 60 Slide 61: 6/3/2010 Advesh Consultancy Services 61 Correlation Analysis : Correlation Analysis 6/3/2010 Advesh Consultancy Services 62 Past Experience: Future Problems : Past Experience: Future Problems 6/3/2010 Advesh Consultancy Services 63 Have we ever encountered a problem like this before? Do we have all of the information and data we need? Is there any pattern to what we know? Can we construct a table or a picture? What might the solution be? What would assist us in getting to a solution? STEP 4 : STEP 4 6/3/2010 Advesh Consultancy Services 64 GENERATE ALTERNATIVES Good decisions emerge from a set of feasible alternatives : 6/3/2010 Advesh Consultancy Services 65 Good decisions emerge from a set of feasible alternatives Tips for Generating Alternatives : Tips for Generating Alternatives 6/3/2010 Advesh Consultancy Services 66 Brainstorm Involve outsiders External Benchmarking Encourage members to step out of their traditional roles Ask probing questions Be willing to consider views differing from yours Revisit abandoned alternatives Slide 67: 6/3/2010 Advesh Consultancy Services 67 Vertical Thinking Lateral Thinking What is Vertical Thinking? : What is Vertical Thinking? 6/3/2010 Advesh Consultancy Services 68 Basing our thought process on prior knowledge and experience. Using logic that relates only to our immediate experience. Constraining our creativity and ability to solve problems. What is Lateral Thinking? : What is Lateral Thinking? 6/3/2010 Advesh Consultancy Services 69 Changing orientation and perception. Generating new ideas and visions. Exploring multiple possibilities and approaches. Slide 70: 6/3/2010 Advesh Consultancy Services 70 Vertical Thinking is selective One may reach a conclusion by a valid series of steps Lateral Thinking is generative Vertical Thinking develops the ideas generated by Lateral Thinking IX : 6/3/2010 Advesh Consultancy Services 71 IX How would you divide a square into four equal piecesGive atleast 6 alternatives : How would you divide a square into four equal piecesGive atleast 6 alternatives 6/3/2010 Advesh Consultancy Services 72 Time 15 minutes EXERCISE Slide 73: 6/3/2010 Advesh Consultancy Services 73 Make a square out of this 10 minutes Exercise Slide 74: 6/3/2010 Advesh Consultancy Services 74 Slide 75: The Dog, the Goose and the Bag of Corn The farmer takes the goose across and leaves the dog with the corn. The farmer then goes back across the stream and gets the corn. He takes the goose back across with him because he cannot leave it with the corn. He then gets the dog and takes it across leaving it on the other side with the corn. He then goes back across once again, gets the goose and returns to the other side of the stream with all safely across and not eaten! 6/3/2010 Advesh Consultancy Services 75 Exercise5 minutes : Exercise5 minutes 6/3/2010 Advesh Consultancy Services 76 You have a pile of 24 coins. 23 of them have the same weight. But one of them is heavier than the rest. You are given a scale but no weights. Your task is t identify the heavy coin in no more than three uses of the scale. Exercise3 minutes : Exercise3 minutes 6/3/2010 Advesh Consultancy Services 77 A conference room contains three separate wall-mounted spotlights - right, left and front of stage. Each is controlled by its own on-off switch. These three switches are numbered 1, 2 and 3, but they are in a back-room which has no sight of the the spotlights or the conference room (and there are no reflections or shadows or mirrors, and you are alone). How do you identify each switch correctly - right, left, front - if you can only enter the back-room once Exercise 5 minutes : Exercise 5 minutes 6/3/2010 Advesh Consultancy Services 78 Four men, one of whom was known to have committed murder, made the following statements to the police. Arun: Dave did itDave: Tony did itGeorge: I did not do itTony: Dave lied when he said I did itIf only one of these four statements is true, who was the guilty man? Exercise5 minutes : Exercise5 minutes 6/3/2010 Advesh Consultancy Services 79 You are the treasurer in charge of the Royal mint, which produces a single type coin, the grote. There are ten machines producing grotes, one machine is producing grotes weighing one gram less than they should, each coin should weigh 10 grams. You have a set of broken scales which can be fixed to provide one single weigh of a single amount (no weight changes are allowed). Using the scales once you must identify the single faulty machine. How do you do it? STEP 5 : STEP 5 6/3/2010 Advesh Consultancy Services 80 SELECT ALTERNATIVES/DECISION MAKING Types : Types 6/3/2010 Advesh Consultancy Services 81 Strategic Decision Business Decision Operational Decision ACTIVITY 5 : ACTIVITY 5 6/3/2010 Advesh Consultancy Services 82 List three personal decisions you’ve made in the last one or two years. List three decisions you need to take in the next one year in your personal life. Classify them into Strategic , Business and Operational How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 83 Decision making. The process of choosing a course of action for dealing with a problem or opportunity. DECISION MAKING : DECISION MAKING 6/3/2010 Advesh Consultancy Services 84 ENVIRONMENT DECISION MAKING MODELS DECISION MAKING REALITIES AUTHORITIES IN DECISION MAKING INFLUENCING FACTORS IN DECISION MAKING 7 Cs ENVIRONMENT : 6/3/2010 Advesh Consultancy Services 85 ENVIRONMENT How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 86 Decision environments include: Certain environments. Risk environments. Uncertain environments. How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 87 Certain environments. Exist when information is sufficient to predict the results of each alternative in advance of implementation. Certainty is the ideal problem solving and decision making environment. How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 88 Risk environments. Exist when decision makers lack complete certainty regarding the outcomes of various courses of action, but they can assign probabilities of occurrence. Probabilities can be assigned through objective statistical procedures or personal intuition. How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 89 Uncertain environments. Exist when managers have so little information that they cannot even assign probabilities to various alternatives and possible outcomes. Uncertainty forces decision makers to rely on individual and group creativity to succeed in problem solving. How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 90 Uncertain environments — cont. Also characterized by rapidly changing: External conditions. Information technology requirements. Personnel influencing problem and choice definitions. These rapid changes are also called organized anarchy. DECISION MAKING MODELS : 6/3/2010 Advesh Consultancy Services 91 DECISION MAKING MODELS Slide 92: 6/3/2010 Advesh Consultancy Services 92 Classical decision theory Behavioural decision theory What are the usefuldecision making models? : What are the usefuldecision making models? 6/3/2010 Advesh Consultancy Services 93 Classical decision theory. Views the decision maker as acting in a world of complete certainty. Behavioral decision theory. Accepts a world with bounded rationality and views the decision maker as acting only in terms of what he/she perceives about a given situation. What are the usefuldecision making models? : What are the usefuldecision making models? 6/3/2010 Advesh Consultancy Services 94 Behavioral decision theory. Recognizes that human beings operate with: Cognitive limitations. Bounded rationality. The behavioral decision maker: Faces a problem that is not clearly defined. Has limited knowledge of possible action alternatives and their consequences. Chooses a satisfactory alternative. What are the usefuldecision making models? : What are the usefuldecision making models? 6/3/2010 Advesh Consultancy Services 95 Classical decision theory. The classical decision maker: Faces a clearly defined problem. Knows all possible action alternatives and their consequences. Chooses the optimum alternative. Is often used as a model of how managers should make decisions. What are the usefuldecision making models? : What are the usefuldecision making models? 6/3/2010 Advesh Consultancy Services 96 Classical decision theory: May not fit well in a chaotic world. Can be used toward the bottom of many firms, even most high-tech firms. Behavioral decision theory: Fits with a chaotic world of uncertain conditions and limited information. Encourages satisficing decision making. DECISION MAKING REALITIES : 6/3/2010 Advesh Consultancy Services 97 DECISION MAKING REALITIES Decision making realities : Decision making realities 6/3/2010 Advesh Consultancy Services 98 Most decision making in organizations goes beyond step-by-step rational choice. Most decision making in organizations falls somewhere between the highly rational and the highly chaotic. Decisions must be made under risk and uncertainty. Decision making realities : Decision making realities 6/3/2010 Advesh Consultancy Services 99 Decisions must be made to solve non-routine problems. Decisions must be made under time pressures and information limitations. Decisions should be ethical. How do intuition, judgment, and creativity affect decision making? : How do intuition, judgment, and creativity affect decision making? 6/3/2010 Advesh Consultancy Services 100 Intuition. The ability to know or recognize quickly and readily the possibilities of a given situation. A key element of decision making under risk and uncertainty. How do intuition, judgment, and creativity affect decision making? : How do intuition, judgment, and creativity affect decision making? 6/3/2010 Advesh Consultancy Services 101 Judgment Simplifying strategies or “rules of thumb” used to make decisions. Makes it easier to to deal with uncertainty and limited information. Can lead to systematic errors that affect the quality and/or ethics of decisions. ACTIVITY 6 : ACTIVITY 6 6/3/2010 Advesh Consultancy Services 102 Imagine that you are driving across country to an important meeting that will start in an hour’s time, along a route you have travelled several times before. You are thirty miles from your destination and the road is clear ahead of you. You see a signpost pointing up to a narrow side road that you have not noticed on earlier journeys. It indicates 20 miles to your destination. ACTIVITY 6 : ACTIVITY 6 6/3/2010 Advesh Consultancy Services 103 Would you turn into the side road without further thoughts? Ignore the side road and continue on your existing route? Stop the vehicle, consult a map and then decide whether to drive up the side road? Why? AUTHORITIES IN DECISION MAKING : 6/3/2010 Advesh Consultancy Services 104 AUTHORITIES IN DECISION MAKING AUTHORITY IN DECISION MAKING : AUTHORITY IN DECISION MAKING 6/3/2010 Advesh Consultancy Services 105 Deciding who should participate. Authority decisions. Made by the manager or team leader without involving other people and by using information that he/she possesses. Consultative decisions. Made by one individual after seeking input from group members. Group decisions. Made by all members of the group. ACTIVITY : ACTIVITY 6/3/2010 Advesh Consultancy Services 106 Give three examples of decisions that you would refer to a senior manager in your organisation. Do these decisions have anything in common? INFLUENCING FACTORS IN DECISION MAKING : 6/3/2010 Advesh Consultancy Services 107 INFLUENCING FACTORS IN DECISION MAKING Slide 108: 6/3/2010 Advesh Consultancy Services 108 Technology Culture Ethics How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 109 Increasingly complex problems and opportunities face decision makers in organizations due to various workplace trends. These workplace trends are changing the who, when, where, and how of decision making. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 110 Information technology and decision making. Artificial intelligence. The study of how computers can be programmed to think like human beings. Will allow computers to displace many decision makers. Expert systems that support decision making by following “either-or” rules to make deductions. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 111 Information technology and decision making — cont. Fuzzy logic and neural networks that reason inductively. Computer support for decision making. The Internet. Company intranets. Decision support software to facilitate virtual teamwork. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 112 Cultural factors and decision making. Culture is “the way in which a group of people solves problems.” North American culture stresses decisiveness, speed, and the individual selection of alternatives. Other cultures place less emphasis on individual choice than on developing implementations that work. The most important impact of culture on decision making concerns which issues are elevated to the status of problems solvable with the firm. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 113 Ethical issues and decision making. Ethical dilemma. A situation in which a person must decide whether or not to do something that, although personally or organizationally beneficial, may be considered unethical and perhaps illegal. Ethical dilemmas are often associated with: Risk and uncertainty. Nonroutine problem situations. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 114 Ethical decision-making checklist. Is my action legal? Is it right? Is it beneficial? How would I feel if my family found out about this? How would I feel if my decision were printed in the local newspaper? How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 115 Suggestions for integrating ethical decision making into the firm. Develop a code of ethics and follow it. Establish procedures for reporting violations. Involve employees in identifying ethical issues. Monitor ethical performance. Reward ethical behavior. Publicize ethical efforts. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 116 Implications of ethics for decision making. Morality is involved in: Choosing problems. Deciding who should be involved in making decisions. Estimating the impacts of decision alternatives. Selecting an alternative for implementation. Moral conduct does not arise from after-the-fact embarrassment. ACTIVITY 8 : ACTIVITY 8 6/3/2010 Advesh Consultancy Services 117 One of the best performing employees under you was caught carrying one stapler belonging to the company at the gate. 6 Cs OF DECISION MAKING : 6/3/2010 Advesh Consultancy Services 118 6 Cs OF DECISION MAKING Six C's of Decision Making (1 of 3) : Six C's of Decision Making (1 of 3) 6/3/2010 Advesh Consultancy Services 119 Construct Compile. Collect. Compare. Consider. Commit. Decision Making (Six C's) (2 of 3) : Decision Making (Six C's) (2 of 3) 6/3/2010 Advesh Consultancy Services 120 Construct a clear picture of precisely what must be decided. Compile a list of requirements that must be met. Collect information on alternatives that meet the requirements. Decision Making (Six C's) (3 of 3) : Decision Making (Six C's) (3 of 3) 6/3/2010 Advesh Consultancy Services 121 Compare alternatives that meet the requirements. Consider the "what might go wrong" factor with each alternative. Commit to a decision and stick to it. Inherent Personal: Traps (1 of 2) : Inherent Personal: Traps (1 of 2) 6/3/2010 Advesh Consultancy Services 122 Trying too hard to play it safe. Letting fears and biases tilt your thinking and analysis. Getting lost in the minutia. Craving unanimous approval. Trying to make decisions which are outside your realm of authority. Inherent System: Traps (2 of 2) : Inherent System: Traps (2 of 2) 6/3/2010 Advesh Consultancy Services 123 Willing to begin with too little, inaccurate, or wrong information. Overlooking viable alternatives or wasting time considering alternatives which have no realistic prospects. Not following the six C's. Failing to clearly define the results you expect to achieve. Worst of all, failing to reach a decision. FINANCIAL TOOLS FOR EVALUATING ALTERNATIVES : FINANCIAL TOOLS FOR EVALUATING ALTERNATIVES 6/3/2010 Advesh Consultancy Services 124 ROI Payback Net present value Internal rate of return Breakeven analysis Sensitivity analysis ACTIVITY : ACTIVITY 6/3/2010 Advesh Consultancy Services 125 List four or five decisions you made at work/home regardless of their size or importance . For each decision, consider whether you really needed to make it or whether the decision could have been handled in some other way. Perhaps it could have been dealt with by someone else. Or perhaps there was not a decision to make at all. STEP 6 : STEP 6 6/3/2010 Advesh Consultancy Services 126 IMPLEMENT IMPLEMENT : IMPLEMENT 6/3/2010 Advesh Consultancy Services 127 Communicate Train Execute Review Slide 128: 6/3/2010 Advesh Consultancy Services 128 PLAN DO CHECK ACT PDCA CYCLE Slide 129: 6/3/2010 Advesh Consultancy Services 129 You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
Probelm Solving and Decision Making tsivasankaran Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 910 Category: Business & Fin.. License: All Rights Reserved Like it (3) Dislike it (0) Added: June 03, 2010 This Presentation is Public Favorites: 2 Presentation Description Presentation on Problem Solving Skill sets and Decision Making concepts Comments Posting comment... By: kitaene (12 month(s) ago) totallly good, and i got lot of infomations about essentioality of creative problem solving. please send me ppt on my e mail essaykorea@hotmail.com Saving..... Post Reply Close Saving..... Edit Comment Close By: anandsinghkhati (15 month(s) ago) Please send me ppt on my email anandsinghkhati@gmail.com Saving..... Post Reply Close By: tsivasankaran (14 month(s) ago) Thanks You can download this from www.advesh.com Sivasankaran Saving..... Edit Comment Close By: aungmin (15 month(s) ago) Pls send this to me via aungminni@gmail.com as it is very useful for me. Thanks Saving..... Post Reply Close By: tsivasankaran (14 month(s) ago) You can download this from www.advesh.com Saving..... Edit Comment Close By: lalitchaudhary (16 month(s) ago) please send it to lcamitchaudhary06@gmail.com Saving..... Post Reply Close By: tsivasankaran (16 month(s) ago) you can download in my website www.advesh.com Thanks Sivasankaran Saving..... Edit Comment Close By: pentairkishore (16 month(s) ago) Hello Very good presentation. How can I download this presentation. Otherwise will you email me on " kishorempatil2002@yahoo.com" thanks Kishore Saving..... Post Reply Close By: tsivasankaran (16 month(s) ago) You can get it from my website www.advesh.com Thanks Sivasankaran Saving..... Edit Comment Close loading.... See all Premium member Presentation Transcript PROBLEM SOLVING AND DECISION MAKING : 6/3/2010 Advesh Consultancy Services 1 PROBLEM SOLVING AND DECISION MAKING PROGRAMME OBJECTIVE : PROGRAMME OBJECTIVE 6/3/2010 Advesh Consultancy Services 2 To clarify and define the problem. To understand the usefulness of collaborative problem solving and decision making. To examine different decision making models. To utilize creativity in the problem solving/decision making process. To plan, practice, and problem solve with making decisions through case studies, role playing and group discussions. Slide 3: 6/3/2010 Advesh Consultancy Services 3 Please write a One Sentence Definition of PROBLEM SOLVING and DECISION MAKING. DEFINITION –PROBLEM SOLVING : DEFINITION –PROBLEM SOLVING 6/3/2010 Advesh Consultancy Services 4 A systematic approach to defining the problem and creating a vast number of possible solutions without judging these solutions. PROBLEM SOLVING : PROBLEM SOLVING 6/3/2010 Advesh Consultancy Services 5 Problem solving is a cognitive processing directed at achieving a goal where no solution method is obvious to the problem solver. Problem Solving : Problem Solving Problem Solving is ….. “….. the art of finding ways to get from where you are now to where you want to be (assuming you do not already know how). The ‘problem’, therefore, is the gap between the present situation and a more desirable one.” (Nolan 1989) Is this Problem Solving? TRIPLE CONSTRAINT PRINCIPLE : TRIPLE CONSTRAINT PRINCIPLE 6/3/2010 Advesh Consultancy Services 7 Something is a problem if: it makes you late it increases costs it degrades performance. time cost performance Slide 8: If none of these occur, it’s NOT a problem, just a hindrance. 6/3/2010 Advesh Consultancy Services 8 DEFINITION – DECISION MAKING : DEFINITION – DECISION MAKING 6/3/2010 Advesh Consultancy Services 9 The act of narrowing down the possibilities, choosing a course of action, and determining the action’s potential consequences. Slide 10: “It's not a problem that we have a problem. It's a problem if we don't deal with the problem.” --Mary Kay Utech 6/3/2010 Advesh Consultancy Services 10 WHAT DOES IT INVOLVE? : 6/3/2010 Advesh Consultancy Services 11 WHAT DOES IT INVOLVE? Slide 12: 6/3/2010 Advesh Consultancy Services 12 Problem solving is a skill, a tool and a process. It is a skill because once you have learnt it you can use it repeatedly, like the ability to ride a bicycle, add numbers or speak a language. It is a tool because it can help you solve an immediate problem or to achieve a goal. It is also a process because it involves taking a number of steps. PROBLEM SOLVING : PROBLEM SOLVING 6/3/2010 Advesh Consultancy Services 13 Skill Process Tools Slide 14: Making judgements SKILL SETS IN PROBLEM SOLVING? Analytical skills Decision making Collecting information Planning 6/3/2010 Advesh Consultancy Services 14 Problem Solving People? : Problem Solving People? 6/3/2010 Advesh Consultancy Services 15 Experts. People who know the area of knowledge thoroughly. Solving problems becomes more natural. People who can think of alternatives even when no clear solutions seems apparent. Slide 16: 6/3/2010 Advesh Consultancy Services 16 Have a better memory for relevant details in the problem. Classify problems according to their underlying principles. Use well-established procedures. Work forwards towards a goal (rather than backwards). Expert Problem Solvers Slide 17: Domain-dependent problem-solving strategies Self-monitoring Problem Solving Requirements 6/3/2010 Advesh Consultancy Services 17 Slide 18: Understanding the Process: ‘How to Solve it’ Engage: I want to and I can Read the problem (and all the information) Listen Learn about the situation that poses the problem Motivation Overcome panic 6/3/2010 Advesh Consultancy Services 18 Slide 19: Understand the problem: define Put in the time to define the problem: Discuss. Ask questions. Visualize. Restate the problem in your own words. Explain the problem to someone else. Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 19 Slide 20: Plan a procedure to solve the problem Prior experience. Data available. Content knowledge. Patterns. Estimation. Alternate solutions. Feasibility. Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 20 Slide 21: Collect data & the knowledge required A solution may be required based upon imperfect knowledge. Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 21 Slide 22: Select the preferred solution: test, use and evaluate Check each step Can you determine clearly that each step is correct? Can you prove that each step is correct? Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 22 Slide 23: Reflect on the process Are you certain you solved the problem? Can you check the result and your argument? Can use alternate solutions? What did you actually do? Can you explain this to another? Can you use the result &/or method for another problem? Understanding the Process: ‘How to Solve it’ 6/3/2010 Advesh Consultancy Services 23 PROBLEM SOLVING : PROBLEM SOLVING 6/3/2010 Advesh Consultancy Services 24 DEFINE INFORMATION/MEASURES ANALYSE GENERATE ALTERNATIVES SELECT ALTERNATIVES/DECIDE IMPLEMENT STEP 1 : STEP 1 6/3/2010 Advesh Consultancy Services 25 DEFINE Slide 26: 6/3/2010 Advesh Consultancy Services 26 Collect all the relevant information. Clarify background issues. What are the constraints? Are there sub-problems that can be dealt with separately? Can the problem now be formulated? Defining The Problem PROBLEM/OPPORTUNITY STATEMENT WORKSHEET : PROBLEM/OPPORTUNITY STATEMENT WORKSHEET 6/3/2010 Advesh Consultancy Services 27 ACTIVITY 2 : ACTIVITY 2 6/3/2010 Advesh Consultancy Services 28 Problem 1I am in the habit of coming late to office Problem 2We could not meet production targets Problem 3Take an issue in work situation. Define the problem. STEP 2 : STEP 2 6/3/2010 Advesh Consultancy Services 29 INFORMATION/MEASURES ACTIVITY : ACTIVITY 6/3/2010 Advesh Consultancy Services 30 Imagine that you were going to buy a house in a new area. List ten things that you would want to know about a house before you gave it serious consideration . Tick any of these things that you could find out from the agent’s information. How could you find out the other things? Slide 31: 6/3/2010 Advesh Consultancy Services 31 Do we have all of the information and data we need? Collect data and digest the information. TYPES OF INFORMATION : TYPES OF INFORMATION 6/3/2010 Advesh Consultancy Services 32 QUANTITATIVE QUALITATIVE Quantitative : Quantitative 6/3/2010 Advesh Consultancy Services 33 How much? How many? How frequently? How likely? How quickly? QUALITATIVE : QUALITATIVE 6/3/2010 Advesh Consultancy Services 34 What? Why? How? DATA SOURCES : DATA SOURCES 6/3/2010 Advesh Consultancy Services 35 PrimaryData gathered by you directly for your purpose SecondaryGathered by others for their purpose SECONDARY DATA : SECONDARY DATA 6/3/2010 Advesh Consultancy Services 36 Collected by other Depts Reference Books Databases Journals Published Reports Govt Statistics ACTIVITY 4A : ACTIVITY 4A 6/3/2010 Advesh Consultancy Services 37 In a production line, the output of a particular machine has come down drastically. There was a hue and cry that the operator is intentionally slowing down production. What all information need to be collected before commencing any action? ACTIVITY 4B : ACTIVITY 4B 6/3/2010 Advesh Consultancy Services 38 First batch of Vacuum Circuit Breakers supplied by a Company in India in the year 1981 failed miserably The Technical collaborators, the Manufacturers and the Customers were trying to resolve the issue What all information need to be collected? ACTIVITY 4C : ACTIVITY 4C 6/3/2010 Advesh Consultancy Services 39 On a piece of paper, draw a map of the people you know. Put yourself in the middle and connect the people you know very well in the first circle. Add people you know through these network in the next layer and connect them with spokes. Do three levels. 3.15 PM-3.3.30PM : TEA 6/3/2010 Advesh Consultancy Services 40 3.15 PM-3.3.30PM STEP 3 : STEP 3 6/3/2010 Advesh Consultancy Services 41 ANALYSE Analyze the Problem : Analyze the Problem 6/3/2010 Advesh Consultancy Services 42 Do not make the mistake of assuming you know what is causing the problem without an effort to fully investigate the problem you have defined. Try to view the problem from a variety of viewpoints, not just how it affects you. Think about how the issue affects others. It is essential to spend some time researching the problem. Questions to Ask When Analyzing the Problem: : Questions to Ask When Analyzing the Problem: 6/3/2010 Advesh Consultancy Services 43 What is the history of the problem? How long has it existed? How serious is the problem? What are the causes of the problem? What are the effects of the problem? What are the symptoms of the problem? What methods does the group already have for dealing with the problem? What are the limitations of those methods? How much freedom does the group have in gathering information and attempting to solve the problem? What obstacles keep the group from achieving the goal? Can the problem be divided into sub problems for definition and analysis Making sense of numbers : Making sense of numbers 6/3/2010 Advesh Consultancy Services 44 Averages(Mean,Median,Mode) Grouping of data Distribution Trends Correlation Pie charts ANALYSE : ANALYSE 6/3/2010 Advesh Consultancy Services 45 Data Analysis ExploringGenerating Theories about causesVerifying/eliminating causes Process Analysis Exploring Generating Theories about causes Verifying/eliminating causes ` : 6/3/2010 Advesh Consultancy Services 46 ` Use Pareto Charts to find the “Vital few” : 6/3/2010 Advesh Consultancy Services 47 Use Pareto Charts to find the “Vital few” Use run/trend charts to find “patterns over time” : 6/3/2010 Advesh Consultancy Services 48 Use run/trend charts to find “patterns over time” Cause and Effect Diagram : 6/3/2010 Advesh Consultancy Services 49 Cause and Effect Diagram When should a fishbone diagram be used? : When should a fishbone diagram be used? 6/3/2010 Advesh Consultancy Services 50 Need to study a problem/issue to determine the root cause? Want to study all the possible reasons why a process is beginning to have difficulties, problems, or breakdowns? Need to identify areas for data collection? Want to study why a process is not performing properly or producing the desired results How is a fishbone diagram constructed? : How is a fishbone diagram constructed? 6/3/2010 Advesh Consultancy Services 51 Draw the fishbone diagram.... List the problem/issue to be studied in the "head of the fish". Label each ""bone" of the "fish". The major categories typically utilized are: The 4 M’s: Methods, Machines, Materials, Manpower The 4 P’s: Place, Procedure, People, Policies The 4 S’s: Surroundings, Suppliers, Systems, Skills Note: You may use one of the four categories suggested, combine them in any fashion or make up your own. The categories are to help you organize your ideas. How To Complete The 5 Whys : How To Complete The 5 Whys 6/3/2010 Advesh Consultancy Services 52 1. Write down the specific problem. Writing the issue helps you formalize the problem and describe it completely. It also helps a team focus on the same problem.2. Ask Why the problem happens and write the answer down below the problem.3. If the answer you just provided doesn't identify the root cause of the problem that you wrote down in step 1, ask Why again and write that answer down.4. Loop back to step 3 until the team is in agreement that the problem's root cause is identified. Again, this may take fewer or more times than five Whys. 5 Whys Examples : 5 Whys Examples 6/3/2010 Advesh Consultancy Services 53 Problem Statement: Customers are unhappy because they are being shipped products that don't meet their specifications.1. Why are customers being shipped bad products? - Because manufacturing built the products to a specification that is different from what the customer and the sales person agreed to.2. Why did manufacturing build the products to a different specification than that of sales? - Because the sales person expedites work on the shop floor by calling the head of manufacturing directly to begin work. An error happened when the specifications were being communicated or written down.3. Why does the sales person call the head of manufacturing directly to start work instead of following the procedure established in the company? - Because the "start work" form requires the sales director's approval before work can begin and slows the manufacturing process (or stops it when the director is out of the office).4. Why does the form contain an approval for the sales director? - Because the sales director needs to be continually updated on sales for discussions with the CEO. Slide 54: 6/3/2010 Advesh Consultancy Services 54 Slide 55: 6/3/2010 Advesh Consultancy Services 55 Verifying Causes : Verifying Causes 6/3/2010 Advesh Consultancy Services 56 Correlation Stratification Pilot Testing Slide 57: 1/02/2007 Business Process Management 57 Types of Flow Charts Linear Flowchart Deployment Flowchart Opportunity Flowchart Slide 58: 1/02/2007 Business Process Management 58 Linear Flowchart Start Collect inputs Draft Circular Type rough Submit to A Sign(A) Retype Make Copies Distribute Type smooth OK? Yes No End Slide 59: 1/02/2007 Business Process Management 59 Deployment Flowchart Collect Input Draft Retype Submit to C Make Copies Type rough Type smooth Distribute Accept? Yes NO Sign PROCESS MAP : PROCESS MAP 6/3/2010 Advesh Consultancy Services 60 Slide 61: 6/3/2010 Advesh Consultancy Services 61 Correlation Analysis : Correlation Analysis 6/3/2010 Advesh Consultancy Services 62 Past Experience: Future Problems : Past Experience: Future Problems 6/3/2010 Advesh Consultancy Services 63 Have we ever encountered a problem like this before? Do we have all of the information and data we need? Is there any pattern to what we know? Can we construct a table or a picture? What might the solution be? What would assist us in getting to a solution? STEP 4 : STEP 4 6/3/2010 Advesh Consultancy Services 64 GENERATE ALTERNATIVES Good decisions emerge from a set of feasible alternatives : 6/3/2010 Advesh Consultancy Services 65 Good decisions emerge from a set of feasible alternatives Tips for Generating Alternatives : Tips for Generating Alternatives 6/3/2010 Advesh Consultancy Services 66 Brainstorm Involve outsiders External Benchmarking Encourage members to step out of their traditional roles Ask probing questions Be willing to consider views differing from yours Revisit abandoned alternatives Slide 67: 6/3/2010 Advesh Consultancy Services 67 Vertical Thinking Lateral Thinking What is Vertical Thinking? : What is Vertical Thinking? 6/3/2010 Advesh Consultancy Services 68 Basing our thought process on prior knowledge and experience. Using logic that relates only to our immediate experience. Constraining our creativity and ability to solve problems. What is Lateral Thinking? : What is Lateral Thinking? 6/3/2010 Advesh Consultancy Services 69 Changing orientation and perception. Generating new ideas and visions. Exploring multiple possibilities and approaches. Slide 70: 6/3/2010 Advesh Consultancy Services 70 Vertical Thinking is selective One may reach a conclusion by a valid series of steps Lateral Thinking is generative Vertical Thinking develops the ideas generated by Lateral Thinking IX : 6/3/2010 Advesh Consultancy Services 71 IX How would you divide a square into four equal piecesGive atleast 6 alternatives : How would you divide a square into four equal piecesGive atleast 6 alternatives 6/3/2010 Advesh Consultancy Services 72 Time 15 minutes EXERCISE Slide 73: 6/3/2010 Advesh Consultancy Services 73 Make a square out of this 10 minutes Exercise Slide 74: 6/3/2010 Advesh Consultancy Services 74 Slide 75: The Dog, the Goose and the Bag of Corn The farmer takes the goose across and leaves the dog with the corn. The farmer then goes back across the stream and gets the corn. He takes the goose back across with him because he cannot leave it with the corn. He then gets the dog and takes it across leaving it on the other side with the corn. He then goes back across once again, gets the goose and returns to the other side of the stream with all safely across and not eaten! 6/3/2010 Advesh Consultancy Services 75 Exercise5 minutes : Exercise5 minutes 6/3/2010 Advesh Consultancy Services 76 You have a pile of 24 coins. 23 of them have the same weight. But one of them is heavier than the rest. You are given a scale but no weights. Your task is t identify the heavy coin in no more than three uses of the scale. Exercise3 minutes : Exercise3 minutes 6/3/2010 Advesh Consultancy Services 77 A conference room contains three separate wall-mounted spotlights - right, left and front of stage. Each is controlled by its own on-off switch. These three switches are numbered 1, 2 and 3, but they are in a back-room which has no sight of the the spotlights or the conference room (and there are no reflections or shadows or mirrors, and you are alone). How do you identify each switch correctly - right, left, front - if you can only enter the back-room once Exercise 5 minutes : Exercise 5 minutes 6/3/2010 Advesh Consultancy Services 78 Four men, one of whom was known to have committed murder, made the following statements to the police. Arun: Dave did itDave: Tony did itGeorge: I did not do itTony: Dave lied when he said I did itIf only one of these four statements is true, who was the guilty man? Exercise5 minutes : Exercise5 minutes 6/3/2010 Advesh Consultancy Services 79 You are the treasurer in charge of the Royal mint, which produces a single type coin, the grote. There are ten machines producing grotes, one machine is producing grotes weighing one gram less than they should, each coin should weigh 10 grams. You have a set of broken scales which can be fixed to provide one single weigh of a single amount (no weight changes are allowed). Using the scales once you must identify the single faulty machine. How do you do it? STEP 5 : STEP 5 6/3/2010 Advesh Consultancy Services 80 SELECT ALTERNATIVES/DECISION MAKING Types : Types 6/3/2010 Advesh Consultancy Services 81 Strategic Decision Business Decision Operational Decision ACTIVITY 5 : ACTIVITY 5 6/3/2010 Advesh Consultancy Services 82 List three personal decisions you’ve made in the last one or two years. List three decisions you need to take in the next one year in your personal life. Classify them into Strategic , Business and Operational How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 83 Decision making. The process of choosing a course of action for dealing with a problem or opportunity. DECISION MAKING : DECISION MAKING 6/3/2010 Advesh Consultancy Services 84 ENVIRONMENT DECISION MAKING MODELS DECISION MAKING REALITIES AUTHORITIES IN DECISION MAKING INFLUENCING FACTORS IN DECISION MAKING 7 Cs ENVIRONMENT : 6/3/2010 Advesh Consultancy Services 85 ENVIRONMENT How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 86 Decision environments include: Certain environments. Risk environments. Uncertain environments. How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 87 Certain environments. Exist when information is sufficient to predict the results of each alternative in advance of implementation. Certainty is the ideal problem solving and decision making environment. How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 88 Risk environments. Exist when decision makers lack complete certainty regarding the outcomes of various courses of action, but they can assign probabilities of occurrence. Probabilities can be assigned through objective statistical procedures or personal intuition. How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 89 Uncertain environments. Exist when managers have so little information that they cannot even assign probabilities to various alternatives and possible outcomes. Uncertainty forces decision makers to rely on individual and group creativity to succeed in problem solving. How are decisions madein organizations? : How are decisions madein organizations? 6/3/2010 Advesh Consultancy Services 90 Uncertain environments — cont. Also characterized by rapidly changing: External conditions. Information technology requirements. Personnel influencing problem and choice definitions. These rapid changes are also called organized anarchy. DECISION MAKING MODELS : 6/3/2010 Advesh Consultancy Services 91 DECISION MAKING MODELS Slide 92: 6/3/2010 Advesh Consultancy Services 92 Classical decision theory Behavioural decision theory What are the usefuldecision making models? : What are the usefuldecision making models? 6/3/2010 Advesh Consultancy Services 93 Classical decision theory. Views the decision maker as acting in a world of complete certainty. Behavioral decision theory. Accepts a world with bounded rationality and views the decision maker as acting only in terms of what he/she perceives about a given situation. What are the usefuldecision making models? : What are the usefuldecision making models? 6/3/2010 Advesh Consultancy Services 94 Behavioral decision theory. Recognizes that human beings operate with: Cognitive limitations. Bounded rationality. The behavioral decision maker: Faces a problem that is not clearly defined. Has limited knowledge of possible action alternatives and their consequences. Chooses a satisfactory alternative. What are the usefuldecision making models? : What are the usefuldecision making models? 6/3/2010 Advesh Consultancy Services 95 Classical decision theory. The classical decision maker: Faces a clearly defined problem. Knows all possible action alternatives and their consequences. Chooses the optimum alternative. Is often used as a model of how managers should make decisions. What are the usefuldecision making models? : What are the usefuldecision making models? 6/3/2010 Advesh Consultancy Services 96 Classical decision theory: May not fit well in a chaotic world. Can be used toward the bottom of many firms, even most high-tech firms. Behavioral decision theory: Fits with a chaotic world of uncertain conditions and limited information. Encourages satisficing decision making. DECISION MAKING REALITIES : 6/3/2010 Advesh Consultancy Services 97 DECISION MAKING REALITIES Decision making realities : Decision making realities 6/3/2010 Advesh Consultancy Services 98 Most decision making in organizations goes beyond step-by-step rational choice. Most decision making in organizations falls somewhere between the highly rational and the highly chaotic. Decisions must be made under risk and uncertainty. Decision making realities : Decision making realities 6/3/2010 Advesh Consultancy Services 99 Decisions must be made to solve non-routine problems. Decisions must be made under time pressures and information limitations. Decisions should be ethical. How do intuition, judgment, and creativity affect decision making? : How do intuition, judgment, and creativity affect decision making? 6/3/2010 Advesh Consultancy Services 100 Intuition. The ability to know or recognize quickly and readily the possibilities of a given situation. A key element of decision making under risk and uncertainty. How do intuition, judgment, and creativity affect decision making? : How do intuition, judgment, and creativity affect decision making? 6/3/2010 Advesh Consultancy Services 101 Judgment Simplifying strategies or “rules of thumb” used to make decisions. Makes it easier to to deal with uncertainty and limited information. Can lead to systematic errors that affect the quality and/or ethics of decisions. ACTIVITY 6 : ACTIVITY 6 6/3/2010 Advesh Consultancy Services 102 Imagine that you are driving across country to an important meeting that will start in an hour’s time, along a route you have travelled several times before. You are thirty miles from your destination and the road is clear ahead of you. You see a signpost pointing up to a narrow side road that you have not noticed on earlier journeys. It indicates 20 miles to your destination. ACTIVITY 6 : ACTIVITY 6 6/3/2010 Advesh Consultancy Services 103 Would you turn into the side road without further thoughts? Ignore the side road and continue on your existing route? Stop the vehicle, consult a map and then decide whether to drive up the side road? Why? AUTHORITIES IN DECISION MAKING : 6/3/2010 Advesh Consultancy Services 104 AUTHORITIES IN DECISION MAKING AUTHORITY IN DECISION MAKING : AUTHORITY IN DECISION MAKING 6/3/2010 Advesh Consultancy Services 105 Deciding who should participate. Authority decisions. Made by the manager or team leader without involving other people and by using information that he/she possesses. Consultative decisions. Made by one individual after seeking input from group members. Group decisions. Made by all members of the group. ACTIVITY : ACTIVITY 6/3/2010 Advesh Consultancy Services 106 Give three examples of decisions that you would refer to a senior manager in your organisation. Do these decisions have anything in common? INFLUENCING FACTORS IN DECISION MAKING : 6/3/2010 Advesh Consultancy Services 107 INFLUENCING FACTORS IN DECISION MAKING Slide 108: 6/3/2010 Advesh Consultancy Services 108 Technology Culture Ethics How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 109 Increasingly complex problems and opportunities face decision makers in organizations due to various workplace trends. These workplace trends are changing the who, when, where, and how of decision making. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 110 Information technology and decision making. Artificial intelligence. The study of how computers can be programmed to think like human beings. Will allow computers to displace many decision makers. Expert systems that support decision making by following “either-or” rules to make deductions. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 111 Information technology and decision making — cont. Fuzzy logic and neural networks that reason inductively. Computer support for decision making. The Internet. Company intranets. Decision support software to facilitate virtual teamwork. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 112 Cultural factors and decision making. Culture is “the way in which a group of people solves problems.” North American culture stresses decisiveness, speed, and the individual selection of alternatives. Other cultures place less emphasis on individual choice than on developing implementations that work. The most important impact of culture on decision making concerns which issues are elevated to the status of problems solvable with the firm. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 113 Ethical issues and decision making. Ethical dilemma. A situation in which a person must decide whether or not to do something that, although personally or organizationally beneficial, may be considered unethical and perhaps illegal. Ethical dilemmas are often associated with: Risk and uncertainty. Nonroutine problem situations. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 114 Ethical decision-making checklist. Is my action legal? Is it right? Is it beneficial? How would I feel if my family found out about this? How would I feel if my decision were printed in the local newspaper? How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 115 Suggestions for integrating ethical decision making into the firm. Develop a code of ethics and follow it. Establish procedures for reporting violations. Involve employees in identifying ethical issues. Monitor ethical performance. Reward ethical behavior. Publicize ethical efforts. How do technology, culture, and ethics influence decision making? : How do technology, culture, and ethics influence decision making? 6/3/2010 Advesh Consultancy Services 116 Implications of ethics for decision making. Morality is involved in: Choosing problems. Deciding who should be involved in making decisions. Estimating the impacts of decision alternatives. Selecting an alternative for implementation. Moral conduct does not arise from after-the-fact embarrassment. ACTIVITY 8 : ACTIVITY 8 6/3/2010 Advesh Consultancy Services 117 One of the best performing employees under you was caught carrying one stapler belonging to the company at the gate. 6 Cs OF DECISION MAKING : 6/3/2010 Advesh Consultancy Services 118 6 Cs OF DECISION MAKING Six C's of Decision Making (1 of 3) : Six C's of Decision Making (1 of 3) 6/3/2010 Advesh Consultancy Services 119 Construct Compile. Collect. Compare. Consider. Commit. Decision Making (Six C's) (2 of 3) : Decision Making (Six C's) (2 of 3) 6/3/2010 Advesh Consultancy Services 120 Construct a clear picture of precisely what must be decided. Compile a list of requirements that must be met. Collect information on alternatives that meet the requirements. Decision Making (Six C's) (3 of 3) : Decision Making (Six C's) (3 of 3) 6/3/2010 Advesh Consultancy Services 121 Compare alternatives that meet the requirements. Consider the "what might go wrong" factor with each alternative. Commit to a decision and stick to it. Inherent Personal: Traps (1 of 2) : Inherent Personal: Traps (1 of 2) 6/3/2010 Advesh Consultancy Services 122 Trying too hard to play it safe. Letting fears and biases tilt your thinking and analysis. Getting lost in the minutia. Craving unanimous approval. Trying to make decisions which are outside your realm of authority. Inherent System: Traps (2 of 2) : Inherent System: Traps (2 of 2) 6/3/2010 Advesh Consultancy Services 123 Willing to begin with too little, inaccurate, or wrong information. Overlooking viable alternatives or wasting time considering alternatives which have no realistic prospects. Not following the six C's. Failing to clearly define the results you expect to achieve. Worst of all, failing to reach a decision. FINANCIAL TOOLS FOR EVALUATING ALTERNATIVES : FINANCIAL TOOLS FOR EVALUATING ALTERNATIVES 6/3/2010 Advesh Consultancy Services 124 ROI Payback Net present value Internal rate of return Breakeven analysis Sensitivity analysis ACTIVITY : ACTIVITY 6/3/2010 Advesh Consultancy Services 125 List four or five decisions you made at work/home regardless of their size or importance . For each decision, consider whether you really needed to make it or whether the decision could have been handled in some other way. Perhaps it could have been dealt with by someone else. Or perhaps there was not a decision to make at all. STEP 6 : STEP 6 6/3/2010 Advesh Consultancy Services 126 IMPLEMENT IMPLEMENT : IMPLEMENT 6/3/2010 Advesh Consultancy Services 127 Communicate Train Execute Review Slide 128: 6/3/2010 Advesh Consultancy Services 128 PLAN DO CHECK ACT PDCA CYCLE Slide 129: 6/3/2010 Advesh Consultancy Services 129