Management Ch. 3

Problem solving:

the process of identifying a discrepancy between an actual and a desired state of affairs and then taking action to resolve it

CMP

RHONDAISMS* Central Management Problem , identify the right problem , sometimes people give the problem but it's just a subset it's not the core, push people to come up with the main problem where we ask why until we find the root and tackle it so we can solve it faster

5 steps in decision making process

1. identify and define the problem 2. generate and evaluate alternative solutions 3. decide on preferred course of action 4. implement the decision 5. evaluate results

step 5: evaluate results

A decision isn't much good if it doesn't achieve the desired outcomes or causes undesired side effects. This is why the decision-making process is not complete until results are evaluated. This is a form of management control where data are gathered so that results can be measured against goals. If things aren't going well, corrective actions can be taken and earlier steps in the decision-making process can be revisited. If things are going better than expected, it's possible to learn why and save these lessons for use in the future.

step 2: generate and evaluate alternative solutions

After the problem is defined, the next step in decision making is to gather relevant facts and information. Managers must be clear here on exactly what they know and what they need to know. They should identify alternative courses of action as well as their anticipated consequences on key stakeholders. It's helpful to use some form of cost-benefit analysis to evaluate alternative courses of action. This compares what an alternative will cost with its expected benefits. At a minimum, benefits should exceed costs. In addition, an alternative should be timely, acceptable to as many stakeholders as possible, and ethically sound. And most often, the better the pool of alternatives and the better the analysis and the more likely it is that a good decision will result.

amazon

Bezos as a decision maker: systematic (planner) vs. intuitive thinker (flexible) Is comfortable and confident enough with the company to jump from one idea to the next without hesitation Excellent customer service Alexa, amazon robots , drones Acquisition of zappos

step 3: decide on preferred course of action

Management theory recognizes two quite different ways that alternatives get explored and decisions get made- classical and behavioral Classical decision model: describes decision making with complete information As a result...... he or she makes an Optimizing decision: chooses the alternative providing the absolute best solution to a problem. *cognitive limitations makes it is hard for us to be fully informed and make perfectly rational decisions in all situations. Behavioral decision model: describes decision making with limited information and bounded rationality As a result.... Satisficing decisions: chooses the first satisfactory alternative that presents itself. de

step 4: implement the decision

Once a preferred course of action is chosen, action must be taken to fully implement it. Otherwise nothing new can or will happen to solve the problem. This means that managers need more than the determination and creativity to arrive at decisions. And, they must have the people skills needed to rally the actions of others on their teams and in their organizations. More often than you might realize, it is lack of support from others that sabotages the implementation of many perfectly good decisions. O Lack of participation: when managers fail to include in the decision- making process those persons whose support is necessary for implementation. Managers who use participation wisely avoid this error and get the right people involved from the beginning. This not only brings their inputs and insights to bear on the problem and strengthens decision making, it also builds their commitments to follow through with the actions needed to make sure things turn out as intended.

Types of Managers

Problem solving: they make decisions and try to solve problems, but only when required. They are reactive, gathering information and responding to problems when they occur, but not before. These managers may deal reasonably well with performance threats, but they are likely to miss many performance opportunities Problem seeking: they are always looking for problems to solve or opportunities to explore. True problem seekers are pro- active as information gatherers, and they are forward thinking. They anticipate threats and opportunities, and they are eager to take action to gain the advantage in dealing with them Problem avoiding: they ignore information that would otherwise signal the presence of a performance threat or opportunity. They are not active in gathering information and prefer not to make decisions or deal with problems

programmed vs nonprogrammer decisions

Programmed: apply preplanned solution based on past experience Non-programmed: decision that require unique solution to an unusual problem

3 competencies of managers

Technological competency: the ability to understand new technologies and to use them to their best advantage Information competency: the ability to gather and use information to solve problems Analytical competency: the ability to evaluate and analyze information to make decisions and solve real problems

Definition of problem :

a discrepancy between an actual and a desired state of affairs

problem solving environments

certain environment: alternative courses of action and their outcomes are known to decision maker ( low risk of failure, programmed) risk environment: decision maker views alternatives and their outcomes in terms of probabilities uncertain environment: decision maker doesn't know all alternatives and outcomes, even as probabilities ( high risk of failure, nonprogrammed)

step 1: identify and define problem

formation gathering, information processing, and deliberation. It is where goals are clarified to specify exactly what a decision should accomplish. However, three mistakes are common in the rush to set goals and get rid of a problem. Mistake 1—defining the problem too broadly or too narrowly. Mistake 2—focusing on symptoms instead of causes. Symptoms are indicators that problems may exist; they aren't the problems themselves. Mistake 3—choosing the wrong problem to deal with. This can happen when we are rushed and time is short or when there are many things happening at once. Instead of just doing something—anything—when something goes wrong, it's important to do the right things.

intuitive and systematic thinking

intuitive thinking: approaches problems in a flexible and spontaneous fashion systematic thinking: approaches problems in a rational and analytical fashion

heuristics

o Availability heuristic: uses readily available information to assess a current situation. o Representative heuristic: assesses the likelihood of an occurrence based on a stereotyped set of similar events. o Anchoring heuristic: adjusts a previously existing value or starting point to make a decision.

errors

o Framing error: evaluates and resolves a problem within the context in which it is perceived. o Escalating commitment: is the continuation of a course of action even though it is not working o Confirmation error: is when we attend only to information that confirms a decision already