1. Problem Solving And Decision Making

2. Define First and See?
People selectively perceive what they expect and hope to see

3. Examples
Any book which is published will have been read possibly hundreds of times, including by professional proof readers.
And yet grammatical and other errors still get into print. Why?
Because the mind is very kind and corrects the errors that our eyes see.

4. Thinking Ways of thinking
Analysis – breaking down a large complex problem into smaller simpler problems
Synthesis – combining two or more concepts into a complex form
Divergent thinking – generating many ideas or possible solutions to a problem
Convergent thinking – choosing the best solution or idea of a possible many

5. Categories of thinking processes
Problem solving – developing a solution to a problem situation
Judgments and decision making – involves making choices
Reasoning – drawing conclusions given specific information
Creativity – production of original thoughts and ideas

6. Definition
Problem solving refers to active efforts to discover what must be done to achieve a goal that is not readily attainable.

7. Decision Making Two types of decisions
Making choices (selecting among alternatives)
Taking chances (deciding amidst uncertainty)

8. Definitions
Decision making – selecting one choice from a number of choices involving some level of uncertainty.
Intuitive Decision Making – quick and relatively automatic responses to a problem.
Example: Response to yellow traffic light
Analytic Decision Making – slow, deliberate, and controlled responses to a problem.
Example: What college to attend

9. Decisions under situations of certainty
You have all the necessary information to make a correct decision

10. Judgment and decision making in situations of uncertainty
The individual is not given all the information necessary to be certain of the answer and has to use previously acquired knowledge
Primary problem: lack of knowledge and misinterpretation

11. Utility Maximization Theory
Humans attempt to make decisions that provide us with the maximum gain
Subjective utility theory – modification that takes into consideration that humans are not always objective, but take consider subjective factors

12. Examples of Subjective factors
Satisficing – we do not always pursue the optimal decision, but accept one that is adequate
Immediate benefit versus delayed reward – discounting delayed rewards
The way the problem is framed (presented) is important

13. Criteria for “Good” Decisions
Outcome produces maximum value
Problem is that decision are often made to avoid worst outcome rather than maximize value
Example: Decision to buy the extended warranty on an appliance
Positive vs. Negative outcome
Problem is decision may be positive in the short term, but turn out to be a big mistake later
Example: Japan’s decision to attack U.S. in 1941
Comparison to expert’s decisions
Problem is that experts don’t always make good decisions
Example: Experts’ decision to launch Challenger

14. Example 1 of framing
You go to New York and decide to go to a Broadway play. You buy a ticket for $100 in the morning, but when you go to the theater that evening, you discover you have lost the ticket. You have plenty of money to buy another one: do you?
You go to New York and decide to go to a Broadway play and tickets cost $100. You go to the theater that evening and when you start to pay for your ticket, you discover you have lost $100. You have plenty of money to buy a ticket: do you?

15. Blaming the victim
Paul normally leaves work at 5:30 and drives directly home. One day, while following his routine, Paul is broadsided by a driver who violated a stop sign and is seriously injured.
Paul, feeling restless at work, leaves early to see a movie. He is broadsided by a driver who violated a stop sign and is seriously injured.
Paul receives an emergency call to return home. While driving home, Paul is broadsided by a driver who violated a stop sign and is seriously injured.

16. Decision traps – summary
Plunging in
Beginning to gather information and reach conclusions without first taking a few minutes to think about the crux of the issue you’re facing or to think through how you believe decisions like this should be made.
Frame blindness
Setting out to solve the wrong problem (Type 3 error) because you have created a mental framework for your decision, with little thought, that causes you to overlook the best options or lose sight of important objectives.
Lack of frame control
Failing to consciously define the problem in more ways than one or being unduly influenced by the frames of others.
Overconfidence in your judgments
Failing to collect key factual information because you are too sure of your assumptions and opinions.
Shortsighted shortcuts
Relying inappropriately on ”rules of thumb” such as implicitly trusting the most readily available information or anchoring too much on convenient facts.

17. Decision traps - summary
Shooting from the hip
Believing you can keep straight in your head all the information you’ve discovered, and thereby ”winging it” rather than following a systematic procedure when making the final choice.
Group failure
Assuming that with many smart people involved, good choices will follow automatically, and therefore failing to manage the group decision-making process.
Fooling yourself about feedback
Failing to interpret the evidence from past outcomes for what it really says, either because you are protecting your ego or because you are tricked by hindsight.
Not keeping track
Assuming that experience will make its lessons available automatically, and therefore failing to keep systematic records to track the results of your decisions and failing to analyze these results in ways that reveal their key lessons.
Failure to audit your decision process
Failing to create an organized approach to understand your own decision making, so you remain constantly exposed to all of the above mistakes.

18. Making Decisions in Groups
Group Polarization
Groupthink

19. Group Polarization
Group Polarization- tendency to shift toward more extreme positions after group discussion
Risky
Cautious
Neutral

20. Groupthink
Groupthink - syndrome of bad decision-making
12.17 4 12 13

21. Group decision making 3 frequent errors Group think
Incremental-decision making
Content error

22. Group Polarization
Group Polarization - tendency to shift toward more extreme positions after group discussion
Risky
Cautious
Neutral

23. Groupthink
Groupthink - syndrome of bad decision-making
12.17 4 12 13

24. drama classical music popular music folk dancing games cooking dress
The cultural iceberg
Primarily in awareness
Primarily out of awareness
fine arts literature
drama classical music popular music
folk dancing games cooking dress
notions of modesty conception of beauty
cosmology ideals governing childrearing rules of descent
relationship to animals
patterns of superior subordinate relations
definition of sin courtship practices conception of justice incentives to work
notions of leadership
tempo of work
patterns of decision making
conception of cleanliness attitudes towards the dependent theory of disease
approaches to problem solving
conception of status mobility eye behavior
roles in relation to status by age, sex, class, occupation, kinship etc..
conversational patterns in social contexts
conception of past and future
definition of insanity nature of friendship ordering of time conception of “self”
patterns of visual perception
preference for competition or cooperation
body language social interaction rate notions of adolescence
notions about logic and validity
patterns of handling emotions facial expressions
arrangement of physical space ...AND MUCH, MUCH MORE...
Temporal perspective
Attitude towards change
Bias against problem diagnosis
Reliance on the scientific method

25. The perfect problem-solver
SENSE:
Collect data
with all 5 senses
INTUITION:
Look for patterns,
inferences,
relationships
THINKING:
Logically analyze data,
patterns, inferences to
reach conclusion
FEELING:
Evaluate impact of
solution on stakeholders
inside and outside
the organization