1. Decision Making And Problem Solving
Nabin Chapagain
Pramod Niroula
2075/08/11

2. Session Outline Problem/Problem Solving Decision/Decision Making
Humans as a Decision Maker
Approaches / Styles and Process of Decision Making
Decision Making in Public Enterprises
Issues / Challenges / Problems in Decision Making
Effective Decision Making

3. Problem!
In a day, when you don’t come across any problems- you can be sure that you are traveling in a wrong path.”
Swami Vivekananda
A problem is a situation or a state of affairs that causes difficulties for people. It is also a gap between a current and a desired state. The gap may be viewed as the difference between 'what is' and 'what should be' or 'where we are' and 'where we want to be'.

4. Problem Solving
If a problem is a gap between two states, then problem solving is 'the process of closing that gap, i.e. changing the current state into the desired one.'
It is an active effort to discover what must be done to achieve a goal that is not readily attainable.
Basically three types (Greeno)
1. Problems of Inducing Structure
2. Problems of Arrangement
3. Problems of Transformation

5. Problem solving is the communication that analyzes the problem in detail before decision making

6. Barriers to Problem Solving
Irrelevant (Distracting) Information
Functional Fixedness (Screw Driver)
Mental Set
Unnecessary Constraints

7. Decision “A Decision is a Judgment.”
Peter Drucker
A decision is a Choice between or among various alternatives.
Decision making is the communication that results in a choice

8. Decision Making
… is the selection of one behaviour alternative from two or more possible alternatives in relation to a problem / situation. – Terry … is the process of examining possible options, comparing them and choosing a course of action. … is the study of identifying and choosing alternatives based on the values and preferences [subjective] of the decision-maker. When we make a decision, we want to choose the one/s that fit us best.

10. A correct/right decision makes our life better and gives us some control over life. On the other side, a bad decision may force us to make another one which could be even worse. Like the old saying, if the first button at one’s coat is wrongly buttoned, all the rest will be crooked.

12. Decision-Making Skills
Task skills
Problem recognition and framing, inference drawing, idea generation, argument
Relational skills
Leadership, climate building, conflict management
Procedural skills
Planning, process enactment

13. Decision-Making Principles
Evolutionary process
Circular rather than linear
Individual-level and group-level influences affect decision making
Decisions are made within system of internal and external constraints

14. Decision Types Two types of decisions Selection of Alternatives
Making choices (selecting among alternatives)
Taking chances (deciding amidst uncertainty)
Selection of Alternatives
Additive
Subtractive (Elimination of Aspects)

15. Making Decisions in Groups
Group Polarization
Groupthink

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

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

18. Decision Making Procedures
Standard agenda
Brainstorming
Nominal Group Technique
Consensus
Voting
Ranking

19. Importance of Decision Making
A key role of an officer
Whatever an officer does, he does through making decisions
No organisations can be run without making decisions
Carries long-term implications. Organisations grow or fail as a result of decisions made by its decision makers.
The wellbeing of an organisation depends almost entirely on the quality of its decisions.

20. Factors Influencing Decision Making
Cognitive and personal biases
Emotional bias
Skills and competencies
Situational factors
Instrumental factors
Political and legal factors
Economic and financial factors
Technological factors
Socio-Cultural factors

21. Classification of Decisions
Personal decisions to achieve own objectives.
Organisational decisions to fulfill the obligations of own position in the organisation.

22. Organizational Decisions
ILL-structured
Type of Problem
Well-structured
Non-programmed
Decisions
Top
Level in Organization
Bottom
Programmed
Decisions
Programmed Decision
A decision that is repetitive and routine and can be made by using a definite, systematic procedure.
Non-programmed Decision
A decision that is unique and novel.

23. Humans as Decision Makers
Classic View
Irrational
Prone to errors & mistakes
Mentally limited
Evolutionary View
Specialized cognition is adaptive
Rational
Fast and Frugal heuristics work
Dual Process Theories
Intuitive Thinking
Rational Thinking

24. Ethics and Decision Making
Five Sources of Ethical Standards for Decision Making
The Utilitarian Approach
The ethical action is the one that will produce the greatest balance of benefits over harms.
The Rights Approach The ethical action is the one that most dutifully respects the rights of all affected.
The Fairness or Justice Approach The ethical action is the one that treats people equally, or if unequally, that treats people proportionately and fairly.
The Common Good Approach The ethical action is the one that contributes most to the achievement of a quality common life together.
Virtue Approach
The ethical action is the one that embodies the habits and values of humans at their best.

25. Self Assessment
Decision Making Styles

26. Decision Making Styles
The Authoritarian Approach. Deciding independently seeking no contributions other than asking for necessary information and passing them down the line for implementation. Officers assume the authority to take decisions alone and to pass them down the line for implementation.
The Democratic Approach. Jointly, as a team, making a decision which has the support of the whole group. The responsibility for decision making is shared between the officer and members of a team.

27. Range of Decision Making Styles
Authoritarian Style
Democratic Style
The officer makes decisions and announces them
The officer sells the decision to the team
The officer presents the idea and invites questions
The officer presents a tentative decision subject to change
The officer presents a problem, gets inputs from the team and then decides
The officer defines the limits and asks the group to make the decision
The officer permits the team to make decisions with predefined limits
The officer allows team members complete freedom of action

28. Approaches/Styles to Decision Making
No one style appropriate for all situations.
Occasions when one style rather than any other is more likely to produce better quality decisions implemented with greater success.
Each style has a probability of getting results depending on the maturity of followers and the situation.
Need to adopt a flexible approach by varying style in response to the nature of the decision and the context in which it is made and ultimately implemented.

29. Decision Making Style Conceptual Analytic Directive Behavioral High
Low
Rational
Intuitive
Way of thinking
Tolerance for ambiguity

30. Decision Making Process
Rational Decision Making Process
Evaluate Alternatives
Develop Alternatives
Choose the Best Alternative
Identify/Define Problems
Implement the Decision
Sense Effects
Monitor the Implementation

31. I Diagnose Problem/ Define the Objective
"A problem properly defined is a problem half solved.“
Define the problem
Identify the decision objectives (what will happen when the problem has been solved)
Identify the causes of problem
To whom is it a problem?
What kind of problem is it (attitude, understanding, competence, …)?
Has this ever happened before?
What is the potential magnitude of the problem, if it remains unresolved?

32. II Develop Alternatives to Solve the Problem
This is a brainstorming step to generate alternatives, not to evaluate them. Brainstorming suggests a range of possible solutions. Listing options (Thinking creatively) - the alternatives to reach Rara Lake?
Nobody says “no”
Nobody says “That will never work”
Nobody says “That has already been tried …”
Nobody says “That is a stupid idea"

33. III Evaluate Alternatives
Realistic to Organisation Goals
Helpful to Solve the Problem
Timing
Resources
Acceptability
Feasibility
Risk

34. IV Choose the Best Alternatives
Solution should be satisfactory rather than ideal. There are four criteria for choosing the best from among the possible solutions:
The risk - weigh the risks of each course of action against the expected gains.
Economy of effort - which will give the greatest results with the least effort?
Timing- situation in the organisation.
Limitations of resources - vision, competence, skill, etc. of staff who carryout decisions. Do we have resources to carryout decisions?

35. V Implement the Decision
Putting a chosen solution into effect requires a carefully drawn-up action plan. SN
Activities / Actions By
Required Resource (s)
Critical Success Factor (s)
Whom
When

36. VI Monitor the Decision
Set dates for monitoring. Who will monitor? How and when?
Is the solution effective?
Are we still satisfied? Are there parts that need reworking? In the light of new data received, do we need to make any changes?
Has there been any permanent improvement?
Are we learning from experience?
What new problems have we identified?

37. Assumption of rational decision making
Problem clarity
Known options
Clear preference
Constant preference
Not time or cost constraints
Maximum pay off

38. Bases of Decision Making (Nepal)
Constitution
Acts, Rules, Policies
Court / Executive order
Budgetary instruments
Administrative procedures
International conventions, declarations and commitments
Treaties/ MOUs with international communities / agencies
Parliamentary directives
CIAA / NVC directions, etc.

39. Tools (Nepal)
Tippani
Minutes (Meeting / Committee)
Tok-aadesh
Najir

40. Characteristics (Public Enterprises)
"Manasaya"
"Bholi" - never comes. Passing to others (above) / avoidance
Afno manchhe- nepotism, favouritism / (exclusion)
Patchwork/ 11th hour
Ad-hoc
Populist
Survival (individualistic)
Pressure – individual / group
Centralized- dominated by power centers
Delegated matters forwarded to delegator
Ignorance to institutional interest

41. Problems in Decision Making Real life Decision Makers must cope with:
Inadequate information about the nature of the problem and its possible solutions,
The lack of resources to acquire more complete information,
Distorted perceptions of the information available,
The inability of the human memory to retain large amount of information, and
The limits of their own intelligence to determine correctly which alternative is best. - Herbert Simon

42. Which problem to solve?
What is a right decision?
External and internal environment
Individual's values, capabilities, biasness / prejudice, experience
Influencing factors
Conflicting information
For some “thinking” is not “work”

43. Modes of thinking Let’s work on Group
Divide the participants into six groups
Each group have 15 minutes for group discussion
The discussion issue – “The age of Retirement to be extended to 60 years in the Civil Service of Nepal”
One participant from each group will present their group’s idea (s)(5 minutes for each participants) in small group of six comprised one person from each group
Decide on the issues (5 minutes)

44. Six Thinking Hats- Team Decision Making

45. Six Thinking Hats- Team Decision Making

46. Six Thinking Hats- Team Decision Making

47. Six Thinking Hats- Team Decision Making meta - cognition

48. Benefits of Six Thinking Hats’ Method
Create awareness that there are multiple perspectives on the issue at hand
Convenient mechanism for “switching gears”
Rules for the game of thinking
Lead to more creating thinking
Improve communication
Improve decision making

49. Six Cs of Decision making
Construct
Compile
Collect
Compare
Consider
Commit

50. Basic Approaches to Improve Decision Making Ability
Improve analytical ability
Adopt systematic approach
Invite conflicting views
Consider factors influencing decision making
Use imagination / Be creative
Implementation and follow-up

51. 1. Improve Analytical Ability
Opinions are perfectly good starting point. Ask questions starting with:
What,
Why,
When,
How,
Where, and
Who.

52. 2. Adopt Systematic Approach
Analyse the situation
Identify possible courses of action
Weigh them up
Decide what to do

53. 3. Invite Conflicting Views
One should not expect a bland consensus view
The best decisions emerge from a clash of conflicting points of view

54. 4. Consider Factors Influencing Decision Making
Availability of resources
Environment- internal / external (PEST)
Capability, values, experience of concerned people
Knowledge
Biasness / prejudice / interest
Customs and habits of people
Psychological factors- emotion, ethics, values…
Future as anticipated
Superiors and subordinates

55. 5. Use Imagination
Use 'lateral thinking' and 'brain-storming'. You can develop your ability to think creatively by:
Breaking away from any restrictions
Opening up your mind to generate new ideas
Delaying judgment until you have thoroughly explored the alternative ideas (for example, 'It won't work', 'It won't solve the problem')

56. 6. Implementation and Follow-up
A problem is not solved until the decision is implemented. Think carefully not only about how a thing is to be done (who, what, when) but also about its impact on the people concerned and the extent to which they will co-operate.

57. How to Overcome Indecisiveness
Avoid decidophia: fear of making wrong decisions
Be entrepreneurial
Better preparedness
Ability (knowledge, skill, information)
Willingness (desire, aptitude, confidence)
Do analysis
Develop team and teamwork
Networking with like-minded persons
Manage stress
Dialogue for negotiation
Avoid passing buck and rent- seeking tendencies
Logically frame the problem realities
Use time management skills
Balance value and fact

58. Effective Decision Making
It is not choice between right or wrong, rather choosing from among alternatives
What is right, not who is right
Consider those affected by the decision (involve if feasible)
Mentally rehearse implementation of your choice
View a ‘problem’ as an ‘opportunity’
Decision must meet the situation, and be acceptable to as large number of people as possible
Choosing the right alternative at the wrong time is not any better than the wrong alternative at the right time, so make the decision while still have time

59. “Think Laterally, and be creative
“Think Laterally, and be creative.” “Whenever you see a successful business, someone once made a courageous decision.”- Peter Drucker