2. Problem Solving and Decision Making Skills - Tarak Bahadur KC, Ph.D. tarakbkc@gmail.com

3. 2 The moment we all open our eyes in the morning, the decision process begins, and continues to happen all throughout our day until we fall asleep at the end of it, whether we are aware of said process or not. We are thus all decision makers. Whether we are right decision makers or not is the question. However, even if one is not a right decision maker, one need not fret – it is an ability that can be learned by anyone.

4. Discussion Issues  Meaning of Problem Solving and Decision Making  Classification of Decisions  Approaches / Styles / Process and Influencing Factors of Decision Making  Problems in Decision Making  Approaches to Improve Ability to Make Decisions and Solve Problems Effectively 3

5. 4 Importance of Decision Making  A key role of a manager  Whatever a manager 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 by its managers.  The wellbeing of an organisation depends almost entirely on the quality of its decisions.  Objective of decision making is solving problem

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7. 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'. 6

8. 7 Do you have a problem? Actual SituationDesired Situation Is there a difference No Do you want to do something about that difference? Do you know what to do and when to do it? You do have a problem You do not have a problem No Yes No Yes

9. 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.' 8

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11. Decision “A Decision is a Judgment” - Peter Drucker A Choice between or among Various Alternatives to solve problems 10

12. Classification of Decisions  Personal decisions to achieve own objectives.  Organisational decisions to fulfill the obligations of own position in the organisation. - Programmed – usually made at lower level and are usually routine in nature. Made on the basis of pre-established rules / procedures. - Non-programmed – established rules / procedures are inadequate to deal with the new kinds of situations, and the decision maker has to be innovative. The risks involved are high. Decisions made about non-recurring problems for which there are no pre-specified courses of action. 11

13. Decision Making ------ is the selection of one behaviour alternative from two or more possible alternatives. - Terry ------ is an activity carried out in the process of solving problems. 12

14. Reactions to Problem / Situation  Ignore or avoid  Act without thinking  Positively decide to do nothing  Take decisions only when there is a crisis or pressure  Take action only after gathering information and giving some thought 13

15. Approaches / Styles to Decision Making  Authoritarian - deciding independently seeking no contributions other than asking for necessary information and passing them down the line for implementation.  Democratic - jointly, as a team, making a decision which has the support of the whole group. 14

16. 15 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 Range of Decision Making Styles

17. 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.  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. 16

18. 17 Decision-Making Procedure Although people can learn at different rates – some more quickly than others of course – there are no short cuts to learning and everyone has to follow a similar learning process to learn how to make right decisions. One of the things that can be learned is a specific process to make a decision.

19. 18 Rational Decision-Making Procedure 1. Diagnose Situation or Problem 2. Generate / develop potential solutions / alternatives 3. Rate each alternative 4. Make the decision! Select the best alternative 5. Communication and implementation 6. Monitoring the implementation

20. 19 Creative Decision Making Process  Understand the barriers to creative thinking - perceptual blocks, - emotional blocks and - cultural / environmental blocks  Develop capacity for creative thinking by: - looking at the situation differently - exchanging ideas with other creative people - thinking outside the box - leaving it for a while  Use collective capacities of group to develop new ideas by “brainstorming”

21. 20 Techniques for Creative Decision Making  Brainstorming  Ideas writing  Lateral thinking

22. Factors Influencing Decision Making  Availability of resources  Environment  Capability, values, experience of concerned people  Knowledge  Biasness / prejudice 21

23. 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 22

24. Problems ……( Contd.)  Which problem to solve?  What is a right decision?  External and internal environment  Individual's values, capabilities, biasness  Influencing factors  Conflicting information  For some “thinking” is not “work” 23

25. 24 Some Common Decision-Making Mistakes  Relying too much on “expert ” information. Experts are only human and have biases and prejudices like the rest of us. Seek information from a lot of different sources.  Overestimating the value of information received from others. They may not know as much about the problem as you may. Their values may be different. The bottom line is that it is important to keep their opinions in perspective.

26.  Underestimating the value of information received from others. We may tend to discount information we receive from individuals such as children, low status groups, blue-collar workers or even women. We should not do so as information from these and other such groups can help us gain a better perspective of the problem as a whole, and  Only hearing what you want to hear or seeing what you want to see. Be aware of your prejudices and expectations. 25

27. 26 Basic Approaches to Improve Decision Making Ability 1. Improve analytical ability 2. Adopt systematic approach 3. Invite conflicting views 4. Consider factors influencing decision making 5. Use imagination / Be creative 6. Implementation and follow-up

28. 27 Ethics and Morality in Decision-Making  Ethics is defined as the branch of philosophy that defines what is good for the individual and society, and which establishes the nature of obligations or duties which people owe both themselves and one another.  Making ethical decisions in business is often difficult because business ethics is not just an extension of either an individual’s or a society’s ethics. However, the following support being ethical:

29.  Trustworthiness - others believe in us and hold us in high esteem; concerns qualities such as honesty, reliability, integrity and loyalty  Respect – we should treat everyone with respect regardless of who they are and/or what they have done  Responsibility – we have to be accountable for what we do and who we are 28

30.  Fairness – adherence to a balance standard of justice without relevance to one ’s feelings or inclinations  Caring – the heart of ethics and ethical decision-making; we should consciously cause no more harm than is reasonably necessary to perform our duties  Citizenship – this includes civic virtues and duties which tell us how we ought to behave as part of a community 29

31. 30 Some Tips for Effective Decision Making Effective decision making means you make things happen instead of letting things happen. You will find that making decisions are required in every activity. These decisions will take place in a situations and problems and can range from the very simple to very complex. You as a senior officer must make the right decisions to direct and guide events and actions into a planned course instead of letting events fall to chance. Making right decisions is a skill like any other and needs to be practiced.

32. Some Tips for Effective Decision Making  It is not choice between right or wrong, rather choosing from among alternatives  Avoid snap decisions  What is right, not who is right  Consider those affected by the decision (involve if feasible)  Mentally rehearse implementation of your choice 31

33. Some Tips (Contd..)  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 32

34. Conclusion Effective decision making / problem solving requires creativity. Creative thinking is hindered by perceptual blocks, emotional blocks and cultural / environmental blocks. Therefore, first thing is to overcome from the blocks and be creative in different course of action, likely causes, possible solutions, and a variety of outcomes. 33

35. 34 Never base your life decisions on advice from people who don’t have to deal with the problem. “Think Laterally, and be Creative.” Good luck and Thank you.

36. 35 Time taken in Making Decisions under Different Approaches SNActivitiesAuthoritarian Approach Democratic Approach 1Making Decisions5 Minutes30 Minutes 2Explaining Decisions30 Minutes0 3Gaining Acceptance30 Minutes0

37. 36 Evaluating Alternatives Situation: Resigning from the Job Outcome Window Positive Negative Self Others Get a better jobFeel like a failure Wife sees me more Less income for kids

38. Some Possible Criteria for Evaluation 37 ProposalContributionMoneyManpowerCommitmentResistanceProblems 1 2 3 4