1. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-1 Chapter 3 Creative Problem Solving and Decision Making

2. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-2 Problem solving and decision making are crucial skills of effective managers. The sport industry is not immune to bad decisions—witness the Starter Corporation. Effective Managers

3. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-3 The Starter Corporation Starter was the leading licensed sport apparel provider in the 80s and 90s. Starter failed to expand their merchandise line from licensed sport apparel to a branded apparel line. Nike decided to take a branded approach and emphasized their name instead of their licenses with professional leagues. Fans who were turned off by labor problems in the MLB, NHL, and NBA turned to athletic brands such as Nike and Fila as well as fashion designer brands such as Tommy Hilfiger, Nautica, and the Gap.

4. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-4 Daily Decision Making Some researchers claim that managers typically make about 80 decisions daily, or one every 5 or 6 minutes; others claim that daily decisions number in the hundreds. Adidas’s CEO, Herbert Hainer, is famous for trusting his gut.

5. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-5 A problem exists whenever company or team objectives are not being met. Problem

6. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-6 Problem Solving vs. Decision Making Problem solving is the process of taking corrective action to meet objectives. Decision making is the process of selecting a course of action that will solve a problem.

7. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-7 Decisions at Adidas Adidas has not yet been able to capitalize on efficiencies within its divisions. Adidas thus faces important decisions— how best to share skills, abilities, and resources. Adidas wants a new vision of a corporate culture that works together as one team across the globe... and a company that people love to work for again.

8. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-8 Decision Styles The reflexive decision making style “shoot from the hip”—that is, making snap decisions without taking time to get all the necessary information and without considering alternatives. The reflective decision making style takes plenty of time to decide, gathering considerable information and analyzing numerous alternatives. The consistent decision making style doesn’t rush and doesn’t waste time. They know when they need more information and when it’s time to stop analyzing and get moving.

9. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-9 Decision-Making for Officials One of the biggest errors that officials fall into is making calls too quickly. When things happen in a split second, it can be tempting to throw a penalty flag before you know what happened. Each decision has two phases: Read and analyze the play, and then make the call. Officials need to work in cruise control.

10. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-10 Six Steps of Effective Decision Making Step 1: Define the Problem or Opportunity Step 2: Set Objectives and Criteria Step 3: Generate Alternatives Step 4: Select the Most Feasible Alternative Step 5: Implement the Decision Step 6: Control the Results

11. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-11 Step 1: Define Problem or Opportunity With programmed decisions (recurring or routine situations), decisionmakers use “decision rules,” or organizational policies and procedures. A typical decision rule: Order X number of golf balls every time stock reaches level Y. With nonprogrammed decisions (significant and nonrecurring and nonroutine situations), decisionmakers use the six-step decision process.

12. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-12 Step 2: Set Objectives and Criteria Objectives state what the individual, group, or organization intends to accomplish. Objectives can address a problem of long or short standing, or they can address opportunities in the marketplace. Criteria are the standards that must be met to accomplish the objective.

13. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-13 Step 3: Generate Alternatives You will often find that there are many ways to solve a problem. An innovation alters what is established by introducing something new. Creativity is a way of thinking that generates new solutions to problems and new ways to approach opportunities.

14. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-14 Step 4: Select the Most Feasible Alternative Generating and evaluating alternatives at the same time often leads to satisficing and wastes time on poorly developed alternatives. Break-even analysis calculates the volume of sales or revenue that will result in a profit. It involves forecasting volume of sales and cost of production. The break-even point occurs at the level where no profit or loss results.

15. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-15 Step 5: Implement the Decision How you implement your plan is crucial to its success or failure. Adidas, for example, developed a plan to sell, advertise, and distribute TaylorMade golf clubs.

16. Lussier/Kimball, Sport Management, First Edition Copyright © 2004, by South-Western, a division of Thomson Learning PPT3-16 Step 6: Control the Results Control methods should be developed during planning. Establish checkpoints to determine whether the chosen alternative is solving the problem. If not, consider corrective action. More importantly, if the implementation continues to go poorly, don’t remain married to your decision—that is, don’t rule out a “divorce.”