Chapter 3

1. Chapter 3 Problem Solving

2. Why Care About Problem Solving? • Organizational members are increasingly being evaluated on their problem-solving ability. So, decisions may affect your career, rewards, and satisfaction. • The quality and acceptability of your decisions will affect how well you perform and the degree of your satisfaction with work. • Solving problems takes considerable time and effort and is often uncomfortable. It makes sense to try to do well on something on which you will spend so much time and psychic energy. • Activities in organizations are generally the results of decisions. By examining how decisions are made, you may better understand how organizations work.

3. Information Gathering Identify Alternative Solutions Evaluate and Choose an Alternative Implement the Decision Monitor and Control Decision Outcomes The Problem Solving Process (Figure 3-1) Define the Problem

4. Guidelines for Problem Definition • State the problem explicitly. Even ‘obvious’ problems are seen differently by different people or not seen at all. • Specify the standard(s) violated. These may be personal, group, organizational, or even societal standards. • State the problem in specific behavioral terms, rather than with broad generalizations. • Specify whose problem it is; that is, who “owns” the problem? • Avoid stating the problem as a preferred solution. • Avoid stating the problem as a dilemma.

5. Identify Alternative Solutions • Alternatives are the various approaches that may be taken to solving the problem; good solutions require good alternatives. • In their rush to judgment, problem solvers often slight the alternative-generation stage. • At this stage, divergent thinking is needed. • That is, problem solvers must stretch their minds, seeking new possibilities. • Creativity is especially important at this stage.

6. Evaluate and Choose an Alternative • Once alternatives are thoroughly generated, they can be evaluated and a choice can be made. • This stage requires convergent thinking, a narrowing in on a solution. • There are two general approaches to evaluation and choice: • With screening approaches, each alternative is identified as satisfactory or unsatisfactory and unsatisfactory alternatives are screened out. • Scoring approachesassign a total score to each alternative and the alternative with the best score is chosen.

7. Screening Table (Figure 3-2)

8. Screening Approaches • Once a screening table is developed, it can easily be used to make a choice. • Elimination by aspects screens out those alternatives not satisfying the constraint for the most important attribute, then screens out those not satisfying the constraint for the next most important attribute, and so on, until only one alternative remains or no attributes are left. • Satisficing checks the alternatives against the constraints, one alternative at a time, until an alternative is found that satisfies all constraints.

9. Scoring Approaches • Scoring approaches assign a total score to each alternative. Then, the alternative with the best score can be chosen. • Attributes are given weights according to their relative importance. • Attribute levels are assigned utilities -- from 100 for the best level to 0 for the worst level -- according to their relative levels of satisfactoriness.

10. Scoring Approaches (Continued) • Overall utility for an alternative is determined as follows: Ui = j=1 (Wj x Uij) n Where: Ui is the overall utility, or satisfactoriness, of alternative I Wj is the relative weight given to alternative j Uij is the utility, or satisfactoriness, of alternative I on attribute J

11. Implement the Decision • The first three stages of the problem-solving process are called decision making. • Some people make the mistake of assuming the problem-solving process is over once they have completed these stages. • Decisions do not implement themselves. Necessary resources must be available for implementation, and those who will be involved in implementation must fully understand and accept the solution. • A fundamental question at this stage is how long to persist in trying to successfully implement the decision.

12. Focus on Management: Escalation of Commitment in the NBA • In one interesting study, new players in the National Basketball Association were examined. • The research found that players for whom the initial investment was greater, as measured by their higher draft position, had more playing time and longer NBA careers, independent of their performance. • The NBA draft is highly visible, and team managers may have expected criticism if they failed to field their expensive players. • As such, they gave their higher draft choices more playing time, even when their performance didn’t justify it.

13. Guidelines for Minimizing the Dangers of Escalation of Commitment • Create “stopping rules” prior to launching a project. • Specify objective criteria for evaluating the status of a project. • Actively gather information on project performance, and accept warning signals when they occur. • Make it clear that “pulling the plug” is a viable option, and don’t be afraid to follow through when needed. • Be wary of penalizing managers if their projects fail. • Seek objective views on project status, such as from external auditors.

14. Monitor and Control Decision Outcomes • The final step in the problem-solving process is to monitor decision outcomes and take necessary corrective action. • If decision control is to be effective, steps must be taken to ensure that necessary information is gathered. • Also, contingency plans are needed. Contingency planning is the process of developing alternative courses of action that can be followed if a decision, perhaps because of unexpected events, does not turn out well.

15. Focus on Management:The Roar of the Crowd • Bill Walsh, formerly the offensive coordinator of the Cincinnati Bengals football team, recalls a close game where the Bengals trailed the Oakland Raiders 31-28 with three minutes left in a playoff game at Oakland. • The Bengals had the ball but crowd noise and a malfunctioning phone Walsh used to communicate with his spotter in the press box caused coordination to break down and the Bengals lost. • Walsh says the event taught him the importance of contingency planning. We wrote, “We lost the game, and I decided that I would never again be confronted by circumstances I hadn’t prepared for, no matter how unlikely.”

16. Act: • Integrate lessons • learned • Reformulate theory • Adjust methods • Learn more about • what needs to be • learned • Do: • Undertake • activities • Introduce • interventions • Apply best • knowledge in pursuit • of desired purpose • and goals • Check: • Monitor outcomes • Study results for signs • of progress or • unexpected outcomes • Search for new lessons • to learn and new • problems to solve The PDCA Cycle(Figure 3-3) • Plan: • Define purposes and • goals • Develop theory • Define measures • of success • Plan activities

17. Influences on Problem Solving • In an ideal world: • the decision maker would have all the information needed -- and no more -- when it was needed and in the desired form. • the perceptual processes would select and process the information in an unbiased way. • the cognitive processes would quickly, accurately, and objectively evaluate the information and arrive at an optimal choice. • Subsequent evaluation of consequences would be unbiased and storage would be efficient. • The “real-world” situation is far from this ideal scenario.

18. Stored Information Evaluation of Consequences Decision Outcomes Perceptual Processes Cognitive Processes DECISION Group Influences Organizational Influences Time and Cost Constraints Stress Factors Influencing Decision Making(Figure 3-4) Information Inputs

19. Information Inputs • People must often act on the basis of less-than-perfect information. • It may be incomplete, late, or in the wrong form. • There may be too much of it, and it may simply be wrong. • One reason information may be imperfect is that there may be too little time to carry out a full information search. • Rapidly changing, complex situations make it especially difficult to get good information. • Some sorts of problem solvers -- including those who are young, risk takers, or dogmatic -- act on the basis of relatively little information.

20. Perceptual Processes • Our perceptual processes can result in distortions. • For instance: • we perceive what we’re expecting to perceive • our perceptual selection is influenced by needs and personality factors and many things about the nature of the object being perceived • when we interpret information, we are subject to stereotyping, halo error, projection, perceptual defense, and a host of other troublesome influences

21. Cognitive Processes • We have very limited short-term memories, with a capacity for only a few pieces of information. • We are basically serial-information processors, and as a result process information relatively slowly. • We have limited computational ability. • Unlike a computer, we care about the outcomes of our decisions, and have doubts about whether our decisions are correct. • We evaluate information differently depending on how it is presented to us (or “framed”).

22. Focus on Management: Deep Blue • There is an ongoing debate and controversy over whether computers can “think” and whether computers can really outperform humans at challenging mental tasks. • One battleground in the human versus computer skirmishes is the chessboard. • In 1997, a much-watched match between world champion Gary Kasparov and IBM’s Deep Blue supercomputer ended with Kasparov’s resignation in the sixth and final game and his losing the competition to Deep Blue. • A dispirited Kasparov said, “I’m a human being. When I see something that is beyond my understanding, I’m afraid.”

23. Time and Cost Constraints • Time and cost constraints restrict our ability to get good, thorough information. • Time constraints also may cause us to change the nature of our decision processes. • When pressed to make a quick decision, for instance, we may seek negative information about alternatives to screen them out quickly instead of carefully balancing positive and negative aspects. • Many managers face strong pressure from the organization to take action as quickly as possible rather than to analyze an issue at length.

24. Stress • Decision makers often act under great psychological stress. • Especially when stakes are high, we may find it difficult to react with cool rationality. • While things such as chemical disasters, nuclear incidents, plant crashes, and product tamperings are notable examples, executives regularly face less visible hot decision situations. • These hot decision situations often lead to inadequate decision making.

25. Defensive Avoidance Use of Heuristics Decision Confirmation Procrastination Incrementalizing Dissonance Reduction Conservatism in Information Processing Consequences of Decision Barriers(Figure 3-5) Barriers to Problem Solving

26. Use of Heuristics • Heuristics (from the Greek word heuriskein, meaning “to find or discover”) are devices we use -- often without knowing it -- to simplify decision making. They are simplifying rules of thumb. • While potentially harmful, heuristics may not be all bad. For one thing, in actual job settings we often receive continuous feedback concerning our performance. So, if a heuristic “points us in the right direction” we can use feedback to make adjustments. • However, we may not know we are using heuristics, so they can be dangerous, especially in one-time decision situations.

27. Some Important Heuristics • Satisficing means choosing the first acceptable alternative. • When faced with a great amount of information, we may simply ignore most of the information and focus on just two or three attributes. • Representativeness is the tendency to place something in a class if it seems representative of the class. • Availability is the tendency to estimate the probability of an event based on how easy it is to recall instances of the event. • Anchoring and adjustment is the tendency to use an early bit of information as an anchor and then use new information to adjust from that initial anchor.

28. Procrastination • Because we find decision making to be uncomfortable, we may put off making and announcing a decision as long as possible. • This procrastination delays the time at which we commit ourselves to a decision and thus makes is more difficult for us to reverse that decision. • We may justify the delay on the grounds that we’re gathering more information, but secretly we may be wishing that the problem would go away. • Procrastination can cost time, money, reputation, and opportunity. It can also lead to scrambling to meet deadlines, and even to cheating or other unethical behaviors.

29. Procrastination at Blimpie’s • When Blimpie International sub shops teetered on the brink of insolvency in 1988, founder Anthony Conza identified procrastination in decision making as a major cause. • In response, he set specific goals for improvements and provided firm dates for task completion. • Within five years, Blimpie’s had rebounded. It tripled in size, and its share price rose from $0.125 to $11.50. • Blimpie’s now has more than 2,100 restaurants in 16 countries.

30. Incrementalizing • Incrementalizinginvolves changing one attribute of a current alternative a little and then another, rather than starting from scratch to design an alternative. • For instance, someone asked to design a perfect mousetrap may think of the best currently available mousetrap and then begin to revise it bit my bit, adding a better spring or disposal mechanism. • While incrementalizing may be appropriate if only a “somewhat better” alternative is needed, it can seriously stifle truly creative alternatives.

31. Conservatism in Information Processing • We tend to show conservatism in information processing, characterized by underrevision of our estimates when presented with new information. • For instance, if we initially believe the probability of an event is .5 and are presented new information that should increase the probability to .8, we are likely to revise our estimate to only .6 or .7. • Conservatism can have serious consequences for decision making since we don’t respond fully to changing situations.

32. Dissonance Reduction • Most decisions require us to make difficult choices. • Even though our choice may seem best overall, we may still like some things about the alternatives we reject and may not care for some things about the chosen alternative. • This creates a condition of conflicting thoughts, called cognitive dissonance. • Since cognitive dissonance is uncomfortable, we take a variety of actions, including a search for confirming information, a distortion of attitudes, and an avoidance of disconfirming information, to justify our decisions. • As a result, we are likely to overestimate the quality of our past decisions, and to underestimate the need to improve our decisions.

33. Decision Confirmation • Decision confirmation is dissonance reduction that occurs before the announcement of a decision. • For instance, research found that it was possible to identify students’ job choices weeks before the students announced them. • The students apparently made a decision fairly early in the process. • The remainder of the process was spent building a case for the preferred alternative. • When they finally announced the decision, the students could present a strong argument in its favor.

34. Defensive Avoidance • Psychological stress in hot decision situations may result in errors in scanning of alternatives. • When a hot situation -- such as a major decision, an impending attack, or major surgery -- occurs and it looks like important goals cannot be met, stress increases. • This stress is especially great if someone is committed to a course of action that is challenged by new information. • As stress grows, there is a tendency to lose hope of finding a better solution to the decision conflict, and defensive avoidance occurs.

35. Defensive Avoidance (Continued) • Defensive avoidance is a condition in which the individual avoids information about risks of the chosen alternative or opportunities associated with an unchosen alternative. • Defensive avoidance is characterized by: • lack of vigilant search • distortion of the meaning of warning messages • selective inattention and forgetting • rationalizing

36. The Many Faces of Intuition • Intuition as paranormal power or sixth sense. According to this view, intuitive managers succeed because they have extrasensory powers. • Intuition as a personality trait. Intuition is sometimes used to mean a personality type that prefers to rely on hunches, inspiration, and insight to solve problems. • Intuition as an unconscious process. This view sees intuition as a set of processes that occur at the unconscious level at the same time that analysis is proceeding at the conscious level.

37. The Many Faces of Intuition (Cont.) • Intuition as a set of actions. Intuition is sometimes seen as a set of observable methods or actions used by decision makers. For example, successful intuitive decision makers are said to often skip levels and seek information directly from key individuals, to meet face to face with those individuals, and to subtly probe for information. • Intuition as distilled experience. According to this view, a manager who makes the same sorts of decisions many times over the years can identify an appropriate course of action without conscious information processing. • Intuition as a residual category. This view says that any choice that isn’t a product of systematic, conscious data gathering and analysis must be intuition.

38. Guidelines Regarding Use of the Term “Intuition” • If someone refers to intuition, ask what he or she means. • There is no support for the “intuition as paranormal power” perspective and no reason to believe that such abilities could be developed if they did exist. • There is no value in treating intuition as a residual. • If intuition is seen as a personality trait, it may be possible to select managers based on their intuitive ability, but training will have little impact. There is little evidence, though, to suggest that personality traits are associated with more effective “intuitive” decisions.

39. Guidelines Regarding Use of the Term “Intuition” (Continued) • If intuition is seen as distilled experience, it is learnable but not teachable; developing intuition will require years of practice. • If intuition is conceptualized as an unconscious process it may not be possible to develop the unconscious, and there is little evidence that decision makers can be trained to rely more on the unconscious. • If intuition is viewed as a set of actions taken by certain types of decision makers, it may be possible to study those decision makers and learn from them.

40. Consider Using a Group Problem- Solving Process Be Aware of Barriers to Effective Problem Solving Use Systematic Tools for Evaluation and Choice Learn More About Your Characteristics as a Problem Solver Consider Using Computers as an Aid to Problem Solving Pay Attention to All Stages of the Problem Solving Process Employ Creativity Enhancement Techniques Work to Attain Complete and Accurate Information Guidelines for Improving Problem Solving (Figure 3-6) Improved Problem Solving

41. Fostering Creativity • Good problem solving occurs when managers have many viable, creative alternatives to consider. • To inspire employees to approach problems creatively and to nurture a creative environment, organizations follow three general approaches: • hiring creative individuals • applying specific creativity-enhancement techniques • developing a creative organization

42. The Nature of Creativity • Creative behavior is defined as production of ideas that are both new and useful. • Creative ability is the ability to produce ideas that are both new and useful. • Both motivation and a proper setting may be necessary if innate creative ability is to blossom into creative output.

43. Incubation Insight Verification The Creative Process Preparation

44. The Creative Process • Preparation involves gathering, sorting, and integrating information and other materials to provide a solid base for a later breakthrough. • During the incubation stage, the mind is not consciously focused on the problem. The individual may be relaxed, asleep, reflective, or otherwise involved. • The insight (“Eureka!”) stage is the familiar, sudden moment of inspiration. • Finally, verification is necessary. Here, the individual carries out the chores involved in carefully checking facts to support the insight.

45. Retroduction Gordon Technique Checkerboard Method Synectics Idea Checklists Attribute Listing Techniques for Enhancing Creativity Enhanced Creativity

46. Gordon Technique • When asked to come up with a creative idea, people often instead incrementalize, taking an available alternative and improving it bit by bit. • The Gordon technique is used to avoid such incrementalizing. • It uses an initial focus on function. • For instance, rather than being told to build a better mousetrap, the group might first be told that the focus was capturing.

47. Synectics • Synectics means “the joining together of apparently unrelated elements.” • Synectics relies heavily on use of analogies, including: • Direct analogy involves looking at parallel facts, knowledge, or technology in a different domain from the one being worked on. • With personal analogy, synectics group members try to identify psychologically with key parts of the problem. • Fantasy analogy asks, “How in my wildest dreams can I make this happen?” • Synectics also includes a full structured problem-solving sequence.

48. Idea Checklists • Idea checklists involve asking a series of questions about how we might use something that we already have. • For example, one checklist of idea-spurring questions is called SCAMPER, for: • Substitute? • Combine? • Adapt? • Modify or magnify? • Put to other uses? • Eliminate or reduce? • Reverse or rearrange?

49. Eliminating and Putting to Other Uses • As an example of eliminating, Kiichiro Toyoda, the founder of Toyota, developed the “just-in-time” approach of eliminating inventories after viewing American supermarkets. • George Washington Carver asked the question “How can peanuts be put to other uses?” and came up with over 300 applications.

50. Adapting from the Inuits • Clarence Birdseye worked as a fur trader in Labrador before World War I. • He note that Inuit preserved fish by quick-freezing and that the dish, when thawed, were flaky and moist. • Birdseye adapted this process to make quick-frozen food available to the general public. • This replaced the old slow-freeze process that left food dry and tasteless. • The huge success of quick-frozen food led to the creation of General Foods.