Chapter 8
Decision Making and Creative Problem Solving
1. Decision making is a fundamental part of management because it requires choosing among alternative courses of action. In addition to having to cope with an era of accelerating change, today’s decision makers face the challenges of dealing with complexity, uncertainty, the need for flexible thinking, and decision traps. Eight factors that contribute to decision complexity are multiple criteria, intangibles, risk and uncertainty, long-term implications, interdisciplinary input, pooled decision making, value judgments, and unintended consequences.
2. Managers must learn to assess the degree of certainty in a situation—whether conditions are certain, risky, or uncertain. Confidence in one’s decisions decreases as uncertainty increases. Managers can respond to a condition of risk—incomplete but reliable factual information—by calculating objective or subjective probabilities. Today’s managers need to tap the creative potential of intuitive employees and the implementation skills of those who process information as thinkers.
3. Researchers have identified three perceptual and behavioral decision traps that can undermine the quality of decisions. Framing error occurs when people let labels and frames of reference sway their interpretations. People fall victim to escalation of commitment when they get locked into losing propositions for fear of quitting and looking bad. Oddly, researchers find that overconfidence tends to grow with the difficulty of the task.
4. Decisions, generally, are either programmed or nonprogrammed. Because programmed decisions are relatively clear-cut and routinely encountered, fixed decision rules can be formulated for them. In contrast, nonprogrammed decisions require creative problem solving because they are novel and unfamiliar. Decision making can be improved with a knowledge management (KM) program. KM is a systematic approach to creating and sharing critical information throughout the organization. Two types of knowledge are tacit (personal, intuitive, and undocumented) and explicit (documented and sharable) knowledge.
5. Managers may choose to bring other people into virtually every aspect of the decision-making process. However, when a group rather than an individual is responsible for making the decision, personal accountability is lost. Dispersed accountability is undesirable in some key decision situations. Group-aided decision making has both advantages and disadvantages. Because group performance does not always exceed individual performance, a contingency approach to group-aided decision making is advisable.
6. Creativity requires the proper combination of knowledge, imagination, and evaluation to reorganize experience into new configurations. The domains of creativity may be divided into art, discovery (the most relevant to management), and humor. Contrary to myth, researchers have found only a weak link between creativity and nonconformity. A fun and energizing workplace climate can tap every employee’s creativity. By consciously overcoming ten mental locks, we can become more creative.
7. The creative problem-solving process consists of four steps: (1) identifying the problem, (2) generating alternative solutions, (3) selecting a solution, and (4) implementing and evaluating the solution. Inadequate problem finding is common among busy managers. By seeing problems as gaps between an actual situation and a desired situation, managers are in a better position to create more effective and efficient solutions. Depending on the situation, problems can be resolved, solved, or dissolved. It is important to remember that today’s solutions often become tomorrow’s problems.
8. A clear and concise statement of the problem forms the “head” of the fishbone skeleton. Each of the “bones” extending out from the backbone of the fishbone diagram represents a possible cause of the problem. More likely causes are located closer to the head of the diagram. Possible explanations for each cause are attached to each particular “bone.”