Bertinoro, February 2016 Christian FISCHER,Prof Dr · Evaluation scale: 1 = verybad, …, 10 =...

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Problem-solving and decision-making

Bertinoro, February 2016

Christian FISCHER, Prof Dr

February 2016 Problem-solving and decision-making – Christian Fischer 2

Outline

1) Problems and decisions

2) Groups and teams

3) Creativity and innovation

4) Jobs and careers

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Problems and decisions

A decision is actually composed of a series of stages :

► Problem recognition – realisation that action must be taken.

► Information search – to find alternatives.

► Evaluation of alternatives – different options are considered.

► Alternative choice – selection of one particular option.

► Outcomes – has the decision solved the problem?

Stages in decision-making


Stages in decision-making


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Definitions Programmed decisions:

a repetitive decision that can be handled using a routine approach

Non-programmed decisions: a unique and nonrecurring decision that requires a custom-made solution.

Structured problem: a straightforward, familiar, and easily defined problem

Unstructured problem: a problem that is new or unusual for which information is ambiguous or incomplete.

February 2016 5Problem-solving and decision-making – Christian Fischer


► Problem recognition occurs whenever we see a significant difference between our current state of affairs and some desired or ideal state.

► It is when a person recognizes that there is a need to take action.

Problem recognition (1)


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Problem recognition (2)


Problem Problem



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The problem-solving method



Making decisions

Decision-making process: a set of eight steps that includes identifying a problem, selecting a solution, and evaluating the effectiveness of the solution.


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Example: what car to buy?Step 1 – choosing and weighting

decision criteria



Example: what car to buy?Step 2 – assessing alternatives


Evaluation scale: 1 = very bad, …, 10 = very good

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Example: what car to buy?Step 3 – selecting the best alternative



► Very often, we use heuristics, or mental rules-of-thumb, to simplify decision-making and lead to speedy decisions.

Heuristics = decision shortcuts


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Common errors in the decision-making process

Over-confidence bias: unrealistic-ally positive views of one's self.

Immediate gratification bias: decision-maker who tends to want immediate rewards and to avoid immediate costs -> focus on the short term.

Anchoring effect: decisions are made on the basis of initial information and not adjusted when new information arises.

Selective perception bias: only selected information are used as a decision base.

Confirmation bias: only information are used which do not contradict past judgements.


Framing bias: another selection bias where only certain aspects of a situation are chosen while others are excluded.

Availability bias: only recent events are used as decision base.

Representation bias: a special type of confirmation bias.

Randomness bias: random events are used as decision base.

Sunk cost error: decisions serve to remedy past error.

Self-serving bias: decisions are made to serve oneself.

Hindsight bias: Once decision-makes now outcomes of events they believe the would have decided in this way.


Decision-making can be risky

Certainty: a situation in which a decision-maker can make accurate decisions because all outcomes are known.

Uncertainty: a situation in which a decision-maker has neither certainty nor reasonable probability estimates available.

Risk: a situation in which a decision-maker is able to estimate the likelihood of certain outcomes.


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Defining risk

Risk has two critical elements:

The severity (magnitude) of an unwanted event.

The likelihood (probability) of that event.

Severity of unwanted event

Low High

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Group decision-making


Group decisions provide more complete information.

Diversity of experiences and perspectives are higher.

Groups generate more alternatives.

Group decisions increase acceptance of a solution.

Advantages

Group decisions are time-consuming.

May be subject to minority domination.

Subject to pressure to conform.

Responsibility is ambiguous.

Subject to 'groupthink' which undermines critical thinking.

Disadvantages

Groups and teams

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Groups and teams

Does group size affect behaviour?

Large groups: are good for gaining diverse input and complex problem-solving.

Small groups: are typically faster at implementation.

Best group size: 5–7 members.

Social loafing: the tendency for individuals to expend less effort when working collectively than when working individually ('free-rider problems').


Groups and teams

Stages of group development


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Groups and teams

Stages of group developmentI. Forming stage: in which people join the group and then define the

group’s purpose, structure and leadership.

II. Storming stage: which is characterised by intra-group conflict.

III. Norming stage: which is characterised by close relationships and cohesiveness.

IV. Performing stage: when the group is fully functional and works on the group task.

V. Adjourning stage: the final stage of group development for temporary groups, during which groups prepare to disband.


Groups and teams

Groups versus teams

Together Everyone Achieves More


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Groups and teams

What factors make teams effective?


Team Effectiveness

Context● Adequate resources● Leadership and structure● Climate of trust● Performance evaluation

and reward systems

Composition● Abilities of members● Personality● Allocating roles● Diversity● Size of teams● Member flexibility● Member preferences

Work design● Autonomy● Skill variety● Task identity● Task significance

Process● Common purpose● Specific goals● Team efficacy● Conflict levels● Social loafing

Groups and teams

When teams are not the answer

Teamwork takes more time and often more resources than does individual work.

Teams require managers to communicate more, manage conflicts and run meetings.

The benefits of using teams need to exceed the costs.


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Creativity and innovation

How to create creativity and innovation?



What is creativity?

Creativity: the ability to combine ideas in a unique way or to make unusual associations between ideas. Some parts of creativity may be inborn others can be learned. It has four components:

perception: seeing things;

incubation: processing information;

inspiration: the moment when the idea is born;

innovation: turning ideas into reality.

"Creativity is 1% inspiration and 99% perspiration" (Thomas Edison).


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What is innovation?

Innovation: the process of taking a creative idea and turning it into a useful product, service or method of operation.



Factors affecting creativity and innovation

Accept ambiguity: too much emphasis on objectivity and specificity constrains creativity

Be open-minded: what first looks foolish may lead to innovative solutions

Keep external controls minimal: regulations kill ideas

Tolerate risks: mis-takes are necessary in order to learn from them

Tolerate conflict: diversity of opinion is a good thing

Focus on ends rather than means: there are several right answers to any given problem

Use an open-system focus: encourage regular exchanges with the environment

Provide positive feedback: encouragement and support of employees are crucial


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Jobs and careers

Career module: managing your professional success

Job: a work position in a new organization.

Career: the sequence of work positions held by a person during his or her lifetime.


Jobs and careers

How can I have a successful career (1)?

Assess your personal strengths and weaknesses: where do your natural talents lie?

Identify market opportunities: where are tomorrow's job opportunities?

Take responsibility for managing your own career: develop your interpersonal skills. These, especially the ability to communicate, top the list of almost every employer's "must have" skills.


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Jobs and careers

Practice makes perfect: if you want to excel in any field, you should expect to have to put in a lot of deliberate practice.

Stay up-to-date: to keep your career on track, you need to make learning a lifetime commitment.

Network: create and maintaining beneficial relationships with others in order to accomplish your goals.



Jobs and careers

Stay visible: you increase your mobility and value in the marketplace by keeping visible.

Seek a mentor: employees with mentors are likely to have enhanced mobility and increased knowledge of the organization.

Leverage your competitive advantage: develop skills that will give you a competitive advantage in the marketplace.



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Jobs and careers

Don't shun risks.

It's OK to change jobs: to keep your skills fresh, your income increasing and your job tasks interesting, it will be increasingly likely that you'll need to change employers.

Opportunities, preparation and luck = success.



Problem-solving and decision-making

Bertinoro, February 2016

Christian FISCHER, Prof Dr

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