Chapter 1: Problem Solving

Contents:

1.1

Definition of a Problem

1.1 Definition of a Problem

A problem is any difference between an actual situation and a desired situation; this can be illustrated in Figure 1.1.

Figure 1.1: Recognizing a problem

1.2

Problem Situations

1.2 Problem Situations

Problem situations may be one of the following:

1.      A performance deficiency, which exists when actual performance is less than desired. For example, turnover or absenteeism suddenly increases is in the work unit

2.      A performance opportunity, which emerges when an actual situation turns out either higher than anticipated, or offers the potential to be so, as shown in Figure 1.2.

Figure 1.2: Types of problem situations

1.3

Problem Solving

1.3 Problem Solving

The Challenge in dealing with any problem, be it a performance deficiency or an opportunity, is to proceed with effective problem solving–the process of identifying a discrepancy between an actual and desired state of affairs and then taking action to resolve the deficiency or take advantage of the opportunity.

The entire problem-solving process is dependent upon the right information being available to the right people at the right times.

1.4

Types of Managerial Problems

Structured Problems

Unstructured

Crisis

1.4 Types of Managerial Problems

The problems which mangers face are usually classified into 3 main types, as shown in Figure 1.3:

a-   Structured problems,

b-   Unstructured problems,

c-    Crisis problems

 Figure 1.3: Types of managerial problems

1.4.1 Structured Problems

These are familiar, straightforward, and clear with respect to the information needed to resolve them. They can be expected, and managers can plan ahead and develop specific ways to deal with them, or even can take action to prevent their occurrence.

1.4.2 Unstructured Problems

Involve ambiguities and information deficiencies, and often occur as new or unexpected situations. They usually require novel solutions.

1.4.3 Crisis Problems

A crisis problem is an unexpected problem that can lead to a disaster if not resolved quickly and appropriately. Managers are installing ”early-warning” crisis information systems and developing crisis management plans to deal with them in the best possible ways.

There is a clear relationship between the types of managerial problems and the decisions applicable to each type; as shown in Figure 1.4.

Figure 1.4: The relationship between types of managerial problems and managerial decisions

1.5

Problem Environments

Certain Environment

Risk Environment

Uncertain Environment

1.5 Problem Environments

Environments or conditions for problem solving in organizations are usually one of the following:

1.      Certainty

2.      Risk

3.      Uncertainty

All managers make decisions under each condition, but risk and uncertainty are common to the more complex and unstructured problems faced by top managers, as shown in Figure 1.5.

 Figure 1.5: Three environments (conditions) for managerial decision making and problem solving

 1.5.1 In Certain Environment, there is sufficient information for the problem solver to know the possible alternatives and what the results of each would be. This is an ideal condition, but few managerial problems occur in certain environments.

1.5.2 In Risk Environment, the problem solver lacks complete information on action alternatives and their consequences, but has some sense of the "probabilities" associated with their occurrence.

1.5.3 In Uncertain Environment, information is so poor that managers are unable even to assign probabilities to the likely outcomes of alternative that are known. This is the most difficult problem environment. Uncertainty forces managers to rely heavily on creativity in solving problems.

Quick Jump 1.1 Definition of a Problem 1.2 Problem Situations 1.3 Problem Solving 1.4 Types of Managerial Problems 1.5 Problem Environments