This document outlines steps for problem solving and decision making. It differentiates between programmed decisions, which are routine and depend on policies, and nonprogrammed decisions, which require creativity to solve novel problems. The steps in problem solving and decision making are identified as recognizing the problem, developing alternatives, evaluating alternatives, choosing a solution, and implementing it. Factors that influence decision making include intuition, information quality, values, and uncertainty. Suggestions for encouraging creativity include establishing a supportive environment that provides challenges and resources, while suggestions for improving group problem solving focus on having a clear agenda and process to build consensus.

1. PROBLEM SOLVING AND
DECISION MAKING
Patrick Henry Entropic

2. Learning Objectives
1 Differentiate between programmed and nonprogrammed
decisions.
2 Explain the steps involved in making a nonprogrammed
decision.
3 Understand the major factors influencing decision
making in organizations.
4 Understand the nature of creativity and how it
contributes to managerial work.
5 Describe organizational programs for improving
creativity.
6 Implement several suggestions for becoming a more
creative problem solver.
7 Appreciate the value and potential limitations of group
decision making.

3. Programmed and Nonprogrammed Decisions: A
Comparison
Programmed Decisions
Nonprogrammed
Decisions
Repetitive, routine,
frequent; decisions made
according to specific
procedures
Novel, complex, difficult,
infrequent; decisions
require original thinking
Depend on policies and
rules
Require creativity,
intuition, tolerance for
ambiguity
Types of
problems
Proce-
dures
Business firm: Periodic
reorders of inventory
Health care: Procedure
for admitting patients
University: Necessary
GPA for good academic
standing
Business firm:
Diversification into new
products and markets
Health care: Purchase of
experimental equipment
University: Construction
of new classrooms
Examples

4. Steps in Problem Solving
and Decision Making
“What really,
really is our
problem?”
Identify and
diagnose the
problem
“Let’s dream up
some great
ideas.”
Develop creative
alternatives
“Some of these
ideas are good;
others are
wacko.”
Evaluate the
alternative
solutions
“How really good
was that idea?”
Evaluate and
control
“Now let’s take
action.”
Implement the
decision
“This alternative
is a winner!”
Choose one
alternative solution

5. Factors Influencing Decision
Making
Intuition
Personality and
cognitive
intelligence
Emotiona
l
intelligen
ce
Quality of
informati
on
Political
considerati
ons
Degree of
uncertaint
y
Values
Crisis and
conflict
Procrastinat
ion
“I like
risks and
I’m really
bright.”
“I can
read
people
great
and
control
my
emotio
ns.”
“I’m
great at
hunches.”
“The IS
group is
feeding
me great
stuff.”
“Let’s
wait
before
deciding.
”
“I’ve
got
integrit
y.”
“Looks
like a sure
thing.”
“Our backs
are to the
wall, and
we
disagree.”
“What
does my
boss want
me to
decide?”
6.4
Decision
Maker

6. Encouraging
risk taking
Allowing
freedom
Providing
organizational
support
Allocating
ample
resources
Establishing a
Creative
Atmosphere
Involves. . .
Providing
challenges
Providing
encouragement Creativity!
6.5

7. Suggestions to Build Creativity
1. Keep an idea notebook
2. Stay current in your field
3. Listen to other people
4. Learn to think in the five senses
5. Improve your sense of humor
6. Adopt a risk-taking attitude
7. Develop a creative mental set
8. Identify your most creative times
9. Be curious about your environment
10. Step back when faced with a creativity block

8. Suggestions for Improving
Group Problem-Solving
1. Have a specific
agenda and adhere
to it
2. Rely on
qualified group
members
3. Have the
leader share
decision-making
authority
4. Provide
summaries for
each major point
5. Build
consensus so
the decision is
more likely to be
implemented
6.7

9. The Nominal Group Technique
6.8
2. Leader presents
a problem
6. Alternatives are
rated and best-
rated one is
chosen
5. Group clarifies
and evaluates all
suggestions
3. Members write
down ideas
individually
1. Small group is
assembled
4. Each participant
presents one idea
to group
Adapted from Exhibit 6.6

10. Thanks