This document provides information on problem solving and decision making. It discusses identifying problems in an organizational group and defining what a problem is. It then covers various problem solving techniques like Pareto analysis, root cause analysis, fishbone diagrams, and bottleneck identification. The document also discusses the importance of problem solving, barriers to problem solving, and attitudes that can hinder ideas. Finally, it addresses decision making models and provides steps for making ethical decisions in an organization.

1. PROFESSIONAL SKILLS DEVELOPMENT
LESSON 06. PROBLEM SOLVING & MAKING DECISIONS
HIGHER DIPLOMA IN COMPUTING/BUSINESS MANAGEMENT
By: Nusaike Mufthie
ACPM, BSc.IM, PGDipM, PIP(WIPO)

2. PROBLEM & DECISIONS
“Demonstrate the Ability to Identify Problems and Raise Solutions according to
the Situation in a Organizational Group”
Problems are only opportunities in work clothes.
– Henry Kaiser (American industrialist)
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3. INTRODUCTION
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What is a Problem? And Why do we need Solutions?
Business problems are current or long term challenges and issues faced by a business.
These may prevent a business from executing strategy and achieving goals.
Financial:
Financial issues such as an inability to refinance debt due to tight credit conditions.
Branding:
Brand issues such as a small business that has difficulty establishing brand recognition in a market
dominated by widely recognized brands.
Costs:
Rising costs such as your cost of capital, labor, materials, parts, overhead and obligations to partners.
Problem Solving is an act or process of finding solutions to problems, especially by using
a scientific or analytical approach. It is a vital everyday skill that you will need to have in
organizations.

4. PROBLEM VS CONFLICT
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Conflict and problems are two words
that typically describe negative
situations or matters. A conflict is a
disagreement or clash, which can be
between two or more people or
concepts.
A problem is a matter or situation that
is considered as harmful or unpleasant.
A conflict can be described as a
problem. The key difference between
conflict and problem is that a conflict
always has two or more parties
whereas problems have no such
parties.

5. PROBLEM SOLVING & DECISION MAKING
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The relationship between problem solving and decision making…

6. ORGANIZATIONAL PROBLEM
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7. WHY PROBLEM SOLVING IS IMPORTANT?
• Employers look for good problem solving skills as it helps to show them you have a
range of other competencies such as logic, creativity, resilience, imagination, lateral
thinking and determination.
• It is a vital skills for your professional and personal life.
• It is a key skill that is assessed at job interviews.
• It is an essential skill for managers and all senior level roles.
• Those with good problem-solving skills are a valuable and trusted asset in any team
– these are the people who think of new ideas, better ways of doing things, make it
easier for people to understand things or help save customers time and money.
• They are proactive thinkers who like to get things done.
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8. BARRIERS TO PROBLEM SOLVING
• Failure to recognize the problem – not sure about what the problem is.
• Convincing the problem too narrowly – not sure about what is happening.
• Making a bad choice – not sure about what do you want.
• Failure to consider all consequences – not enough resources.
• Failure to consider the feasibility of the solution.
• Failure to communicate.
• Value judgement – members afraid to be judged on their skills.
• Team attitudes like complacency, ridiculing others’ ideas, lack of accountability, fear of
change, lack of trust etc.
• Too many alternatives.
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9. AVOIDING PITFALLS
• Giving up too early
•Jumping straight to conclusion
• Not getting the right people involved
• Not collecting/considering all relevant data
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10. ATTITUDES THAT KILL IDEAS
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11. PROBLEM SOLVING ACTION FLOW (P-A-I-D)
• Set a Problem Statement
• Describe the problem
• Develop a concise problem statement
• Analyze the problem in detail
• Analyze what is wrong/right
• Identify potential causes
• What is different?
• What has changed?
• What are the most likely expectations?
• Define actual cause(s)
• What is the most possible explanation and evidences?
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12. STEPS FOR EFFECTIVE PROBLEM SOLVING IN THE
WORKPLACE
The most common mistake in problem solving is trying to find a solution right
away. That's a mistake because it tries to put the solution at the beginning of the
process, when what we need is a solution at the end of the process.
Seven-steps for an effective problem-solving process:
1. Identify the Issues.
Be clear about what the problem is.
Remember that different people might have different views of what the issues are.
Separate the listing of issues from the identification of interests.
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13. STEPS FOR EFFECTIVE PROBLEM SOLVING IN THE
WORKPLACE
2. Understand everyone's interests/Find Alternatives.
✓This is a critical step that is usually missing.
✓Interests are the needs that you want satisfied by any given solution. We often ignore our
true interests as we become attached to one particular solution.
✓The best solution is the one that satisfies everyone's interests.
✓This is the time for active listening. Put down your differences for awhile and listen to
each other with the intention to understand.
3. List the possible solutions (options).
✓This is the time to do some brainstorming. There may be lots of room for creativity.
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14. STEPS FOR EFFECTIVE PROBLEM SOLVING IN THE
WORKPLACE
4. Evaluate the options.
✓What are the pluses and minuses? Honestly!
5. Select an option or options.
✓What's the best option, in the balance?
✓Is there a way to "bundle" a number of options together for a more satisfactory solution?
6. Document the agreement(s)/Implement the Options.
✓Don't rely on memory.
✓Writing it down will help you think through all the details and implications.
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15. STEPS FOR EFFECTIVE PROBLEM SOLVING IN THE
WORKPLACE
7. Agree on contingencies, monitoring, and
evaluation.
✓Conditions may change. Make possible agreements
about foreseeable future circumstances (If-then!).
✓How will you monitor compliance and follow-
through?
✓Create opportunities to evaluate the agreements
and their implementation. ("Let's try it this way for
three months and then look at it.")
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16. REARRANGE 2 MATCHES AND MAKE 7 SQUARES
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17. REARRANGE 2 MATCHES AND MAKE 7 SQUARES
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18. GATHERING INFORMATION
The most important step in problem solving…
• Facts: data based on objective details and past experience
• Opinioned fact: when a fact and opinion are presented together
• Ex: only 80 people are died in the accident
• Opinions: based on observation and experience, but are subjective
• Ex: the new operating system is difficult to learn
• Concepts: the general ideas and categories that share common features and important to develop theories
• The background is red
• Assumptions: concept/suggestion taken
• The proposed employee retention program will be cost effective.
• Procedures: information on how to do something formally
• How to apply for passport – there is a procedure
• Processes: are continuous actions or operations to explain on how something works
• The water cycle – there is a process
• Principles: accepted rules, laws, actions or conducts
• Dropped objects always fall to the ground
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19. ACCEPTING THE PROBLEM
• Accept the problem by acknowledging that the problem exist and committing
yourself to trying to solve it.
• Finding ways of motivation to solve it,
• List your benefits from solving the problem
• Formalize your acceptance – commit to solve the problem
• Accept responsibility for your life
• Create a worst case scenario
• Identify what’s holding you back, what is preventing you from solving the problem
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20. DEFINE THE PROBLEM
• Where did the problem begin?
• What do I know about the problem? What is the current state and desired
state? What can you see is the cause of the problem? What results I seek?
• How it is happening?
• Whom it is happening to?
• Why it is happening?
• Which part causes it?
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21. SETTING THE PROBLEM STATEMENT
• Describe the problem as a general view to lay a solid foundation for further
work.
• The problem statement should,
• Include specific details about the problem – who, what, when, where and how?
• Address the scope of the problem to identify boundaries of what you can responsibly
solve.
• The problem statement should not include,
• Any mention of possible cause
• Any potential solutions
• Problem statements should be clear and concise, so anyone can comprehend it.
A detailed and concise problem statement will provide clear cut goals for
focus and directions for coming up with solutions. 2/8/2020 21

22. OVERVIEW AND ANALYZE THE PROBLEM IN DETAIL
• Describe the problem as a general view to lay a solid foundation for further
work.
• The problem statement should,
• Include specific details about the problem – who, what, when, where and how?
• Address the scope of the problem to identify boundaries of what you can responsibly
solve.
• The problem statement should not include,
• Any mention of possible cause
• Any potential solutions
• Problem statements should be clear and concise, so anyone can comprehend it.
A detailed and concise problem statement will provide clear cut goals for
focus and directions for coming up with solutions. 2/8/2020 22

23. ANALYZING WHAT IS WRONG & RIGHT
WRONG
• Develop detailed specification of the problem.
• Measure its scale and scope, determining what is detailed symptoms are and the
negative consequences they cause.
• It also needs to determine who is involved and when and how often the problem
occurs.
RIGHT
• The purpose of this is to determine what the problem is not
• If things are not going well, then they can’t be part of the problem
• What I’m satisfied with
• When are things correct
• How much is correct
• Where are things correct
• Who is not involved 2/8/2020 23

24. IDENTIFY LIKELY CAUSES
• Identify the differences between what is identified and between what is right
and what is wrong.
• What is different? Distinctive symptoms, locations, time etc.
• What has changed? Something happened to cause the problem.
• What are the most likely explanations?
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25. DEFINE ACTUAL CAUSES
• Identifying what is the most likely explanations for the symptoms identified, is
it consistent with the data collected?
• Proving the cause: Testing if the cause identified explains the symptoms
• Identification of the cause of a problem will almost always lead to action designed to
eliminate it, make sure it is the right cause explains all facts at hand
• If action is taken to eliminate the wrong cause, there is a strong possibility that your
actions will only make matters worse
• Test the assumptions that support the analysis
• Replicate the problem in a controlled environment
• Therefore, it is often worthwhile seeing if you can prove that the most likely explanation is
the actual cause.
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26. ANALYZING PROBLEMS AND DEVISE SOLUTIONS
• Pareto Analysis or 80/20 Rule.
• Root Cause Analysis.
• 5 Why’s
• Cause and Effect Analysis/Ishikawa/Fishbone Diagram.
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27. ANALYZING PROBLEMS AND DEVISE SOLUTIONS
Pareto Analysis or 80/20 Rule - Use this approach to identify which challenges
you should tackle first.
• Pareto Analysis is a simple technique for prioritizing problem-solving work so that the
first piece of work you do resolves the greatest number of problems. It's based on
the Pareto Principle – the idea that 80% of problems may be caused by as few as
20% of causes.
• To use Pareto Analysis, identify and list problems and their causes. Then score each
problem and group them together by their cause. Then add up the score for each
group. Finally, work on finding a solution to the cause of the problems in group with
the highest score.
• Pareto Analysis not only shows you the most important problem to solve, it also gives
you a score showing how severe the problem is.
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28. ANALYZING PROBLEMS AND DEVISE SOLUTIONS
Root Cause Analysis (RCA) is a popular and often-used technique that helps
people answer the question of why the problem occurred in the first place. It
seeks to identify the origin of a problem using a specific set of steps, with
associated tools, to find the primary cause of the problem, so that you can:
1. Determine what happened.
2. Determine why it happened.
3. Figure out what to do to reduce the likelihood that it will happen again.
Figure out what negative events are occurring. Then, look at the complex
systems around those problems, and identify key points of failure. Finally,
determine solutions to address those key points, or root causes.
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29. ANALYZING PROBLEMS AND
DEVISE SOLUTIONS
You can use 5 Whys for troubleshooting,
quality improvement and problem solving, but
it is most effective when used to resolve simple
or moderately difficult problems.
Start with a problem and ask "why" it is
occurring. Make sure that your answer is
grounded in fact, then ask "why" again.
Continue the process until you reach the
problem's root cause, and you can identify a
counter-measure that prevents it from
recurring.
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30. ANALYZING PROBLEMS AND DEVISE SOLUTIONS
Cause and Effect Diagrams that you create with are known as Ishikawa
Diagrams or Fishbone Diagrams (because a completed diagram can look like
the skeleton of a fish).
Although it was originally developed as a quality control tool, you can use the
technique just as well in other ways. For instance, you can use it to:
✓Discover the Root Cause of a Problem.
✓Uncover Bottlenecks in a Process.
✓Identify where and why a process isn't working.
✓Analyze the diagram.
The diagram is useful to solve complicated problems.
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31. ANALYZING PROBLEMS AND DEVISE SOLUTIONS
Example: The manager identifies the following factors, and adds these to his
diagram: Site, Task, People, Equipment, Control. The manager brainstorms
possible causes of the problem, and adds these to his diagram.
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32. BOTTLENECK
Bottlenecks are setbacks or obstacles that slow or delay a process. In the same way
that the neck of a physical bottle will limit how quickly water can pass through it,
process bottlenecks can restrict the flow of information, materials, products, and
employee hours.
• Bottlenecks can cause major problems for individuals and organizations, so
identifying and fixing them is critical.
• Typical signs include backlogged work, long waiting times and stress relating to a
task or process.
• Bottlenecks are commonly associated with manufacturing and logistics. To identify the
cause, use a Flow Chart or the 5 Whys technique. Then unblock your bottlenecks by
increasing efficiency or decreasing input.
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33. MAKING DECISIONS
• A process involve in evaluating and choosing among available
alternatives and implementing solutions
• It is about making choices
• These aptitudes are crucial to leadership
• Decisions and problem solving can be found in human brains or
artificial intelligence.
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34. ORGANIZATIONAL DECISION MAKING MODELS
Classical Model Administrative Model Political Model
Clear cut problems and goals. Vague problem and goals. Pluralistic, conflicting goals.
Condition of certainty. Condition of uncertainty. Condition of
uncertainty/ambiguity.
Full information about alternatives
and their outcomes.
Limited information about
alternatives and their outcomes.
Inconsistent viewpoints, ambiguous
information.
Rational choice by individual for
maximizing outcomes.
Satisficing choice for resolving
problem using intuition.
Bargaining and discussion among
coalition members.
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35. THE “I-C-E-S” PROCESS
• Initiate – Deciding what you decide. This is the first important stage
of any decision making process
• Criteria – Defining exactly what you want
• Evaluate – Evaluating the options available against the criteria
• Select – Selecting the best option
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36. THE “6C” MODEL
• Construct – A clear picture of precisely what must be decided
• Compile – A list of requirements that must be met
• Collect – Information on alternatives that must be met
• Compare – Alternatives that meet the requirement
• Consider – The “what might go wrong” factor with each alternative
• Commit – To a decision and follow through with it.
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37. STEPS FOR DECISION MAKING
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38. ETHICS IN DECISION MAKING
• Ethics define what is good/bad. Nature of obligations or duties
which people owe both themselves and one another.
• Indicators of being ethical,
• Trustworthiness
• Respect
• Responsibility
• Fairness
• Caring
• Ownership
• Culture
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39. RISK ASSOCIATED IN DECISION MAKING
• Risk is necessary, desirable, have a clear purpose and a goal
• Do it for the right reasons when calm, thoughtful and non-emotional
• Look at pros, cons, probabilities, consequences and worst case
scenarios
• When possible take one risk at once
• Use image and visualization
• Have a scheduled plan with SMART goals
• Recognize tradeoffs
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40. COMMON DECISION MAKING BIAS & ERRORS
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41. COMMON DECISION MAKING BIAS & ERRORS
• Overconfidence Bias: Believing too much in our own ability to make
good decisions
• Hindsight Bias: Opposite to overconfidence
• Looking back, once the outcome has occurred, and believing that you
accurately predicted that outcome of an event
• Anchoring Bias: Using early, first received information as the bias
for making subsequent judgements
• Confirmation Bias: Using only the facts that support our decision
• Availability Bias: Using the information which readily available at
hand 2/8/2020 41

42. COMMON DECISION MAKING BIAS & ERRORS
• Representative Bias: Mixing mangoes with potatoes
• Assessing the likelihood of occurrence by trying to match it with a pre-
exiting category using only the facts that support our decision
• Framing Bias: Decision makers are influenced by the way
information is presented
• Escalation of commitment:
• Continue of failing cause of action even after information have been
revealed
• Continuation is often based on the idea that one has already invested in
the course of action
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43. TYPES OF DECISIONS
• Programmed decisions/straight forward decisions: A routine or
repetitive decision that can be handled by established business
rules or procedures.
• These types of decisions are often called for at certain points in a
standard process, and are decided based on recognized and
easily identifiable factors. So that we develop an automated
response. The automated response is called decision rule
• Programmed decisions made using standard operating procedures.
• Deals with frequently occurring situations. (Such as requests for leaves of absence by
employees)
• Much more appropriate for managers to use programmed decisions for similar and
frequent situations. 2/8/2020 43

44. TYPES OF DECISIONS
• Non-programmed decisions are unique. They are often ill-structured, one-
shot decisions. Traditionally they have been handled by techniques such as
judgment, intuition, and creativity.
• More recently decision-makers have turned to heuristic problem-solving
approaches in which logic; common sense and trial and error are used to deal
with problems that are too large or too complex to be solved through
quantitative or computerized approaches.
• Situations for Non-programmed decisions are unique, ill-structured.
• Non-programmed decisions are one-shot decisions.
• Handled by techniques such as judgment, intuition, and creativity.
• A logical approach to deal with extraordinary, unexpected, and unique problems.
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45. PROGRAMMED VS. NON-PROGRAMMED D/M
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46. DECISION MAKING TOOLS
1. Problem Statement Technique: Broaden the perspective of the problem,
helps to identify the central issues and alternative solutions. Increases the chance
of solving the problem fully or partially
2. SWOT Analysis: Strength-Weaknesses-Opportunities-Threats
3. Pareto Principle/80-20 Rule
4. Brainstorming Technique
5. Cause and Effect/Ishikawa Diagram
6. Porter’s 5 Forces Model
7. Cost-Benefit Analysis 2/8/2020 46

47. 4. BRAINSTORMING TECHNIQUE
• Brainstorming combines a relaxed, informal
approach to problem solving with lateral
thinking. It encourages people to come up
with thoughts and ideas
• By contrast, brainstorming provides a free
and open environment that encourages
everyone to participate.
• Quirky ideas are welcomed and built upon,
and all participants are encouraged to
contribute fully, helping them develop a rich
array of creative solutions. 2/8/2020 47

48. 4. BRAINSTORMING TECHNIQUE
• Individual Brainstorming
• Tends to develop fewer ideas but takes each idea further
• Can be risky for individuals, valuable strange suggestions may be ignored
• Group Brainstorming
• Good for generate many ideas but time consuming
• Requires formal rules for regulation
• Enjoyable experience, creates cohesion within teams
• Can develop ideas in greater depth with group brainstorming than with
individual brainstorming
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49. 6. PORTER'S 5 FORCES MODEL
• The tool was created by Harvard Business School professor Michael Porter, to analyze an
industry's attractiveness and likely profitability
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50. 7. COST-BENEFIT ANALYSIS
• Cost-Benefit Analysis involves adding up the benefits of a course of action,
and then comparing these with the costs associated with it.
• The results of the analysis are often expressed as a payback period – this is
the time it takes for benefits to repay costs. Many people who use it look for
payback in less than a specific period – for example, three years.
• Used for,
• Deciding whether to hire new team members.
• Evaluating a new project or change initiative.
• Determining the feasibility of a capital purchase.
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51. SUMMARY
Using established tools and techniques will help you improve your approach to
solving the problems and make appropriate decisions at right time.
You'll be more successful at solving problems, make decisons and, because of this,
more successful at what you do. What's more, you'll begin to build a reputation as
someone who can handle tough situations, in a wise and positive way.
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