Today’s session (30 October 2017)

Hi everyone

Today we started with a quick of the work ahead of us in the next two weeks.

Firstly, Assignment 4 (the review paper) can be submitted any time up to and including 4:00pm on Friday 10 November 2017. Usual instructions apply here, so please email your softcopy to me BEFORE 4:00pm and deposit a hardcopy at the office in E block. Remember to use your own words throughout this review (except for the occasional acknowledged quote, enclosed in quotation marks and cited appropriately!)

Starting new week, we have two consecutive weeks of student presentations for Assignment 2 (part 2). By now everyone should have put their name on the roster for presenting this assignment (see the roster on Moodle, under Session 12). Each student will have 10 minutes in which to present, followed by 10 minutes in which to lead a class discussion of the issues raised in your 10 minute presentations. We will have to move quickly to get through all presentations so please manage your time well. Refer to the assignment and the Marking Schedule for further information.

Please note the following points:

1. Please DO NOT read directly from slide or notes. I am testing your ability to present material that you are (or should be!) already familiar with. I am NOT testing your reading ability! I need to see how well you know the problem that you have previously written about.

2. Please make sure that you actually plan and lead a discussion. I DO NOT want your 10 minutes to consist of “does anyone have any questions?”

3. Think of this as a practice for work-related situations where you might be required to present material or to lead a discussion.

4. Please show-off you knowledge and understanding of PSDM and your chosen business problem!

Moving on to today’s class, we looked at various decision making styles. I began by reminding you of a question that I asked earlier in the semester, viz. are we objective, rational, logical creatures or are we subjective, imperfect and impressionable (or somewhere in between the two extremes)? This is an important question to consider because it affects our ability to make good decisions.

To illustrate this point, we did a short test based on the work of Paul Nutt (http://money.cnn.com/quizzes/2006/fortune/decisions/index.html). Nutt analyzed 400 decisions in U.S. companies over 20 years to see which ones didn't work out and what went wrong. According to Nutt, many of these managers have poor decision making records, backed up by poor review practice and an unrealistic appreciation of their own successes.

So, if Nutt is correct, then we are faced with a rather unpleasant and unsettling thought: That people in positions of management responsibility, with many years of experience and training, have only limited ability to make sound business decisions! Some people might even point to high-profile examples, such Exxon Valdez and Lehman Brothers, as additional evidence of this problem!

To find out more about decision making styles, we then did another short test, courtesy of book publishers McGraw Hill (http://www.mhhe.com/business/management/buildyourmanagementskills/updated_flash/topic10a/quiz.html). This test is intended to show which decision making style we favour (Directive, Analytical, Conceptual or Behavioural). Interestingly, we found that the class was evenly split between the first three styles and that we didn’t have a single behavioural style decision maker in the entire room!

So, using this information, we started sorting decision making styles into some basic groups, according to different criteria. One of the simplest ways to do this is by asking whether the decision maker favours an individual / authoritative approach or a group / collaborative style? This question led us to note that sometimes people can favour one style and sometimes another, depending on the situation, urgency, importance and other factors.

Some of the key things from the Directive / Analytical / Conceptual / Behavioural model are:

* Directive (quick, authoritative)

* Analytical (complexity and data)

* Conceptual (broad topics)

* Behavioural (concern for people)

Another way to look at decision making styles is to consider the amount of involvement:

* Authoritative (decision made on behalf of others)

* Consultative (wide input)

* Voting (majority)

* Consensus (blended results)

Finally, we looked at four different models which have been used to explain different facets of decision making:

I. The Rational-Economic (or Classical) Model

How decisions ought to be made.

* Assumes the decision maker is completely rational and unbiased.

* Assumes all information and alternatives available.

* Assumes ‘best choice’ scenario.

* Assumes logical, sequential steps.

II. The Administrative / Behavioural Model

How decisions are actually made.

* Assumes limited abilities of decision maker.

* Assumes that decision makers are bounded by their limitations.

* Assumes a limited number of decision making criteria and alternatives

* Assumes a ‘good enough’ solution.

* Assumes logical, sequential steps to get to the first satisfactory alternative solution.

III. The Implicit Favourite Model

How decisions are actually made (solo)

* “Implicit favourite" solution selected at start.

* Assumes we are neither rational nor objective and unbiased.

* Appearance of rationality

* Preferred solution selected as ‘best’.

* Decision is intuitive and unscientific.

IV. The Political Model

How decisions are actually made (groups).

* Assumes we are neither rational nor objective and unbiased.

* Group members negotiate (own agendas)

* Characterised by influence, power, pressure, favours, bargaining and trade-offs.

* Negotiation rather than information.

* Leaders and followers.

The Classical model is the ‘objective, rational and logical’ approach to decision making, which assumes a ‘perfect world’ where the decision maker is dispassionate, all necessary information is available and the choices are clear-cut.

The Behavioural model acknowledges that, as humans, we are susceptible to biases and limitations (which may vary from person-to-person) and that we do our best under these constraints.

The Implicit Favourite model takes the Behavioural model a step further by suggesting that our rationality is only superficial and that we use our decisions to support a pre-determined stance.

The Political model goes even further and suggest that we are subject to group pressures (such as approval and acceptance) and that our decisions are a reflection of these factors.

After the break, we turned our attention to the big question of ‘why should we study problem solving and decision making?’ Bearing in mind that we are studying this from a business perspective, we set about grouping business problems into a few simple areas:

* HR / People problems (staff, customers, public)

* Production problems (quality, workflows)

* Logistical (distribution, storage, etc.)

* Management (decisions, strategy, governance, etc.)

* Market intelligence (predictions, foresight, trends)

* Other?

We then split into small groups to do some online research using Seek and Trade Me Jobs. Our job was to find specific instances of ‘problem solving’ and ‘decision making’ in New Zealand jobs, so that we could understand what these things mean in a work context.

Finally, I let you with a quote from Jay Abraham who said, ‘Realize this hard fact: the people above you (bosses, management and organization leaders) want one thing most of all – they want solutions to problems. Solutions that make them look good and help them achieve their goals. They want the people who report to them to be problem solvers. Employers will kill for problem solvers’.

If you can be the ‘problem solver’ (even before problems become evident!) then you can be invaluable to an employer. Think about this idea and see if you can shift your thinking to be more creative, disruptive and innovative in the things that you do.

One way to do this is to use your creative abilities to hone your critical thinking skills. Earlier in the semester we talked about critical thinking and creative thinking, and you may have concluded that the two are quite different things. I would like to suggest to you that you can actually link the two to produce some very rich problem solving and decision making skills.

One example of this is a question that Abraham asks, about whether people who buy electric drills really need to buy a drill or just a hole? There are a whole range of possible answers to this question and the important things isn’t to find the exact answer but to recognise that there may be many different answers, depending on how you apply your skills to answering the question!

Good luck with your studies and I hope that you have found something interesting in the Problem Solving and Decision Making paper!

Cheers

Phil