PROBLEM SOLVING and DECISION MAKING

Problem solving and decision-making are important skills for business and life. Problem-solving often involves decision-making, and decision-making is especially important for management and leadership. There are processes and techniques to improve decision-making and the quality of decisions. Decision-making is more natural to certain personalities, so these people should focus more on improving the quality of their decisions.

Steps involved in Decision Making:

• Situation Analysis
• Valuing
• Priority Setting
• Problem Analysis
• Information Gathering
• Problem Definition
• Solution Analysis
• Implementation

Problem solving and decision making can be done in two ways:

a) Indiviually

b) Team

The yellow coloured cube is the most complex at it it involves complexities due to the involvement of the group in which different candidates may have different views regarding the problem. The one where both the decision and implementation is done by individual is an example of Craftsmanship. In Modern Management system all the decisions are made in groups.      

There is no such term like simple problem and complex problem. It all depends on how one analysis the cause of the problem. Once the cause is known, getting to the right solution depends on us. Getting to the root cause is the main criteria rather than categorizing the problem into simple or complex.

THEORY X or Y?

Theory X and Theory Y are theories of human motivation created and developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s. He avoided descriptive labels and simply called the Theory X and Theory Y. He did not imply that workers would be one type or the other. Rather, he saw the two theories as two extremes - with a whole spectrum of possible behaviors in between.

Theory X: ('Authoritarian management' style)

Management that believes in theory-X assumptions, creates stick-and-carrot approach based firms with restrictive discipline and pervasive controls.

Theory Y: ('Participative management' style)

Theory-Y believers create trust based firms with empowered employees.

Assumptions of Theory X and Theory Y:

Comparing Theory X and Theory Y:

Motivation

 Theory X assumes that people dislike work; they want to avoid it and do not want to take responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility.

Management Style and Control

 In a Theory X organization, management is authoritarian, and centralized control is retained, whilst in Theory Y, the management style is participative: Management involves employees in decision making, but retains power to implement decisions.

Work Organization

 Theory X employees tend to have specialized and often repetitive work. In Theory Y, the work tends to be organized around wider areas of skill or knowledge; Employees are also encouraged to develop expertise and make suggestions and improvements.

Rewards and Appraisals

 Theory X organizations work on a ‘carrot and stick’ basis, and performance appraisal is part of the overall mechanisms of control and remuneration. In Theory Y organizations, appraisal is also regular and important, but is usually a separate mechanism from organizational controls. Theory Y organizations also give employees frequent opportunities for promotion.

Application 

 Although Theory X management style is widely accepted as inferior to others, it has its place in large scale production operation and unskilled production-line work. Many of the principles of Theory Y are widely adopted by types of organization that value and encourage participation. Theory Y-style management is suited to knowledge work and professional services. Professional service organizations naturally evolve Theory Y-type practices by the nature of their work; Even highly structure knowledge work, such as call center operations, can benefits from Theory Y principles to encourage knowledge sharing and continuous improvement.

GRAMEEN BANK

Among the many traps that the world’s poor are in, one of the most needless is that of credit. The poor are generally exhorted to pull themselves up by their own bootstraps, without recognising that the poorest of the world have no boots—neither metaphorically nor literally. In order for entrepreneurs to make money, they usually need to borrow money. To borrow money, they need collateral. To gain collateral, they need to have had money already.
One man recognised just how needless and destructive the poverty/credit trap is, and decided to act. His actions not only helped numerous people escape poverty, but achieved international acclaim. That man is economist Dr Muhammed Yunus, founder of the Grameen Bank. Yunus began in the Indian village of Jobra in 1976, lending tiny amounts of money to extremely poor women who had no collateral. Through hard work and with support, these women become economically self-sufficient. “Grameen,” meaning “rural,” was the beginning of the micro-credit lending system which has since become international, having lent more than $5.7 billion to 6.61 million borrowers. To date, repayment has been 99%.

Yunus is highly regarded globally, having served on dozens of international committees and commissions. He’s a Director on 15 international boards, the recipient of 29 honourary degrees from universities around the world, and is a member of the South Africa-based Elders Project, convened by Archbishop Desmond Tutu. Yunus’s work has been celebrated almost beyond compare. He’s won 15 major international awards, including the 1989 Aga Khan Architecture Award for helping the poor construct 60,000 housing units, the 2000 Gandhi Peace Prize, and the 2006 Nobel Peace Prize. The Nobel Committee remarked, “Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Microcredit is one such means. Development from below also serves to advance democracy and human rights.”

Muhammad Yunus is the author of an autobiography,The Banker to the Poor: Micro-lending and the BattleAgainst World Poverty.

MANAGEMENT CONCEPTS LEARNT FROM VALLEY CROSSING:

Valley Crossing:
There are three people trying to cross a valley. The gap of the valley is in the range of one foot to two feet. Assume that each of them has the same footstep. They have a rod of a convenient size and they have to cross the valley using the rod as a support. Direct jumping is considered fatal assuming the valley is fathomless.

Task:Three persons should cross the valley using a long stick.

Now the task can be solved in two ways:

1)Place the stick such that it acts like a bridge between the valleys and each member individually goes on it to reach the other side.

2)All the team members should hold and rest the stick on their shoulder and while one member is crossing the valley the other two should balance it.

If we properly analyze the two methods the first one seems to be very risky and the chance of completing the task is very less. Here we come across another important aspect of management called Planning. In any organization even if we have all the resources to complete a task but there is no proper planning we cannot do anything with our resources but drain them. So one point we should note is

                                    "The beauty of management lies in planning"

Now in the second method we can see that as a team the three members can perform the task effectively with proper understanding and effective communication among themselves.The picture below gives an idea about the process.

There are totally 9 steps involved in completing the task and the step by step procedure can be seen in the picture below.

Now from the steps we can see that 

All three member roles are similar but not same and are equivalent in terms of total effort and risk.

All three member roles have equal distribution of 

a)   Risky (1) situations  

b)  Half risky (2) situations

c)   No risk (2) situations

All three member roles are designed equally strong and responsible.

All three members were equal contributors for the overall task and the communication and feedback among the members was instantaneous.Interdependence among the three member roles was made crucial.So we can see that difficult tasks can be completed effectively when there is a proper planning and teamwork which is the main reason for this task to get completed, gives us the idea about how important it is in an organization to work in teams and achieve the organizational goals.

Management Concepts Learnt:

Team Work:

The three members worked as part of a team and accomplished the goal of crossing the valley. In the whole exercise, at any point of time someone is either half safe or completely unsafe. Also, the number of times someone is either unsafe or half safe is same for all the three members. This shows that they should believe in each other and should develop a sense of mutual trust to complete the task successfully. The following are the characteristics that were followed in the valley crossing and are essential for team work.

• Open and clear communication – Communication is the key to crossing valley effectively.
• Mutual trust – Every person needed to trust each other completely especially when their feet was off the ground.
• Managing conflict – dealing with conflict openly and transparently and not allowing grudges to build up and destroy team morale.
• Clear goals – The goals were clear, defined and each member in the team fully understood the gravity of the problem.
• Defined roles and responsibilities – each team member understands what they must do (and what they must not do) to demonstrate their commitment to the team and to support team success. Furthermore the roles and  responsibilities keep on changing depending on the situation.
• Co ordination relationship – the bonds between the team members allow them to seamlessly coordinate their work to achieve both efficiency and effectiveness.
• Positive atmosphere – an overall team culture that is open, transparent, positive, future-focused and able to deliver success.