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Chapter 4

COMMERCE 3S03 Chapter Notes - Chapter 4: Problem Solving, Sunk Costs, 5 Whys

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Frances L Tuer

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Chapter 4 – Creative Problem Solving
A manager’s primary job is to solve problems.
o A problem exists whenever a gap exists between actual
performance and desired performancewhen things are not
operating as they should.
o Problem solving basically means the process of taking corrective
action to meet objectives and achieve desired results
Problems take many forms
o Some simple problems occur so frequently that managers can even
establish a standard rule or programmed response for solving them.
o For problems that have no clear-cut solution, managers have to rely
on research, analysis, creativity, judgment, intuition, experience,
trial and error, and some guess work to craft a response
Stages in the Problem Solving Process
1) Define the Problem
a) Recognize the problem
(detect deviations from
planned or acceptable
Intuitive Problem
Identification using your
experience and judgment
to recognize problems.
b) Diagnose the Problem
(Don’t just jump into
generating alternatives).
Explore what caused
the problem grasp the true nature of the problem.
Build consensus make sure all stakeholders are involved.
Problem Consensus The agreement among stakeholders about the
nature of a problem and about which goals to pursue.
2) Select A Response
a. Develop Alternatives
Search the Environment Seek out alternatives within the
organizations’ repertoire of solutions (e.g. past experiences).
o If no precedent, make a custom solution via trial and error.
Think Systematically Think about the interacting elements that
continually affect one another and work toward a common
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purpose. See the synergy of the whole rather than just separate
elements of a system.
b. Select the Best Alternative
Satisficing Accept a satisfactory outcome rather than trying to
maximize or achieve an optimal solution.
Obtain Support Smoothens the implementation of the decision.
3) Execute a Solution
a. Implement the Selected Alternative
Typically starts with upper-level authorization
If the alternative is not successfully implemented, it will not
solve the problem, no matter how good the chosen
alternative might have been
b. Evaluate the Solution
Problem solving is a continuous, never ending process.
Techniques to Improve Problem Solving
Stages in the Problem Solving Process
1) Problem Definition Techniques
a) Root Cause Analysis
Find out the true meaning
of the problem-not just
focusing on symptoms.
RCA can be time
consuming to collect
b) The Five Whys
A question-asking
approach to understand cause-effect relationships underlying a
problem with an unknown cause.
Keep asking why until the deepest cause of the problem is
2) Selection of Response Techniques
a. Brainstorming
No criticism All ideas are considered valuable
Freewheeling is welcome People should express any idea that
comes to mind no matter how weird.
Quantity Desired Combining ideas is also encouraged
b. Develop Your Creative Intuition
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