Strategic Problem Solving and Decision Making Methods

Types of Problems

• Frequency: Frequently foreseeable (no unusual relationship between cause and effect).
• Foreseeable Consequences and Alternatives: Certainty, Risk, Uncertainty.
• Number of People: Individual, Group.
• Objective Number: Single objective, Multiple objectives.

Problem Identification and Definition

• Collection of Information
• Defining the Problem
• Diagnosing the Situation

Analysis of Causes and Consequences

The reason we use the Cause-Effect Diagram (often called the Fishbone Diagram or Ishikawa Diagram) is to divide the organization into five areas to analyze its various elements and focus on aspects that can be improved.

These five areas lead to the Effect: Problem Identification and Diagnosis:

• Implementation of Human Resources
• Implementation of Material
• Implementation of Technology
• Methods of Work
• Organizational System

Implications for SWOT Analysis

SWOT analysis examines Strengths, Weaknesses, Opportunities, and Threats:

• Weaknesses (W): The most vulnerable point.
• Threats (T): Areas where competitors can force us to lose ground.
• Strengths (S): All positive internal tools or attributes.
• Opportunities (O): Strategies to convert weaknesses into strengths.

Pattern of Resolution Stages

1. Set Objectives and Priorities: Taking account of the sequence of work needed to solve the problem.
2. Search and Choose Alternatives: A problem often has multiple solutions. Choose the right one taking into account: Time, Cost, Simplicity, and Improvement.
3. Implementation: Once the best solution is chosen, put it into practice.
4. Evaluation: Evaluate the implementation of the selected alternative.

Decision Making Fundamentals

A Decision is the act of selection, made by an individual or a group, based on a rational analysis of data between different options that lead to the same objective.

Types of Decisions

• By Number of Persons: Individual and Group (Voting, Consensus).
• By Hierarchy Level Involved:
  • Strategic (Executives/Directors)
  • Technical (Intermediate Management)
  • Operational (Employees/Control)

Decision Making Process

1. Information Analysis: Have all possible information and analyze it.
2. Identification of Possible Options: Value options to choose the best one.
3. Application of Decision Criteria:
   • Margin of Error
   • Timing
   • Consistency
   • Applicability
   • Adequacy
4. Implementation: Developing the work under the terms and time set.

Factors for Better Decision Making

Factors that positively influence the decision-making process:

• Improving communication
• Applying techniques of group dynamics
• Using negotiation strategies
• Motivating people

Definition of a Problem

A problem is a question that needs clarification, or a set of facts or circumstances that impede the achievement of a desired end.