Decision Making and Problem Solving

Today it is not difficult to find a lot of useful material on decision making and problem solving in management in journals and periodicals. The review of the literature in this paper will be organized under various subtopics.

PROBLEM SOLVING STYLES OF MANAGERS

It is found that the effectiveness of manager’s job is characterized by his ability to make decisions and to solve problems. The higher the manager’s position, the more complex the decisions will be. Donald Mosley, the Professor of Management at the University of Alabama and his colleagues discuss these issues in the article Problem Solving Styles Determine Manager’s Approach to Making Decisions. Decision making and problem solving processes are focused on the manager’s problem solving style which depends on the individual’s psychological types. According to Myers-Briggs Type Indicator, that is specially designed in order to measure the individual’s problem solving style, there are several problem-solving styles. (Mosley, 1991, para.2)

First of all, there are two ways perceiving information. It means some managers perceive information through their five senses, while others perceive information through their intuition or “the ability to know things without the use of rational thinking processes.” (Mosley, 1991, para.3) According to Myers-Briggs Type indicator, those managers who use their senses in problem solving are rather patient, practical and realistic. They tend to use details. Those managers who rely on their intuition are often rather impatient and creative. They are “idea and theory oriented” people. The statistics shows that there are 75% of sensing type managers, and 25% of intuitive type managers. (Mosley, 1991, para.4)

Secondly, there are two basic ways of data evaluation: thinking and feeling. The first way of data evaluating is when managers think their decisions through with the use of logic and rational reasoning. The second way of data evaluation is when managers decide through their feelings with the use of innate processes that depend on personal values and beliefs. The statistics shows that there are 60% of male managers who are thinkers, and 60% of female managers who prefer to rely on their feelings. (Mosley, 1991, para.5)

Besides the above mentioned types, there are combined types of managers, such as sensing-feeling types, sensing-thinking, intuitive-feeling and intuitive-thinking managers.

THE IMPORTANCE OF PROBLEM SOLVING SKILLS DEVELOPMENT

Today many managers are aware of the importance of development of problem solving skills to succeed in the competitive market. The development of these skills can be performed through learning process as well as through reflection of certain problems that occur in the development phases of business process. Moreover, problem solving skills can help to identify the most powerful influences on the managers’ perceptions of problems. (Giroux, 2009, p.180)

The research study conducted by Isabelle Giroux, the Professor of Management at Brock University, proves the importance of problem solving skills for small business owner-managers. She tries to find out the major causes of bankruptcy in small firms where internal difficulties prevent managers from adequately responding to the problems. She is sure that lack of appropriate problem solving skills creates serious implications for successful development of business. The analysis of the research data concerning problem solving process in firms give an opportunity to define the most important components of this process. The findings represented in the study show that “problem solving in these small firms is an intuitive, often emotional process that is not characterized by objective conceptualizations of problems that leads to rational solutions.” (Giroux, 2009, p.174)

Problem solving skills should include intuition to solve some critical problems, learning, or the managers’ ability to improve past mistakes, and emotional response to problem solving. Giroux states that emotions play a significant role in “shaping how each person perceives, approaches and solves a problem.” (Giroux, 2009, p.176) In addition, it is found that luck and destiny also influence the managers’ ability to successfully deal with critical problems in business. Many respondents who took part in the survey used the words luck and destiny when they described the situations in which they tried to resolve critical problems. One more component of problem solving skills is self-efficacy and determination which can help managers to achieve positive outcomes in complex business situations. (Giroux, 2009, p.178)

THE ROLE OF CREATIVITY IN PROBLEM SOLVING

It is known that creativity plays an important role in today’s management. The growth of creativity of human potential leads to successful development of our society and economy. Today companies face different problems including simple and complicated ones, absolutely new and routine ones. In most cases, they lead to “blind and automatic decisions.” (Hornak, 2009, para.1) The common problems most companies face in today’s business environment include development of new effective policies, implementation of changes in the workplace, creation of new products and services, and improvements of existing ones, development and implementation of more effective advertising concepts and so on. Creativity is one of the most important components in problem solving. According to the research conducted by the Institute of Prospective Technology, about 70-80% of competitiveness of business organizations are always based on new technologies and new knowledge. (Hornak, 2009, para.3)

Creative potential of managers stands for the managers’ ability to perform their duties in a creative way. Creative problem solving is determined by the manager’s behavior and personality potentials. Behavior potential of managers includes flexible attitude, openness in communication, consistency at work, methods to solve conflict situations, sense of group dynamics and the ability to work in team, and consciousness at work. Personality potential includes emotional potential and intelligence potential which involves professional knowledge, knowledge of other cultures, analytical thinking, and general knowledge of social, political and economic situation. Emotional potential is based on self-motivation, self-control, awareness of one’s own emotional state, and social perception. The above mentioned components influence the development of creative potential of managers in today’s competitive business environment and guarantee effective problem solving. (Hornak, 2009, para.8)

DECISION MAKING DOMAINS

Although many special techniques and systems have already been developed in order to make managers’ decisions more rationale, they are used as tools in this process as they cannot eliminate the necessity for judgment. Charles Holloman, a behavioral consultant and licensed therapist, states that decision making process is “often a tortuous process”. (Holloman, 1992, para.2) It is known that the theory of decision making represents an analytical model.

The main domains of decision making in management include rational, non-rational and irrational models. The first one is used in all areas of organizational activity. The second one, non-rational model is based on intuition and personal experience. The third model is irrational. It is personalized and psychological. The main feature of rational domain is based on the fact that a decision maker should have a conscious goal. In the intuitive domain of decision making, managers’ decisions are focused on recognition and personal experience. These decisions can be made intuitively because of the possible limitations of the analytical method, but at the same time “they can be made instinctively because the consequences are relatively unimportant or the skills involved in making intuitive decisions were acquired under conditions that allowed the decision maker to test and improve their adequacy. “ (Holloman, 1992, para.8) In the irrational domain, the decisions of managers are based on personal preferences as well as aversions. In this case, the managers’ feelings and wishes influence the decision making process. It is found that most managers mix these decision making domains in this or that business situation. Fulton Oursler, a famous American journalist and writer, said, “In making decisions, we must use the brains that God has given to us. But we must also use our heart which He also gave us.” (Holloman, 1992, para.26)

THE ADVANTAGES OF INTUITIVE DECISION MAKING IN MANAGEMENT

The issue concerning intuitive decision making in management have been discussed by a number of specialists, including psychologists, Management Professors and others. Different researchers give different definitions to the term intuition. For example, Jung defines the term intuition as “psychological function transmitting perceptions in an unconscious way.”, while Smith defines it as “rapid, affectively charged judgment arrived at without conscious awareness of the reasoning processes involved.” (Khandelwal & Taneja, 2010, para.1) Intuition does not require any analytic process as it focuses on the current situation and gives an opportunity to realize specific strategy and find innovation. It is found that intuitive decision making is “an integral part of successful business management.” (Khandelwal & Taneja, 2010, para.5)

The study conducted by American researchers proves the fact that about 80% of business success of executives relies on their intuitive decision making. Moreover, it is proved that leadership skills of managers depend on intuition as leadership is considered to be the talent to know what decisions should be made in this or that business situation, even if they are rather risky. The major advantages of intuitive decision making include managing conflict, intuitive visioning and strategizing, adjustment to changing environment, problem solving, and others. Many managers successfully use intuition to check the outcomes of rational analysis. Intuitive decision making helps managers to feel the changing situation and to work out flexible and workable scenarios which will provide positive outcomes. Managers must learn to trust their intuition in order to succeed in business. (Khandelwal & Taneja, 2010, para.12)

THE WAYS TO SPEED DECISION MAKING PROCESS

Today most managers understand the importance of speedy decisions in the workplace. It is known that in many cases, the organization’s decisions are moved through several organizational levels. For example, simple decisions are made by individual managers and do not require the interference of others, while strategic and operational decisions require the interference of many people in the company and take a rather long period of time to resolve the problems. (Denton & Richardson, 2000, para.2)

In order to speed decision making process, managers should eliminate the need to approve decisions by means of elimination of the layers of management. In many cases, it is very important to eliminate unnecessary paper work. Moreover, it is recommended to simplify decision making process in management because “simplification provides another route to speeding up decision making.” (Denton & Richardson, 2000, para.10) Besides, it is necessary to combine functions and knowledge of managers. Teams are considered to be a rather effective tool in management. Combining skills and knowledge of operational staff can speed decision making process in management.

Healthy decision making process involves not only creating the process and consensus building by means of inclusive discussion and critical thinking model, but also feedback from the staff members who can point out where “the successes and failures have occurred”. (Schachter, 2006, para.9)

THE ROLE OF ETHICS IN DECISION MAKING

As decision making process is closely connected with business ethics, most managers pay special attention to moral system, which helps to predict the possible outcomes of decision in this or that business situation. The researchers who study ethical and unethical decision making at work are sure that this issue is one of the most important in management because in some situations they still cannot explain “how and under what circumstances individuals make unethical choices.” (Rittig et al., 2011, p.164) Although many business organizations spend much money on such formal documents and special programs as codes of conduct and ethics, commissioning special sanction programs and so on, in many cases, there are no positive outcomes. One of the models of ethical decision making developed by Rest in 1986 refers not only to ethical decisions, but also to moral awareness, when a manager recognizes a moral problem, to moral judgment, when a manager rules his actions as ethical or unethical, and to moral intention, when a manager intends to follow a certain course of action in this or that business situation. (Rittig et al., 2011, p.165)

Daniel Rittig, the Professor of Management at Florida Gulf Coast University and his colleagues studied Rest’s four –stage model of ethical decision making the relationship between the organization’s formal ethical infrastructure and managers’ moral awareness of ethical situations at work, moral judgment and moral intention. They tested this model based on the results of the survey of 805 respondents who took part in three ethical situations. It was found that ethics plays an important role in decision making process. In most business situations, “ethical misconduct whether for personal gain or for the organization’s advantage can be rather detrimental.” (Rettig et al., 2011, p.194) Moreover, the study proved the fact that formal ethical infrastructure of any business organization which comprises formal communication, formal surveillance, and sanction programs can help to create and maintain “a healthy ethical climate described by trust, honesty and professionalism.” (Rettig, et al., 2011, p.195)

CONCLUSION

In conclusion, it is necessary to say that decision making and problem solving are important components of managerial functions. I consider that intuitive decision making that is considered to be a bridge between unconscious and conscious decision making can help to see possible changes, identify current and future problems, manage information in a proper, and deal with conflict situations. That is why I recommend developing intuitive skills in management. It is necessary to learn to trust intuition. My personal experience proves the fact that good decision making and problem solving skills can help managers to find appropriate strategies for this or that business environment. Moreover, I am sure that in order to speed decision making process, it is necessary to eliminate unnecessary paper work and approvals, to simplify decision making process and to combine skills and knowledge of operational staff. Special attention should be paid to creativity in problem solving as creative managers are always ready to cope with any difficult situation and to achieve positive outcomes in today’s competitive business environment. I will use the information represented in this research project for both my personal and professional development.

REFERENCES

Denton, K. & Richardson, P. (2000) Making Speedy Decisions. Industrial Management. Vol.41(5). Retrieved from:

Giroux, I. (2009) Problem Solving in Small Firms: An Interpretive Study. Journal of Small Business and Enterprise Development. Vol.16(1). Retrieved from:

Holloman, C. (1992) Using Both Head and Heart in Managerial Decision Making. Industrial Management. November 1, 1992. Retrieved from:

Hornak, E. (2009) Development of Managers’ Creative Potential. Annals of DAAAM and Proceedings. January 1, 2009. Retrieved from:

Khandelwal, P. & Taneja, A. (2010) Intuitive Decision Making in Management. Indian Journal of Industrial Relations. July 1, 2010. Retrieved from:

Mosley, D., O’brien, F., Pietri, P. (1991) Problem Solving Styles Determine Managers’ Approach to Making Decisions. Industrial Management. September 1, 1991. Retrieved from:

Rittig, D., Koufteros, X., Umphress, E. (2011) Formal Infrastructure and Ethical Decision Making: An Empirical Investigation and Implications for Supply Management. Decision Sciences. Vol.42(1). February 19, 2011. Retrieved from:

Schachter, D. (2006) The Importance of Good Decision Making. Information Outlook. Vol.10(4). Retrieved from:< http://www.questia.com/PM.qst?a=o&d=5036777193>