Understand the problem
Managers use useful information and clear thinking to find the gap between the current result and the goal.
PROBLEM SOLVINGCHAPTER 4How managers
How managers
make decisions.
A problem exists when the current result is different from the result we want. A manager needs to understand that difference before choosing what to do.
Look beyond the first warning sign.
If a manager reacts too quickly then the action may fix a symptom instead of the real cause.
Know the decision type
A programmed decision follows a known rule. A nonprogrammed decision needs a new response to a new or complex problem.
DECISION TYPESUse facts and experience
Systematic thinking uses facts and clear steps. Intuitive thinking uses experience. Managers can use both while checking first impressions.
THINKING STYLESCheck for bias
Easy information can seem more important than it is. Managers should hear other views before committing to a choice.
DECISION BIASES
KEY IDEAS
Words worth knowing
Ask Nexa to explain any of these terms.
INFORMATION
Knowledge workers use information to solve problems. Managers need skills with technology and information as well as analysis.
CHOICES
Managers face performance threats and opportunities. They also make programmed and nonprogrammed decisions under certainty or risk or uncertainty.
JUDGMENT
Availability bias and confirmation error can distort a choice. Escalating commitment can keep a failing plan going.
FIVE STEP PROCESS
A clear way to decide
The Chapter 4 presentation teaches these five steps.
- 01DefineFind the real problem
- 02CompareConsider different choices
- 03ChooseSelect the best course
- 04ActPut the plan into practice
- 05ReviewCompare results with the goal
OUR CHAPTER 4 KNOWLEDGE BASE
From an idea to an answer.
Each record shows what an idea means. It also shows why managers use it and how it applies to a real situation. The questions help Nexa serve both students and managers.
01Problems and knowledge workREAD
A problem is the gap between the current result and the result wanted. Managers use information to find that gap and decide what to change.
Why it matters
A quick reaction may fix a symptom while the real cause continues.
How a manager uses it
Compare the current result with the goal. Gather facts about what is happening before choosing an action.
Workplace example
A car detailing shop hears that vehicles are returned later than promised. The manager checks scheduling and supply delays before blaming workers.
Connection to management
Defining the problem is the first step in the decision process. Information also supports planning and control.
STUDENT QUESTION
What does it mean to define a problem in Chapter 4?
MANAGER QUESTION
Our service is often late. How do we find the cause before changing the schedule?
EXAMPLE NEXA ANSWER
We start by comparing the actual result with the goal. A late service is a warning but not yet an explanation. We check when the delays happen and whether scheduling or missing supplies are involved. This helps us act on the cause rather than blame workers without evidence.
Presentation pages 4 and 11. Group response notes.
02Skills for using informationREAD
Technological skill helps managers apply useful tools. Information skill helps them find and judge credible information. Analytical skill helps them see patterns and solve problems.
Why it matters
A decision is weaker when the manager has data but cannot judge its quality or meaning.
How a manager uses it
Use suitable tools to gather reliable information. Organize the facts and look for patterns that relate to the problem.
Workplace example
In a sample service business a manager checks appointment records. The manager looks for days with repeated delays before changing staffing.
Connection to management
Managers are information centers. Their information supports planning organizing leading and controlling.
STUDENT QUESTION
What are the three information skills managers need?
MANAGER QUESTION
We have many appointment records. How do we use them to understand repeated delays?
EXAMPLE NEXA ANSWER
We use technology to collect the records. We check whether the information is reliable and organize it by day or shift. We then look for a pattern in the delays. These three skills help us make a decision based on evidence instead of a guess.
Presentation pages 4 and 5. Illustrative workplace scenario.
03Threats and opportunitiesREAD
A performance threat means something is wrong or may go wrong. A performance opportunity is a chance for a better result. Problem seekers look ahead rather than waiting for a crisis.
Why it matters
Early action may prevent a small problem from becoming serious and may reveal a way to improve.
How a manager uses it
Watch for warning signs. Ask whether the situation is a current problem or a chance to improve before deciding what to do.
Workplace example
In a sample cafe customers begin waiting longer. The owner checks the delays now and considers a better order process.
Connection to management
Looking for threats and opportunities informs planning. Defining the actual gap connects this topic to problem solving.
STUDENT QUESTION
How is a performance threat different from an opportunity?
MANAGER QUESTION
Customer wait times are rising. How can we respond before the problem grows?
EXAMPLE NEXA ANSWER
We treat longer waits as a possible performance threat. First we check when and why waits are rising. We then consider a change that addresses the cause. If the change also improves service beyond the old result then the threat has revealed an opportunity.
Presentation page 6. Illustrative workplace scenario.
04Programmed and nonprogrammed decisionsREAD
A programmed decision uses an existing rule for a familiar problem. A nonprogrammed decision needs new judgment because the problem is unusual or complex.
Why it matters
Routine choices can be handled consistently. A new problem should not be forced into a rule that does not fit.
How a manager uses it
Ask whether the problem has happened before and whether a trusted procedure already solves it. If not then gather facts and compare new choices.
Workplace example
A routine inventory reorder can follow a set rule. A computer attack may require a new response based on its specific effects.
Connection to management
Unusual decisions need careful problem definition and often occur under risk or uncertainty.
STUDENT QUESTION
What is the difference between programmed and nonprogrammed decisions?
MANAGER QUESTION
We have a new kind of service failure. Should we use our normal procedure or make a new plan?
EXAMPLE NEXA ANSWER
We use a programmed decision when a familiar problem already has a reliable rule. We use a nonprogrammed decision when the situation is new or complex. For a new service failure we first check whether the normal rule fits the facts. If it does not then we define the problem and compare new responses.
Presentation page 7. Chapter 4 presentation.
05Systematic and intuitive thinkingREAD
Systematic thinking uses facts and orderly steps. Intuitive thinking uses experience and pattern recognition to make a judgment when time or information is limited.
Why it matters
Facts help us avoid a weak guess. Experience may help us notice a problem quickly when a fixed rule does not fit.
How a manager uses it
Use information and clear steps where possible. Treat an initial feeling as a reason to check the facts rather than as proof.
Workplace example
In a sample shop the owner senses that a schedule is too tight. The owner checks actual completion times before making a change.
Connection to management
These thinking styles support the five step process. Experienced judgment becomes more important as uncertainty rises.
STUDENT QUESTION
Can managers use both systematic and intuitive thinking?
MANAGER QUESTION
We think our schedule is the problem. How can we check that feeling before acting?
EXAMPLE NEXA ANSWER
We can use both ways of thinking. Experience may alert us that the schedule is too tight. We then check records of actual completion times and compare them with the goal. That keeps the useful warning from becoming an unsupported conclusion.
Presentation pages 8 and 9. Illustrative workplace scenario.
06Certainty risk and uncertaintyREAD
Certainty means the choices and outcomes are well known. Under risk information is incomplete but outcome probabilities can be estimated. Under uncertainty reliable probabilities cannot be assigned.
Why it matters
A manager needs a different approach when the outcome is unknown. Risk can be analyzed with estimated chances while uncertainty requires more learning and judgment.
How a manager uses it
Check what is known about the options. Use estimated chances only when evidence supports them. When reliable chances are missing gather more information and consider small tests.
Workplace example
A shop may estimate demand for a regular service from past bookings. A completely new service may have too little history for a reliable estimate.
Connection to management
Uncertainty often increases the need for a nonprogrammed decision and a review of the result after action.
STUDENT QUESTION
What is the difference between risk and uncertainty?
MANAGER QUESTION
We want to offer a new service with no sales history. How should we decide?
EXAMPLE NEXA ANSWER
We should not pretend to know the chances of success when we have no useful history. That is uncertainty rather than measurable risk. We can gather information about customers and try a small test. We then review the result before committing more resources.
Presentation page 10. Illustrative workplace scenario.
07The five step process and ethicsREAD
The presentation teaches five steps. Define the problem. Compare choices. Choose a course. Put it into action. Review the results. Managers should also consider utility rights justice and caring.
Why it matters
A sound choice can still fail if no one carries it out or checks the result.
How a manager uses it
Find the real cause. Compare options for cost value time and fairness. Assign responsibility for the chosen action. Compare the result with the goal and adjust.
Workplace example
At a car detailing shop the manager checks why vehicles are returned late. The manager compares schedules and daily appointment limits. After making a change the team tracks completion times.
Connection to management
Problem solving begins the process. Planning and organizing help implement the choice. Control helps review the result.
STUDENT QUESTION
What are the five steps in the decision process?
MANAGER QUESTION
Our customers report late vehicles. How do we decide what to change and check if it worked?
EXAMPLE NEXA ANSWER
We first define why vehicles are late. We compare reasonable options such as changing the schedule or limiting appointments. We choose the option that best fits the facts and treats people fairly. We assign duties and make the change. We then compare completion times with the goal and adjust if needed.
Presentation pages 11 and 12. Group response notes.
08Biases and staying with a failing planREAD
Availability bias gives too much weight to easy memories. Representativeness relies on resemblance or stereotypes. Anchoring stays close to the first number. Framing lets wording change a judgment. Confirmation error favors supporting facts. Escalating commitment keeps resources in a failing choice.
Why it matters
A manager can follow a decision process and still reach a poor answer when important evidence is ignored.
How a manager uses it
Look for evidence against the current view. Ask other people for their views. Decide in advance what result would make us stop or change course.
Workplace example
A company has spent eight million dollars on delayed software. Pilot customers dislike it. Before spending three million more the team should focus on future value rather than money already spent.
Connection to management
Bias checks belong when comparing choices and reviewing results. They help managers under risk and uncertainty.
STUDENT QUESTION
What is escalating commitment in a management decision?
MANAGER QUESTION
We have spent a lot on a project that is late. What should we check before spending more?
EXAMPLE NEXA ANSWER
We should not continue only because we already spent money. That past spending cannot be recovered by choosing to spend more. We check current customer feedback and the likely value of the next investment. We compare continuing with changing the project or stopping it. This helps us avoid escalating commitment.
Presentation pages 13 and 14. Chapter 4 presentation exercise.
Where the information comes from.
We built these records using the Chapter 4 Managers as Decision Makers course presentation and our group notes. Page numbers in the records refer to the 15 page presentation. Workplace examples are either from our notes or are clearly described as examples.