PROBLEM SOLVING

&
DECISION MAKING

1
 Introduction

Problem Solving is a
process whereby the problem
solver seeks to devise a method
for transforming a problem from
its current state into a desired
state when a solution is not
immediately obvious to the
problem solver.

2
Steps in Problem Solving

Evaluate
(assessment)
Action of the
success of
Finding a actions
solution
Problem
definition
Problem
identification

3
 Steps in Problem Solving (1)
1. Problem Problem identification is considered the most important step in the process
identification of solving a problem. The problem to be solved is sometimes not clear
resulting in difficulties of finding a solution. A specialist / professional may
find it straight forward in getting a solution but for the non-specialist a
solution remains difficult to find until the objective is clear.

2. Problem To understand a problem, one needs to know the components involved.

definition Asking the following questions can help us to understand the problem:
• What are the parameters already known?
• What are the parameters remain unknown?
• In what form will the solution be presented?
• What are the obstacles to arrive at the solution?

4
 Steps in Problem Solving (2)
3. Finding a Think systematically and plan a strategy of action are important ingredients
solution in finding a solution, and can avoid us from taking the unnecessary hasty
action. The success to getting the problem solved requires a proper
planning. Very rarely a solution is obtained in a hastily manner.

4. Action The next step is to put into action the most suitable solution after taking into
consideration the effects of the action from the chosen solution.

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 Steps in Problem Solving (3)
5. Evaluate The evaluation / assessment on the success of actions is based on
(assessment) of the following questions:
the success of • How far the action done is effective?
actions • Are there any differences before and after action is taken?
• Are the objectives achieved from the actions taken?
• What are the good and bad effects as results of the actions
taken?
• If the solution already put into action does not lead to achieving
the objective, the process may be repeated or find an alternative
solution.

6
 Strategies in Problem Solving

Refer to the work of If you are stuck

Sub-divide problem into
other people who have somewhere, forget
smaller sub-problems so
successfully solved about it a while and
that each one would be
approximately similar come back when you
easier to solve.
problems. have an idea.

“Life is a continuous exercise in creative problem solving.” Creative Problem

Michael J. Gelb Solving is not a
destination…..
“The problems that exist in the world today cannot be solved by
the level of thinking that created them.” It is a journey
Albert Einstein

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Problem Solving Tools

SWOT
Analysis

Pareto McKinsey
Analysis 7-S
Problem
Solving
Tools

Ishikawa /
Fishbone / PESTEL
Cause &
Effects
Diagram

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Problem Solving Tools: SWOT

• A decision (for example,

investment in a new production
plant) could be considered not
only in financial terms but also
by analysing other criteria

• A SWOT analysis is one of the

tools other criteria involved,
namely:
▫ Strengths
▫ Weaknesses
▫ Opportunities
▫ Threats

9
 Problem Solving Tools: McKinsey Seven-S

• Might need to consider the internal elements that are able to

influence the outcome + the successfulness of the solution.
• Elements such as:
• Shared values
• Structure
• Systems
• Style
• Staff
• Skills
• Strategy

10
 Problem Solving Tools: PESTEL

• This tool consider external

factors that might influence the
problem solving & decision
making process, namely:
• Political factors
• Economic factors
• Social factors
• Technological factors
• Ecological factors
• Legal factors

11
Problem Solving Tools: Fishbone / Ishikawa / Cause and
Effect Diagram
• To Have A Clearer Picture of
the Cause and Effect of A
Particular Issue
• The 7 M’s [Man, Machine,
Material, Method,
Measurement, Maintenance,
Environment]
• The 8 P's [Price, Promotion,
People, Processes, Place /
Plant, Policies, Procedures &
Product (or Service)]
(recommended for
administration and service
industry)
• The 4 S's [Surroundings,
Suppliers, Systems, Skills]
(recommended for service
industry).

12
 Problem Solving Tools: Pareto Analysis
This is a way to separate the major causes of a problem (the vital few) from the minor
ones (the trivial many). It is based on the 80/20 rule: The idea that 80% of problems
are due to 20% of causes.

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 Individual vs. Group Problem Solving

• If it is up to the individual to solve the problem then it is less difficult.

• What if we have to solve the problem as a group?
• What are some of the obstacles we might encounter?

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Obstacles in group problem solving / decision making process

1. Unclear objective – group are not totally

sure what they are suppose to achieve.
2. Blurred responsibility – group is unclear
about authority of the group. Who are
they reporting to? What is the authority
and responsibility of the group leader?
Who will make the decision?
3. Status – Working in a group will not
necessarily iron out perceived
differences in authority. People with
higher status may be dangerously
influential in manipulating ideas and
information.

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 Obstacles in group problem solving / decision making process

4. Expertise – Appointing people

on the basis of their expertise
can also prove dangerous.
Experts may concentrate on
their specialist areas, ignoring
areas they know little about
5. Time constraint (both too
much and too little)
6. Self censorship – Group
members avoid speaking up
against the majority for fear of
being ridiculed or because
they do not want to waste the
group’s time.
7. Pressure on dissenters – Those
who insists on dissenting are
branded as a nuisance or
rebels. Their loyalty
questioned.
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 The connection between Problem Solving & Decision Making Process

Although the terms "problem-solving" and "decision-making" are

sometimes used interchangeably, management literature makes a clear
distinction between the two. Problem Solving
Problem-solving is a larger process that starts with the identification
of a problem and ends with an evaluation of the effectiveness of the
chosen solution.
Decision-making is a subset of the problem-solving process and Decision Making
refers only to the process of identifying alternative solutions and
choosing from among them.

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 Two Basic
Problem Solving
Steps

Eureka Steps Seven Steps

To Problem To Problem
Solving Solving

18
 Eureka Steps to Problem Solving

Preparation: Gathering information that is pertinent and relevant to

the problem that is to be solved.

Incubation: Leaving the problem aside temporarily if one can’t find a

solution. Later, one may return to thin of a solution.

Illumination: A sudden idea, that may prove to be effective to the problem

at hand, comes to mind. This often called the “Aha!” moment or the
“Eureka!” experience.

Verification: Implementing the idea to make sure it is valid and that it will
solve the problem.

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Seven Steps Approach to Problem Solving

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 Explanation of the Seven Steps (1)

Define and identify You must define exactly what is the actual problem all
the problem about. What are the situation you face now and what are
(1) the situation you hope to be in?

Analyze the problem Find out the 5W + 1H of the problem. List all the
(2) symptoms and root causes. Clarify the problem. Example:
In order to cure condition X, we need to discover whether
condition X is an infectious kind of disease, a hereditary
condition, a chemical poison, or something else.

Identify Possible Read, research, think, ask questions, discuss. Look for
Solutions ideas and solutions.
(3)

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 Explanation of the Seven Steps (2)
Evaluating What possible solutions, either individually or in conjunction with
Possible each other, will solve this problem? You may want to adopt 2 or 3
Solutions separate solution paths at the same time--kind of like the triple
(4) antibiotic treatment. You might also want to set up "Plan B," a possible
solution approach that can be implemented if your main plan does not
work.

Selecting the Select one or more solutions to try. Choose from among those near the
best solution top of the list of ranking. However the very top ranked solution is not
(5) always the one to get chosen for implementation. Emotional factors,
sudden changes, peculiar circumstances, the desire for beneficial side
effects not directly related to the solution, and so forth, often shift the
logical ranking.

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 Explanation of the Seven Steps (3)
Implement Try out the solution(s). The key concept here is action. Get going and begin the
the solution solution. Once you choose a solution path, get to work on it.
(6)

Evaluate the Investigate to determine whether the solution(s) worked, and to what extent.
solution Do modifications need to be made? Do other solutions need to be selected and
(7) tried? Is a different approach needed? One of the most frequent failures of
problem solving is the lack of evaluation of the implemented solution. Too
often in the past, once a solution has been chosen and implemented, people
have wandered off, assuming that the problem was solved and everything was
fine. But the solution may not have worked or not worked completely, or it
may have caused other problems in the process.

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Decision Making

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Rational Decision Making Model (Logical)

Environmental Factors

2 3
1
Set Search for
Identify the
goals alternative
problem
solutions

4
Compare and
evaluate
alternative solutions

6
7 5
Implement
Regulatory Make a Selection
the preferred
and Actions
alternative solutions

Environmental Factors

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The decision making process-Example
1. Identify the Problem “Ex: You want to buy a new laptops computer”

2. Set Goals Budget RM2,000, 2 year warranty, light in

weight => Think Acer Brand

3. Search for alternatives Solutions Brand in this case: Compaq, Dell, Fujitsu, HP,
Lenovo, Sony, Toshiba or Apple.
4. Compare and Evaluate Alternative Solutions
Brands in this case
5. Make a Selection in Alternative Solutions
Select brand

6. Implement the Preferred Alternative Solutions

7. Regulatory and Actions ✓Buy that brand

Follow up on that solution (performance)

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Decisions Making Structure

• Programmed decision
*A repetitive decision the can be handled by a routine approach.

• Non-programmed decisions
* Decision that are unique and nonrecurring.
* Decision that generate unique responses.

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Programmed vs. Non-programmed Decisions

Characteristics Programmed decisions Non-programmed

decisions
Frequency Repetitive New, unusual

Information Readily available Ambiguous or

incomplete
Time frame for Short Relatively long
solution
Solution relies on Procedures, rules, and Judgment and creativity
policies
Type of problem Structured Unstructured

Managerial level Lower level Upper level

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Types of Programmed Decisions

 Policy
 a general guideline for making a decision about a structured
problem.
 Procedure
 A series of interrelated steps that a manager can use to respond
(applying a policy) to a structured problem.
 Regulation
 an explicit statement that limits what a manager or employee can
or cannot do.

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Decision Making Conditions
 Certainty
 Each alternatives outcome is known in advance
 A situation in which a manager can make an accurate decision because
the outcome of every alternative choice is known.
 Risk
 Probabilities can be assigned to each outcome
 A situation in which the manager is able to estimate the likelihood
(probability) of outcomes that result from the choice of particular
alternatives.
 Uncertainty
 limited information prevents estimation of outcome probabilities for
alternatives associated with the problem and may force managers or
rely on intuition, hunches, and “gut feelings”.

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Decision Making Conditions

Objective
Probabilities
RISK Subjective
Probabilities

CERTAINTY UNCERTAINTY
Clear Intuition and Judgement

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Types of Decision Makers

Directive Analytic Conceptual Behavioral

• Use minimal • Make careful • Maintain a broad • Avoid conflict by

information and decisions in outlook and working well
consider few unique consider many with others and
alternatives. situations. alternatives in being receptive
making to suggestions.
decisions.

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Errors and Biases in Decision Making
Over-
confidence.

No following- Confusion
up on the about the
solution. problem.

Immediate Problem
gratification identification is
(quick results). unclear.

Selective
Not sure about
perception
goals.
(not flexible).

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Characteristics of Effective Decision Making

It focuses on what is
important

It is straight forward, It is logical and

reliable, easy to use, consistent.
and flexible.

It acknowledges both
It encourages and
subjective and
guides the gathering
objective thinking and
of relevant information
blends analytical with
and informed opinion.
intuitive thinking.

It requires only as much

information and
analysis as is
necessary to resolve a
particular dilemma.

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Guidelines on Making Effective Decisions

Defining problems
• A problem needs to be clarified and defined accordingly.

Limiting factor
• Limiting factors should be considered in order to analyse the strength and weakness.

Adequate information
• The quantity of information should be reliable.

Giving space to other views

• Different views on the same matter can be considered to reach a quality decision.

Punctuality
• Decision must be made at the appropriate time.

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Techniques to Improve the Decision Making Process

Brainstorming Nominal Group

• Producing many ideas to Technique (NGT)
make a decision. • Problems are outlined,
solutions are presented
in written form,
discussion takes place
and a final decision is
reached.

Delphi Technique Consensus

• The results are based on Mapping
questionnaires Techniques
completed by
respondents. • Decisions made are
based on the report
submitted by the
representative of each
group.

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Intuitive Decision Making
Experiences

• Making decisions on the Ethical, values

and culture
basis of experience, Feelings or
Decision based on emotions
feelings, and accumulated experience
judgment.
• However, overreliance on Decision based on Superficiality
intuition sometimes also values or ethics INTUITION Decisions
does not help in making
decisions effectively and
efficiently. Cognitive
Subconscious processes Decisions

Data from Skills, knowledge or

subconscious mind training

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Problem Solving and Decision Making in Islam

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Problem Solving and Decision Making in Islam
The important step in
decision making in Islam is
quite clear. What ever
decision we want to make,
must not defer from what is
stated in Al-Quran and also in
Hadith.

Whatever problems that we

want to solve, we are taught to
work hard to find the solution
(ikhtiar) and also asking for help
from Allah through doa. Lastly
rely on Allah (tawakal)

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Problem Solving and Decision Making in Islam

Belief in
Allah

To
attribute
the
problem
to Allah
To have
good
thoughts
about
Allah

Between
fear and
hope

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Problem
Solving &
Decision
Making in Islam

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