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1. Problem Solving
and
Decision Making
1

2. Objectives
At the end of this chapter, you will be able to;
•Define problem and Problem solving
•Know problem analysis and decision making
•Describe the process of problem solving
•Describe decision making process
•Know the types of decisions
2

3. Definition
3
Problem
- A problem is something that endangered an organization;
e.g. budget cut-down and the implications.
- It occurs when a gap exists (actual/desired) and in many times
could be an opportunity.
•Any difference between an actual situation and a desired situation.
Problem solving : the art of identifying Problems and implementing
the best possible solution.
•

4. Problem Solving & Decision Making
Managerial Problem Solving & Decision Making
A manager does both elements.
1. Problem Analysis: involves recognizing and defining a
problem situation that requires a decision.
2. Decision Making: involves defining and evaluating
alternatives followed by choice of an alternative.
• Both are often used interchangeable, but they are not the
same.
4

5. Cont.
Problem situation can be:
Performance deficiency: the actual performance is less than
the desired performance.
Eg. Turnover, absenteeism,
Performance opportunity: the actual performance is better than
the anticipated
5

6. Managerial Problem Solving
-It is a process composed of a series of activities and steps by
which managers bring about change so that the actual
conditions or results more closely align with those desired.
-Problem analysis involves recognizing and defining a situation
that requires a decision.
6

7. Managerial Problem Solving cont…
-Problem solving begins when there are indicators those actual
results of organization activity are not consistent with desired
results.
-It also begins when the manager is faced with a new situation,
one in which there are no previous data development analysis
of the present situation suggests a potential problem.
-Problem solving includes Problem analysis, Post decision
implementation, and Evaluation.

7

8. Managerial Problem Solving cont…
The Problem finding process emanates from:
1.Deviation from past experience; e.g. community images of
physicians
2.Deviation from a set of plans, e.g. medical care and a non-
medical services in a hospital.
3.Other people; e.g. community, media people.
4.The performance of competitors; e.g. private/non-
governmental
8

9. Problem Solving Steps/Process
Steps/Activities/Process
1. Problem Analysis
- Includes recognition and definition
- The solver must gather information
The existence of the problem
The extent and the nature of the problem.
Sources of information:
- Routine H/S reports, - Survey data
- Interviews, - Observation

1.
9

10. Problem Analysis cont.
At this step three common mistakes can be occur.
The problem can be defined broadly or narrowly.
Focusing on the symptoms instead of causes.
Choosing the wrong problem to deal with.
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11. 11
Cont.
Problem-analysis approaches
•The Problem Tree

12. cont.
2. Making Assumption
 Bring a set of assumptions to each problem-solving
solution.
 Three categories in to which most assumptions fall:
A.Structural Assumptions
B.Personal Assumptions
C.Problem Assumptions
12

13. 13
Cont.
A. Structural Assumptions
- Whether or not the problem lies with the managers area
of responsibility.
- caused by departments or sections.
- uncontrollable internal/external factors such as job
design, technology, etc. are causing the problem.

14. Cont.
B. Personal Assumptions
- Unique to the manager.
- Includes biases, willingness to deal with risks, etc.
C. Problem Assumptions
- Importance of the problem.
- Urgency of solution and change.
- The degree to which subordinates/superiors will
accept the solutions.
- Possibility of success of an implemented solution.
14

15. Problem Solving Steps/Process
cont…
3. Developing tentative alternatives solutions and selecting those
to be considered in depth.
4. Evaluating alternatives solution by applying decision criteria.
5. Selecting the alternatives that best fit the criteria.
6. Implementing the solution.
7. Evaluating results.
15

16. Problem Solving Classification
Conditions that initiate Problem solving
-Another way to classify problem solving is by conditions that
initiate it. These are:
 Opportunity/Threat
 Crisis
 Deviation
 Improvement
16

17. Problem Solving Classification cont…
Opportunity Problem Solving is prospective and
anticipatory.
•It occurs when a favorable internal or external
circumstances enables the HSO/HS to achieve or
enhance desired result.
17

18. Problem Solving Classification cont…
•Threat Problem Solving also is prospective and anticipatory.
But is the converse of opportunity problem solving. Threats
may be internal or external and, if left undressed, may cause
future results to be less than what is desired.
•Crises Problem Solving responds to a current or predictable
threat. Failing to act promptly will cause unfortunate result,
such as a decline in near-term performance.
18

19. Pitfalls in Problem Identifications
Pitfalls of managers in problem identification:
•False expectation: e.g. TB can be controlled by establishing
TB-sanatoriums.
•False association of events:
•False self-perception and social image: e.g. quality health
services are provide by referral hospitals, “We are the best
type of attitude”.
19

20. Decision Making
Decision Making is integral to all management functions,
activities, and roles.
 Making decisions about what type of information to collect
and report and which monitoring systems should be used to
measure and compare HSO/HS conversation activities and
outputs with expectations and standards.
20

21. Decision Making cont…
Decision Making
Decision is a choice made between two or more available
alternatives.
 Decision making is a managerial function, defined as the
process of choosing the best alternatives for reaching
objectives.
 Decision making involves two steps:
- Identifying and evaluating alternatives, and
- Choosing an alternative.
21

22. Decision Making cont…
Before deciding a Manager should assess:
•The impact on responsibility
•Whether it affects other departments
•Need for information by higher authorities
•Implications on budget
•Extent of responsibility and authority.
22

23. Decision Making cont…
Elements of the Decision Making
Five of the elements are:
1. The Decision Maker
2.Goals to be served
3.Relevant Alternatives
4.Ordering of Alternatives
5.Choice of Alternatives
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24. Decision Making cont…
1.The Decision Maker
•Ideal decision makers try to use all of their talents when
making a decision and characterized by reason and sound
judgment.
•Weak decision makers usually have one of the four
orientations:
Receptive, Exploitation, Hoarding, and Marketing.
24

25. Decision Making cont…
- Decision makers who have a receptive orientation believe that
the source of all-good is outside them. Therefore, they rely
heavily on suggestions from other organization members.
Basically, they want others to make their decisions for them.
- Decision makers with an exploitative orientation also believe
that the source of all good outside themselves, and they are
willing to steal ideas as necessary in order to make good
decisions. They build their organizations on others’ ideas and
typically hog all the credit themselves, extending little or none
to the originators of the ideas.
25

26. Decision Making cont…
-The hoarding orientation is characterized by the desire to
preserve the status quo as much as possible.
-Decision makers with this orientation accept little outside
help, isolate themselves from others, and are extremely self-
reliant.
-They are obsessed with maintaining their present position and
status.
26

27. Decision Making cont…
-Marketing oriented decision makers look upon themselves as
commodities that are only as valuable as the decisions they
make.
Thus, they try to make decisions that will enhance their
value and are highly conscious of what others think of their
decisions.
27

28. Decision Making cont…
2. Goals to be served: The goals that decision makers
seek to attain are another element of the decision
situation.
3. Relevant Alternatives: are alternatives that are
considered feasible for solving an existing problem
and for implementation.
28

29. Decision Making cont…
4. Ordering of Alternatives: The decision situation
requires a process or mechanism for making
alternatives from most desirable to least desirable.
5. Choice of Alternatives: This choice establishes the
decision. Typically, managers choose the alternative
that maximizes long-term return for the organization.

29

30. Decision Making cont…
Decision Making Process
•The decision-making process comprises the steps the decision
maker takes to arrive at this choice.
•A model of the decision making process recommends the
following decision-making process steps.
30

31. Decision Making cont…
1.Identify existing problems.
2.List possible alternatives for solving the problem.
3.Select the most beneficial of these alternatives.
4.Implement the selected alternatives.
5.Gather feedback to find out if the implemented alternative is
solving the identified problem.
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32. Model of the Decision Making Process
Decision Making cont…
Identify
Existing
problems
List
Alternative
Problem
solutions
Select
Most
Beneficial
alternative
Implement
Chosen
alternatives
Gather problem-related
feedback
32

33. Decision Making cont…
Types of Decisions
-Three types describe most of the managers’ decisions:
1. Ends-Means,
2. Administrative-Operational, and
3. Non-programmable-Programmable
33

34. Decision Making cont…
1. Ends-Means
 Ends decisions determine the individual or organizational
objectives and results to be achieved.
Decisions about ends are inherent in strategic planning, which
includes formulating objectives.
 Means decisions choose the strategies or programs and
activities to accomplish the desired result.
34

35. Decision Making cont…
2. Administrative-Operational
 Many administrative decisions that are made by top-level
executives significantly affect the HSOs/HS and have major
implications for resource allocation and utilization.
Policy decisions are a synonyms for administrative decisions.
35

36. Cont.
•Operational decisions are made about day-to-day
activities by middle-and first level managers.
•Operational decisions include deciding whether to
purchase equipment, reassign staff, modify work
systems, and modify job content.
36

37. Decision Making cont…
3. Non-programmable-Programmable
 Non-programmable decisions are typically one-shot
decisions that are unstructured and significant.
Programmable decisions are repetitive and routine;
procedures and rules are used to guide them. E.g. Patient
admitting, scheduling, inventory and supply ordering
procedures.
37

38. Decision Making cont…
Overlap of Decisions Types
•The three decision types overlap and decisions may include parts
of each.
•For e.g. establishing a satellite care center or primary care
preferred provider organization is a ‘means’ decision because it is
a strategy to achieve the organization’s objectives.
•Furthermore, it is an administrative decision because it involves a
major commitment or resources, compared with a primarily
operational decisions about day-today activities.
38

39. Cont.
•Finally, the decision is non programmable because it is
unique and occurs infrequently.
39

40. Cont.
40
Fig. Overlap of Decisions Types

41. Factors Influencing Problem Solving & Decision Making
Three groups of factors influencing how problem solving and
decision making are performed:
A.Related to the problem solver
- Knowledge, experience
- Perspective and the way how he/she views the situation,
problems or environment.
- May think vertically are not horizontally.
- Personality traits such as nature, aggressiveness, self-
centeredness, self-confidence.
- Individual values, morals,
- Personal philosophy may include political position and
managerial style.
41

42. Factors Influencing Problem Solving and
Decision Making cont…
B. The Situation
- Urgency and consequences of the problem
- Magnitude and importance
- Need greater attention.
C. The Environment
- External legal, political, economic, cultural,
- May impose uncontrollable variables and limit alternative
solutions for a problem.
- Internal environment factors have a more direct impact.42

43. Summary
Problem Solution Approach
1.Defining the Problem.
A.What is happening?
- Step One: Frustrating incidents/situations
- Step Two: Problems suggested by the
frustrating factors
- Step Three: Selecting priority problems
- Step Four: Formulating problem statement.
43

44. Summary cont…
B. Why is it happening?
- Step Five: Problem Analysis
The “But Why Technique”
2. Development of solutions
C. What can we do?
- Step Six: Listing Interventions
- Step Seven: Assessing feasibility of
interventions
44

45. Summary cont…
D. Where do you want to go?
- Step Eight: Formulation of goals and
objectives for the
interventions.
3. Developing Interventions
- How we do it?
Costing Methodology
- What will it cost?
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46. Summary cont…
Exercise:
Identify the most important problems of your
college and apply the problem solution approach.
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