CONCEPT, TYPES AND PROBLEM SOLVING STRATEGIES

A problem is a discrepancy between ideal and actual condition. It is the process of identifying the gap between the desired situation and the actual situation, and initiating corrective action. The basic purpose of making a decision is to solve a problem. Decision making begins with the awareness that a problem exists. Identifying problems requires considerable skill. Managers may become aware of a problem by noticing one of the following indicators.

(1) Deviation form Past Performance: If performance figures are down, a problem almost surely exists. Common problem indicators are declining sales, increased employee turnover, and higher scrap rates.

(2) Deviation from the plan: When the result hoped to attain with a plan are not forthcoming, there is a problem. This type of problem occurs when future performance deviates from the plan.

(3) Criticism from outsiders: Managers sometimes become aware of problems by hearing complaints from individuals and group. These sources of criticism include customers, government regulations, and shareholders.

(4) Competitive threats: The presence of competition can create problems for an organization.

Types and Problems Solving Strategies

Managers will face different types of problems and make decisions to solve the problems as they do their jobs. Robbins and Coulter have classified problems into two types-well structured problems and poorly-structured problems.

(1) Well-Structured Problems: Well-Structured problems are straight forward. The goal of the decision maker is clear, the problem familiar, and information about the problem is easily defined. Such problems are routine and repetitive. They align closely with the assumptions of perfect rationality. The manager uses a programmed decision. Hence, procedure, rule or policy is used to solve well-structured problems.

(2) Poorly-Structured Problems: Many organizational situations involve poorly-structured problems. They are new, unusual, and the information is incomplete. When problems are poorly structured, managers must rely on non-programmed decision making which are unique and non-recurring. Poorly structured problems require a customers made response through non-programmed decision making.