Problem solving is a process in which we perceive and resolve a gap between a present situation and desired goal, with the path to the goal blocked by known or unknown obstacles. In contrast, decision making is a selection process where one, two or more possible situations are chosen to reach a desired goal decision.
But, the steps in both problems solvingand decision making are quite similar and the first involves often the second. In fact, the terms are sometimes used interchangeably.
Different types of decisions
People at different levels in a company have different types of decision-making responsibilities.
Strategic decisions, also known as nonprogrammed decisions (because neither the appropriate solution nor the potential outcome is known)which affect the long-term direction of the entire company, are typically made by top managers. Examples of strategic decisions might be to focus efforts on a new product, to merger with another company or to increase production output... These types of decisions are often complex and the outcomes uncertain, because available information is often limited. Managers at this level must often dependon past experiences and their instincts when making strategic decisions.
Tactical decisions, which focus on more intermediate-term issues, are typically made by middle managers. The purpose of decisions made at this level is to help move the company closer to reaching the strategic goal. Examples of tactical decisions might be to pick an advertising agency to promote a new product...
Operationaldecisions focus on day-to-day activities within the company and are typically made by lower-level managers. Decisions made at this level help to ensure that daily activities proceed smoothly and therefore help to move the company toward reaching the strategic goal. Many of these decisions are relatively simple and routine, such as ordering production supplies, choosing the discount rate for anorder, or deciding the annual raise of an employee... These routine types of decisions are known as programmed decisions, because the decision maker already knows what the solution and outcome will be.
Some of these decisions are individual, others are collective, and some are structured, clear and straightforward while others are fuzzy and ambiguous.
Making a decision implies that there arealternative choices to be considered, and in such a case we want not only to identify as many of these alternatives as possible, but to choose the one that has the highest probability of success or effectiveness and best fits with our goals, desires, values, and so on.
Problems solving and decision making tools
Problem solving and decision making are closely linked, and each requires creativity inidentifying and developing options. There are several tools:
2-Pros and Cons method
3- Deming Wheel or PDCA
4-Cause and effect diagram
The selection of an appropriate one is not an easy task and depends on the concrete decision problem, as well as on the objectives of the decision makers.Sometimes, the «simpler the method, the better», but complex decision problems may require complex method as well.
Each tool has a specific application that will guide us in analyzing the problem and in explaining our solution to others.
Generally, these steps are followed to figure out problems:
Step 1- Identify the problem or opportunity
- Defining the problem
- Verifying yourunderstanding of the problems
- Prioritize the problem
- Establish the objective ( define what you want to achieve)
- Agree on the process ( Know how the final decision will be made)
- Establish a schedule...
Step2- Gather relevant information as much as possible because having all the facts gives the decision maker a much better chance of making the appropriate decision. When an uninformed decision...