Learning Objectives
 4.1 Recognize and define an existing or
potential workplace problem.
 4.2 List the nine steps that comprise a
systematic approach to problem solving.
 4.3 Describe the relationship between ethics
and decision making.
 4.4 Identify tools managers can use to
facilitate decision making.
 4.5 Describe the importance of creativity and
brainstorming in solving problems.
Problems: Cause and Effect
• Problem solving may well be one of the most important tasks in the
day to day work of a manager.
• Given the complexity inherent in most problems, problem solving is
among the most deficient skills in managers.
• Research suggests that as high as 50 percent of managerial
decisions either fail or are not optimal.
What is a
Problem?
• A problem is an unsettled matter or
disturbing condition that raises puzzling
questions about its specific nature and
demands resolution by decisive action.
• A problem exists when there is a substantial
difference between an expected condition
and an actual condition that has occurred or
is now occurring.
• Problems usually require making a
decision/choice from among multiple options.
Problem Classifications
• Current Problems – Problems that have already been observed or
are occurring presently.
• Potential Problems – Problems that lie in the near future, but that
managers must be aware of their potential presence and impact.
• Problems and their solutions are related to the management
process. Managers must solve problems when they plan, organize,
staff, lead, and control. Otherwise problems interfere with the
attainment of departmental goals.
What causes a
Problem?
CHANGE!
• If everything operates exactly as it should,
and the situation remains as it has been, few
problems will occur. Unfortunately change,
especially unwanted change is always
present.
• Change occurs in material, technology and
equipment, employee attitudes,
specifications received from customers, the
work space itself, etc.
Problem Solving
• Problem solving is the process of systematically analyzing gaps
between expected and actual conditions to find and remedy their
causes.
• Managers need to be constantly on alert for cause-effect
relationships between changing conditions and valued results.
Solving Problems Effectively
• The first step in any good problem-solving process is to define and
structure the problem.
• A common mistake in problem solving is starting with the solution
rather then with the problem.
Solving the Wrong Problem Precisely
• There are several ways in which people solve the wrong
problem precisely, which includes:
• Picking the wrong stakeholders
• Framing the problem to narrowly
• Failure to think systematically
• Failure to find facts
9 Step
Problem Solving
Systematic Approach
• Step 1 – State the problem clearly and specifically
• Step 2 – Collect all information relevant to the problem
• Step 3 – List as many possible causes for the problem as you
can
• Step 4 – Select the cause or causes that seem most likely
• Step 5 – Suggest as many solutions as you can to remove
causes and over come obstacles
• Step 6 – Evaluate the pros and cons of each proposed solution
• Step 7 – Choose the solution you think is best
• Step 8 – Spell out a plan of action to carry out your solution
• Step 9 – Implement the solution and learn from the experience
Decisions
• Decision making is part of the problem solving process and involves
choosing from among various alternatives.
• Most managerial decisions are made to solve or avoid problems.
Ethics and Decision Making
• All managers are faced with issues related to ethics or moral
standards of conduct.
• Pressures to deviate from one’s moral standards can come from
superiors, peers, employees, competitors, and others.
• Business ethics is the capacity to recognize moral issues in the
workplace and apply relevant moral principles and standards of
conduct to make fair decisions.
• Standards for acceptable conduct in business are determined by
the organization, as well as by stakeholders and employees’
personal principles and values.
Ethical Conduct and Ethical Issues
• Ethical conduct builds trust among employees and businesses,
which validates and promotes confidence in business relationships.
• An ethical issue is an identifiable problem, situation, or opportunity
that requires a person to choose from among several actions that
may be evaluated as right or wrong, ethical or unethical.
• In business ethical issues often involve weighing monetary profit
against what a person considers appropriate conduct.
• The best way to judge the ethics of a decision is to look at a
situation from a customer’s or competitor’s viewpoint.
Ethical Issue Categorization
• Many ethical issues can be categorized in the context of their
relation with:
• Misuse of company resources
• Abusive and intimidating behavior
• Conflict of interest
• Fairness and honesty
• Communications
• Business relationships
Misuse of Company Resources
• Can range from excessive use of e-mail at work to unauthorized
use of equipment and computer systems to embezzling of company
funds.
• It can also include time theft, which is estimated to cost companies
hundreds of billions of dollars annually.
• The average employee steals 4.5 hours per week with late arrivals,
early departures, long lunch breaks, inappropriate sick days,
excessive socializing, and engaging in personal activities such as
online shopping while on the job.
• Many companies have implemented official policies delineating
acceptable use of company resources.
Abusive and Intimidating Behavior
• Can mean anything from physical threats, false accusations,
profanity, insults, yelling, harshness, and unreasonableness.
• The time that many companies spend in solving abusive
relationships can be detrimental to the companies success.
• Abusive behavior can be difficult to assess and manage because of
the diversity in culture and lifestyle.
Conflict of Interest
• Exists when a person chooses to advance his or her own personal
interests over those of the business.
• To avoid conflict of interest managers must be able to separate their
personal interests from business dealings.
• Bribes – payments, gifts, or special favors intended to influence the
outcome of a decision are considered to be conflicts of interest.
Fairness and Honesty
• Relates to the general values of decision makers.
• Managers are expected to follow all applicable laws and
regulations.
• Managers are also expected not to harm customers, employees,
clients, or competitors knowingly through deception,
misrepresentation, coercion, or discrimination.
• Honesty and fairness can relate to how employees use resources
of the organization.
Communications
• Ethics in communications evolves around false and misleading
information, as well as deceptive personal-selling tactics.
• Deceptive and misleading tactics in communication can lead to the
failure of a business, as truthfulness about product safety and
quality are important to consumers.
Business Relationships
• The behavior of managers toward customers, suppliers, and
employees may generate ethical concerns about keeping company
secrets, meeting obligations and responsibilities, and expecting
others to act unethically.
• Managers, because of the authority of their position have the
opportunity to influence employees’ actions.
• It is the responsibility of managers to create a work environment
that helps the organization achieve its objectives and fulfill its
responsibilities. But the methods used should not compromise
employee rights.
What is
Plagiarism?
Plagiarism involves taking someone else’s
work and presenting it as your own without
giving credit to the source.
Questions to Consider when Determining
Whether an Action is Ethical
• Are there any potential legal restrictions or violations that could
result from the action? Does your company have a specific code of
ethics or policy on the action?
• How would customers view the activity or action?
• Is the activity customary in your industry? Are there any industry
trade groups that provide guidelines or codes of conduct that
address this issue?
• Would this activity be accepted by your co-workers? Will your
decision or action withstand open discussion with co-workers and
managers and survive untarnished?
• How does this activity fit with your own beliefs and values?
Ethical Decision Factors
• Ethical decisions in an organization are influenced by three
key factors:
• Individual moral standards
• The influence of managers and co-workers
• The opportunity to engage in misconduct
Code of Ethics
• Formalized rules and standards that define an organization’s values
and acceptable workplace behaviors.
• A code of ethics should not be so detailed as to cover every
situation, but should provide guidelines and principles that can help
employees achieve organizational objectives and address risks in
an acceptable and ethical way.
Ethical Codes
• Some of the areas traditionally covered in a code of ethics
include the following:
• Honesty and integrity
• Respect and fair treatment
• Competence
• Objectivity
• Accountability
• Fair business practices
• Professional balance
• Corporate stewardship
ICPM
Code of Ethics
The Institute of Certified Professional
Managers (ICPM) uses a code of ethics to
describe its practice expectations for Certified
Managers. All managers obtaining a CM
certification, a professional credential for
middle managers, must attest to follow the
code annually. The code is as follows:
ICPM Code of Ethics
• I will recognize that management is a call to service with
responsibilities to my direct reports, associates, supervisors,
employer, community, nation and world.
• I will maintain honest relation with customers, suppliers,
management and employees.
• I will recognize that, as a leader, my own pattern of work and life will
exert more influence than what I say or write.
• I will give the same consideration to the rights and interests of
others that I ask for myself.
• I will consider and look for value in the ideas and opinions of others.
ICPM Code of Ethics
• I will regard my role as a manager as an obligation to help others
achieve personal and professional fulfillment.
• I will set reasonable performance goals for myself and for my direct
reports and balance interests of management and employees
during challenging times.
• I will promote and practice management principles and methods I
have learned in achieving management certification.
• I will report and encourage others to report unethical business
practices to appropriate authorities.
• I will discourage and confront any inappropriate behavior observed
or reported to me.
What is
Whistleblowing?
• Whistleblowing is the act of an employee exposing
an employer’s wrongdoing to outsiders, such as the
media or government regulatory agency.
• One the most important components of an ethics
program is a means through which employees can
report observed misconduct anonymously.
• Many companies are establishing programs to
encourage employees to report illegal or unethical
practices internally so that they can take steps to
remedy problems before they result in legal action or
generate negative publicity.
Current Trend in Ethics
• The current trend is to move away from legally based ethical
initiatives to cultural or integrity based initiatives that make ethics
part of core organizational values.
• Organizational ethics initiatives have been supportive of many
positive organizational objectives such as profitability, hiring,
employee satisfaction, and customer loyalty.
• Lack of organizational ethics and the absence of workplace values
can have a negative impact on organizational objectives and
employee retention.
Decision Making Methods
• Decision Tree – A graphic portrait of the possible outcomes of
alternative solutions.
• Cost-benefit Analysis – A technique for weighing the pros and
cons of alternative courses of action.
• Programmed Decision – A solution to a recurring problem that can
be established for continual use every time the problem reappears.
• ABC Analysis – Concept based on economic fact: A vital few
problems usually account for the greatest loss, while a modest
number of opportunities tend to account for the greatest gain.
Creativity and Problem Solving
• Creativity is the generation of new solutions to existing problems
by using techniques to encourage “out of the box” thinking.
• Manager and their staff must look at situations from a unique
perspective and try to make connections that are not normally
made.
• Creativity can lead to new combinations of previous problem
solving approaches or totally unexpected innovations.
Systematic Approach to Creativity
• Narrow down the problem or the target.
• Concentrate on the problem.
• Persevere and be patient.
• Take action.
What is
Brainstorming?
• Brainstorming is a group approach to creative
idea generation.
• Four rules for a successful brainstorming session
are:
– Don’t criticize ideas.
– Generate new ideas freely.
– Strive for quantity.
– Combine and improve.