Welcome to the HKUST MBA Program!

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Welcome to the HKUST MBA Program!

• RESIDENTIAL COURSE MGTO 521
• MANAGERIAL PROBLEM SOLVING

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MGTO 521 Managerial Problem Solving

• Steve DeKrey
• Stephen Nason Katherine Xin
• Hong Kong University of Science and Technology
• sjdekrey_at_ust.hk
• mnsnason_at_ust.hk
• mnkxin_at_ust.hk

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MGTO 521 Managerial Problem Solving

• Teaching Assistants
• Anindita Banerjee
• Ann Fok
• Cubie Lau
• Michelle To
• Hong Kong University of Science and Technology

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Course Objectives

• To understand the basic modes of decision making
• To experience decision making in groups and
  examine the dynamics
• To practice problem solving skills which includes
  spotting problems, framing them correctly, and
  implementing appropriate solutions
• To receive feedback on your own style from the
  group

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Today! Day 1

• Why this course???
• Lets get acquainted
• Desert survival Exercise
• Decision making/Problem Solving
• Teams a preliminary look
• Minicase SIA Tanglin Polymers
• Learning with Cases (Mauffette-Leenders, Erskine,
  Leenders)

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Why This Course??? Introductions Expectations

• Why managerial problem solving??
• Problem solving, decision making the essence of
  management
• Is there a difference between decision making
  and problem solving?
• A key role of LEADERS the art of PROBLEM FINDING

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- From Smart Thinking for Crazy Times by Ian
Mitroff

• Where is the true competitive edge that will
  separate successful individuals, organizations,
  societies from the also-rans?

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Focus on PROCESS,Not SOLUTIONS

• Spot the right problems
• Frame them correctly
• Implement appropriate solutions

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An Experiential Learning Exercise

• Participate
• Observe
• Reflect, Learn, and have fun

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Lets Get Acquainted!!
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The Process

• Meet with your group members in the designated
  breakout areas
• Introduce yourselves
• Learn something about each member
• Introduce an interesting fact/trait
• What do you want to accomplish this week?
• Please take 45 minutes for this process

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The Presentation

• Establish a team identity - a name, a symbol
• Introduce team members in a memorable way
• What are the team objectives and goals for this
  class?
• Each team has 5 minutes!!!

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What Is an Organization?

• Definition Social entities, goal directed,
  deliberately structured activity systems, linked
  to external environment

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Organizations as Systems

• Open systems
• Organization subsystems
• boundary spanning
• production
• maintenance
• adaptive
• management

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Structural Dimensions of Organizations

• Formalization
• Specialization
• Standardization
• Hierarchy of authority
• Complexity
• Centralization
• Professionalism
• Personnel ratios

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Levels of Analysis

• Organization
• Departments
• Groups and teams
• Individuals

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The External Environment

• Task environment
• Industry sector
• Market sector
• Human resource sector
• International sector
• General environment
• Government and political
• Economic and financial
• Technological
• Socio-demographic

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Organic versus Mechanistic

• Low specialization
• More teamwork
• More participation
• Less hierarchy
• Less formalization
• More decentralization
• Horizontal communication

• High specialization
• Rigid defined areas
• More authority
• More hierarchy
• More formalized
• Centralized decision-making
• Vertical communication

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Decision Making Processes
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What Is Decision Making?

• The process by which members of an organization
  choose a specific course of action to respond to
  both problems and opportunities.

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Types of Decisions

• Programmed Decisions
• decisions made in response to recurring problems
  and opportunities
• Non-programmed Decisions
• decisions made in response to novel problems and
  opportunities

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Decision-Making Process

• Rational Model of decision making
• Boundedly Rational Model of Decision Making
  (March and Simon)
• Intuition

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Rational Model of Decision Making

• Based on assumption that decision maker has all
  necessary information and will choose the best
  possible solution.

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The Rational Model

• Define the problem
• Identify criteria
• Weight the criteria
• Generate alternatives
• Rate alternatives on each criterion
• Compute the optimal decision

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How managers actually make decisions (March
Simon)

• People making decisions subject to
• Incomplete information,
• Psychological and sociological processes,
• Limited cognitive abilities
• Which affect decision making such that decision
  makers
• make boudedly rational decisions and
• choose satisfactory, not optimal, solutions.

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How managers actually make decisions

• Satisficing Searching for and choosing an
  acceptable response or solution, not necessarily
  the best possible one.
• Bounded Rationality An ability to reason that
  is constrained by the limitations of the human
  mind itself.

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Intuitive Model

• Decisions result from an unconscious process
  based on intuition.
• Intuition is often based on accumulated
  experiences which allow one to recognize patterns
  so not necessarily illogical
• Problems with the intuitive model
• criteria not open to examination
• often intuition influenced by perceptual biases.

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When the World Changes . . .

• Creativity decision-making process that
  produces novel and useful ideas
• Innovation successful implementation of
  creative ideas

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Desert Survival Exercise
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Desert Survival What Did We Learn?

• Group decision making Slower but better
• Takes longer! MUCH longer
• On average, more input, more information, thus
  better decisions
• But always some who are WORSE off in groups
• Why does group not hear these people?
• How can groups improve?

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Advantages of Group Decision Making

• Wide range of knowledge and experience
• Enhanced memory about facts
• Acceptance is high by participants
• Understanding by participants is high

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Disadvantages of Group Decision Making

• Social pressure may create conformity
• Groups tend towards riskier decisions
• Time consuming
• Premature closure

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Other Consequences of Group Decision Making

• Diffusion of Responsibility
• Group Polarization
• Potential for Conflict

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Is it a Group Decision?

• Type of problem or task
• Is acceptance essential?
• Is quality of decision important?

• Personalities and capabilities
• Climate (cooperative or competitive)
• Time available

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The Nature of High Performing Teams
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What Are the Properties of Effectively
Functioning Teams?

• Results are consistent
• People in effective teams KNOW the answer
• But this is tacit knowledge
• We must make it explicit

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Key Success Factors for Teams

• A clear elevating goal
• Results driven structure
• Competent team members
• Unified commitment
• Collaborative climate
• Standards of excellence
• External support and recognition
• Principled leadership

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A Clear and Elevating Goal

• What does this mean?
• What is a goal?
• Clarity focused and non-political
• Elevating worth doing and personally challenging

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A Results Driven Structure

• What types of results
• Problem resolution team
• Creativity team
• Tactical team
• What kind of team are you?
• Team structure
• Roles and responsibilities
• Effective communication
• Methods for monitoring and feedback
• Emphasis on fact-based judgments

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Competent Team Members

• Right people for the task
• Technical competencies
• Personal competencies
• Best matches
• Problem solving teams intelligent, savvy, people
  sensitive, high integrity
• Creative teams cerebral, independent, tenacious
• Tactical teams loyal, committed, action oriented

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Unified Commitment

• What does this mean?
• Spirit
• Loss of self
• Unity
• How to get it?
• Involvement
• Balancing
• Expectations
• Group task and maintenance behavior only

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Collaborative Climate

• Meaning?
• Teamwork, whole gt sum of parts, working well
  together
• Four elements
• Honesty, openness, consistency, respect
• Total trust through involvement and autonomy

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Standards of Excellence

• Standards matter
• Standards are hard work
• Standards are easy to ignore
• No resting on past performance
• Standards in this class???

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External Support and Recognition

• What is this?
• Why is it important?
• Why is tangible support needed?

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Principled Leadership

• Consistency
• Courage
• Standards
• Communication skills
• Promotes the other 7 factors
• Leaders create leaders

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Learning with Cases
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Singapore Airlines Tanglin Polymers

• Discuss in your groups
• Prepare a 5-minute presentation
• One key finding the right problem
• You choose. possible topics follow

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Singapore Airlines Continuing Service
Improvement?

• You may wish to consider the following questions
• How would you answer Paul Denvers letter?
• What should SIA say or do about the staff at
  Denpasar?
• What should SIA say or do about the staff at
  Changi?
• What suggestion would you give SIA in terms of
  continuing customer service improvement?

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Tanglin Polymers Case

• You may wish to consider the following questions
• Is there a problem?
• If so, what is the problem?
• Whos problem is it?
• How would you solve the problem?

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What Is a Case?

• A description of an actual situation, commonly
  involving a decision, a challenge, an
  opportunity, a problem or an issue faced by a
  person (or persons) in an organization.
• Allows you to step figuratively into the position
  of a particular decision maker.
• Field-based with the visit of an organization and
  collection of data.
• The product of a carefully thought-out process.

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Why Do We Do Cases?

• Examine real life situations
• Practice our analytical tools
• Engage in discussion of issues/answers
• Develop professional attitudes

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Cases are frustrating!

• Never enough information
• But you are typically told dont go beyond
  case, dont use web, dont go to library
• And what is the answer? NO ONE ANSWER!

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Inventory of Skills Developed by the Case Method

• Analytical skills
• Decision making skills
• Application skills
• Oral communication skills
• Time management skills
• Interpersonal or social skills
• Creative skills
• Written communication skills

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Analyzing the Case - 7 Steps

• Defining the issue
• Analyzing case data with focus on causes and
  effects as well as constraints and opportunities
• Generating alternatives
• Selecting decision criteria
• Analyzing and evaluating alternatives
• Selecting the preferred alternative
• Developing an action and implementation plan

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Deliverables

• Issue identification
• Analysis and alternatives
• Recommendations for action
• Implementation plans

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Defining the Issues

• Produce a clear and comprehensive statement of
  the issue(s) involved in the case.
• Clearly identify key concern(s), problem(s),
  decision(s), challenge(s) or opportunity(ies).
• 3 things to be considered
• Immediate and basic issues
• Importance
• Urgency

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Analyzing Case Data

• Look at facts, numbers
• Look at causes and causes of causes
• Recognize challenges
• Identify and insert opportunities

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Generating Alternatives

• Be creative and think widely
• Consider constraints and opportunities
• Be realistic and plausible

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Selecting Decision Criteria

• Provide the basis for evaluation or assessment
  measures
• Common decision criteria
• Quantitative
• profit, cost, return on investment, market share,
  capacity, delivery time, risk, cash flow,
  inventory turnover, productivity, staff turnover,
  time to complete, growth rate, quantity
• Qualitative
• competitive advantage, customer satisfaction,
  employee morale, corporate image, ease of
  implementation, synergy, ethics, flexibility,
  safety, visual appeal, obsolescence, cultural
  sensitivity, motivation, goodwill

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Analyzing and Evaluating Alternatives

• List the key advantages and disadvantages of each
  alternative.
• Compare and contrast each alternative against the
  selected criteria by Alternative Analysis Matrix.
• Short vs long term
• Predicting outcomes
• Quantitative vs qualitative analysis

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Make a Decision

• Dont be timid or weak. Decide
• Explain your rationale
• Be ready to argue against alternatives you didn't
  select

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Developing an Action and Implementation Plan

• Be specific
• Focus to produce the advantages and minimize the
  disadvantages
• Planning the implementation
• Provide a schedule and milestones for the action
  plan
• Provide measures or signals for progress

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SMART Action Plan

• Specific
• Measurable
• Action-oriented (not statement)
• Realistic
• Time-anchored

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Airline Industry

• Mistakes in this industry can lead to business
  failure
• Some of yesterdays leaders are GONE
• Think strategically and tactically
• Many models can help analysis, but . . .
• Problem finding part science, part art
• Possible leading questions

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Cathay Pacific Service Straight From the Heart

• What were the most important forces promoting
  change for Cathay ISD during Buecklings term?
• What were the most important forces promoting
  change for Cathay ISD during Wrights term?
• What forces impeded these changes?
• What worked well? Less well? Why?
• What is the one most important thing Wright
  should do in the next 24 months?
• (Note Do not answer all of these. In fact, you
  may ask an entirely different question)

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Cathay Pacific A View from the Top

• What internal problems has Cathay faced in the
  past?
• Might these old internal problems cause problems
  in the future?
• What external problems has Cathay faced in the
  past?
• What external problems might impact Cathays
  future?
• As Phillip Chen asks, what should Cathay be ten
  years in the future?

(Note Do not answer all of these. In fact, you
may ask an entirely different question)
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Format for Presentations

• Each team has 10 minutes including QA
• Be concise, be precise
• Not every group member needs to talk
• Use PowerPoint

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Technical Issues

• If you save your presentation on USB memory,
  check tonight to insure it works on our computer!
• Tonight, have one team member learn all the
  presentation technology (visualizer, computer,
  microphones, etc.)

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Will this be a lot of work?

• No pain, no gain!