Report on Problem Solving and Decision Making in Management

This report delves into the critical aspects of problem-solving and decision-making within the context of operation management. It emphasizes the significance of these skills in achieving organizational excellence and meeting customer expectations. The report outlines the essential steps involved in the decision-making process, including problem analysis, information gathering, pros and cons evaluation, and solution selection. It also explores the challenges faced in decision-making, such as information overload and misidentifying problems, and highlights the importance of problem-solving methodologies. Furthermore, the report discusses various decision-making models, like the Vroom-Yetton-Jago model, and their impact on decision quality, subordinate commitment, and time constraints. The report concludes by underscoring the direct relationship between effective decision-making and the overall quality of products and services, ultimately contributing to the financial health and success of a business. The report also mentions the importance of operation management and its functions within an organization.

Running head: PROBLEM SOLVING AND DECISSION MAKING
PROBLEM SOLVING AND DECISSION MAKING
Name of Student
Name of University
Author’s Note

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PROBLEM SOLVING AND DECISSION MAKING
ABSTRACT
This report is based on the problem solving and decision making in operation management. In
order to prove the decision making and problem solving skills this report reflects the significance
of the decision making and problem solving. The report also provides the steps that a manger
needs to take in order to complete the decision making process. How to analyse the problem in
the company are also being provided. The models that can be used to mitigate such problem are
also being highlighted in this report.

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Table of Contents
INTRODUCTION:..............................................................................................................4
IMPORTANCE OF DECISSION MAKING:.....................................................................5
STEPS FOR DECISSION MAKING AND PROBLEM SOLVING:................................5
 Analyse the Problem:.................................................................................................5
 Gather Information:...................................................................................................6
 Weigh Pros and Cons:...............................................................................................6
 Decide of the Solutions:.............................................................................................7
OPERATION MANAGEMENT:........................................................................................7
OPERATION DECISION MAKING:................................................................................8
SIGNIFICANCE OF DECISION MAKING IN OPERATION MANAGEMENT:..........9
 Pervasive Functions:..................................................................................................9
 Indispensable Component:.........................................................................................9
 Successful Operations of the Business:.....................................................................9
CHALLENGES OF DECISSION MAKING:...................................................................10
 Information Overload:.............................................................................................11
 Insufficient Information:..........................................................................................11
 Misidentifying the problem:....................................................................................11
 Overconfidence in Outcome:...................................................................................12
 Impulsiveness:.........................................................................................................12

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 Options and Objectivity:..........................................................................................12
 Failed to Follow-up:................................................................................................12
SIGNIFICANCE OF PROBLEM SOLVING:..................................................................13
 Define the Problem:.................................................................................................13
 Generate Alternative Solutions:...............................................................................13
 Evaluation:...............................................................................................................13
 Implementation:.......................................................................................................14
DECISION MAKING MODEL:.......................................................................................14
 The Vroom-Yetton-Jago Decision Model:..............................................................14
 Decision Quality..................................................................................................15
 Subordinate commitment:....................................................................................15
 Time Constraint:......................................................................................................15
CONCLUSIONS:..............................................................................................................16
REFERENCES:.................................................................................................................17

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PROBLEM SOLVING AND DECISSION MAKING
INTRODUCTION:
In the business world the most important stakeholder for any company is the customer.
Meeting the customer expectations is one of the most important priorities for every business
entity. In order to meet the customer’s expectations the companies around the world perceives to
increase the degree of quality of their products and services. Quality of the product or service is
perceptual, conditional and subjective in nature. As per American Society for Quality, quality
can be defined as the ability to satisfy the needs of the consumers.
In order to perceive the quality of any product and service different processes are used.
Quality planning is the process of identifying the quality standards that are associated with the
products and services delivered by the organizations. It mainly determines the policies, standards
and many more in order to identify the quality gap. Organizations often go for quality assurance
after quality planning. In this process the quality of the products and services are being compared
with the quality standards. Organizations uses quality control process in order to move out the
products and services from the production line that does not performed as per the mentioned
standard. In order to improve the total quality of the products and services total quality
management is very much required. In order to manage the total quality of the organizations the
management needs to conduct the quality improvements programme that are done in planning,
training, field testing and auditing process of the product.
Problem solving and decision making are considered as the fundamental of total quality.
The right decisions are the key to solve the existing problems that nearly deteriorates the
performance of the organizations. There is a direct relationship between the decision making and
the quality of the products. If the management failed to take proper decisions then the quality of

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the products and services will deteriorate and will directly affects the financial health of the
company. Thus, this report tries to identify whether the improvement of the decision making
process of the company increases the quality of the product.
IMPORTANCE OF DECISSION MAKING:
Decision making and problem solving skills are an essential part for any business entity.
Both decision making and problem solving skills go hand-in-hand. Using the proper decision
making and problem solving strategies can enhance the financial health of the company. The
decisions making and problem solving can assists the organizations to review the situations very
minutely and even organize the ideas that are associated with the situations. It also assists the
organization to create a plan of action. It also assists the management of the company to predict
the consequences of decisions (Bhattacharya et al., 2014). The better decision making also
enables the organization to gain competitive advantage in the industry. The proper decision
making assists any business entity to develop products and services that can satisfy the
customers’ expectations. This will ensure the high revenue for the company. In order to gain
profitability the management of the company needs to spend maximum time in decision making
and problem solving.
STEPS FOR DECISSION MAKING AND PROBLEM SOLVING:
In order to identify the problems and making decisions on solutions the management of
the company needs to follows certain steps. These steps are explained below:
 Analyse the Problem:
In order to use problem solving skills and decision making skills it is very
important to identify the problems that are associated with the entity. The management

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needs to search for the roots of the problems. The management also needs to access the
road map of the problem. In order to mitigate the problem the management needs to
consider for seeking other’s opinion, so that they can have different outlook.
It is very important for the management to determine whether the problem needs
any kind of action or not. The management also needs to access the time they require to resolve
the issue. In this way the management can understand the severity of the issue. On the basis of
the severity of the issue the management needs to determine the steps that are required to
mitigate the problem.
It is also very important for the management to oversee whether the rising problem will
have any after affect or not. If yes then the management needs to implement safety policies.
 Gather Information:
In order to understand the intensity of the problem the management needs to
gather information from various sources. Reviewing of all the related documents plays a
significant role in the information gathering process. This information will help to
support the thoughts of the management. The documentation that the management needs
to consider are financial statements of the company, marketing metrics of the company,
customer acquisition cost and other problem relate documents. The review of all this
document will enable the management to create a strategy.
 Weigh Pros and Cons:
Reviewing the advantages and disadvantages of the problem is one of the most
important steps. The management can use SWOT analysis or different techniques in
order to find the advantages and disadvantages that are associated with the problems. The

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pros and cons of the solutions are also needs to reviewed by the management. In this way
the management can develop proper safeguard for the company from the rising solutions.
It is also advisable for the management to search for more than one solution. In this way
they can have broader perspective. This will enable the management to develop a solution that
carries low risk and high return.
 Decide of the Solutions:
After analysing the problems, reviewing of all problem related documents and
assessing the pros and cons of the solutions the management needs to consider few
things. They are amount of risk that is associated with the solutions, possible outcomes
from the solutions, existence of side effects and the percentage of success. In this way the
management can identify proper solutions that will assist the entity to mitigate the
problem.
After completing the problem solving and decision making process the
management can easily implement the solution in the operation of the business entity.
OPERATION MANAGEMENT:
The management that engaged in the production and distribution of products or services
is known as operation management. It includes different sets of activities like production of the
product, development of the product, distribution of the product and also creation of the product.
Operation management also focuses in developing the inputs into outputs (Ferrell & Fraedrich,
2015). Various inputs like labour and capital. Operation management plays a significant role in
the process of decision making. In order to achieve the demand of the customers, operation

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management plays a very vital role. In order to transfer the inputs into outputs the decision-
making process plays a major role.
Operation management oversee all kinds of operations in an organization. The main
functions of the operation management are Managing Purchases, material management,
inventory control, production planning, quality control, quality assurance, distribution network
and logistics management.
OPERATION DECISION MAKING:
In order to take operation management decisions, it is very important to design the supply
chain of the company. Thus, the management of the company needs to take decisions regarding
the shorter horizon of supply chain. In order to create unwavering supply chain design, the
management of the company needs to take tactical decisions making. The management needs to
create tactics about the demand forecasting, production planning, procurement planning,
distribution planning, inventory management, relationship management and customer order
processing.
The major decision making areas in operation management are location, production,
distribution and inventory. Location decision making is one of the most critical decisions a
operation manager needs to take. The good location assists both production and distribution
process of any business entity. The better location reduces the production cost and transportation
cost (Steenkamp & Van der Lingen 2014). The transportation cost directly affects the
distribution management of the company. The production cost of the company also reduced if
the transportation cost of the company reduces. The next most important decisions making is the
inventory decisions making. Inventory decisions making assists the company to coordinate

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production and stocking management. In order to manage the inventory of any business entity
logistics management plays an important role.
SIGNIFICANCE OF DECISION MAKING IN OPERATION MANAGEMENT:
Decision making is the process of selecting best course of action among array of
alternatives under operation management. In order to follow the several set of activities the
decision making for operation management is very important. These functions are as follows:
 Pervasive Functions:
Decision making is one of the essential parts for every level manager. The
manager from top level to operational level requires taking decision. Top level managers
require decision making in order to take strategic decisions like planning, organizing,
controlling and directing. The middle level managers require decision making for making
tactical decision making like work division, authority fixation, efforts integration and
many more. Operational level management also uses decision making process for
scheduling of daily works, work division and even authority delegation (Kahraman, Onar
& Oztaysi, 2015).
 Indispensable Component:
Decision making is one of the integral parts of management functions. It not only
assists the management to reach to the desired end, but it also assists the management to
successfully operate the business. It covers every part of the organizational structures.
 Successful Operations of the Business:
Decision making of the business is one of the most important tools for successful
operations of the business. In the course of life of any company many problems arise

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related with the operations of the company. These problems can be solved using the
decision making process of the management.
CHALLENGES OF DECISSION MAKING:
As discussed above decision making is a tenuous process for the management, as the
future of any business entity depends on it. The significance of decision making increases when
the management of the company wants to design operations of that entity. In order to take right
decision, the management faces a series of problems. These challenges are explained below:
 Information Overload:
Availability of lots of information is usually beneficial for the management of any
business entity. The problem rises when the information that are provided to the
management of the company are not corelated. The collation of information using
different methods is one of the most vital criteria for decision making. Thus, collating of
information is one of the major criteria that all management of the business entity should
consider before taking any decisions (Hsu 2015).
 Insufficient Information:
In order to take decisions, the management requires lots of information. When the
management has limited access to the information then the result will be less effective
and hence the operations of the company may get hampered. Thus, the management
needs to spend consider spending considerable amount of time for collecting information.