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CREATIVE DECISION MAKING AND RESEARCHChapter 3Describe the role
of research in business decision making.Present a creative and
analytical decision-making process.Discuss the importance of
writing actionable research questions.Suggest techniques for being
more creative.Understand concepts related to evaluating
alternatives and choice.
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Research and Decision-Making Go Together C-A-B
PROCESSCreative-Analytical-Business Decision-Making ProcessResearch
QuestionsCreativityEvaluation & ChoiceImplementation
Research
Feedback
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How much research?Routine decisions require little research.
Unfamiliar decisions with high risk require much research.
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Research has value two ways!Provides a more informed answer to
the current question.Increases the knowledge of personnel so that
more informed decisions can be made in general.
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DECISION MAKING PROCESSBusiness decision-making = selectingfrom
among alternative courses ofaction each likely to have adifferent
outcome.1. Opportunity = a situation where a potentially
advantageous outcome is possible.2. Crisis management = a decision-
making situation that occurs with little notice and has great
potential for negative implications.
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IDENTIFYING DECISION-MAKING SITUATIONSDSSMIS
CrisisPure OpportunityImmediate Response NeededUnplanned
TacticalPreprogrammed Solution Usually UsedResponse Can Be Timed
(Long-Run Orientation)Plan can be developedStrategic Novel Solution
Often Desired
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BUSINESS DECISION MAKING PROCESSDecision maker identifies issues
and/or problems.Available information is screened.Decision maker
and researcher translate issues/problems into researchable
questions.Knowledge is acquired through research.Decisions are made
to reach a more desirable future situation.
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BARRIERS TO EFFECTIVE PROBLEM IDENTIFICATION AND ACTIONABLE
RESEARCH QUESTIONS:Incorrect AssumptionsFunctional
FixednessExpedienceCommunication DifficultiesThe SolutionUnclear
GoalsDeveloping better vision.
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Functional FixednessOnce one learns an effective rule or action,
increased familiarity with the process makes it difficult to see
other ways of doing the same thing, even if they are simpler and
better. That is, it creates tunnel vision.
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BEATING FUNCTIONAL FIXEDNESSInterrogatories.What ___?Why
___?When___?Where ___?Who ___?How ___?Invite Multiple
Solutions.Identify WAYS not a WAY!?
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EFFECTIVE COMMUNICATIONS. . . are essential because multiple
people are usually involved in the decision making process.
Effective communications make effective research questions more
likely!
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INVITING MULTIPLE SOLUTIONSToo often we tend to work on the most
obvious question, or the first one posed.Considering a larger
number of potential questions and solutions leads to better
research, better answers, and improved decision making.
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ISSUES OR SYMPTOMS?Issues are the things that if altered will
close the gap between the actual and the desired situation.Symptoms
are signals that some change is needed to avoid further problems or
to take advantage of an opportunity.Effective communication insures
that research and decision making are directed toward issues and
not symptoms!
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ISSUES, SYMPTOMS, RESEARCH QUESTIONS
SymptomPotential IssuesDecision IssuesResearch
QuestionsStock-outs are reduced from last yearShelf space reduction
has lowered retail inventories?Should we increase slotting
allowances in an effort to gain more shelf space?What is the
relationship between shelf space and retail sales?Churn-rate is
highest in the marketService provider unfriendly?Should we change
service management procedures?Is service provider friendliness
related to churn rate?Labor costs are higher than the
competitionsEmployee sick days are too high?Should we create flex-
time?Do flexible schedules create increased labor efficiency (lower
labor costs)?
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CREATIVITY. . . involves combining and synthesizing information
into novel ideas.. . . is a divergent thinking exercise.. . . means
developing many possible alternatives, not just one.
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BARRIERS TO CREATIVITYFunctional Fixedness.Group Think.Emotional
Inhibition.Expediency.
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BUSINESS PEOPLE LACK CREATIVITYQuantity creates quality.Defer
judgment.Craziness should be encouraged.Get away from the
situation.Run with your ideas.Thus, their decision making lacks
creativity too. So, tips for adding creativity . . . .
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HEURISTIC IDEATION TECHNIQUE. . . is a very effective way of
combining lists and forced combinations to develop large numbers of
ideas in a very short period of time.
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Heuristic Ideation Matrix [HIT]What do people eat for
breakfast?How can food be cooked?Identify possible new breakfast
foods.
What/How:FriedBoiledRawBakedColdMWToastedFrozenGrilledw/FruitBread12345678910Cereal11121314151617181920Pancakes21222324252627282930Muffins31323334353637383940Scones41424344454647484950Bagels51525354555657585960Eggs61626364656667686970Bacon71727374757677787980Ham81828384858687888990Yogurt919293949596979899100
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EVALUATION AND CHOICEThe best decision makers avoid any
evaluation until a large set of alternatives has been developed.The
goal of evaluation and choice is to narrow down the alternative
courses of action to those most likely to produce a good
outcome.Preliminary screening is used to reduce large numbers of
alternatives to a more manageable number.
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EVALUATIVE CRITERIA . . . characteristics used to judge the
merits of alternatives. Good alternatives generally have high
levels of some or all of the
following:Advantageousness.Trialability.Observability.Consistency.Simplicity.
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FIELD TESTSTest Market an experiment evaluating a new product or
promotion under real market conditions.Pilot Test small scale
implementation of an idea being considered.
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IMPLEMENTATION Critical to success.good idea + poor
implementation = poor result.Often a problem unto itself.C-A-B used
again.
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MONITORINGAssessing the extent to which a decision is
accomplishing its stated objective.MIS and DSS useful
again.Requires feedback.Creates learning instead of failing.
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SUMMARYDescribed the role of research in helping make effective
business decisions.Presented a C-A-B process.Discussed importance
of actionable research questions.Identified approaches for better
problem definition.Suggested ways to enhance creativity.Discussed
concepts related to evaluation and choice of alternative
decisions.