DevelopingManagementSkills3

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Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Chapter 3

Problem Solving and EthicsBarbara M Fowler

[email protected]

The Challenge of Problem Solving

Problem Solving Myths– Taking action is better than standing by– Trust your gut– I know when I’m making a poor decision– Dividing an elephant in half makes two small

elephants– Ethics is not my problem– Ethical abuses are due to unethical people

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Why Smart People Make Bad Decisions

• Intuition – represents a collection of what we’ve learned

about the world, without knowing that we actually learned it

• Common for intuition to be influenced by unconscious biases

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• Inference – conclusion drawn about what we don’t know

based on things we do know

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Ladder of Inference

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• Fundamental attribution error – people tend to over attribute behavior to internal

rather than external causes

• Self-serving bias – people attribute personal success to internal

causes and personal failures to external causes

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Ways People Exercise Poor Judgment Without Knowing It

• Availability• Representativeness• Anchoring and Adjustment• Confirmation• Overconfidence• Escalation of Commitment

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• Availability bias – things that are more readily available to us are

likely to be interpreted as more frequent or important

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• Hasty generalization fallacy – people often draw inappropriate general

conclusions from specific cases because they do not realize that their specific example is not necessarily so in most cases

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Question?

What is the tendency is to collect evidence that supports rather than negates our intuition before deciding?

A. AnchoringB. AdjustingC. Confirmation biasD. Overconfidence bias

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• Anchoring and adjusting– Different starting points lead to different end

results

• Confirmation bias – tendency is to collect evidence that supports

rather than negates our intuition before deciding

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• Overconfidence bias – we posses some unique trait or ability that allows

us to defy odds, whereas others simply don’t have such a trait

• Escalation of commitment – people are likely to continue to invest additional

resources in failing courses of action even though no foreseeable payoff is evident

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Overcoming Judgment Biases

1. Confidence estimates2. Trial and error3. Healthy skepticism

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Best Defenses for Decision Biases

1. Do not jump to conclusions2. Do not assume a relationship is a cause3. Do not base your conclusion only on your

own experience4. Do not just look to support your case 5. Do not fall prey to overconfidence

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Question?

What type of decision is made when the most acceptable solution to a problem is chosen rather than the optimal one?

A. Bounded rationalityB. SatisfyingC. SatisficingD. PADIL

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Solving Problems Ethically and Effectively

• Bounded rationality – thinking and reasoning ability is constrained by the

limitations of our minds – It is impossible to consider simultaneously all

information relevant to any decision or problem

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Solving Problems Ethically and Effectively

• Satisficing – determining the most acceptable solution to a

problem rather than an optimal one

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A Problem Solving Framework

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PADIL


• Define and Structure the Problem– Be sure you are working on the right problem

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How people solve the wrong problem precisely1. Picking the wrong stakeholders2. Framing the problem too narrowly3. Failure to think systematically4. Failure to find the facts

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• Assess key stakeholders– Stakeholders – anyone who has a “stake” in the

problem or solution

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Vroom’s Problem Solving Approaches

• Decide• Consult individually• Consult group• Facilitate group• Delegate group

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Vroom Decision Factors

• Decision significance• Importance of commitment• Leader’s expertise• Likelihood of commitment• Employee support• Employee expertise• Employee competence

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Discussion Question?

Which is the most important decision factor?A. Decision significanceB. Importance of commitmentC. Leader’s expertiseD. Likelihood of commitment

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Framing the problem correctly– Black or white fallacy • assumes that our choices are clear and limited to two

when in reality there may be many other choices

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Thinking systematically– System • perceived whole whose elements “hang together”

because they continually affect each other over time and operate toward a common purpose

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Systems Approach

• Events• Patterns of behavior or trends• Systemic structure

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Systems Approach

• Mental models – prevailing assumptions, beliefs and values that

sustain the current systems

• Inquiry skills – understanding how to ask the right questions

about a problem

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Tools for Understanding the Problem Scope

• Affinity diagram• Is-Is not• Graphic displays• Generate creative alternatives

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Affinity Diagram1. Write the problem statement2. Allow each person to write as many potential

causes as possible3. Look for similarities in the ideas

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Graphic Displays– Histogram bar chart • allows for the display of data categories tracked against

some important standard

– Behavior over time chart (BOT)

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Generate Creative Alternatives

• Brainstorming• Brainwriting• Diversify participants• Use metaphors and analogies• Performance standards and feedback• Assume a “Perfect World”• Benchmarking

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Generate Creative Alternatives

• Benchmarking – organizational representatives trying to solve a

problem go to visit other organizations that are thought to have solved the problem successfully

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Characteristics of Good Alternatives

• Postponed evaluation• Stakeholder involvement• Organizational focus• Time implications• Effective

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Paralyzed by Choices

• Equifinality – condition in which different initial conditions lead

to similar effects

• Devil’s advocate – method for increasing debate and exploring a

problem from all the angles

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Implementing the Solution

• Implementing a solution involves others• Does not have to happen all at once• Often the scope of the problem is

underestimated or the problem is defined incorrectly

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Ethics: Making the Tough Choices

• Ethical commitment – level of desire to do what is right even in the face of

potential personal implications

• Ethical consciousness – developing an ability to understand the ramifications of

choosing less ethical courses of action

• Ethical competency – involves a thoughtful consideration of ethics in each stage

of the problem solving process

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Right vs. Right Scenarios

• Truth vs. loyalty• Individual vs. community• Short-term vs. long-term• Justice vs. mercy

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Fairness in Decision-Making

• Economics• Equality • Justice

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Justice

• Distributive justice – perceived when people view fairness of a

particular outcome• Procedural justice – perceived when the process used to make

decisions is fair• Interactional justice – perceived when people treat others respectfully

and explain decisions adequately

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Intensity of Ethical Issues

• Magnitude of consequences• Social consensus of good/evil• Probability of harm/benefit• Temporal immediacy• Proximity• Concentration of effect

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Making the Tough Choices

Moral imagination is the ability to:1. Step out of one’s situation and see the

possible ethical problems present2. Imagine other possibilities and alternatives3. Evaluate from an ethical new possibility one

has envisioned

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Rationalizations and Ethical Traps

• If it’s legal, it’s ethical• I was only trying to help• Everyone else

does it• It’s owed to me• As long as I don’t

gain

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Quick Tests of Your Actions

1. Is my action legal?2. Am I behaving fairly?3. Is my decision in line with my own values?4. Will others be negatively impacted?

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Test Your Ethics

• Use the self assessment at monster.com to test your business ethics

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DevelopingManagementSkills3

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