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Problem-Centered Summer Internship Projects (SIP) and Business
Consultancy Projects (BCP): New Research Paradims!swald "# $# %ascarenhas& S# $#& Ph#'#
%ay & *+*
Re,ised and epanded: $uly +& *+*
Business management in general and the MBA degree in particular, are professional practitioner subjects, just
like medicine, law, engineering, and architecture. Hence, MBA learning, unlike MCom or MA in economics, is
professional practitioner learning that needs the practice of summer internship projects (S!" and business
consultanc# projects (BC!", both of which pa$e #our wa# to permanent placement (!!". deall#, #ou must so
choose #our S! that it naturall# leads to BC!, and both of which deser$edl# terminate in #our !! in the same
industr# or compan#. %his note is premised on this hope and assumption, and seeks to maintain this ideal
transitional focus of SIP ./ BCP ./ PP. &irst, we briefl# define a problem.
0hat is a Problem1
A problem is a 's#stem at unrest (Ackoff and )mer# *+-". A s#stem is an#thing (subject, object, propert# or e$ent" that is made of two or more parts. n this sense, e$er#thing in the uni$erse is a s#stem.
A market is a s#stem. All products and ser$ices offered in the market are s#stems. A business that offers such products and ser$ices is a s#stem. An# of these s#stems could be at unrest at a gi$en time it is a business or
market, legal, social or en$ironmental problem.
/o$ernments, politics, laws and legislator bodies, econom#, culture, religion, ci$ili0ation and eras are s#stemsin the world. 1hen the# are at unrest, there are problems or the# become problems.
'A problem is a de$iation from some standard or norm of desired performance (Str#ker *+234-55*6 **+".
Hence, problems should be distinguished from decisions. 7ecisions alwa#s in$ol$e a choice among $arious
wa#s of getting a particular problem resol$ed or a task accomplished.
Business toda# is problem resolution management. %here are se$eral major problems that ha$e to be resol$ed
both at the global and national le$els, the industr# and corporation le$el and the internal departmental and
di$isional4functional le$els.
An# problem can be e8pressed in the following simple structure6 P . 2 (3& 4)& where 3 is a set of
controllable $ariables, 4 is a set of uncontrollable $ariables, and 2 is the function that relates 3 to 4 to generate
the problem P. n which case6
# Step !ne: Problem description& identi2ication and de2inition characteri5e P# 6he problem P occurs
whene,er 4 / 37 that is& when uncontrollable ,ariables dominate controllable ,ariables#
*# Step 6wo: Problem 8ormulation identi2ies each ,ariable in 3 and 4#
# Step 6hree: Problem Speci2ication speci2ies the relation o2 each ,ariable in 3 to each ,ariable in 4&
and relations within 3& and relations within 4#
9# Step 8our: Problem Resolution "lternati,es In,estiation: 0e in,estiate ,arious alternati,es that are
e22icient in reducin uncontrollable ,ariables 4 in relation to controllable ,ariables 3& or which
increases the control ratio 34#
;# Step 8i,e: Selection o2 the best amon Problem Resolution-"lternati,es e,aluated under Step 8our#
6hat is& the best resolution is that which maimi5es
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%#picall# in S! #ou handle Steps *3, and in BC! #ou e8plain to #our client steps *3, and offer consulting
ad$ise as to wh# steps *3 are correct, that #our research method and methodolog# are $alid, that #our
9uestionnaire design was based on sound theor# and h#potheses formulation$erification procedures, that #our
data collection was $alid, reliable, and objecti$e, that #our data anal#sis was technicall# thorough and $alid, and
hence, that #our conclusions are reliable, $alid, dependable and objecti$e, profitable and sociall# responsible.1hen S! and BC! are done professionall# well and technicall# perfect, !! should follow.
Business Problems and 'ecision-%a>in
Business management is about making business decisions, and e$er# business decision is a risktaking
judgment. Hence, effecti$e corporate e8ecuti$es do not make a great man# decisions6 the# concentrate on what
is important. %he# tr# to make the few important decisions on the highest le$el of conceptual understanding
and corporate undertaking. %he# prefer depth and comprehensi$eness rather than breadth and superficialit#:
the# want impact rather than techni9ue: the# want to be sound rather than cle$er (7rucker -55*6 *-".
7ecision making in the -*st centur# will be e$en more of an art and less of a science than it was a decade or two
ago. ;ot onl# is the world growing more comple8 and uncertain at a faster and faster pace, but the old
decisionmaking models are failing, and we can e8pect their failure to accelerate as well. 1ith informationo$erload and e8plosion, e8tracting rele$ant data and inferences from the torrent is increasingl# a daunting task,and for all practical purposes e8ecuti$e decision makers must often proceed with onl# partial information, and
which the# will ha$e little time to full# process and anal#0e. Hence it becomes a 'humble decision making
process, according to Amitai )t0ioni ()t0ioni -55*6
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6he Structure o2 Business Problems
%echnicall#, an# problem situation must deal with a certain le$el of knowledge and a certain le$el of certaint#
uncertaint# regarding that le$el of knowledge. %hat is, an# problem situation must confront four states of
affairs as follows6
• Relevant knowledge high and knowledge certainty high6 here the best decisionmaking approach is
rational, logical and deterministic. %here is just one solution to the problem.
• Relevant knowledge is high but knowledge certainty is low6 here the best decisionmaking approach is
fine-tuning, artistic and nondeterministic. Business data and knowledge are rarel# une9ui$ocal. %hereis one problem but with man# possible solutions.
• Relevant knowledge is low but knowledge certainty is high6 we know $er# little about the causes of
cancer, but what we know we are 9uite certain about under present conditions. n other words, there
could be man# connected problems e$en though in practice we treat them with some known solutions.
Here #ou follow a diagnostic or focused trial-and error approach. %his is what doctors do when the#cannot pinpoint the patient@s problem6 the# tr# $arious medical regimes and con$erge on the one that
works best.
• Relevant knowledge is low and knowledge certainty is low6 for instance, we ha$e $er# little knowledge
about global climate change, global pandemic diseases, global terrorism, and the like, and what we
know is hardl# certain and mostl# conjectural. Here we proceed b# a pure trial-and-error approach of
experimentation and trial balloons. %his approach often assumes no knowledge at all.
ationalism is a deepl# optimistic approach that assumes we ha$e learnt all we need to know. mplicit in the
rational model of decision making is the assumption that decision makers ha$e un9ualified power and wisdom.
%here is hardl# an# problem is business toda# that belongs to this first categor#. Most business problems
belong to the other three categories.
Currentl#, we need to know much more than e$er before. Computers and search engines pro$ide us with
abundant and often, rele$ant information. But information is not the same as knowledge. 1ithout powerful
o$erarching e8planator# schemes or theories, whate$er knowledge there is in the mountain of data we dail#amass is often in$isible. 'n short, the e8ecuti$es of toda# and tomorrow face continuing information o$erloads
but little growth in the amount of knowledge usable for most comple8 managerial decisions ()t0ioni -55*6
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)t0ioni (-55*6 353" re$iews other problem sol$ing, decisionmaking models of the*+5s and *++5s6
• ncrementalism: a 2ormal title 2or what is otherwise >nown as the science of muddling through7 it does not
ad,ocate mo,in towards a oal as much as mo,in away 2rom trouble& tryin ,arious small maneu,ers
without any rand plan or sense o2 ultimate purpose# Its wea>ness is that it is ,ery conser,ati,e ? it
in,ariably chooses a direction close to the pre,ailin one# Incrementalist decisions are tentati,e andremedial ? small steps ta>en in the riht direction when the present course pro,es to be wron# !2ten& they
end in dri2tin and in actions without direction#
• !o"for"it Headlong #pproach: it is also a counsel o2 despair li>e incrementalism& but is openly opposed to
re2lection and analysis# Since many thins are ,ery di22icult to predict& it calls on eecuti,es to rely on their
eperience& intuition& and ut 2eelins& and whate,er in2ormation is readily a,ailable& to 2ore ahead and
rema>e the world rather than see> to understand it& and then to commit# Such an approach& while
appealin to the sel2-imae o2 certain eecuti,es& is 2rauht with daner and is li>ely to end in shipwrec>
than in ,ictory#
• #daptive decision making : also called @humble decision ma>in&A this decision-ma>in process implies
mied scannin since it entails a miture o2 shallow and deep eamination o2 data 2or a 2ocused
eamination o2 a subset o2 most rele,ant 2acts and choices# 6his decision-ma>in approach is an adapti,estratey that ac>nowledes our inability to >now what we need to >now to ma>e a ood rational decision#
%ied scannin ma>es the best use o2 partial >nowlede rather than proceed blindly with no >nowlede at
all# 'octors 2ollow this route when they do not 2ully understand the patient or the disease# Based on partial
>nowlede& they initiate a tentati,e treatment& and# i2 it 2ails& they try somethin else#
"dapti,e or umble 'ecision %a>in
A $er# useful wa# of resol$ing a problem in the midst of less knowledge and high uncertaint# is to do adapti$e
decision making. &ocused trial and error approach is probabl# the most used procedure for adapting to partial
knowledge. t has two parts6 knowing where to start the search for an effecti$e inter$ention, and checking
outcomes at inter$als to adjust and modif# the inter$ention. %his approach assumes there is important
information that the e8ecuti$e does not ha$e and must proceed without. t is not a rationalistic approach but anadapti$e one: often a humbling approach to decision making. "entativeness is an essential adapti$e role it is a
commitment to re$ise one@s course as necessar#. /reat doctors follow this rule in the absence of real
knowledge. %he# prescribe a medicine tentati$el#, watch for the s#mptoms, an accordingl#, adjust the
inter$ention if the medicine pro$es to be ineffecti$e or counterproducti$e.
Procrastination is another adapti$e rule6 dela# permits the collection of fresh e$idence, the processing of
additional data, and the presentation of new options.
ecision staggering is one common form of dela#. &or instance, he &ederal eser$e Board often dela#s
changing the discount rate or parcels it in smaller changes.
#ractionali$ing is a second corollar# to procrastination. nstead of spreading a single inter$ention o$er time, ittreats important judgments as a series of subdecisions staggered in time. &or instance, the &ederal eser$eBoard ma# decide to lower or increase the discount rate b# >F o$er the ne8t two #ears, but ma# make se$eral
inter$entions of a 9uarter percent each time. Similar would be the strateg# of bank managers and their lending
rates, brand managers and their pricing rate, ad$ertising managers and their pulse ad$ertising rate, and so on.
%edging bets is a good adapti$e rule. &or instance, the less the in$estors know about a specific compan#, the
wiser is it to spread their in$estments in a portfolio of se$eral stocks and bonds. n this connection, maintaining
strategic reserves is another form of hedging bet, especiall# in relation cash, li9uidit#, and contingenc#. n a
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world where we must e8pect the une8pected, we need reser$es to co$er unanticipated costs and to respond to
unforeseen opportunities.
All the abo$e are reversible decisions: the# a$oid o$ercommitment when onl# partial information is a$ailable.
%oda#, most corporations are becoming increasingl# bureaucratic and political, e$en though most e8ecuti$es
ma# pretend their decisions are professional and technocratic, but rarel# as political. &or instance, #oung andcreati$e managers often come up with brilliant new product ideas and projects, but soon reali0e that the# find
difficult to get top management support from $ice presidents, di$ision leaders and labor unions. Successful
decisionmaking strategies must necessaril# include a place for cooperation, coalition building, and differing
personalities, perspecti$es, responsibilities, and powers ()t0ioni -55*".
'ecision-%a>in under ut 8eelins
'Gur emotions and feelings might not onl# be important in our intuiti$e abilit# to make good decisions but ma#actuall# be essential (Ha#ashi -55*6 *-". %op e8ecuti$es are often known for their gut instincts when the#
made gamechanging decisions. Such decisions were not rationall# or logicall# deri$ed: at the least, the# defied
rational or local anal#sis. 1hen asked how top e8ecuti$es made such decisions that became smashing marketsuccess e$entuall#, the# described that $ague feeling of knowing something without knowing e8actl# how or wh#: the# used words like 'professional judgment, 'intuition, 'gut instinct, 'inner $oice, and 'hunch, but
could not describe the process much be#ond that.
G$er the #ears, $arious management studies ha$e found that e8ecuti$es routinel# rel# on their intuitions to
sol$e comple8 problems when logical methods (such as costbenefit anal#sis, S1G% anal#sis, and statistical
methods" would not help. n fact, the higherup #ou go on the corporate ladder, the more #ou will need well
honed business instincts. n other words, intuition is one of the factors separating the top corporate e8ecuti$es
from the middle managers and below.
Gb$iousl#, rel#ing on gut is more conduci$e to corporate decisions (e.g., mergers and ac9uisitions, di$estitures,
debt and e9uit# restructuring, new joint $entures", while rel#ing on data and anal#tics is more suited for
functional decisions (e.g., I7, production, costing, budgeting, !, suppl# chain management". n the former
case, #ou ma# gather as much information as #ou can (e.g., $ia due diligence, consulting, research", but at the
end, after looking all at the data and information, #ou still need #our e8perience gut calls or intuition to makethe plunge and that@s the reason wh# C)Gs are paid more.
alph S. Earsen, 9uondam Chairman and C)G of Dohnson I Dohnson, e8plains6 'Jer# often, people will do a
brilliant job up through the middle management le$els, where it@s hea$il# 9uantitati$e in terms of decision
making. But then the# reach senior management, where the problems get more comple8 and ambiguous, and
we disco$er that their judgment or intuition is not what it should be. And when that happens, it@s a problem6 it@s
a big problem K Gften there is absolutel# no wa# #ou could ha$e time to thoroughl# anal#0e e$er#one of the
options or alternati$es a$ailable to #ou. So #ou ha$e to rel# on #our business judgment (cited in Ha#ashi
-55*6 *>". After ** #ears as C)G of DID, Earsen asserts that one thing his e8perience has taught him is to
listen to his instincts. gnoring them has led to some bad decisions. Gne has to learn to trust one@s intuition.
ichard Abdoo, Chairman and C)G of 1isconsin )nerg# Corporation, said, 'As we mo$e to a deregulated
marketplace, we don@t ha$e this slow process of hearings and re$iew and two #ears to make a decision. 1e
now ha$e to make decisions in a timel# manner. And that means that we process the best information that@s
a$ailable and infer from it and use our intuition to make a decision (cited in Ha#ashi -55*6 *
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&ight-Brain versus 'eft-Brain ichotomy6 Henr# Mint0berg, professor of management at Mc/ill ni$ersit#,
Canada, and a longtime proponent of intuiti$e decisionmaking, argues that our mind continuousl# processes
information that we are not consciousl# aware of, not onl# when we are asleep or dreaming but also when we
are wide awake. Hence, the sense of intuiti$e re$elation (an 'aha e8perience" occurs when our conscious mindfinall# learns something that our subconscious mind has alread# known. Gne e8planation for this phenomenon
is to consider our brain as di$ided into hemispheres6 the left brain for the conscious, rational, and logicalfunctions, and the rightbrain for the subconscious, intuiti$e, and the emotional. Man# e8ecuti$es ha$e learned
to tap into their rightbrain thinking capacities while jogging, da#dreaming, listening to music, showering, and
the like.
But what makes the rightbrain of some people so smartL Scientists are far from the answer to that 9uestion.
Seemingl#, our brain is intricatel# linked to other parts of our bod# through an e8tensi$e ner$ous s#stem as well
as through chemical signals (hormones, neurotransmitters, and modulators". %hus, some neuroscientists assert
that what we call the 'mind is reall# this intertwined s#stem of brain and bod#. %his e8plains wh# intuiti$e
feelings are fre9uentl# accompanied b# ph#sical reactions.
Antonio . 7amasio, a leading neuroscientist at the ni$ersit# of owa College of Medicine, has been stud#ing
people who ha$e suffered from brain damage to a specific area in their prefrontal cortices, where we processsecondar# emotions, such as sorrow aroused through empath# (as opposed to primar# emotions, such as fear
triggered b# the sight of a large rattlesnake". Such patients retain their normal functions (e.g., language and
motor skills, attention, memor#, intelligence" but ha$e trouble e8periencing certain emotions (in abilit# to
decide, making tri$ial information and decisions critical".
%o e8plain this beha$ior, 7amasio contends that decisionmaking is far from a cold, anal#tic process. Gur
emotions and feelings pla# a crucial role b# helping us filter $arious possibilities 9uickl#, e$en though our
conscious mind might not be aware of the screening. %hus, our intuiti$e feelings guide our decision making
until our conscious mind is able to make good choices. So, just as an abundance of emotion (e.g., anger, fear,
an8iet#" can lead to fault# decisions, so can its paucit#.
Michael )isner, e8 C)G of 1alt 7isne# Corporation, confesses that whene$er he hears about a real good idea,his bod# reacts in a certain wa#: he gets an unusual feeling in the stomach, in his throat or on his skin. '%he
sensation is like looking at a great piece of art for the first time. 'Balanced emotions are crucial to intuiti$e
decision making K that is, emotions and intellect in balance then #ou ha$e instincts that are proper (cited in
Ha#ashi -55*6 **+".
Intuition and (udgment as analyses fro$en into habit 6 ;obel Eaureate Herbert A. Simon, professor of ps#cholog# and computer science at CarnegieMellon ni$ersit#, studied human decision making for decades
and concluded that e8perience enables people to chunk and classif# information so that the# can store and
retrie$e it easil#. &or instance, out of the 35,555 significant patterns that grandmasters can figure out on a chess
board, the# 9uickl# chunk out a smaller number of possible offensi$e and defensi$e maneu$ers that each cluster of pieces might suggest. )8perts see patterns that elicit from memor# the things the# know about such
situations. 1hen we use our gut, we are drawing on rules and patterns that we cannot 9uite articulate.According to Simon, e$en e8tremel# sophisticated processes, such as a C)G deciding a merger or an
ac9uisition or a di$estiture, can in principle be broken into patterns and rules. 1e are reaching conclusions on
the basis of things that go on in our perceptual s#stem, where we are aware of the result of the perception but
not of the steps. Simon claims that intuition is merel# those steps, that inbetween mechanism that is
m#sterious onl# because we do not #et understand how it works. 1hat distinguishes intuiti$e e8ecuti$es is that
the# ha$e $er# good enc#clopedias that are inde8ed, and pattern recognition is that inde8 (Ha#ashi -55*6 **".
2
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%rul# inspired intuiti$e decisions seem to re9uire an e$en more sophisticated mechanism6 cross inde8ing the
abilit# to see patterns in disparate fields. %he power of crossinde8ing increases with the amount material that
can be crossinde8ed. Sa#s, Bob Eut0, e8C)G of Chr#sler that pioneered the 7odge Jiper, a smashing
success, that the intuiti$e decision was a fruit of crossinde8ing. ' find that in general management, people
with $aried and di$erse backgrounds are, all other things being e9ual, going to be probabl# more $aluable andwill learn faster because the#@ll recogni0e more patterns (cited in Ha#ashi -55*6 *>". NA former Marine
fighter pilot, Eut0 describes the decision process that launched 7odge Jiper despite mounting criticisms. '1hen#ou are going too slow in an airplane, #our aerod#namic drag builds up because the nose of #our airplane is
positioned too high and actuall# #ou can get to the point where, e$en at full power, #ou can@t get the plane to
climb an#more. So #our onl# solution is to drop the nose and trade off some altitude to get speed. Similarl#,
Chr#sler in the late *+5s had lost so much momentum that it was in danger of stalling. %o pre$ent that, the
con$entional wisdom called for cost cutting to gain altitude. But Eut0 knew better. )$en though people
complained6 '?ou are slow and low and struggling for altitude: what an incredibl# bad time to drop the nose
and di$e some more b# spending cash on a fri$olous $ehicle like the 7odge Jiper. But the 7odge Jiper ga$e
Chr#sler the forward momentum it desperatel# needed, both internall# and e8ternall# with the financial
communit#, the auto maga0ines, and all those constituencies that create the ps#chological climate in which #our
compan# either prospers or does not.
Bob !ittman, president of America Gnline (AGE" also courts his intuiti$e skills b# placing himself in unfamiliar situations. 'Staring at market data, he sa#s, is like looking at a jigsaw pu00le. ?ou ha$e to figure out what the
picture is. 1hat does it all meanL t@s not just a bunch of data. %here@s a message in there. K)$er# time get
another data point, @$e added another piece to the jigsaw pu00le, and @m closer to seeing the answer. And,
then one da#, the o$erall picture suddenl# comes to me (cited in Ha#ashi -55*6 *+".
Problem Centered Research
n general, problemcentered research in$ol$es the following major steps6
*. $roblem dentification and Definition6 %hat is, describe, frame, classif# or categori0e the problem
gi$en $arious ta8onomies or t#pologies. %o which industr# or crossindustr# does the problem belongL
n this connection do some industry scanning in order better to identif# and define the problem.
dentif#ing and defining wrong problems are "ype "hree errors that we must a$oid. N&or a framework
on ndustr# Scanning, see #ppendix 1O.
-. $roblem %ormulation6 that is, identif# the major controllable and uncontrollable $ariables that
constitute the problem. Controllable $ariables are those the compan# can handle and control gi$en its
current resources (of manpower, capital, cash, infrastructure, technolog# and regulationcompliance".
ncontrollable $ariables are related to the competitors, markets, legal en$ironments and global factors.
Hence, do some competitor scanning& market scanning& legal environment scanning and global
scanning in order to formulate #our problem better. A problem well formulated is half sol$ed. Gften,
the process of problem formulation indicates the path of solution. N&or a framework on Market
Scanning that includes competitor and legal scanning, see #ppendix 1O.
>. $roblem 'pecification6 that is, e8plore, e8amine and understand the relationships (actual and potential"
between #our controllable $ariables, between #our uncontrollable $ariables, and between #our
controllable and uncontrollable $ariables. Gne of the fundamental laws in s#stems thinking is thate$er#thing is connected with e$er#thing else in a global web or network of relationships. Hence, all
#our $ariables, controllable and uncontrollable, are connected, related, and the# influence each other.
dentif# the major connections and influences. ;ote the relationships could be comple8. Comple8it# in
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s#stems thinking is twofold6 a" variables complexity6 the more the number of $ariables in$ol$ed, the
more comple8 is the problem: b" dynamic complexity6 the more the relationships between these
$ariables, and more the relationships change constantl#, as often the case is, the more is d#namic
comple8it#. Hence, at this juncture, #ou ma# need ,ariables scannin such as product scannin and
customer scannin to specif# #our problem better. N&or a framework on !roduct Scanning andCustomer Scanning, see #ppendix (O.
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1e detail each of these steps Gne to &i$e in the following sections.
Step !ne: Problem Identi2ication
1e must describe or define a problem precisel#: e$en properl# frame the problem and draw a boundar# around
it e.g., this is the domain (the ')hat " of the problem, and this is not its domain: this is )here the problemoccurred and this s where it did not: this is )hen the problem occurred, and when it did not: this is the extent to
which the problem occurred, and so on. 1hen we describe the problem precisel#, then we do not need to gather
all the facts and figures about the problem, but just the rele$ant ones.
1hile #ou look for similarities between this problem and another related problem, also look for differences between the problems for instance, the differences between the 'is of the problem (what it is, where it is,
when it occurs, to what e8tent it occurs, etc." and the 'is not of the problem (i.e., what it is not, where it does
not occur, when it does not occur, and the e8tent to which it does not occur". All these steps help to describe
and frame the problem precisel#. &or a detailed illustration of this t#pe of problem specification see Str#ker (*+234-55*6 +*
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2reDuent occurrences unless eneric solutions are 2ound# Similar is the case o2 the F attac> on
"merica and lobal terrorism#
!roblems must be distinguished from their s#mptoms. &or instance, %om &riedman and Michael Mandelbaum
(-5**6 *5" in their latest book *"hat +sed to be +s hat )ent )rong )ith /merica, and %o) it can Come Bac! , in$estigate the problem that currentl# America is declining and distinguish the decline from other
s#mptoms of decline such as terrorism or alQaeda, trade and budget deficits, national and international debts,and energ# and climate change (these are just s#mptoms be#ond repair of a major generic problem". %he main
cause of decline the# argue is that America has stopped in$esting in education (that is, in educating the
workforce it needs", or admitting the energetic immigrants it seeks, or in$esting in the infrastructure it re9uires
(the problem of dela#ed maintenance is getting out of control", funding the research it en$isions, or putting in
place the intelligent ta8 laws and incenti$es that its competitors ha$e installed. A great countr# with enormous
potential, America is currentl# falling into disrepair, political disarra#, and palpable discomfort about its present
condition and future prospects. America has not been able to fi8 its problems or rein$est in its strengths because
its political s#stem has become paral#0ed and its s#stem of $alues has suffered serious erosion.
%he problem in ndia is no different. Britain ruled the *+th centur#, America dominated the -5 th centur#, and
now China is sweeping the -*st centur# lea$ing ndia behind. 1e are our own enemies. 1e are getting so much
less than we can, should, and must get out of our great and largest democrac#.
Gnce a problem has been framed, classified as generic or uni9ue, and categori0ed, defining the problem is
relati$el# an eas# task. !ertinent 9uestions in this regard are6 1hat is this all aboutL 1hat is pertinent hereL
1hat is the ke# to this situationL And so on. &or instance, the American auto industr# did not define auto safet# precisel#: the# indulged in plausible and incomplete definitions. t was far more than an# reluctance to spend
mone# on safet# engineering: it was in understanding what auto safet# was. 1as it passenger safet# from injur#
during collision, from accidents caused b# unsafe potholeridden roads or unlicensed dri$ers, during a tire bust,
during a gas e8plosion, during drunken dri$ing, during road rage, during a car burglar#, in sub0ero ic#
conditions, during carbon mono8ide emissions, or during o$erspeedingL )$en to this da#, the wicked problem
of auto safet# remains imprecisel# defined. )$en though the ratio of accidents per thousand cars or per
thousand miles dri$en has been going down in SA, the total numbers of accidents and their se$erit# ha$e kept
creeping up. Accidents keep occurring despite safet# laws and safet# training. Besides designing safe cars,SA is now engaged in making auto accidents themsel$es safe. %hat is, whereas cars ha$e been engineered to
be safe when used correctl#, the# will also ha$e to be engineered for safet# when used incorrectl# (7rucker
-55*6 ".
n arri$ing at a complete definition of a problem, a good decision maker alwa#s tests for signs that something is
at#pical or something unusual is happening, b# asking 9uestions such as6 7oes the definition e8plain the
obser$ed e$ents, and does it e8plain all of themL Check the incomplete definition against all facts, and throw
out a definition the moment it fails to encompass an# of them. Gr, think trough the problem again whene$er
#ou see something at#pical, when #ou find une8plained phenomena, or when the course of e$ents de$iates from
e8pectations, e$en in small details.
6aonomies 2or Classi2yin Business %anaement Problems
?ou ma# identif# or define #our problem along an# one or more of these areas6
s it market"related, s it an unmet need, want or desireL Gr, is it an underser$ed market in the inner cit#,
urban or rural areasL s it an o$erser$ed market dense with competition and market entr# barriersL s it a new
market, an une8plored marketL s there a distribution problem, a logistics problem, a deli$er# problem, or a
retailing problemL s it an ad$ertising or promotional problemL s it a redlining problem, a monopol#, a
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monopson#, or a dominant supplier problemL A minorit# supplier suppressed and harassed b# dominant
suppliersL Con$erging industriesL Con$erging marketsL Con$erging trade 0onesL Con$erging continentsL
Con$erging countries (e.g., )"L Con$erging consumer lifest#lesL Con$erging consumer $aluesL Con$erging
consumer e8pectationsL
s it product"related, s it costrelated (cost o$erruns, high wage, high salar#, organi0ational slack, outdated
technolog#, K"L s it o$erpriced $ia gougingL s there predator# pricingL s there dumpingL s it 9ualit#
relatedL s it technolog# relatedL s it re$enue related (low sales, market share erosion, low profits, low GS,GM, GQ, G, GA, G)"L s it an outdated or obsolesced productL 7oes the product in$ol$e long
product c#clesL 7oes the product in$ol$e $er# short life c#cles $ia planned product or ser$ice obsolescenceL s
it a much needed, wanted or desired product and ser$iceL A new product that is new to the firm, or new to the
industr#, or new to the countr#, or new to the worldL Eack of product or ser$ice instructions and informationLA defecti$e productL A harmful productL A confusing label or packageL Confusing product or ser$ice
instructionsL Are there an# confusing product warranties and guaranteesL Eack of ade9uate financing
programsL A confusing brandL A confusing product bundleL A confusing price bundleL !oor 9ualit#L
Confusing 9ualit#surrogates $ia pricing, branding, bundling, ad$ertising, promoting, and retailingL Con$erging
technologiesL Con$erging industriesL Con$erging core productsL Con$erging core processesL Con$erging
productsL
s a legal problem, 7oes the product or ser$ice $iolate an# written or unwritten law, ordinance, or contract
(e.g., antitrust, GSHA, e9ual access"L 7oes it $iolate an# tort law such as deception, underdisclosure, o$er
disclosure or information o$erload, misleading, misrepresentation, negligence, or lack of due careL 7oes it
$iolate patent lawL s there an# trademark infringementL An# trade law (/A%%, 1%G, ;A&%A, and )"
$iolationL 7oes the product or ser$ice $iolate consumer rights such as right to information, right to choice or
$ariet#, right to safet#, right to consumer education, right to complain, right to redressL 7oes it $iolate
indi$idual, consumer and social pri$ac#L
s it environment"related problem, 7oes the product harm land, water, sea and airL 7oes it protect local and
social landscapeL 7oes it pre$ent from ecological harmL 7oes it benefit ecolog# and ecos#stemsL 7oes the
product or ser$ice offend an# social, national, cultural, religious, political, racial and ethnic sensiti$ities,
customs and moresL 7oes it undermine local communities, local businesses, local institutions and marketsL7oes the product or ser$ice promote global ine9ualities of income, opportunit# and entrepreneurshipL 7oes the
product or ser$ice meet global lifesa$ing needsL 7oes the product or ser$ice eliminate or progressi$el#
eradicate global po$ert#, hunger, healthha0ards, homelessness, joblessness, illiterac#, crime and diseaseL
Jpstream& %idstream and 'ownstream Kalue-Chain Inno,ation
Besides the abo$e partial classification of problems, there could be man# other methods for identif#ing and
classif#ing business problems. Some problems are corporate and organi0ational in nature, degree, magnitude,
latitude, and kind, specificall# in relation to the corporate mission, $ision, goals and objecti$es. Gther problems
are functional in nature, reach, se$erit#, ramifications and conse9uences. Both sets of problems can be identified
along the $alue chain of upstream, midstream, and downstream technologies, policies and strategies. pstream
$alue chain relates to ideation, concept de$elopment, planning, budgeting, and the like until the new
product4ser$ice is designed and engineered: midstream $alue chain relates to the proper si0ing, shaping,
streaming, packaging, bundling and the like stages until the product4ser$ice is market read#: downstream $alue
chain deals with commerciali0ation and relates to pretest marketing, test marketing, and accordingl#, pricing,
promoting, retailing, ad$ertising, and national launching strategies and processes.
Identi2yin Problems around Kalue Chains
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egardless of industr#, almost all companies are operating on faster e$olutionar# tracks and at greater risks
than e$er before. n this conte8t, a compan#@s real core capabilit# is its abilit# to redesign continuall# its $alue
chain and to reshuffle its structural, technological, financial and human assets in order to achie$e ma8imum
competiti$e ad$antage. ;e$ertheless, competiti$e ad$antage is, at best, a fleeting commodit# that must be won
again and again. %hat is, all pla#ers in the $aluechain producers, suppliers, emplo#ees, retail channels, andcustomers are also seeking their own competiti$e ad$antage. %his competiti$eness makes e$er# $aluechain
d#namic. Grgani0ations toda# must continuall# disintegrate and reintegrate in order to 9uickl# and continuall#assess which parts of their $alue chain are $ulnerable, which parts are defensible, which corporate alliances
make the most strategic sense, and which competiti$e threats are deadl# (&ine et al. -55-". n this $aluechain
assessment process the $alue of the customer must be reinforced and recogni0ed throughout the chain (!rahalad
and amaswam# -555, -55>".
Con$entional wisdom affirms that what a strategist should achie$e is sustainable competiti$e ad$antage
(SCA". C#nthia A. Montgomer# (-556 3+25", professor of strateg# at the Har$ard Business School (HBS",
challenges this $iew. Although criticall# important, SCA is not the ultimate goal. SC/ is a means to an end
and not an end in itself . Strategi0ing onl# in terms of SCA, mistakes the means for the end and missions
managers on an unachie$able 9uest. SCA is essential to strateg# but it is onl# a part of a bigger stor#, one
frame in a motion picture. Strategic ad$antage changes from time to time, e$en as the world, both inside and
outside the firm, changes not onl# in big, discontinuous leaps but also in fre9uent, smaller ones. Corporateidentities are changed not onl# b# catacl#smic restructurings and grand pronouncements but also b# strategic
decision after strategic decision, #ear after #ear, and C)G after C)G. An organic conception of strateg#,
therefore, recogni0es that whate$er constitutes strategic ad$antage will e$entuall# change. %hus, the $er#
notion that there is a strategic hol# grail of SCA, that is, a strateg# brilliantl# concei$ed, carefull# implemented,and $aliantl# defended through time, is dangerous.
n general, major corporate and organi0ational management problems are (Set A"6
Jpstream Corporate Kalue Chain Inno,ation:
*. 1e need to look into new markets, new products and new support s#stems:-. 1e need to look into new industries, crossindustries and opportunities:
>. Hence, there is a need to realign our corporate resources with market opportunities:
. 1e need to e8plore corporatewide forgetting (unlearning", borrowing, and inno$ating:*
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*+. %here is due process and justice regarding emplo#ees to be in$estigated and achie$ed:
-5. %here is a need for upgrading worker safet#, securit# and pri$ac# policies:
-*. 1e need to refine our performance appraisal s#stem di$ision and departmentwide:
--. %here is an organi0ational $alue and morale conflict to be resol$ed:
->. %here is a lending polic# to be re$iewed since corporate borrowing capacit# is weakened:-
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-5. Gld and new worker health and safet#, securit# and pri$ac# technologies:
-*. Gld and new labor and personnel appraisal processes and $alidation procedures:
--. Gld and new materials 9ualit# assessment technologies:
->. Gld and new production technologies:
-5. Gld and new product protot#pe testing strategies and procedures:
>*. Gld and new product si0ing, shaping, te8turing, streaming and packaging technologies:
>-. Gld and new product4ser$ice bundling technologies
>>. Gld and new price or priceproduct bundling technologies:
>3. Gld and new market pretesting processes and e8perimentations:>2. Gld and new testmarketing methodologies, policies and strategies:
>. Gld and new finished goods in$entor# management technologies:
>. Gld and new product bundling technologies:
>+. Gld and new product warehousing and logistics technologies:
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collection to situate the problem, primar# data collection to throw further light on the problem and its solution
alternati$es: problemresolutions in$estigation and alternati$es assessment, final problem resolution selection,
and final resolution conse9uences assessment. BC! re$iews the problem, its in$estigati$e research, its alternate
resolutions, and accordingl# ad$ises the management on what solution to accept, wh#, and with what
conse9uences.
Step 6wo: Problem 8ormulation
!roblem formulation is $er# specific. ?ou need to identif# the major sets of $ariables that compose or
constitute the problem. An# problem is composed of two major sets of $ariables6 controllable and
uncontrollable. %here are two perspecti$es to control scanning6 there are controllable or uncontrollable from the
producer $iewpoint, and there are controllable and uncontrollable $ariables from a customer perspecti$e.
Hence, gi$en #our main problem that #ou ha$e identified and defined under Step Gne, do the following6
) Identi2y almost all the rele,ant ,ariables that cause the problem#
*) Cateori5e ,ariables into @controllableA and @uncontrollableA 2rom the companyLs ,iewpoint#
) 6o what etent are the uncontrollable ,ariables associated with cost1
9) 6o what etent are the uncontrollable ,ariables associated with pricin1
;) 6o what etent are the uncontrollable ,ariables associated with Duality1G) 6o what etent are the uncontrollable ,ariables associated with technoloy1
M) 6o what etent are the uncontrollable ,ariables associated with employees1
H) 6o what etent are the uncontrollable ,ariables associated with supplies and materials1
F) 6o what etent are the uncontrollable ,ariables associated with eports or imports1
+) 6o what etent are the uncontrollable ,ariables associated with suppliers1
) 6o what etent are the uncontrollable ,ariables associated with creditors& ban>s and shareholders1
*) 6o what etent are the uncontrollable ,ariables associated with competition1
) 6o what etent are the uncontrollable ,ariables associated with mar>et demand or lut1
9) 6o what etent are the uncontrollable ,ariables associated with o,ernments& laws and ordinances1
;) 6o what etent are the uncontrollable ,ariables associated with lobali5ation& outsourcin& and lobal
competition1
G) Cateori5e ,ariables into @controllableA and @uncontrollableA 2rom the consumerLs ,iewpoint#
M) 6o what etent are the uncontrollable ,ariables associated with pricin as percei,ed by the consumers1
H) 6o what etent are the uncontrollable ,ariables associated with Duality as percei,ed by the consumers1
F) 6o what etent are the uncontrollable ,ariables associated with technoloy as percei,ed by consumers1
*+) 6o what etent are the uncontrollable ,ariables associated with con,enience o2 sa,in time1
*) 6o what etent are the uncontrollable ,ariables associated with con,enience o2 sa,in enery1
**) 6o what etent are the uncontrollable ,ariables associated with sa,in aniety and worries1
*) 6o what etent are the uncontrollable ,ariables associated with chanin 2ads& 2ashions& and li2estyles1
*9) 6o what etent are the uncontrollable ,ariables associated with shi2tin demoraphics& socioraphics&
psychoraphics& eroraphics& ethnoraphics& or chiroraphics1
*;) ence& correctly identi2y and 2ormulate the main problem toether with subsidiary or embedded sub-
problems# 6hat is:
*G) Identi2y the ,arious contets the problem is nested or embedded in (e##& economic& political& lobal&
technoloical& cultural& social and cultural)#
*M) Jnderstand the connections and rami2ications (e##& antecedents& determinants& concomitants& conseDuences)
o2 the problem on these contetual en,ironments#
*H) Reconi5e the good or bad conse*uences o2 the selected alternati,e (i#e#& best solution) on these contetual
en,ironments#
"t this stae& in order more completely to 2ormulate your research problem& you may need to do your speci2ic
industry scannin and taret mar>et scannin# #ppendix 1 pro,ides a 2ramewor> 2or industry and mar>et
scannin#
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6he contextual environment does beyond the domain o2 internal and eternal sta>eholders# In a hihly lobali5ed and networ>ed
world the contetual domain is e,er epandin# It is a borderless world# Students should be tauht to thin> lobally# Eocal and
domestic problems ha,e international and lobal connections and conseDuences#
#ntecedents are 2actors and e,ents that precede but in2luence the problem at hand#
-oncomitants are 2actors and e,ents that accompany and in2luence the problem at hand#
Determinants are 2actors and e,ents that cause (are necessary andor su22icient conditions) the problem#-onse*uences are e22ects and outcomes that are causally connected to the problem or its selected solution#
Step 6hree: Problem Speci2ication
f the problem we started with is real and if it is caused b# some $ariables identified at the problem formulation
stage, then the inter$ariable relationships that are e8plored now at the problem specification stage will enable
us to trace the causes of the problem. Most of these relationships operate within certain 'boundar# conditions
(e.g., the minimum or ma8imum thresholds with which the inter$ariable relationships are rele$ant and
meaningful: will these relations satisf# corporate needs or enable us to reali0e our goals and objecti$es". &or are
these relationships best under centrali0ation conditions that seek for unit# and controlL Gr do these relations
empower decentrali0ation, and autonom# of decisions units that respect strength and responsibilit# in the chief
operating positionsL
Hence, understand the relationships between the controllable and the uncontrollable $ariables. &or instance,
*F) "re these relationships just seDuences1
+) "re these relationships mere associations1
) "re these relationships wea> or stron correlations1
*) "re these relationships necessary conditions1
) "re these relationships su22icient conditions1
9) "re these relationships necessary and su22icient conditions or causal connections1
;) 0hat are your dependent ,ariables in your problem-solution eDuation1
G) 0hat are you independent ,ariables in your problem-solution eDuation1
M) 0hat are your residual (unaccountable) ,ariables in your problem-solution eDuation1
H) "re the relationships between dependent and independent ,ariables linear or non-linear1
F) ow can you establish or ,eri2y these relationships1
9+) 'o you ha,e representati,e and random samples o2 rele,ant data or responds to empirically ,eri2y
these relationships1
9) a,e others tested these relationships that you can 2ollow1
9*) "re there any theories that can hypothesi5e these relationships1
9) "re there research streams to enable you to ,eri2y these relationships1
99) "re there any stron trends or manaerial hunches to support these relationships1
9;) 'o the past data& practices& relations and trends support the present projected relationships1
9G) 'o the past data& practices& relations and trends condition the present or 2uture relationships1
9M) "re the mar>et& cost& scale& price& technoloy and inno,ation discontinuities so stron so as to totally
2orce you to rein,ent the present and the 2uture relationships between your dependent and independent
,ariables in the problem-solution eDuation1
f a problem is defined as a 's#stem at unrest or as 'a de$iation from a standard or norm, then after identif#ing and classif#ing the problem (Step Gne" and formulating the problem in terms of its major sets of
controllable and uncontrollable $ariables (Step %wo", the third stage of problem specification in$ol$es searching
for real causes in terms of factors, determinants, antecedents, concomitants that bring about the 'unrest or
'de$iation in the s#stem. !roblem specification in$ol$es asking the rele$ant 9uestions about e$er# problem.
!roblem specification in$estigates who did wrong, what went wrong, how, when, where, how often, with
whom, how and wh#L %he more rele$ant 9uestions #ou ask the right wa# with the right people, the more
complete is problem specification.
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At this stage, in order more completel# to formulate and specif# #our research problem, #ou ma# need to do
#our specific product0service and customer scanning and target market scanning. #ppendix ( pro$ides a
framework for product scanning and customer scanning .
A precise problem specification ma# in$ol$e a twofold descriptive in9uir# of 'is and 'is not in relation to at
least eight classical in$estigati$e 9uestions such as6
a) .ho caused the unrest or de,iation1 0ho did not cause it1
b) .hat did they do and what they did not do to brin about this unrest or de,iation1
c) How did they do it and how not& such that it enerated this unrest or de,iation1
d) .here did they do it and where not& such that it enerated this unrest or de,iation1
e) .hen did they do it and when not& such that it enerated this unrest or de,iation1
2) .ith whom did they do it and with whom not& such that it enerated this unrest or de,iation1
) How often did they do did it and how o2ten not such that it enerated this unrest or de,iation1
h) .hy did they do it and why not such that it enerated this unrest or de,iation1
%he last set of 9uestions that deal with wh#, wh#not, and hence what, are more anal#tical than descripti$e. All
eight 9uestions specif# the problem b# contrast , and that ma# not be enough. 1e need further problem
specification b# seeking differences as follows6
a) 0hat characteri5es those who caused the unrest or de,iation1 0hat characteri5es those who did not
cause it,
b) 0hat characteri5es what they did and what characteri5es what they did not do in relation to this unrest
or de,iation1
c) 0hat characteri5es how they did it and what characteri5es how they did not do it relati,e to this unrest
or de,iation1
d) 0hat characteri5es where they did it and what characteri5es where they did it not in relation to this
unrest or de,iation1
e) 0hat characteri5es when they did it and what characteri5es when they did it not in relation to this
unrest or de,iation1
2) 0hat characteri5es with whom they did it and what characteri5es with whom they did it not in relation
to this unrest or de,iation1) 0hat characteri5es how o2ten they did it and what characteri5es how o2ten they did it not in relation to
this unrest or de,iation1
h) 0hat characteri5es why they did it and what characteri5es why they did it not in relation to this unrest
or de,iation1
Table ( captures all these rele$ant 9uestions in relation to problem specification b# contrasts and problem
specification b# differences. n general, the cause of e$er# problem is a change of one kind or other. %his
change that causes the problem ma# not be so much in terms of contrasts as much as in terms of differences.
Hence, problem specification should specif# more on the differences than on contrasts (Str#ker -55*b".
An# change that causes the problem should e8plain all the contrasting features and characteri0ing differences in
"able 1. &ailure to do ma# lead to a wrong cause or not the actual cause. %hat is, we must find a possible causethat accounts for e$er# fact in the specification list of "able 1. %he "able 1 process ma# be long and arduous:
but it will stop us from prematurel# jumping to a conclusion about the cause. n general, e$er# contrast or
difference listed in "able 1 could be a possible cause of the problem, but more so the differences. Con$ersel#,
#ou can test the possible cause against e$er# facet of contrast and difference in the specification list of "able 1.
Gften, the most likel# cause turns out to be a change in a distinction plus a second distinction (Str#ker -55*b6
*>+".
*
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Step 8our: Problem Resolution "lternati,es In,estiation
Ste$e Dobs in describing the i!od said ( 2e)s)ee! , Gctober *eholders#
• 22iciency concerns doing things rightly7 but one could do wron thins rihtly too#
• 22iciency supposes thin>in that maimi5es bene2its and minimi5es costs#
• 22ecti,eness& on the other hand& concerns doing right things rightly+
• 22ecti,eness supposes critical thin>in that maimi5es bene2its and minimi5es costs to all
sta>eholders#
OSee Table 0 for a &ourfold %#polog# of Critical %hinkingO.
Stakeholders within the compan# are emplo#ees, unions, suppliers, retail partners, other di$isions and
departments.
Stakeholders outside the compan# are customers, creditors, brokers, media, shareholders and local
communities.
!resent a good comparati$e anal#sis of all the identified alternati$es in terms of6
a" &easibilit# and $iabilit#:
b" )fficienc# to resol$e the main problem:
*
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c" Eeast net costs to internal stakeholders, and
d" Eeast net costs to e8ternal stakeholders.
%he comparati$e anal#sis should be objecti$e with no biases or prejudices to an# solution.
Clearl# distinguish between facts, opinions and $alue judgments in the selection of the best alternati$e.
• " preudice implies a judment or opinion 2ormed be2ore the 2acts are >nown# It is a preconcei,ed idea&2a,orable& or usually& un2a,orable& mar>ed by a suspicion& intolerance or irrational hatred 2or other
races& creeds and occupations#
dentif# #our basic assumptions underl#ing the best selected alternati$e.
• "n assumption is more basic act o2 assumin a 2act& property or e,ent 2or ranted without critically
assessin its accuracy and ,eracity& reliability and ,alidity#
• " presumption is a subset o2 assumption and implies ta>in somethin 2or ranted or unjusti2iably
acceptin it as true& usually on the basis o2 improper e,idence#
dentif# #our basic presuppositions underl#ing the best selected alternati$e.
• " supposition is the act o2 assumin somethin to be true 2or the sa>e o2 an arument or to i llustrate a
proo2# It is reardin somethin as true without actual >nowlede& hence& o2ten tantamount to
conjecture& uessin or mere imaination# In this sense& it is a subset o2 assumption#
• " presupposition is an act or statement o2 supposin or assumin be2orehand# It also means to reDuire
or imply as a precedin condition 2or somethin#
ence& select the best solution alternati,e i,en all your analysis abo,e and pro,ide con,incin e,idence and data to
support the selected best solution alternati,e#
"t this stae o2 SIP& you may need to collect primary data 2rom rele,ant mar>et sements 2rom your taret mar>ets
in order to better understand all 2our steps o2 problem research# 6his is a crucial stae where uncertainty&ambiuity and ambi,alence reardin your research problem may be clari2ied by directly contactin your taret
customers# 4ou need to desin your sur,ey research now& do some care2ully Duestionnaire () desinin and
pretestin# #ppendix 2 has all the rele,ant details in this reard#
Step 8i,e: Problem Resolution "ssessment
At this stage, we objecti$el# assess the net costs to internal or e8ternal stakeholders in terms of loss of re$enues,
increased e8penses, loss of morale and goodwill, noncompliance with laws and ordinances, ecological ha0ards
and loss to local communities. %he following considerations should help in this regard6
Correctly assess the e22iciency o2 these alternati,es to resol,e the main identi2ied problem#Correctly assess the rami2ications o2 these alternati,es on ,arious sta>eholders within the company#
Correctly assesses the rami2ications o2 these alternati,es on ,arious sta>eholders outside the company#
Assess the problem solution in terms of the goals and objecti$es that the problem failed to reali0e. %hus, does
the problem resolution6
enerate adeDuate and increasin sales re,enues1
enerate adeDuate and increasin mar>et shares1
*+
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enerate adeDuate and increasin pro2itability1
enerate adeDuate and decreasin costs o2 capital and labor1
enerate adeDuate and increasin return on sales (R!S)1
enerate adeDuate and increasin return on Duality (R!)1
enerate adeDuate and increasin return on mar>etin (R!%)1
enerate adeDuate and increasin return on assets (R!")1
enerate adeDuate and increasin return on eDuity (R!I)1
enerate adeDuate and increasin return on in,estments (R!I)1
enerate adeDuate and increasin earnins per share (PS)1
enerate adeDuate and increasin priceearnins ratio on stoc> (P)1
enerate adeDuate and increasin mar>et e,aluation o2 the 2irm (%K)1
enerate adeDuate and increasin 6obinLs ratio (. %Kreplacement ,alue o2 the assets)1
Assess the problem solution in terms of the consumer and social goals and objecti$es that the problem failed to
reali0e. %hus, does the problem resolution6
enerate adeDuate and increasin consumer satis2action1
enerate adeDuate and increasin consumer total eperience1
enerate adeDuate and increasin consumer loyalty1
enerate adeDuate and increasin consumer li2etime loyalty and ,alue1
dentif# the legal (e.g., GSHA, )!A, &7A, &)C, C!SC, and 7GD" ramifications of the best alternati$e.
'egality relates to compliance or noncompliance to e8isting laws that appl# to the selected alternati$e.
%hus, does the problem resolution6
(each 9uestion can ser$e as a $erifiable h#pothesis for further research"
enerate increasinly decreasin consumer complaints1
enerate increasinly decreasin producer deceptions1
enerate increasinly decreasin producer nelience1
enerate increasinly decreasin consumer product liability1
enerate adeDuate and increasin consumer redress when harmed1
enerate adeDuate and increasin consumer sa2ety1enerate adeDuate and increasin consumer pri,acy1
enerate adeDuate and increasin consumer Duality o2 li2e1
enerate increasinly decreasin consumer the2t and crime1
dentif# the rele$ant ethical issues (e.g., pri$ac#, consumer rights, justice, fairness, e9uit#, wage ine9ualities,
unjust structures" with respect to the selected alternati$e.
3thicality goes be#ond law to mores, customs, ethical codes, international agreements and imperati$es.
%hus, does the problem resolution6
enerate increasinly decreasin consumer oppression and injustice1
enerate adeDuate and increasin social ecoloy1
enerate adeDuate and increasin en,ironmental de,elopment1
enerate adeDuate and increasin consumer ethics and morals1
enerate adeDuate and increasin corporate social responsibility1
enerate adeDuate and increasin consumer social responsibility1
enerate adeDuate and increasin consumer justice1
enerate adeDuate and increasin social justice1
enerate adeDuate and increasin consumer distributi,e justice1
enerate adeDuate and increasin social distributi,e justice1
-5
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Stud# the moral (e.g., conscience, compassion, human rights and dignit#, natural rights and duties, respect for
life, religious freedom" dimensions of the chosen alternati$e.
3orality relates to natural and positi,e& rihts and duties o2 all internal and eternal sta>eholders#
)8amine the spiritual (e.g., inner harmon# and peace, world$iew and path, faith in humanit#, hope, lo$e, trust,
personhood, sacred parenthood, selfsacrifice and generosit#" dimensions of the selected alternati$e on allstakeholders.
'pirituality relates to upli2tin and empowerment o2 the human spirit (personal and social) within and
without the orani5ation# OSee Ste,en Co,eyLs @ihth abitA or @Spiritual IntellienceA (S)# S
represents our dri,e 2or meanin and connection with the in2inite# S is @thin>in with your soul#A S
relates to the whole reality and dimension that is bier& more creati,e& more lo,in& more power2ul& more
,isionary& and mysterious ? than the materialistic daily human eistenceQ
Concludin Remar>s6wo Schools o2 6houht
How do businesses advance knowledge& and create and capture value, oger Martin argues that there are two
schools of thought responding to this 9uestion. Gne school of thought holds that the path to $alue creation lies
in dri$ing out the oldfashioned practice of gut feelings and instincts, replacing it with strateg# based onrigorous, 9uantitati$e anal#sis, optimall# backed b# decisionsupport software. n this model, the basis of
thought is analytical thin!ing that combines deducti$e reasoning and inducti$e reasoning to declare truths and
certainties about the world. %his model seeks knowledge and master# through rigorous, continuousl# replicated
anal#tical processes. %his model and the organi0ational culture that backs it pri$ilege anal#sis o$er intuition
and master# o$er originalit#. Dudgment, bias, and $ariations are the enemies of this school of thought. f these
are $an9uished, the school presumes, great decisions will be made and great $alue will be created.
%he opposing school of thought is centered on the primacy of creativity and innovation. According to this
school anal#tical thinking has banished creati$it#, imagination and inno$ati$e management, has dri$en
creati$it# out of the product and ser$ices, and has doomed organi0ations to boring stultification. /reat products
like i%unes, i!hones, bo8, 7ell, ntel and %oshiba spring from the heart and soul of a great designer (like Ste$e
Dobs, Bill /ates, Michael 7ell, And# Moore": the# are flashes and insights that surface, unencumbered b#
anal#sis, 9uantitati$e research, sur$e# designs or processes. %his is the school of intuitive thin!ing , backed b#
creati$it#, imagination, design thinking and inno$ation. '%his is the art of knowing without reasoning. %his is
the world of originalit# and in$ention (Martin -55+6 2".
Table 2 captures the differences between these two opposing schools of thought. ;either anal#tical
thinking nor intuiti$e thinking is enough for dri$ing inno$ations and capturing $alue. nstead of a dichotomousapproach to either anal#tical thinking that dri$es out intuition or intuiti$e thinking that dri$es out anal#sis,
oger Martin (-55+" proposes a combined approach that he calls design thin!ing for optimal business
performance. %he most successful businesses in the #ears to come, argues Martin, will balance anal#ticalmaster# and intuiti$e originalit# in a d#namic interpla# of anal#tical reasoning and intuiti$e thinking. 7esign
thinking firms will stand apart in their willingness to engage in the task of continuousl# redesigning their
business. %he# will create ad$ances in both inno$ation and efficienc# the combination that produces the most
powerful competiti$e ad$antage.
" 6aonomy o2 Research %ethods
-*
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All research needs focus6 #our research domain is either past4present or future, and #our research focus is
problem $ersus nonproblem orientation. Accordingl#, we ha$e a - 8 - research focus paradigm detailed in
Table 4. %he predominant t#pe and field of thinking within each of the resulting 9uadrants are also outlined in
"able 4. Both S! and BC! in$ol$e problem centered research orientations, but their methodolog# is different.
S! clearl# falls in Quadrant Gne where the dominant method is Empirical $ositivism (appeared in *+>5s",which is an inducti$e method characteri0ed b# the methodologies of empirical testabilit# ($erifiabilit#4
falsifiabilit#" $ia mostl# 9uantitati$e Anal#sis. Gn the contrar#, BC! falls under Quadrant %hree where the predominant method is 5ogical"Experimental& Experiential& and Hermeneutical nterpretationism (that has
emerged since *++3". Table 6 pro$ides an historical de$elopment of research methods and their comparati$e
methodologies.
%his methodolog# uses mi8ed methods 9ualitati$e and 9uantitati$e methods deducti$einducti$e methods
a multi$ariate approach that draws upon logic rather than probabilit# embedded case studies that emplo# both
case design and sur$e# design, and basic consulting research. ts dominant resource is social realit# of data,
beha$ior, social interactions, narrati$es, oral traditions, and cultures. ts dominant in9uir# is obser$ing and
listening to people and registering their gestures, signs, s#mbols, pro$erbs, similes, parables, metaphors,
themes, humor, traditions and cultures: comparing peoples and their cultures. ts dominant outcomes are
engaging in different t#pes of research practice methods are tools or lens (optics" to in$estigate se$eral t#pes
and kinds of research 9uestions (See Table 6 ".
#ppendix 0 suggests a structure for the S! eport.
Biblioraphy
Ackoff, ussell E. and )mer# &. ). (*+-", 5n Purposeful Systems. Aldine Atherton, Chicago.
Bennis, 1arren /. and obert D. %homas (-55-", 6ee!s and 6ee$ers %o) 3ra, 7alues, and efining Moments Shape 'eaders. Boston6
Har$ard Business School !ublishing.
Bollier, 7a$id (*++", /iming %igher . Chicago6 Amacom.
Bossid#, Earr# and am Charan (-55-", 3xecution "he iscipline of 6etting "hings one. ;ew ?ork6 Crown Business.
Ca$anagh, /erald &. (-552", /merican Business 7alues / 6lobal Perspective, 3th edition, !renticeHall.
Chaffee, Dohn (*+", "hin!ing Critically, -nd edition, Boston, MA6 Houghton Mifflin Co.
Childre, 7oc and Bruce Cr#er (*+++", #rom Chaos to Coherence. Boston6 ButterworthHeinemann.
Christensen, Cla#ton M. (*++", "he Innovators ilemma hen 2e) "echnologies Cause 6reat #irms to ail , Boston6 Har$ardBusiness School.
Collins, Dim and Derr# . !orras (-55-", Built to 'ast Successful %abits of 7isionary Companies. Harper Business.
Collins, Dim (-55*", 6ood to 6reat . Harper Business.
Co$e#, Stephen . (*++", "he 8 %abits of %ighly 3ffective People. ;ew ?ork6 &ree !ress.
Co$e#, Stephen . (-55
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)mer#, &red ). and )ric E. %rist (*+>", "o)ards a Social 3cology. !lenum !ress, Eondon.
)t0ioni, Amitai (-55*", 'Humble 7ecision Making, in %arvard Business &evie) on ecision Ma!ing , Har$ard Business School !ress,
pp. ", "he Po)er of 3ngagement . ;ew ?ork6 Simon I Schuster.
Malhotra, ;aresh R. and Sat#abhushan 7ash (-55+", Mar!eting &esearch /n /pplied 5rientation, 3th edition, !earson, !renticeHall.
Mandela, ;elson (*++
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6able : %ar>et Jncertainty and "mbiuity and their 22ect on 6ypes o2
Research %ethodoloy
Distinguishing
Dimension
Types of Research Exploratory
Research
Descriptive Research -ausal Research
Nature o2 the Problem "mbiuous and
unstructured and
@wic>edA Problems
Jncertain or partially
de2ined Problems
Problems clearly de2ined&
eplored and described
State o2 Nature o2 the
%ar>ets
%ar>et "mbiuity %ar>et Jncertainty %ar>et Certainty
State o2 %ar>et
nowlede
Problem 2ormulations
and solutions are
un>nown
Problem 2ormulations are
>nown but solutions are
un>nown
Problem 2ormulations and
solutions are >nown
Kariation SeDuence Concomitant and
circular ,ariation o2
causes and e22ects
"ntecedent and seDuential
,ariation o2
Causes and e22ects
Cause precedes e22ect linearly
6ypical Research
!bjecti,es
plore plurality o2
causes and e22ects
wor>in concomitantly#
'escribe and weed
spurious e22ects between
causes and seDuential
e22ects
stablish the appropriate causal
order or seDuence o2 e,ents7
measure the concomitant
,ariation between presumed
causes and the presumed e22ect7
reconi5e alternati,e plausible
eplanations or causal
seDuences&
6ypical %ar>etin
Research uestions
!ur sales are declinin
and we do not >now why#
0ho would be interested
in our products1
0hat >inds o2 people are
buyin our product1 0hat
are their demoraphics1
0hat 2eatures do buyers
pre2er in our product1
i,en this price-Duality
combination& will buyers
purchase more o2 our product&
repeat-buy& and be loyal1
0hich o2 the two ad,ertisin
campains will be moree22ecti,e in eneratin sales
re,enues and net pro2its1
6ypical R% Research
uestions
Is our labor 2orce
su22erin 2rom chronic
malaise1
$uded by accidents our
wor>er sa2ety conditions
are declinin and we
donLt >now why1
0hat are the
demoraphics and
psychoraphics o2 our
labor 2orce1
0hat are the situational
characteristics o2 our
declinin wor>er sa2ety
conditions1
0hy is our labor 2orce
su22erin 2rom chronic malaise1
ence& what are the causes o2
increasin accidents in the
wor>place1
6ypical 8inancial
Research uestions
!ur stoc> prices areplummetin downwards
and we cannot 2athom
why#
!ur erodin borrowin
capacity will a22ect our
wor>in capital 2or the
net two Duarters and
what can we do about it1
0hat are thedemoraphics and
psychoraphics o2 our
indi,idual in,estors1
0hat are the situational
characteristics o2 our
erodin borrowin
capacity1
0hat is ailin our in,estorcommunity and what are its
determinants1
ence& what are the causes o2
our decreasin wor>in capital
and cash position1
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6able *: Problem Identi2ication-Speci2ication StaesNSee also Str#ker (-55*6 *-"O
Classical
'omain o2 InDuiry
Problem Speci2ication by
Contrasts
Problem Speci2ication by
'i22erencesIs1 Is not1 0hat is
distincti,e o2
the @IsA1
0hat is
distincti,e o2
the @Is NotA1
0ho1 0ho did it1 0ho did not1 0hat characteri5esthose who did1
0hat characteri5es
those who did not1
0hat1 0hat did they do1 0hat did they notdo1
0hat characteri5es
what they did1
0hat characteri5es
what they did not1
0here1 0here did they do it1 0here did they notdo it1
0hat characteri5es
where they did it1
0hat characteri5es
where they did it not
0hen1 0hen did they do it1 0hen did they not doit1 0hat characteri5eswhen they did it1 0hat characteri5eswhen they did it not1
0ith 0hom1 0ith whom did theydo it1
0ith whom did they
not do it1
0hat characteri5es
with whom they did
it1
0hat characteri5es
with whom they did
not do it1
ow1 ow did they do it1 ow did they not doit1
0hat characteri5es
how they did it1
0hat characteri5es
how they did it not1
ow !2ten1 ow o2ten did they doit1
ow o2ten did they
not do it1
0hat characteri5es
how o2ten they did
it1
0hat characteri5es
how o2ten they did it
not1
0hy1 0hy did they do it1 0hy did they not doit1
0hat characteri5es
why they did it1
0hat characteri5es
why they did it not1
Hence .hat is the problem, .hat is not the problem,
.hat characteri7esthe problem,
.hat does notcharacteri7e the
problem,
Hence .hat caused the problem,
.hat did not cause
the $roblem,
.hat characteri7es
the cause that
caused the problem,
.hat does not
characteri7e the caus
that caused the
problem,
Hence .hat caused the problem"
conse*uences,
.hat did not cause
the $roblem"
conse*uences,
.hat characteri7es
the cause that
caused the problem"
conse*uences,
.hat does not
characteri7e the caus
that caused the
problem"
conse*uences,
Hence .hat is a solution, .hat is not a
solution,
.hat characteri7es
the solutions,
.hat does not
characteri7e thesolutions,
-3
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6able : " 8our2old 6ypoloy o2 Critical 6hin>in
6a>e means
that are:
6o "chie,e
Riht nds or!utcomes
0ron nds or !utcomes
Riht
-ritical Thinking to #chieve8
Theory& /alue and .isdom
/irtue
'piritual ntelligence 9':;
)8amples6
&ortitude, Courage
Compassion, Rindness
&airness, Dustice%ruth and ectitude
Honest# and integrit#
Balance and maturit#
-ritical Thinking to #void8
-unningness
'hrewdness
.orldliness
)8amples6
Collateral damage
Eo$e to kill
Ser$e to dominate7ieting to anore8ia
Merger to kill competition
Ac9uisition to kill competition
0ron
-ritical Thinking to #void8
3anipulation
Deception
Trickery
)8amples6
Jillain@s courage
Murderer@s fortitude
!reempti$e war
Stealing to donate
Eie to sa$e one@s lifeEosing to win
-ritical Thinking to #void8
.ickedness
/ice
Evil
)8amples6
A$arice, greed
Jerbal or ph#sical $iolence
Co$eting neighbor@s goods
Co$eting neighbor@s spouse
Conspirac# and murder )8ploitation and oppression
ercise:
Jsin this 2our2old critical thin>in paradim& where and why would you classi2y the 2ollowin properties or e,ents&
and with what conseDuences1
Se,erance pay& retirement bene2its& street smarts, jobs outsourcin to reduce costs& child labor& sweatshops&employin illeal immirants& trans2errin outmoded technoloies& 2orced obsolescence& planned obsolescence&
arti2icial shortaes& mar>et luts& downsi5in to impro,e e22iciency but creatin host towns& bait and switch&
decepti,e ads& decepti,e contracts& dumpin& price war& predatory pricin& insider tradin& round trip sales&
underdisclosure in ads& in2ormation o,erload or o,erdisclosure in media& hostile ta>eo,er& merers& di,estitures&
acDuisitions& plant closin& declarin insol,ency or ban>ruptcy& eecuti,e compensation& reenmail& olden
parachutes& and bribin#
-2
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6able 9: !pposin Schools o2 6houht in relation Kalue Creation and
Capture in !rani5ations
'imensions o2
Inno,ation
%anaement
School o2 "nalytical 6hin>in School o2 Intuiti,e 6hin>in
Primary oal %astery o2 >nowlede and 'ecision ma>in based
on riorous Duantitati,e analysis that can be
,alidated throuh replication
InDuiry into >nowlede 2or oriinality and
in,entions that empower eplorations into decision
ma>in based on creati,ity& intuition& imaination
and inno,ati,e thin>in
Primary dri,er o2
,alue creation
"nalysis and analytical thin>in7
Eoic o2 eplanation& prediction and control
Intuition and intuiti,e thin>in7
!riinality and creati,e thin>in
%ethod 'educti,e and inducti,e reasonin as the source
o2 truth and certainty
6he art o2 >nowin without deducti,e-inducti,e
reasonin& but throuh intuition& insihts&
imaination and desin thin>in
%ethodoloy Einear Duantitati,e numerical data analysis
bac>ed by analytical so2tware (e##& SPSS& cel)7
hence hea,ily based on past data& well roomedand loyal leaders7 no mo,ers and sha>ers#
Circular& Dualitati,e& non-numerical synthesis based
on ut 2eelins& instincts& emotions& intuitions&
eperimentation& imaination& etc#7 hence hea,ilybased on understandin and predictin the 2uture ?
this school ne,er systemati5es what it does7 it waes
and wanes with indi,idual intuiti,e leaders#
!rani5ational
structure
ierarchical& ,ertical& top-down& resistance to
chane& pre2errin status Duo
'emocratic& hori5ontal& down-up& e,er-adaptin and
resilient to chane
"d,antaes 6hey can build si5e and scale& enjoy low ris>& rely
on the tried and true& reduced bias& reduced
,ariation& less judments& sa2ety and security o2
incremental inno,ations
Inno,ations may come 2ast and 2uriously with many
mar>et brea>throuhs& technoloical brea>throuhs&
radical inno,ations& disrupti,e inno,ations& catalytic
inno,ations& rowth and lone,ity representin as
tremendous challenes
'isad,antaes !rani5ational riidity& stanancy& status Duo&
shunnin ris> and ambiuity and thereby
2or2eitin opportunities&
!rani5ational o,er-2leibility and resilience& too
2orward loo>in& o,er ris> prone& indulin in
uncertainties and ambiuities&
%uch souht
a2ter outcomes"nalytical mastery ,ia tried and pro,entruths& doctrines& domas& certainties& norms&
standards& rules and routines that stabili5e
decision ma>in and minimi5e ris>& reduce
uncertainty and ambiuity#
Intuiti,e oriinality ,ia untried and unanaly5ed2lashes o2 insihts& intuitions& disco,eries& creations&
imainations& desins& and eperimentations that
empower strateic decision ma>in that& in turn&
capitali5e on ris> and uncertainty& ambiuity and
ambi,alence& economic chaos and mar>et
turbulence#
nemies 'ecentrali5ation& democracy& bias& judment& ris>&
uncertainty& ambiuity& ambi,alence& con2licts&
economic chaos& 2inancial crisis& mar>et
turbulence
Centrali5ation& hierarchies& imposed truths& domas&
certainties& absolutes& routines& best practices&
traditions& norms& riid rules& discipline& and control&
Currentrepresentati,e
companies
8ord& eneral %otors& Chrysler& on& most JSand J ban>s& most Indian nationali5ed ban>s&
& IB%& P& "pple& %icroso2t& 'ell& Sony& Sun%icrosystems& 6oyota& 6oshiba& onda& No>ia& 6ata
%otors& In2osys& 0ipro&
Current
representati,e
products and
ser,ices
%ost JS and J o,ernments and
bureaucracies7 JS" domestic auto products such
as 8ord& % and Chrysler ,ehicles& most JS"& J
and Indian uni,ersities& most JS"& J and
Indian %B" prorams&
%ost 0est and ast uropean o,ernments and
uni,ersities (e##& ermany& 8rance& Swit5erland&
'enmar>& Norway& Sweden& 8inland& Poland)& 0est
uropean cars (B%0& %ercedes)& $apanese cars and
laptops& orean Cars& Chinese computers
8uture Prospects Conser,ati,e& static& linear& occasionally reressi,e Proressi,e& dynamic& spiral& prospecti,e& 2orin&
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2orayin&
-
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6able ;: " 6aonomy o2 Research InDuiries
'omain o2 Research
InDuiry
Problem-Centered:"nomaly Centered7
nowlede-ap centered7
6echnoloy-ap centered
Non-Problem CenteredCreati,ity-centered7
Inno,ation centered7
'esin thin>in centered
Past and
Present
Basic
%ethodoloy o2
Research
InDuiry
5ogical Empiricism8 Empirically Testable& /erifiable&
%alsifiable8
3ostly
:uantitative #nalysis
'ociological
Experimentation and
nvestigation8 nter"subectively
-ertifiable& #greeable&
#cceptable8 3ostly :ualitative #na
5ogic of
in planation&
Jnderstandin&Prediction and Control
o2 Phenomena&
anomalies& con2licts&
truth& laws& norms&
principles& rules and
standards disco,eredthrouh the Eoic o2
'isco,ery
$udmental 6hin>in -
Process:Problem identi2ication&
Problem description&Problem de2inition&
Problem 2ormulation&
Problem speci2ication&
Problem-resolutions-in,estiation&
Solutions-hypotheses-,eri2ication&
!bser,ation-eperimentation&
Best solution selection&
Best theory selection&
Best law-li>e enerali5ation&
Best truthnormmores selection&
Solution-conseDuences-estimation&
Problem re2ormulation&
In,estiati,e 6hin>in
Process:Intuition& insihts&
'iscussion& discernment&indsiht research&
'emoraphic analysis&
conomic analysis&
Socioraphic analysis&
Psychoraphic analysis&
roraphic analysis&
thnoraphic analysis&
Clicoraphic analysis&
Chiroraphic analysis&
"nthropoloical analysis&
Consensual analysis&
Retrospecti,e analysis
6he
8uture
5ogic of
Discovery:See>in new lands& new
elements& new laws&
rules and standards&
new 2ormulae& new
products ser,ices&
new processes
procedures& new
eplanations& new
theories& new
paradims& new
>nowlede& new laws&norms& principles& rules
and standards
Critical 6hin>in ?
Processes:Critical thin>in research&
lobal ,alues enhancement thin>in&
lobal systems research thin>in&
lobal scarce-resources research&
lobal enery conser,ation thin>in&
coloical thin>in research&
Sustainability research thin>in&
lobal po,erty eradication thin>in&
Pandemic disease eradication thin>in&
lobal injustices elimination thin>in&
lobal terrorism eradication thin>in&
lobal huner pre,ention thin>in&
lobal illiteracy eradication thin>in&
lobal school re2ormation thin>in&
lobal research uni,ersity thin>in&
lobal healthcare research thin>in&
lobal peace research thin>in&
lobal racial harmony research
thin>in&
lobal optimal 2utures thin>in
'esin 6hin>in ?
Processes:Creati,e thin>in&
Imainati,e thin>in&
Inno,ati,e thin>in&
Producti,e thin>in&
'i,erent thin>in&
Eateral thin>in&
New paradim thin>in&
New desin thin>in&
New methods thin>in&
New methodoloy thin>in&
Radical inno,ati,e thin>in&
'isrupti,e inno,ati,e thin>in&
Catalytic inno,ati,e thin>in&
New process thin>in&
New product thin>in&
New ser,ices thin>in&
New mar>ets thin>in&
New challenes thin>in&
-+
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6able G: " Chronoloical Sur,ey o2 Research %ethods and %ethodoloies
Time $eriod=
$hilosophy of
'ocial 'cience
Dominant
3ethod
Dominant Resource Dominant n*uiry Dominant
Outcomes
F+M-Eoical
Positi,ism
(6he Kienna