 The model consists of 6 steps: Step 1: Define the problem or opportunity. Step 2: Set objectives & criteria. Step 3: Generate alternatives. Step 4: Select the most feasible alternatives. Step 5: Implement the decision. Step 6: Control the results.

 Define the problem you want to solve or opportunity you want to capitalize on.  This step requires you classify the problem, select an appropriate level of employee participation, & distinguish the cause of the problem from its symptoms.

 Classify the problem:  Problems can be classified in terms of how the decision is structured, the conditions in which decisions are made, and the decision model used.

 Decisions can be categorized as programmed or nonprogrammed:  Programmed Decisions – recurring or routine situations in which the decision maker should use decision rules or organizational policies & procedures to make decisions.  Nonprogrammed Decisions – significant & nonrecurring & nonroutine situations in which the decision makers should use the decision-making model.

 Nonprogrammed decisions take longer to make than programmed decisions.  Must be able to differentiate between the 2 types of decisions, because they alert you to the time & effort you should be spending.  Upper-level managers typically make more nonprogrammed decisions than do lower- level managers, who tend to make programmed decisions.

 When a problem arises, managers must choose the best people to solve it.  The key to successful group decisions is to avoid the pitfalls and capitalize on the strengths of the group process.  The upside of Group Decision Making:  When group members participate in the decision process, 6 advantages often occur.

 The 6 advantages: 1. Better-quality decisions. 2. More information, more alternatives, & heightened creativity and innovation. 3. Better understanding of the problem & decisions. 4. Greater commitment to the decision. 5. Improved morale & motivation. 6. Good training.

 Downside of Group Decision Making:  Careful leadership is required to avoid the following pitfalls of group decision making: 1. Wasted time & slower decision making. 2. Satisficing. 3. Domination by subgroup or individual & goal displacement. 4. Conformity & groupthink/grouping.

 Once you’ve defined the problem, set an objective that states end result in solving problem or capitilizing opportunity.  Objective answers question ‘Why am I doing this?’ so the objective states what the individual, group, or organization intends to accomplish.  When writing objective, specify criteria for achieving it.  Criteria are standards that must be met to accomplish the objective.

 After defining the problem & setting objectives & criteria, generate alternatives.  Often there’s more than one way to solve a problem.  Base alternatives on evidence, not just opinion.  In this section, we examine innovation & creativity, the use of information & technology to generate alternatives, & group methods for generating creative alternatives.

 Use Innovation & Creativity:  Innovation alters what is established by introducing something new.  Product innovations are changes in outputs to increase consumer value & development of new outputs.  Process innovations are changes in the transformation of inputs into outputs.  Creativity is a way to thinking that generates new solutions to problems & new ways to approach opportunities.

 Creative Process:  Intelligence & creativity are not highly correlated.  3 stages in the creative process are: 1. Preparation. 2. Incubation & illumination. 3. Evaluation.

 Use Information & Technology:  Useful information has 4 characteristics: 1. Timeliness, 2. Quality, 3. Completeness, 4. Relevance.

 Get Groups to use Creativity & improvement.  Five widely used methods: 1. Brainstorming 2. Synectics 3. Nominal Grouping 4. Consensus Mapping 5. The Delphi Technique

1. Brainstorming:  Group members generate as many alternatives as they can in a short time.  Group presented with a problem & asked to develop as many solutions as possible.  Short time period (10-20 min) is specified.  Members encouraged to make wild, off-the- wall suggestions.  Build on suggestions made by others.  Not to react in anyway to any contribution.

1. Brainstorming (continued):  When selecting members, include varied of people.  5 – 12 people.  Everyone has equal voice – status differences should be ignored.

2. Synectics:  Novel alternatives are generated through fantasizing.  Focuses on generating novel ideas rather than large number of ideas.

3. Nominal Grouping:  Structured voting method is used to generate & evaluate alternatives. Involves 6 steps:  List ideas.  Record ideas.  Clarify the ideas.  Rank the ideas.  Discuss the ranking.  Vote.

4. Consensus Mapping:  Develops group agreement on a problem solution.  If agreement can’t be reached, the group doesn’t make a decision.  Consensus mapping can be used after brainstorming.  Benefit – the group ‘owns’ the solution, so members are more committed to implementing it.

5. Delphi Technique: A series of confidential questionnaires are used to refine a solution. Response from the 1 st questionnaire are analyzed & resubmitted to participants in a 2 nd questionnaire. This process may continue for 5 or more rounds before a consensus emerges. These group members are experts in their field, and are outsiders.

 Make evidence-based decisions.  Two types of techniques will assist you in this process.  Quantitative & Cost-benefit analyses.

 Quantitative:  Mathematical analysis to assess alternative solutions.  Break-even analysis – calculates the volume of sales or income that will result in a profit – involves estimating the volume of sales & cost of production, break-even point occurs when no profit or loss results.  Capital budgeting – used to analyze alternative investments in major long-term resources – goal is to find the quickest payback.

 Quantitative:  Queuing Theory – Addresses waiting time, companies have staff providing customer service, using too many staff to wait on customers is an inefficient use of resources & costly, too few staff providing customer service can also be costly if poor service drives customers away.

 Cost-benefit Analysis:  Combines subjective methods & mathematical techniques to compare alternative courses of action.  Also called pros & cons analysis.  Looks at advantages & disadvantages of each alternative.

 Develop a plan of action.  How you implement your plan is crucial to its success or failure.

 Establish checkpoints to determine whether the chosen alternative is solving the problem.  If not, consider corrective action.  If implementation continues to go poorly, don’t remain with your decision.