1. Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. 1 Quality Management for Organizational Excellence Lecture/Presentation Notes By: Dr. David L. Goetsch and Stanley Davis Based on the book Quality Management for Organizational Excellence (Sixth Edition)

2. 2 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making MAJOR TOPICS Problem Solving for Total Quality Two Models for Solving and Preventing Problems Solving and Preventing Problems Problem-Solving and Decision-Making tools Decision-Making for Total Quality The Decision-Making Process

3. 3 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) Objective versus Subjective Decision-Making Scientific Decision-Making and Problem Solving Employee Involvement in Decision-Making Role of Information in Decision-Making Using Management Information Systems (MIS) Creativity in Decision-Making Major Topics Continued

4. 4 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) Decision Making is the process of selecting one course of action from among two or more alternatives. Decisions should be evaluated not just by results but also by the process used to make them. A problem is a situation in which what exists does not match what is desired or, put another way, the discrepancy between the current and the desired state of affairs. Problem solving in a total quality setting is not about putting out fires. It is about continual improvement. Two effective problem-solving models are the Deming Cycle and the Toyota Practical Problem- Solving Process.

5. 5 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) Securing reliable information is an important part of problem solving and decision making. W. Edward Deming recommends the use of the following tools:  Cause-and-effect diagrams  Flowcharts  Pareto charts  Run charts  Histograms  Control charts  Scatter diagrams

6. 6 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) The decision-making process is a logically sequenced series of activities through which decisions are made. These activities include identifying or anticipating the problem; gathering relevant facts; considering alternative solutions; choosing the best alternative; and implementing, monitoring, and adjusting. All approaches to decision making are objective, subjective, or a combination of the two.

7. 7 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) Scientific decision-making means making decisions based on data rather than on hunches. Complexity in scientific decision making means nonproductive, unnecessary work that results when organizations try to improve processes in a haphazard, nonscientific way. The different types of complexity include errors and defaults, breakdowns and delays, inefficiencies, and variation.

8. 8 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) There are advantages and disadvantages to employee involvement. Techniques to enhance group decision-making are brainstorming, NGT, and quality circles. Managers should be prepared to counteract groupshift and groupthink.

9. 9 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) Information is data that have been converted into a usable format that is relevant to the decision-making process. Decision makers are receivers of information who base decisions in whole or in part on what they receive. Technological developments have introduced the potential for information overload, or the condition that exists when people receive more information than they can process in a timely manner.

10. 10 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) A management information system (MIS) is a system used to collect, store, process, and present information. Such a system has three components: hardware, software, and people. A management information system can do an outstanding job of providing information about predictable and routine matters. However, many decisions that managers have to make concern problems that are not predictable for which no data are tracked.

11. 11 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) Creativity is an approach to problem solving and decision-making that is imaginative, original, and innovative. The creative process proceeds in four stages:  Preparation  Incubation  Insight  Verification.

12. 12 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sixteen: Problem Solving and Decision Making (Continued) Factors that inhibit creativity include:  Looking for just one right answer  Being too logical  Avoiding ambiguity  Avoiding risk  Forgetting how to play  Fearing rejection  Saying “I’m not creative.” ● Three strategies for helping people think creatively are  Idea vending  Listening  Idea attribution