Solving problems is a natural part of business development.
Every organizational will need to solve particular problems if they hope to
overcome market challenges and economic environments. The complexity of today’s
global business environment requires better decision making that ensures the
best solutions are forthcoming to enhance opportunities. A study by Baer et. al
(2013) delves into a theory of the
microfoundations of decisions that help to predict impediments to solution
formation when complex and ill-structured problems present themselves.
Problem formation has always been the fundamental
stumbling block and main activity of strategic decision making (Quinn, 1980).
Without solutions to problems organizations cannot move forward in their
development and may be derailed by personalities, vantage points, bounded
rationality, and poor decision-making process that take their toll on
profitability.
Complex problems are more likely to be derailed by
the microfoundations of decision making due to the inherent self-interest of
the decision makers themselves. In complex problems there are simply many more
places for them to insert their own needs and interests into the solution
thereby creating poor results. A problem is complex when it has lots of varying
variables, a high degree of connectivity among the elements, and dynamic
actions that change the situation over time (Watson, 1976).
Teams are naturally limited by their bounded
rationality or knowledge and cognitive capacity to understand and solve these
complex problems (Simon 1957). Heterogeneous teams allow for greater diversity
of thought and the loosening of social structure to incorporate new
perspectives and vantage points into the problem. They can help avoid “tunnel
vision” or the need to use their limited cognitive capacity on well-worn
solutions and selective approaches.
The authors believe that framing the problem and
then formulating the root of the problem is the best approach to handing
complex problems. Framing includes the writing down of symptoms of the problem,
correlating those symptoms, and then settling on the important ones. Solutions should not be discussed until all of
the symptoms are agreed upon to ensure tunnel vision doesn’t make its way into
the process. Once the problem is framed the seeking it is important to see
determine the root cause. That root can be used as the catalyst to finding
effective solutions.
Baer, et. al. (2013). Microfoundations of strategic problem formulation Microfoundations
of strategic problem
formulation. Strategic
Management Journal, 34 (2).
Quinn J. (1980). Strategies
for Change: Local Instrumentalism. Irwin: Homewood, IL.
Simon H. (1957). Models
of Man: Social and Rational. Wiley: New York.
Watson C. (1976). The problems of problem solving. Business Horizons, 19: 88–94.
