policy making on decision making, Lecture notes of Public Policy

Download policy making on decision making and more Lecture notes Public Policy in PDF only on Docsity! & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA OEM UNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process by YOLANDE DU TOIT Submitted in partial fulfilment of the requirements for the degree Masters of Engineering (Technology Management) in the GRADUATE SCHOOL OF TECHNOLOGY MANAGEMENT UNIVERSITY OF PRETORIA May 2011 Supervisor: Prof Dr L Pretorius © University of Pretoria Abstract According to Harvard Business Essentials (2006) an organisation is a series of decisions linked by implementation and other activities. Decisions set the pace and direction; the rest is follow through. Paul Nutt has been studying how decisions are made for more than 20 years and have found that decisions fail half of the time, without realising any benefit for the organisation (Nutt, 2002). Decision making is an essential part of the management function of an organisation. But why do so many decisions fail? Why does the outcome of decisions sometimes not satisfy the initial problem or support the organisation’s goal? Four decision making processes were analysed for this dissertation, the conclusion was drawn that current decision making processes do not incorporate a clear system approach. The dissertation shows that a system approach, as defined by systems engineering, satisfies the need for ensuring decisions are made taking into account a holistic picture. By following a system approach when making a decision, a bigger picture view can be obtained. Having a bigger picture view, will aid the decision maker in identifying whether the decision to make is indeed the right decision to be made, or merely a symptom of another decision or problem. A system approach aids the decision maker to determine where the decision to be taken fits in and what impact it will have on the system. A system approach to decision making process was designed, incorporating the strengths of the decision making process and system approach methodologies researched. The system approach methodology can be applied successfully to management decisions. By using this methodology a holistic view is obtained of a decision regarding a problem, resulting in effectively handling and managing the decision or problem. IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Using a System Approach .........ccccececssssssssseseseseesessesesseseseseeeeeseseseseseessaseseseenenenes 5.4. Case Study 3: Training Approach ..........ccccccesecsesessesseseseeeenessesesesseseneeneneete Using a System Approach .........cccccccecscssssssseseseseesesseseseeseseseeeeseseseseeesseseseneenenenes 5.5. COMCIUSION .......secccscsseseseeeescssssssseseseeesessesssecseneeeeesiseseseseessisesesesseneneeesesaneneees Chapter 6: — COnclusiOn.........cccsccscesesessesssesseseseeeeessesssssseseeeenseseseseseesesinesseneneee Future research tOpics............ccccccccscssescscsesesesscsesesseesescsessseesceesesesesensssessssenseseaees List Of References .......ccceccccc cece ceceececeeeeceseeeeceecesseseseessesseseessessseesesseeesesseeeseesaaees iv]|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA OEM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process List of Figures Figure 1-1: Research Methodology . Figure 1-2: Research Roadmap ...........cccccccscsscscessssssesescsssetscsesesssenscscsessseesseeneeseasseees 3 Figure 1-3: Inductive Theory Guidelines. ..........ccccscesesesssssssssseseseeressesesseseneneeeitene 5 Figure 1-4: Dissertation Structure.........c.ccccccecessssssssseseseseessssesssssseneeeessisceeteneeeeeseseneees 8 Figure 2-1: Decision TyP@s............cccccccscccsesssessescsesstecsesesessenscsesesensescssesessseensessaeeeees 13 Figure 2-2: Strategic Managerial Process .........:.cccccseseseessissssseseseeeeseseseseeneneeeeneets 16 Figure 2-3: Harvard 5 Step Process .........:cccsecscsssssssseseseesesssesseseseseenesseseseseeneasesesenes 19 Figure 2-4: 6 Step Problem Solving Process... Figure 2-5: Decision Making Loop ProCeSS............::ccccccsssssseseseeteteeseseseetsesessseeneeees 23 Figure 2-6: The Problem Statement SUMMALY............cccececesssseseseseeeeesseeseseneeteneets 32 Figure 3-1: Organisation as a SYSteM .........ccccccsssssssesesessessesseseseseeenseseseeeeneneeseneee 36 Figure 3-2: TOC 5 focus step flow diagram .........cccccceeceessisssseseseseeneseseseseeneneeneneets 42 Figure 3-3: The Soft System Model. Figure 4-1: A System Approach to Decision Making ..........:cc:cceeeeeteseeeseneereeees 52 Figure 4-2: Selection Criteria .........ccccscsesesesssssssssseseseenessesesseseseseesesiseseneeeesesesets 55 v|Page ERSITEIT VAN PRETORIA & univ UNIVERSITY OF PRETORIA OEM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process List of Tables Table 2-1: Table 2-2: Table 2-3: Table 2-4: Table 2-5: Table 2-6: Table 2-7: Table 3-1: Table 3-2: Table 3-3: Table 4-1: Table 5-1: Table 5-2: Table 5-3: vi|Page Strategic Managerial Process Description............cceccee eerste tetas 17 Harvard 5 Step Process DeSCription ............:ccccesessessssssereseeeeesseseenenenee 19 6 Step Problem Solving Process Description .. Decision Making Loop Process Description .............::ccesseseeeseeeeeneeees 24 Decision Making Process CompariSOn..........:::ccessssssseseseeeeteseseseeneneeee 26 Decision Making Processes' Common Thread..........:::ccceeeeeeeee 27 Decision Making Processes Strengths and Weaknessé6...........c:ceeee 28 TOC 5 FOCusing Steps .........cececscsssseseseseesessesseseseeeenseseseseeseneeeeesaseseneees 40 The Soft System Model Description ..........csccsccseseesessssseseseeeeneseseteens 45 System Approach Characteristics ... A System Approach to Decision Making Process Description.................. 53 ReSOUrCE COSt..... eee cece eee eenece ce eeteeneneeeteseeeneneteesesesseneneseseeeeeneeeeee 65 Resource Alternatives ..........ccccccccscecccceeecseceeeececeseeceeeeseesseeeseeseeeeesnesaaee 67 Training Approaches ..........:ccecceccceeeecseeeceeceeeeseceseesseseseesseseseeseseeeeeeaaeess 71 & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process A second type of study was completed namely comparative study. During the application of the integrated systems model, this type of study was completed. Different applications of the model were compared with each other under different scenarios. The research strategy followed for this dissertation is applied research (Carole, et al., 2003); the model developed is specifically focused on supporting decisions to be made on management level in organisations. Figure 1-2: Research Roadmap illustrates the research methodology used. X\ Applied & Action research Analysing «Compared the decision making | results obtained processes and +Applied and from the case systems tested the studies designed model approaches . to case studies Exploratory research Comparative research > a Figure 1-2: RESEARCH ROADMAP The research methodology used can be summarised into one methodology, namely management research. Management research is defined as a specific dimension of business research, where the research is concerned with influences on the work behaviour of people, in this dissertation decision making, how to achieve efficiency, effectiveness and productivity (Carole, et al., 2003). Management research is research that has a theoretical base, however incorporates within them the potential to take action (Easterby-Smith, et al., 2002). Easterby-Smith 3|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process (2002) has noted the distinctive difference between management research and other research approaches. 1. Management is a very diverse function within an organisation, it incorporates multidisciplinary functions for example economics, anthropology and mathematics. Therefore the researcher is at a cross road whether to adapt a single or a transdisciplinary approach. Unless either commercial or personal advantages can be realised through research, managers will not give access to their organisation. This leads to problems getting access to organisations for fieldwork and confidentiality clauses can limit the research as well. Management requires both thought and action. Managers require research that will enable them to take action on the research. The management research approach was used by designing a model which can be applied across multi disciplinary functions within management. The designed model is based on research conducted on existing approaches and incorporating the approaches to enable managers to practically implement the model in the organisation. 4|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Locke’s (2007) suggested guidelines for the development of inductive theories were also used during the compilation of the dissertation. Guidelines illustrates Locke’s guidelines graphically. Figure 1-3: Inductive Theory Start with valid Develop a substantial F A . Formulate valid philosophical axioms body of observations concepts as the base or data Ld J , Tie in valid concepts from other sources and theories where applicable Look for evidence of causality and identify causal mechanisms Integrate the totality of findings and concepts into a non-contradictory whole Identify the domain conditions for the and boundary theory Figure 1-3: INDUCTIVE THEORY GUIDELINES (Locke, 2007) 1. Start with valid philosophical axioms as the base Locke identifies three primary axioms: i. Existence That something is real. ii. Identity That something has a specific nature to it. iii. Consciousness That awareness exists. For the dissertation the axiom was identified that decision making and the process followed do rarely realise any benefit for the organisation (Nutt, 2002). 5|Page UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process The systematic outline of this dissertation is illustrated in Figure 1-4: Dissertation Structure. Chapter 1: Introduction Introduction to the dissertation, including motivation for the dissertation and research methodology used. Chapter 2: Background and Context for Decisions Study the definitions of decision, decision making and processes used for decision making. The Problem Statement is defined in this chapter. Chapter 3: A Systematic Approach Study the definitions of systems, system approach and two system approaches are analysed. Chapter 4: Integrated Approach The decision making processes and system approaches, are incorporated into one model. Chi 1-H ade Application Testin The developed model is tested in real world scenarios. (oie Te) mee) ney cela) Conclude on the impact and benefits of the developed Tirole Figure 1-4: DISSERTATION STRUCTURE 8|Page VERSITEIT VAN PRETORIA VERSITY OF PRETORIA IBESITHI YA PRETORIA & @ x UNI fn N Incorporating a system approach to the decision making process 1.4. Conclusion Decision making is an essential part of the management function of an organisation, but often fails. Through a management research approach, this dissertation aims to address this statement. The dissertation gives an introduction to decisions, decision making and why decisions fail. System approach is analysed to determine how the approach can be incorporated with the decision making processes to form an integrated model. A model is defined, based on the analysis, which will support the management decision making function. 9|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Chapter 2:Background and Context for Decisions “Indecision is the thief of opportunity” — Jim Rohn, business philosopher. Chapter 2 gives an overview of decisions, decision making and the processes used during decision making. In this chapter decision making and the strengths and weaknesses of the processes followed are placed in context. The problem statement for the dissertation is stated and elaborated in this chapter. 2.1. Defining Decisions Peter Drucker defines a decision as a judgement, a choice between alternatives, however rarely a choice between right and wrong. Drucker goes further to describe that it is at best a choice between “almost right” and "probably wrong” — but much more often a choice between two courses of action neither of which is provable more nearly right, than the other (Drucker, 1967). Managers within organisations, regardless of industry or the size of the organisation, are faced with numerous decisions each day. The types of decisions can vary from determining resource requirements for a department to product strategies to follow. Decisions can be classified into six groups (Teale, et al., 2003): 1. Structured decisions; Decisions that are considered to be clear, unambiguous and easily definable. 2. Unstructured decisions; Decisions that are unclear, ambiguous and difficult to define. 3. Programmed; Decisions that rely on some form of predetermined organisational apparatus or routine that occurs, e.g. a procedure. Jennings (1994) defined programmed decisions as the extent to which the decision is repetitive, routine or a definite procedure has been established for making the decision. 10|Page NIBESITHI YA PRETORIA Incorporating a system approach to the decision making process & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA OH TUNIGESITHI YA PRETORIA illustrates the decision types and levels set out by Langford (2001) and Crawford (1997). Figure 2-1: DECISION TYPES 2.2. Defining Decision Making It has been said that administration is the critical organisational process, making possible production, procurement and the rest; that leadership is the heart of administration; and that decision making is the key to leadership (Gore, et al., 1964). Decision making can be defined as follows: . Acts of choice between alternative courses of action designed to produce a specified result and one made on the review of relevant information guided by explicit criteria (Teale, et al., 2003) . A conscious and human process involving both individual and social phenomena based upon factual and value premises, which includes a choice of one behavioural activity from one or more alternatives with the intention of moving towards some desired state of affairs (Elliott, et al., 2005) 13|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process e A moment, in an ongoing process of evaluating alternatives for meeting an objective, at which expectations about a particular course of action impel the decision-maker to select that course of action most likely to result in attaining the objective (Harrison, 1996). The conclusion can be drawn, given the definitions above, that decision making is the selection between alternatives to achieve a predetermined state or goal. 2.3. The Importance of Decisions and Decision Making Why should organisations make decisions? Decisions are made when a change is required or imminent. According to Robert Charette, change is the primary driver for decision making, either one has to make change happen or react to it. With change come decisions (Charette, 1993). Jennings, et al (1994) identified factors which emphasise the importance of having an effective decision making process (Jennings, et al., 1994), these factors are: . Scarcity of resources; Organisations generally face scarcity of resources and need to effectively utilise the resources available. * — Competition; Both the private and public sector are facing an increase in competition. . Environmental issues. Consumer safety, pollution and employment practices, often raise public concern over the degree of social responsibility demonstrated by organisations in their decision making process. 14|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Various decision making processes have been identified over the years; for this dissertation four decision making processes were used to determine what the common thread between these processes are. These processes were randomly selected based on the availability of information about each process. The decision making processes include: 1. Strategic Managerial process; 2. Harvard 5 Step process; 3. 6 Step Problem Solving process; and 4. Decision Making Loop process. The decision making processes are discussed in more detail in section 2.4. 2.4. Decision Making Processes The four decision making processes were analysed to determine the common factors, strengths and weaknesses. The four processes are illustrated and a brief description is given in sections 2.4.1 — 2.4.4. In Section 2.4.5 and 2.4.6 the four processes are compared and the common thread between them and their strengths and weaknesses are discussed. 2.4.1. The Strategic Managerial process The strategic managerial decision making process requires managers to take a more integrated and quantitative approach to decision making by infusing relevant methodologies from the strategic management and six-sigma processes (Friday- Stroud, 2007). During the strategic managerial decision making process, goals should be set by the relevant managers that align with the organisation’s mission. The goals identified should represent the desired end state that is to be achieved. Once a goal has been identified, the manager is to identify problems/issues that might deter the organisation to achieve the goals set out. Metrics are identified prior to the identification of alternative solutions to the problem to ensure that the manager remains unbiased 15|Page & s u u WOM VUNIBESITHI YA PRETORIA NIVERSITEIT VAN PRETORIA NIVERSITY OF PRETORIA UNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process TABLE 2-1: STRATEGIC MANAGERIAL PROCESS DESCRIPTION Step Description = | Set specific goals Set specific, measurable goals that align with the organisation’s mission. feedback 2 Identify problem Identification of organisational problem/issue based on synthesis of data generated from SWOT and statistical analyses. A problem/issue exists when a gap exists between existing and desired performance. 3] Select standard | Set selection criteria and standardised metrics for performance metrics performance accountability and evaluation. 4) Develop alternatives Develop alternative strategies to address the decision which will close the gap between the existing and desired performance. 5] Select best alternative Compare, evaluate and select the best alternative option to the decision. 6] Acquire and allocate | Acquire and allocate the appropriate resources. resources 7) Execute selected | Execute the selected alternative to the decision. decision 8) Evaluate decision using | Evaluate decision based on performance metrics metrics and take corrective action as necessary. 9 Monitor and control using | Ensure continuous feedback throughout the process. 18|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Although the process does emphasize the importance of aligning identified problems and decisions to the goal of the organisation, the following weaknesses were identified: The process does not include identifying the root cause of a problem hence this might lead to dealing merely with a symptom of a problem and not the real problem. The problem or decision is not put into context. The system and subsystem the problem or decision forms part of is not identified, therefore the decision maker might lack understanding of the influences and facets of the problem or decision. 2.4.2. The Harvard 5 Step Process According to the Harvard Business School (2006), decision making is not essentially different than any other business activity, by following a process, even decision making can be more effective and the quality of outcomes more consistent. A brief overview of the process is presented: During the 5 step process the decision maker is to establish a healthy context for the decision to be made. Context refers to the environment in which decisions are to be made, how the decision makers interact with each other, their interpersonal relationships, behaviour and how ideas and data are shared. A healthy context includes having the right people in an appropriate environment, who agree on how decisions will be made and are open for discussion and new ideas. When the correct context has been established, the decision is to be framed in the correct manner. This will ensure that all the decision makers have a common understanding of the decision at hand, the factors that influence the decision and what the decision will influence. Before selecting a solution, alternative solutions/choices should be generated and evaluated in accordance to each alternatives’ feasibility, risks and implications. 19|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process The 5 step decision making process is illustrated in Figure 2-3: Harvard 5 Step Process; the description of each step is given in Table 2-2: Harvard 5 Step Process Description. Create a context Frame the issue Generate for sucess properly alternatives OT Evaluate Choose the best altematives altemative Figure 2-3: HARVARD 5 STEP PROCESS (Harvard Business School, 2006) TABLE 2-2: HARVARD 5 STEP Process DESCRIPTION Step Description 1. | Create a context for | Create an environment in which effective decisions success are possible. This includes getting the right people to participate in the process and creating a decision-friendly context to ensure creative thinking and careful deliberation. 2. | Frame the issue properly | Get a clear understanding of the issues at hand and the ways each affect the objectives of the business. 3. | Generate alternatives Decision makers must develop alternative choices 20|Page IVERSITEIT VAN PRETORIA & uN UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process TABLE 2-3: 6 STEP PROBLEM SOLVING PROCESS DESCRIPTION Step Description 1. | Define the problem Note down a concise problem statement of the problem at hand, as well as a brief summary of the desired end state once the problem has been resolved. 2. | Analyse potential causes | Identify the potential causes and the most likely root causes of the problem. 3. | Identify possible solutions | Without evaluating effectiveness, compile a list of all possible solutions. Narrow the list down to potential solutions. 4. | Select the best solution Evaluate solutions according to predetermined criteria and select best solution. 5. | Develop an action plan Compile a detailed plan that lists action steps, responsible person(s), start/end dates, estimated time and cost. 6. | Implement solution and | Follow up using the Action Plan to ensure the evaluate progress action steps are achieved. Within the 6 Step Problem Solving process the following weaknesses were identified, these weaknesses are similar to the ones identified in the Harvard 5 Step process: The process does not include identifying the system and subsystem the decision forms part of. An analysis is not done to determine whether the decision hinders the organisation’s goal or whether the decision is the constraint for achieving that goal. 23|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 2.4.4. The Decision Making Loop Process According to Moody (1983) whether decisions are simplistic or complex, or relate to any of the fields of management, all decisions can be guided by the closed-loop process. The closed-loop process requires management to become conscious that a problem does exist and translate the problem into a clear, understandable problem statement. The problem statement should be agreed upon by the team that is to solve the problem. The team is to identify alternative solutions to the problem with each solution’s possible consequences and impacts on the organisation. Once a solution has been agreed upon and implemented, feedback should be given to the team whether the solution did satisfy the problem statement and whether the problem has been resolved. The decision making loop process is illustrated in Figure 2-5: Decision Making Loop Process descriptions of each step given in 24|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Table 2-4: Decision Making Loop Process Description. Figure 2-5: DECISION MAKING Loop Process (Moody, 1983) 25|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process TABLE 2-6: DECISION MAKING PROCESS CoMPARISON Strategic Harvard 5 6 Step Decision Managerial Step Problem Making Solving Loop Identify goal V Become conscious of V V the problem Identify problem V V V V Analyse potential y causes Identify standard y performance metrics Develop alternatives V V V Evaluate alternatives V V Select best solution V V V V Develop an action plan V V Implement solution V V V Evaluate V V Provide feedback V V 28|Page NIVERSITEIT VAN PRETORIA NIVERSITY OF PRETORIA UNIBESITHI YA PRETORIA & s u u WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Table 2-7: Decision Making Processes' Common Thread illustrates the common thread that exists. TABLE 2-7: DECISION MAKING PROCESSES’ COMMON THREAD Step Description 1. | Define the problem In each of the processes it is clearly stated that the problem needs to be defined, understood and clearly documented before continuing with the process. 2. | Generate alternatives | To be able to make a decision, alternative solutions should be generated. 3. | Evaluate the | Alternatives should be evaluated using predetermined alternatives criteria. 4. | Select the best | The best alternative should be selected, based on the alternative evaluation criteria. 5. | Implement the solution | The chosen alternative/solution should be implemented by allocating resources to the alternative. 6. |Close the feedback |The success of the alternative/solution should be loop tracked and the outcome should feedback into the process. 29|Page IVERSITEIT VAN PRETORIA & uN UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 2.4.6. Strengths and Weaknesses Although the analysed processes indicate that decision making processes are generic and a definite common thread does exist between the processes, the decision making processes are still prone to failure. The identified strengths and weaknesses of the decision making processes are illustrated in Table 2-8: Decision Making Processes Strengths and Weaknesses. TABLE 2-8: DECISION MAKING PROCESSES STRENGTHS AND WEAKNESSES Strengths NEEL tort) The problem is defined in anj|A narrow minded approach is followed, unambiguous and unbiased manner. only focussing on the problem at hand. Criteria are predetermined to measure | The decision is not put into context, alternatives. where the decision lies within the organisation and the impact. A feedback loop exists to ensure} The root cause of the decision is not continuous learning from past | analysed. experience. 2.4.7. Conclusion From the analysis conducted, the conclusion is drawn that decision making processes do not possess some of the key characteristics one would expect when making a management decision. The decision making processes analysed are narrowly focused, not allowing the decision maker to take the bigger picture view and putting the decision into context. By following such a narrow minded approach, the risk arises that interdependencies are overlooked and the root cause is not addressed appropriately. 30|Page VERSITEIT VAN PRETORIA VERSITY OF PRETORIA IBESITHI YA PRETORIA & @ x UNI wy ) N Incorporating a system approach to the decision making process This dissertation focuses on defining a system approach for decision making by managers in an organisation, regardless of industry. 2.5.3. Research Questions The following research questions are addressed in this dissertation: e How can a system approach to decision making assist managers in an organisation to make decisions? e How can the system approach and decision making processes be integrated to form a single system approach to decision making? 2.5.4. Objectives By answering the research questions, the following research objective will be achieved: e To develop and evaluate a system approach for decision making that can be utilised by managers in any type of organisation. A brief overview of the problem statement as discussed in Section 3.2. is given in Figure 2-6: The Problem Statement Summary. 33| Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA QM YUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process The Problem Statement Many decisions fail due to a lack of a system lapproach that is applied by managers. Retrospection is neglected; therefore an inability) exists to determine whether the negative result} lwas obtained from the wrong decision or the| junforeseen and uncontrolled uncertainties. Objective To develop a system approach for decision making that can be utilised by managers in any type of organisation Figure 2-6: THE PROBLEM STATEMENT SUMMARY Research Questions How can a system approach to decision making assist managers in an organisation to make decision? How can system approach and decision making processes be integrated to form a systematic approach to decision making? Proposal Evaluate four decision making processes Evaluate two system approach methodologies Integrate the strengths of the decision making processes and the system approach methodologies Apply integrated methodology to case studies 2.5.5. Limitations and Assumptions The following limitations apply to this dissertation: e The focus of this dissertation will be on management decisions in for-profit organisations; and e This dissertation will focus on the decision making methodology used, not uncertainties that influence a decision or the outcome. The following assumptions were made for the purposes of this thesis: e All management decisions will be handled through the same process, irrespective of complexity of the decision. e Management activities and decisions are similar regardless of the industry of the organisation. 34|Page ERSITEIT VAN PRETORIA & univ UNIVERSITY OF PRETORIA OEM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 2.6. Conclusion In Kraut’s work (1989) and various other authors, including Drucker (1967), no distinction is made between the role of manager in different industries. The aim of the manager is to enable and assist an organisation to achieve its goal by managing resources through effective decision making (Kraut, et al., 1989). However, many decisions made by managers are failure prone due to a lack of a system approach to the decision making process. The aim of this dissertation is to develop and evaluate a system approach for decision making that can be utilised by managers in any type of organisation. 35| Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA QM YUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Dynamic systems are a combination of structural components and activities over time, e.g. a building with management and employees, together with computers. 4. Closed and open systems A closed system does not interact significantly with the environment, its environment only provides context. An example is the chemical equilibrium reached when reactants are mixed together. An open system allows energy, information and matter to cross it boundaries. Open systems interact with the environment, e.g. business organisations. From the definitions given above, it can be concluded that anything can be seen either as a system or part of a system. Business organisations can be classified as human-made, physical, dynamic open systems. Figure 3-1: Organisation as a System illustrates how an organisation can be viewed as a system with sub-systems and elements. System folrciieriel} Manufacturing Sales Sub-systems Dy Tut U4 Dryas Elements Production Pelee) 4 Marketing FIGURE 3-1: ORGANISATION AS A SYSTEM 38| Page NIVERSITEIT VAN PRETORIA NIVERSITY OF PRETORIA UNIBESITHI YA PRETORIA & @: u wm Incorporating a system approach to the decision making process 3.3. Defining the System Approach In Section 3.2 systems are defined, including the different types and classifications of systems. In this section, system approach is defined. System approach has been defined in many ways. Some definitions given to a system approach are: A system approach provides a distinctive, holistic, view of a situation and the problems that are associated with that situation (Jennings, et al., 1994). In the online Business Dictionary, system approach is defined as: Management thinking that emphasises the interdependence and interactive nature of elements within and external to an organisation. The following is the definition for system approach as defined by Blanchard (2006): 1. A top-down approach that views the system as a whole; 2. A life-cycle orientation; and 3. An interdisciplinary or team approach. Aronson characterise the system approach as an approach that focuses on interactions between constituents of a system. Instead of isolating smaller and smaller parts of a system, a system approach expands its view to take into account larger and larger numbers of interactions (Aronson, 1999). The following points are common themes that arise from the various definitions: It is a holistic approach — taking into consideration all the elements of the system, their interaction and dependencies on one another; and It is a beginning to end approach. According to Buckley (1990), the system approach can be applied at organisational level in order to focus on the goal of the organisation, whereas systematic approaches are applicable to the daily activities of the organisations. 39| Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 3.4. The Importance of applying a System Approach In the definition given by Aronson (1999), in Section 3.3, a system approach does not break a system down into smaller parts, but rather expands its view to take into account larger and larger numbers of interactions. Aronson continues to explain that by doing this, the conclusions obtained from taking a bigger picture view, instead of breaking the problem down, is often noticeably different. Consider the following example to illustrate this point: A product developer designs an innovative drinking can that will never spill and keeps drinks cold for four hours. When only looking at the design function of the system, this product seems like a sure winner to go to market with. However, when considering development costs, additional raw materials required, the manufacturing costs and additional packaging requirements, the design is no longer feasible and the costs outweighs the benefits. To avoid looking at a problem or a situation in isolation, one should take a step back, look at the situation from a bigger picture view and then decide on actions to be taken. 40|Page NIBESITHI YA PRETORIA & UNIVERSITY OF FRETORIA we ow Incorporating a system approach to the decision making process By using the five focusing steps of TOC, Pretorius (2009) compiled a process flow to depict the TOC approach, as illustrated in Figure 3-2: TOC 5 focus step flow diagram. Each of the five steps is depicted in the process flow diagram. The manager or decision maker should define the goal that is to be achieved and the measurements that will indicate whether the goal is achieved. The constraint should be identified that is hindering the organisation to achieve the defined goal. Constraints can be classified as either physical constraints or policy and behaviour constraints. A physical constraint should be exploited to perform at maximum effectiveness; the other elements of the system should be adjusted to enable this. If the constraint is not broken, additional capacity should be added to the constraint. If the constraint is not physical, a new policy should be developed or behaviour should be changed. Once the constraint has been broken, a new constraint should be investigated. 43|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA QM YUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Figure 3-2: TOC 5 FOCUS STEP FLOW DIAGRAM (Pretorius, 2009) 44|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 3.5.2. The Soft System Approach The soft system approach focuses on implementing a change rather than optimising a system (Checkland, 2000). According to Ho (1994) the soft system approach emphasises that equally valid perceptions of the reality of a problem exist and that discussions and debates will lead towards some agreed feasible solution that should alleviate the problem situation. During the soft system approach the identified problem should be expressed and the root definitions of the relevant systems should be identified. The root definitions should be used to construct conceptual models as alternative solutions, which should be evaluated and compared with each other. The conceptual model that best addresses the defined key issues, and the outcomes of the implementation of the model that is most desirable and feasible, should be implemented. The soft system approach is illustrated in Figure 3-3: The Soft System Model and described in further detail in 45|Page NIVERSITEIT VAN PRETORIA NIVERSITY OF PRETORIA UNIBESITHI YA PRETORIA & G: u ee TUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Step Description 4. | Conceptual models On the basis of the root definitions, conceptual models are constructed. These models include all the probable activities and measures that the system needs to implement to achieve the root definition. In other words, alternative scenarios need to be formulated. 5. | Comparison of | The next step is to compare the scenarios or expressed problem | conceptual models with the situation analysis. The situation and | idea is to test the scenarios and decide whether the conceptual models implementation of a scenario would resolve the defined key issues. 6. | Feasible, desirable | If the implementation of a conceptual model would, it change needs to be investigated and there needs to be debate as to whether the changes proposed, resulting from implementation of the scenario, are both desirable and feasible. What is desirable and what is feasible might clash as a result of system objectives, possibilities and constraints. 7. | Action to improve the | The final step is to define the measures and changes problem situation to be implemented. 48|Page ERSITEIT VAN PRETORIA & univ UNIVERSITY OF PRETORIA OEM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 3.5.3. Interpretations of System Approaches Both the TOC 5 focus step flow diagram and the soft system model clearly brings to light that a “bigger picture” view should be taken when confronted with any problem. The TOC model emphasises the importance of always staying true to the organisation’s goal and to only optimise or improve a process/function if it will aid the organisation to achieve its goal (Goldratt, et al., 1992). The soft system model describes how a perceived problem should be broken down into systems, sub-systems and their elements. This model provides guidelines for the handling of multiple interpretations of the complex and interrelated problems that exist in organisations. Table 3-3: System Approach Characteristics illustrates how both the TOC and the Soft System approach satisfy the key characteristics of a system approach as defined in Section 3.3. 49|Page 4 UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA ww NIBESITHI YA PRETORIA Incorporating a system approach to the decision making process TABLE 3-3: SYSTEM APPROACH CHARACTERISTICS SHE Ti) Characteristic Tee Ci) 1 | Holistic Views the system as a whole in order to identify | A rich picture of the problem situation should be the system constraint. formed, which includes various elements to enable a holistic view. 2 | Top down The organisation is seen as a chain; the| The relevant systems and subsystems are weakest link is identified on a high level and further investigated to find the root cause. identified in order to find the root definition. 3 | Interdisciplinary Each department is seen as a link of the chain; Goldratt (1992) highlights the importance of cross functional collaboration as key to making TOC succeed. The problem is expressed taking into account multi-disciplines, including legal and technical. 4 | Life-cycle orientated The TOC process is a continuous process which runs across life cycles. The Soft System approach is a continuous process which runs across life cycles. By applying a system approach to a problem, it can be determined whether the perceived problem is merely a symptom of another problem or whether is the root cause. 50|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process together with a team should brainstorm and analyse the problem to determine whether the problem is the root problem, or merely a symptom of another problem. Once the root problem has been identified, the decision maker is to identify the aspect of the problem which is the system constraint. This aspect or element should be the element that hinders the system to reach its defined goal. At this stage the decision maker should redefine the problem to include the root problem and the system constraint to ensure that everyone understands the problem that should be solved. The decision maker should identify measurements and criteria that will determine whether the problem has been solved successfully. The measurements and criteria that are defined should be unbiased and unambiguous (Friday-Stroud, et al., 2007). Alternative solutions should be identified based on preset criteria and the preferred solution should be selected in accordance the measurements defined. Following the implementation of the preferred solution, the decision maker should record the lessons learnt during the process to avoid making the same mistakes and to know what worked well during the process. The system approach to decision making process is illustrated in Figure 4-1: A System Approach to Decision Making and described in further detail is given in Table 4-1: A System Approach to Decision Making Process Description. 53| Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Identify the system and subsystems Define problem 4 5 Identify the root Identify the system | Redefine the cause constraint problem 7. 8. Define success Identify alternative il measurements based on criteria 9, Select preferred alternative based on measurements "1 Implement Document lessons alternative learnt Figure 4-1: A SysTEM APPROACH TO DECISION MAKING 54|Page IVERSITEIT VAN PRETORIA & uN UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process TABLE 4-1: A SYSTEM APPROACH TO DECISION MAKING PROCESS DESCRIPTION Step Description Organisational Goal | According to Goldratt (Goldratt, et al., 1992) the real goal of any for-profit organisation is to make money, now as well as in the future. Other conditions e.g. satisfying market needs, minimising environmental impact, being a responsible company, are merely requirements to achieve this goal. The organisation’s goal forms the base for each of the steps of the system approach to decision making process. Having the organisation’s goal in mind is of high importance to ensure that all decisions made aspire towards the goal and supports it. 1. | Define problem | The decision or problem should be clearly and factually stated and documented in an unbiased manner. 2. | Does the | Based on the description above for the organisation’s goal problem hinder | and problem definition, it should be determined how the the goal? problem affects the bottom line of the organisation and the impact. If the problem does not affect the goal of making money or has little impact, a lower priority should be assigned to the problem. 3. | Identify the | The decision maker should identify the system that the system and | decision or the problem plays a role in. The subsystems subsystems should also be identified in order for the decision maker to have a holistic view of the influences and facets of the decision or problem. 55|Page IVERSITEIT VAN PRETORIA & uN UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Step Description 9. | Select the | In step 7 success measurements were identified which preferred indicate how successful the problem was resolved. These alternative measurements should be used when the preferred solution based on_ the | is selected. defined measurements 10. | Implement The preferred solution should be implemented. During this solution step resources should be allocated to implement the solution and an Action Plan should be documented. 11. | Document Once the solution has been implemented and the constraint lessons learnt has been eliminated, go back to step 1. Lessons learnt during the process should be documented, as well as the results achieved. From the analogy that an organisation is like a chain, it is concluded that once the weakest link was strengthened, another link will become the weakest link, hence the process will start again at step 1. 58|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 4.2. Conclusion By including a system approach to decision making the following strengths of this approach should prove beneficial to the process: . The organisation’s goal is taken into consideration; . A “bigger picture” view is taken when defining the problem; ° Problems that are constraints, that have direct or indirect, impact on the organisation’s goal are addressed first; ¢ Only the root problems are addressed, not only the symptom problems; ° Lessons learnt are documented for future use; and . Focus is on global optimisation, not local optimisation. The validity of the defined model will be tested in Chapter 5 through applying the model to three identified actual business problems on management level. The validity of the model will be based on the feasibility of implementing each step of the model to the case studies. 59|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Chapter 5: Process Application Testing “Management means decision making.” - Ross Moore In Chapter 5 the System approach to decision making, as conceptualised in Chapter 4, is applied to three case studies with the aim of testing the validity of the model. In this chapter it is discussed what the effect of applying the process is on each scenario. 5.1. Approach A case study is a description of a management situation (Bonoma, 1985). Therefore, for the purpose of this dissertation, the model presented in Chapter 4 will be tested by applying the model to three case studies. Johnston (1999) reports that using case research is useful when the topic being researched, or in this case model to be tested, cannot be studied outside its natural setting or the results obtained cannot be readily quantified. The case studies presented are independent studies from which the validity of the model is tested individually. The aim of the case studies is not to generalise to a sampling universe, but to directly confirm or disconfirm the model. This will be done by trying to replicate the findings or the success of implementing the model under various management conditions (Johnston, et al., 1999). 60|Page ERSITEIT VAN PRETORIA & univ UNIVERSITY OF PRETORIA OEM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process ° 40% of Product 1 are defects and cannot be sold. 6. IDENTIFY THE SYSTEM CONSTRAINT Two constraints exist for this problem. Firstly, since sales of all the products, except Product 1, are low, an external market constraint exists. Secondly, only 60% of Product 1 manufactured can be sold due to quality constraints. Therefore for Product 7 an internal constraint exists. 7. REDEFINE THE PROBLEM By taking the root causes and the identified constraint into consideration, the problem statement can be redefined as follows: The company is experiencing a financial loss as a whole, factors that are contributing to the loss are: ° High cost of raw materials; . High overhead costs; . High production costs; . Low sales for most products; and ° 40% of Product 1 are defects and cannot be sold. An external market constraint exists for all the products, except Product 1. For Product 1 an internal constraint has been identified. 8. DEFINE SUCCESS MEASUREMENTS The success of this problem can be clearly observed by analysing the income statement for the organisation after implementation. 63| Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 9. IDENTIFY ALTERNATIVES BASED ON CRITERIA By taking into account the problem statement and the system constraints, the following alternatives were identified: i. Redefine the organisation’s marketing strategy to expand market and market share; ii. Introduce new products to the product line; iii. | Reduce the number of defects manufactured for Product 1; and iv. Reduce the organisation’s overhead costs. 10. SELECT THE PREFERRED ALTERNATIVE BASED ON THE DEFINED MEASUREMENTS Each of the alternatives identified are measured against the impact the alternative will have on the income statement of the organisation. i. Redefine the organisation’s marketing strategy to expand market and market share. According to the marketing manager of the organisation, the steel industry is a pull market, the organisation will not greatly benefit from improving the marketing strategy of the organisation. No additional funds are available to endeavour on an extensive marketing campaign. ii. Introduce new products to the product line. The effect of introducing new products to the product line can be beneficial. However, at this point in time, the organisation cannot afford additional capital investment for new lines. iii. | Reduce the number of defects manufactured for Product 1. By reducing the number of defective Product 1 items, the sales of this product can increase. Since the market demand can be met by reducing the defects to 10% of products produced, production will be able to reduce the number of overtime required for producing Product 1. 64|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process iv. Reduce the organisation’s overhead costs. Costs can be saved by reducing the organisation’s overhead costs. The savings obtained will have an impact immediately on the income statement. By considering the effectiveness of all the alternatives and how they satisfy both the problem statement and address the system constraint, alternative iii should be selected. Alternative iii will have the lowest cost impact; however will have the most positive impact on the profits of the company. 11. IMPLEMENT SOLUTION A project should be initiated to determine how the quality issues in the Product 1 plant can be addressed. The project will follow the system approach decision making process to determine what alternatives exists to address the quality issues in the plant and which alternatives are feasible. 12. DOCUMENT LESSONS LEARNT In retrospect the decision maker should analyse the decision taken and the results obtained for future reference and to ensure learning and continuous improvement when applying the decision making process. Conclusion The two initiatives the organisation identified to address the problem had little effect on the bottom line of the organisation. By reducing the operating hours of the plants and implementing compulsary leave, the organisation was not able to manufacture the required products for the market. When the decision was made, the effect of the solution on the organisation was not assessed and alternative solutions were only identified within the department and not taking a bigger picture view by incorporating other departments in the decision. By implementing the System Approach to Decision Making process this would have been avoided. By taking a bigger picture view the problem was broken down into root 65|Page ERSITEIT VAN PRETORIA & univ UNIVERSITY OF PRETORIA OEM VUNIBESITHI YA PRETORIA Incorporating a system approach to he decision making process 3. DOES THE PROBLEM HINDER THE GOAL? The problem does hinder the goal; if the correct people are not appointed with the correct knowledge base of strategic sourcing the new function will not be successful. 4. IDENTIFY THE SYSTEM AND SUBSYSTEMS In this case study the new strategic sourcing function is the system, the function can be broken down into the four categories, which represents the subsystems. 5. IDENTIFY THE ROOT CAUSE The root cause of the problem is that a new function is started and the organisation does not have the internal skills to carry out the function of strategic sourcing. 6. IDENTIFY THE SYSTEM CONSTRAINT The manager has a budget constraint for employing resources for his function. The manager can only appoint new resources with the budget allocated to him by the Head of Department. A market constraint also exists, as only a limited amount of people have relevant experience in strategic sourcing and are currently in the market for a new position. 7. REDEFINE THE PROBLEM By taking the root causes and the identified constraint into consideration, the problem can be redefined as follows: External resources with prior experience in strategic sourcing should be appointed within the allowed budget. The right combination of resources on the right level should be appointed to ensure that the targets are met. 8. DEFINE SUCCESS MEASUREMENTS A target has been set of R15 million for the team. The function will be measured upon whether the target was achieved or not. 9. IDENTIFY ALTERNATIVES BASED ON CRITERIA By taking into account the problem statement that the manager needs to appoint new resources and the system constraints, namely the allocated budget and experience 68| Page IVERSITEIT VAN PRETORIA & uN UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process levels required, alternatives were identified for appointing the right resources at the right level within allocated budget. Table 5-2: Resource Alternatives illustrates the alternative resource allocations considered per level. TABLE 5-2: RESOURCE ALTERNATIVES Job level VN) Cost Category lead R800 000 4 4 2 4 Category R600 000 4 4 4 2 specialist Technical R750 000 4 2 2 2 specialist Analyst R400 000 4 6 6 4 Total cost: R10.2m R9.5m R7.9m R7.5 10. SELECT THE PREFERRED ALTERNATIVE BASED ON THE DEFINED MEASUREMENTS Based on the role descriptions provided in 69|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Table 5-1: Resource Cost, it is concluded that the category specialist can act as a category lead if required. Therefore alternative iii should be selected. The two team leads can be assigned two categories each, when the team lead is not available, the category specialist on each team can take the role as the team lead. Since the technical specialists are only required for technical evaluation, two specialist can be appointed or four technical specialist part time. Six analysts should be appointed, that can assist across the categories, to ensure that all analytics are completed. 70|Page & UNIVERSITEIT VAN PRETORIA UNIVERSITY OF PRETORIA we nN IBESITHI YA PRETORIA Incorporating a system approach to the decision making process 1. THE ORGANISATION’S GOAL The goal of the manager is to successfully transition the supply chain department to follow the processes and procedures defined by the project team. 2. DEFINE PROBLEM To define a training approach to enable the end user to follow and understand the processes and procedures defined. 3. DOES THE PROBLEM HINDER THE GOAL? To be able to use the processes and procedures, the end users need to know how to use it. The problem does hinder the goal. 4. IDENTIFY THE SYSTEM AND SUBSYSTEMS The system is the organisation, since supply chain influences the organisation as whole. The subsystems are supply chain, the departments that are involved in the training, etc. 5. IDENTIFY THE ROOT CAUSE Since the project team designed the processes and procedures and took ownership of it, the root cause for needing a training approach is to ensure that knowledge is transferred effectively and efficiently. 6. IDENTIFY THE SYSTEM CONSTRAINT The system constraints identified include: . Time constraint for the development of the training material; . Skill constraint, in terms of development of high technology training material; e Availability of trainers; and ° Budget constraints. All the abovementioned constraints are internal to the organisation. 73|Page IVERSITEIT VAN PRETORIA & uN UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process 7. REDEFINE THE PROBLEM An effective approach to transfer knowledge of supply chain processes needs to occur within the following constraints: . Time constraint for the development of the training material; . Skill constraint, in terms of development of high technology training material; e Availability of trainers; and . Budget constraints. 8. DEFINE SUCCESS MEASUREMENTS The success of the training approach will be measured on the acceptance of the end users of the processes and the degree of understanding attained. The number of queries received following the training will be a measurement as well. 9. IDENTIFY ALTERNATIVES BASED ON CRITERIA Alternative approaches to training were identified via internet based research and approaches that the organisation is familiar with. The following alternative approaches have been identified, as illustrated in Table 5-3: Training Approaches. TABLE 5-3: TRAINING APPROACHES Instructor-led Classroom Training Corey ice ecto erl Te) In-person lecture On-line lecture Medium On-line exercises On-line exercises Use of training modules on) Use of training modules on Techniques | functions based on how the job | functions based on how the job is conducted, (e.g. how does the is conducted, (e.g. how does the 74|Page IVERSITEIT VAN PRETORIA & uN UNIVERSITY OF PRETORIA WOM VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Tiida cele tee elu) _ Method Computer-based training Training inventory procedure work) inventory procedure work) Use of case studies that) Use of case studies that represent the real work world represent the real work world Workstations, overhead | Authoring software, workstations Tools projector, large screen projector, printer Flipchart emphasizing key | Handout providing instructions Aids points, handouts. Power Point | for accessing and using the slides course 10. SELECT THE PREFERRED ALTERNATIVE BASED ON THE DEFINED MEASUREMENTS Considering the defined constraints, the training approach to be used will utilise both approaches identified as alternatives. Instructor-led classroom training will be used to train the specialists, who will be utilised as training assistants during the training of the other end users during instructor-led sessions. The training material will be available electronically after each training session to the end users. The end users are to complete a computer-based test to test their understanding and acceptance of the processes and procedures. 11. IMPLEMENT SOLUTION A training approach is to be developed in terms of the selection of the approach to be followed. In the training approach it has to be defined who, what, when and where the training will be. The training material will also be developed in accordance to the selection. 75|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Chapter 6: Conclusion 1. Anyone can make a decision, given enough facts. 2. A good manager can make a decision without enough facts. 3. A perfect manager can operate in perfect ignorance. - Spencer’s Laws of Data This dissertation focused on determining firstly why decisions fail and secondly conceptualising and evaluating a model which will support the management decision making function. During the analysis of four decision making processes, it was found that the decision making processes are narrowly focused and do not necessarily put the decision into context. However the processes do emphasise the importance of defining the decision or problem in an unambiguous and unbiased manner, as well as establishing measurements and criteria on which alternatives are evaluated and selected from. The conclusion was drawn that current decision making processes analysed do not necessarily incorporate a clear system approach. Therefore the decision maker is not always aware of the factors that impact the decision and all the facets the decision will impact. The decision maker is also not aware whether the decision to be made is the right decision, or merely a symptom of another decision. By incorporating a system approach when making a decision, a bigger picture view can be obtained. Having a bigger picture view, should aid the decision maker in identifying whether the decision to make is indeed the right decision to be made, or merely a symptom of another decision or problem. A system approach aids the decision maker to determine where the decision to be taken fits in and the impact it will have on the system. 78|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process A system approach to decision making process was designed, incorporating the strengths of the decision making process and system approach methodologies researched. The following benefits were realised when using the integrated model: . The organisation’s goal was taken into consideration; ° A “bigger picture” view was taken when defining the problem; ° Problems that were constraints, that have direct or indirect, impact on the organisation’s goal were addressed first; . The root/true problems were addressed, not only the symptom problems; . Lessons learnt were documented for future use; and . Focus was on global optimisation, not local optimisation. Based on the three case studies the validity of applying the system approach to decision making model was tested. During the application of the model to the three independent case studies the success of the implementation of the model was replicated. However, due to the complexity of the management function, the validity of the proposed model has not been tested fully. Therefore, only limited validity has been established. 79|Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Future research topics Since only limited validity has been proven for the proposed model and limitations set out in the dissertation, the following topics are suggested as future research topics: . The effect the proposed system approach to decision making model would have on non-profit organisations. The dissertation is based on the common goal, as defined by Goldratt (1992) that all for-profit organisations goal is to make more money, both now and in the future. Since this does not necessarily ring true for non-profit organisations, it is recommended that a study is done determining whether there is a common goal across multiple non-profit organisations, secondly whether the proposed model could be incorporated successfully into the decision making process followed by such organisations. . The effect of uncertainties that influence a decision or the outcome. Decisions are not made in closed systems where uncertainties and influences do not have an effect on the outcome of a decision. Therefore, it is recommended that further research is done on how the proposed model would react on such uncertainties and influences. . Theory testing. Limited validity of the proposed model has been achieved during this dissertation. 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Operations Management: Class notes theme 1 // Graduate School of Technology Management. - Pretoria : University of Pretoria, 2009. 83| Page IVERSITEIT VAN PRETORIA & UN UNIVERSITY OF PRETORIA WOH VUNIBESITHI YA PRETORIA Incorporating a system approach to the decision making process Rahman Shams-ur Theory of constraints: A review of the philosophy and its applications [Journal]. - [s.I.]: Journal of Operations and Production Management, 1998. - 4: Vol. 18. Robertshaw Joseph E., Mecca Stephen J. and Rerick Mark N. Problem Solving: A systems approach [Book]. - NewYork : PBI Petrocelli, 1978. Tanji Kenneth K. and Kielen Neeltje C. Agricultural Drainage Water Management in Arid and Semi-Arid Areas [Article] // FAO Irrigation and Drainage Papers. - 2002. - Vol. 61. Teale Mark [et al.] Management Decision making: Towards an Intergrated Approach [Book]. - Essex : Pearson Education Limited, 2003. Zeleny Milan School of Public and Environmental Affairs [Online] // Multiple Criteria Decision Making.- | McGraw-Hill Company.- February 16, 2010.- http://classwebs.spea.indiana.edu/kenricha/Oxford/Archives/Oxford2006/Courses/De cision%20Making/Articles/Zeleny ,%20Ch.%203.pdf. 84| Page