Problem Identification Art or Skill?

When a problem's root cause is not recognized, identified, or fully explored, the effectiveness of any proposed solutions will be negatively affected. The techniques for rational thinking and recognizing filters with which you have familiarized yourself this week can make you a more effective diagnostician of problems, and thus, a more effective decision maker.

Rational decision-making is a part of daily business for this student, and several situations can be selected to address this discussion post. As an account manager, dealing with quota’s, customer satisfaction and overall growth of business is a challenge. The scenario discussed in this post will focus on the decision around increase or decrease of margin on deals in order to gain gross profit.

In sales number define the success of an organization and adjustments are often made in scenarios to ensure profitability. This student recently was placed in a position to have to choose between being “overly” profitable or gaining a new customer. The disagreement existed between management and this student. The thought from management was that we would only have one chance with the customer to attain business, however this student felt this was a potential long time customer. The decision was do we charge higher prices to obtain the one-time business or lower prices to obtain a long time customer. Management was adamant about being a single transaction account. However this student stood against this, the strategy applied to this rational thinking was similar to that of Drucker (2001). This student looked at the problem and created different specifications that would help determine a route to deciding.

Creating a clear specification list of what would happen from the decisions made was a necessary requirement in making the decision (Drucker, 2001, p.9). The need in this case was to make this customer a long-term customer rather than a single transaction customer. In order to accomplish this, this student needed to remove the stigma with management about the potential of this customer. Through a study conducted showing the growth potential of this account from the single account done at a highly discounted rate, this student was able to show management the value of the account.


This judgment strategy of anchoring and (insufficient) adjustment was the filter utilized by management in making the decision to see this account as a single transaction account. The theory is a result of our limited attention to other options and the selective strategies that we have developed through our experiences in life (Hastie & Dawes, 2010, pg. 73). Management’s decision was a conscious one, as it has been applied on different accounts but this student chooses to stand apart from other account managers.

In making decision one must utilized rational thinking and follow guided steps that analyze the proper root of the problem. In the case of this student management insufficient data was used to draw a conclusion and those filters nearly cost the organization an enterprise account.

References


Drucker, F. (2001). The effective decision. Harvard Business Review on Decision Making,
Harvard Business School Publishing Company, p. 2-3.


Hastie, R. K., & Dawes, R. M. (2010). Rational choice in an uncertain world (2nd ed.). Washington, DC: Sage Publications