what are the nature of managerial problem solving

Managerial Problem Solving and Decision Making

• Walden University

Discover the world's research

• 25+ million members
• 160+ million publication pages
• 2.3+ billion citations
• Rogie M. Mendoza
• Felix A. Adewusi
• Yacob Haliso

• Lyubov Shevchenko

• J W Giulioni
• E Holtzclaw
• Meeting Sift
• Recruit researchers
• Join for free
• Login Email Tip: Most researchers use their institutional email address as their ResearchGate login Password Forgot password? Keep me logged in Log in or Continue with Google Welcome back! Please log in. Email · Hint Tip: Most researchers use their institutional email address as their ResearchGate login Password Forgot password? Keep me logged in Log in or Continue with Google No account? Sign up

• > Economics
• > Financial Analytics

What is Managerial Economics? Definition, Types, Nature, Principles, and Scope

• Ritesh Pathak
• Nov 26, 2020
• Updated on: Nov 21, 2023

Businesses run on various theories that are explained in Economics. Managerial Economics is the stream of management studies that emphasizes solving problems in businesses using the theories in micro and macroeconomics . This branch of economics is used by firms to not only find a solution to problems in daily running but also for long-term planning. We can also say that Managerial economics is a practical application of theories in economics. 

“Managerial economics is concerned with the application of economic concepts and economic analysis to the problems of formulating rational managerial decisions.” - Edwin Mansfield, Economics Professor, University of Pennsylvania  

We should also look here at What is economics? Economics is an inevitable part of any business. All the business assumptions, forecasting, and investments are based on this one single concept. Investopedia explains “Economics is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices about how to allocate resources.” So, theories in economics are not just some statements written but rather they act as fuel for a firm. In the broader picture, economics also helps nations in policy formation. 

So, in this blog, we will discuss the branch of economics that helps businesses to find a solution to almost every problem they may face. We will discuss the definition of managerial economics, its nature, its scope in businesses, and the principles of managerial economics. 

Also Read |   5 Key elements of Financial Analysis

Definition of Managerial Economics

Managerial economics is defined as the branch of economics which deals with the application of various concepts, theories, methodologies of economics to solve practical problems in business management . It is also reckoned as the amalgamation of economic theories and business practices to ease the process of decision making. Managerial economics is also said to cover the gap between the problems of logic and problems of policy. 

Managerial economics is used to find a rational solution to problems faced by firms. These problems include issues around demand, cost, production, marketing, and it is used also for future planning. The best thing about managerial economics is that it has a logical solution to almost every problem that may arise during business management and that too by sticking to the microeconomic policies of the firm.  

When we talk of managerial economics as a subject, it is a branch of management studies that emphasizes solving business problems using theories of micro and macroeconomics . Spencer and Siegelman have defined the subject as “the integration of economic theory with business practice to facilitate decision making and planning by management.” The study of managerial economics helps the students to enhance their analytical skills, developing a mindset that enables them to find rational solutions.

Nature of Managerial Economics 

We know about managerial economics like what it is and how different people define it. Managerial Economics is an essential scholastic field. It can be termed as a science in the sense that it fulfills the criteria of being a science. 

We all know science as a systematic body of knowledge and it is based on methodological observations. Similarly, Managerial Economics is also a science of making decisions and finding alternatives, keeping the scarce of resources in mind. 

In science, we arrive at any conclusion after continuous experimentation. Similarly, in managerial economics policies are formed after constant testing and trailing. 

In science, principles are universally acceptable and in managerial economics, policies are universally applicable at least partially if not fully. 

Nature of Managerial Economics

We will now look at the characteristics of managerial economics in brief. 

Art and Science

Managerial Economics requires a lot of creativity and logical thinking to come up with a solution. A managerial economist should possess the art of utilizing his capabilities, knowledge, and skills to achieve the organizational objective. Managerial Economics is also considered as a stream of science as it involves the application of different economic principles, techniques, and methods, to solve business problems.

Microeconomics

In managerial economics, problems of a particular organization are looked upon rather than focusing on the whole economy. Therefore it is termed as a part of microeconomics. 

Uses Macroeconomics

Any organization operates in a market that is a part of the whole economy, so external environments affect the decisions within the organization. Managerial Economics uses the concepts of macroeconomics to solve problems. Managers analyze the macroeconomic factors like market conditions, economic reforms, government policies to understand their impact on the organization. 

Multi-disciplinary

Managerial Economics uses different tools and principles from different disciplines like accounting, finance, statistics, mathematics, production, operation research, human resource, marketing, etc. This helps in coming up with a perfect solution. 

Management oriented and pragmatic

Managerial economics is a tool in the hands of managers that aids them in finding appropriate solutions to business-related problems and uncertainties. As mentioned above, managerial economics also helps in goal establishment, policy formation, and effective decision making. It is a practical approach to find solutions. 

Types of Managerial Economics

Everyone has their perceiving ability, so the same goes with managerial economics. All managers perceive the concept of managerial economics differently. For some, customers’ satisfaction can be the priority while some may focus on efficient production. This leads us to different types of managerial economics. So, let us explore the different approaches to managerial economics. 

Liberal Managerialism

Market is a free and democratic place in terms of decision making. Customers get a lot many options to choose from. So, companies have to modify their policies according to consumers’ demands and market trends. If not done so, it may result in business failures. This is what we call liberal managerialism. 

Normative Managerialism

The normative view of managerial economics means that the decisions taken by the administration would be normal, based on real-life experiences and practices. The decisions reflect a practical approach regarding product design, forecasting, marketing, supply and demand analysis, recruitments, and everything else that is concerned with the growth of a business. 

Radical Managerialism

Radical managerialism means to come up with revolutionary solutions. Sometimes, when the conventional approach to a problem doesn’t work, radical managerialism may have the solution. However, it requires the manager to possess some extraordinary skills and thinking to look beyond. In radical managerialism, consumer needs and satisfaction are prioritized over profit maximization. 

So, these were the three different types of managerial economics. These are decided based on the different approaches by managers.

Recommended Blog: Stripe vs Paypal: How to Decide the Right Payment Platform for Online Business

Principles of Managerial Economics

The great macroeconomist N. Gregory Mankiw has given ten principles to explain the significance of managerial economics in business operations which can be further classified into three categories. 

Principles of How People Make Decisions

Based on the real-life decision-making processes, four principles are recalled in Managerial Economics. 

1. People Face Tradeoffs

There are enormous options in the market. So, people have to make choices among the various options available. 

2. Opportunity Cost

Every decision involves an opportunity cost that is the cost of those options which we let go of while selecting the most appropriate one.

3. Rational People Think at the Margin

When we make choices from the various options available and before investing the capital or resources we look at the profit margin we would make in the investment.

4. People Respond to Incentives

It is human nature to look for something extra while purchasing something. Decision-making is affected by the incentives attached to a particular product or service. Positive incentive motivates people to opt for the particular product while negative incentive discourages. 

Principles of How People Interact

Communication with the audience plays a vital role in good performance. Over the years, organizations have realized the need to communicate well with their audience. Based on this, three principles are given in Managerial Economics. 

1. Trade can Make Everyone Better Off

This principle states that trade is a medium to exchange services and products. Everyone gets a fair chance to offer products and services which they are good at making and also to purchase those products and services.  Also Read: The success story of Delhivery

2. Markets Are Usually A Good Way to Organize Economic Activity

Market is a place where buyers and sellers interact with each other. Consumers put in their demands and requirements and the producers decide on the production and supply of those products and services.

3. Government can better the market outcomes

Government intervenes in business operations whenever there are unfavorable market conditions like the current pandemic situation or also for the welfare of society. One example of the latter is deciding the minimum wage for laborers. 

Referred Blog |   How is India recovering from the economic slowdown . 

Principle of How Economy Works as a Whole

Three principles are given to explain the role of the economy in the functioning of an organization. 

1. A Country’s Standard of Living Depends on the Goods and Services produced

The role of organizations in the economic growth of a country is one of the major, so, the organizations must be capable enough to produce goods and services for the population. This ultimately raises the standard of living and also contributes to GDP growth. 

2. Price Rises When Government Prints Too Much Money

If there is surplus money available with people, their spending capacity increases, ultimately leading to a rise in demand. When the producers are unable to meet the consumer’s demand, inflation takes place.  Referred blog : What does the 24% shrink in India’s GDP mean?

3. Society Faces a Short-Run Tradeoff between Inflation and Unemployment

Government bring-in policies to tackle the problem of unemployment and boost the economy in the short run as well. This further leads to inflation. 

Scope of Managerial Economics

Managerial Economics has a more narrow scope. It solves a firm’s problem using microeconomics. In the situation of scarce resources, managerial economics ensures that managers make effective and efficient decisions that are equally beneficial to customers, suppliers, and the organization. The fact of scarcity of resources gives rise to three fundamental questions-

What to produce?

How to produce?

For whom to produce?

To answer these questions, a firm makes use of managerial economics principles.

Managerial Economics is not only applicable to profit-making business organizations, but also to non- profit organizations such as hospitals, schools, government agencies, etc.

Read this article to know about the scope of Managerial Economics in detail.

We tried to explain Managerial Economics through this blog. The definition of Managerial Economics says that it is a branch of economics that deals with the application of various theories, concepts, and methodologies to solve business problems. It is said to cover the gap between problem of logic and problem of policy. 

For any firm to be successful, it needs to solve its problems logically and rationally. Managerial Economics helps the managers to make effective and efficient decisions using the concepts of microeconomics. One of the top characteristics of Managerial Economics is that it uses the different factors of macroeconomics helping firms to act according to the market trends. 

Share Blog :

Be a part of our Instagram community

Trending blogs

5 Factors Influencing Consumer Behavior

Elasticity of Demand and its Types

An Overview of Descriptive Analysis

What is PESTLE Analysis? Everything you need to know about it

5 Factors Affecting the Price Elasticity of Demand (PED)

6 Major Branches of Artificial Intelligence (AI)

Dijkstra’s Algorithm: The Shortest Path Algorithm

Different Types of Research Methods

Latest Comments

abigailkelly54324721991d077f4a8a

If not for Baba Powers what would my life turn out to be? I want you all to please contact Baba Powers now to get the powerful black mirror from him. I want you all to also BELIEVE AND TRUST HIM because whatever he tells you is the TRUTH and 100% guaranteed. The black mirror makes it happen, attracts abundance. I bought the black mirror from Baba Powers and now, I am super rich and successful with the help of the black mirror. When I first saw the testimonies of Baba Powers of the black mirror, I thought it was a joke but I contacted him to be sure for myself and to my greatest surprise, the black mirror is real. The black mirror is powerful. Check him out on his website to see plenty of amazing testimonies from people about him. These are some of the people that he has helped. Here is his website; Babablackmirrorsofpowers.blogspot.com and here is his email; [email protected] I really can't thank you enough Baba Powers. God bless you, thank you

martzmichelle153dec949915ee44332

Hi, my name is Michelle Martz. My credit was deeply in mess. I saw a few people praising PINNACLE CREDIT SPECIALIST as the credit doctor. So, I got in touch with him and hint me some details which increased my credit score by 215 points within 6 days. I also had some late mortgage payments, medical bills, one late credit card payment and some inquiries which have been wiped out. Hit him up by email: [email protected] OR +1 (409) 231-0041. DON’T FAIL TO LET HIM KNOW I REFERRED YOU.

danieltam672b704bdef64864600

PINNACLE CREDIT SPECIALIST remains the best credit expertise I have known. I had 6 negative items and a couple of late payments last year and my score tanked. One of them is from Capital One and another from Chase which I paid off and I am not sure of the others but they’re both 6 years old. I filed bankruptcy 5 years ago and settled with all of these. My attention was called that they’re still on my report I recently got referred by my wife to hire ([email protected] / +1 (409) 231-0041) which I did and he helped me boost my credit to (700 Equifax, 704 and 710 Experian) also deleted all negative items on my credit report including the late payments. I recommend anyone that needs to fix his or her credit to get through with PINNACLE. He is just the best.

rhondarosemari6045af2cea7c40fc

(Web-site. www://trustgeekshackexpert.com/) (Tele-Gram, trustgeekshackexpert ) As a single mom of five, my life took a drastic turn when my husband died in a tragic fire caused by a lightning strike during a storm, which destroyed our home. Struggling to make ends meet, I juggled three jobs to support my family. The constant struggle pushed me to look for other ways to secure a better future for my children. One day, I stumbled upon an article about Bitcoin. Intrigued by the potential, I invested some of the insurance money we received after the fire. I devoted countless hours to research, learning everything about cryptocurrency and proper risk management. My efforts paid off, and I soon made $250,000 a month trading Bitcoin. This financial breakthrough was a lifesaver, providing my family's stability. However, not all was smooth sailing. My oldest son and I had a heated argument about his college plans, which led to a shocking betrayal. In an attempt to get back at me, he plotted to steal my cryptocurrency. Panicked and desperate, I turned to Facebook for help. There, I came across a testimony from a trader friend about the Trust Geeks Hack Expert team. Reaching out to them was the best decision I made. They were incredibly professional and compassionate, understanding the urgency of my situation. The team helped me recover access to my email and, more importantly, restored my Bitcoin wallet, which had been deleted from my phone. Their expertise also uncovered the plot my son had orchestrated. This revelation was heartbreaking, but it also opened up an opportunity for healing. With the help of Trust Geeks Hack Expert, we began to mend our fractured relationship. I realized that I needed to be a better parent, and my son acknowledged his mistakes. We are now working towards rebuilding trust and strengthening our family bond. Throughout this ordeal, I learned several crucial lessons. Firstly, financial success requires thorough research and prudent risk management. Secondly, it's essential to secure digital assets vigilantly. Lastly, and most importantly, even in the face of betrayal, family remains a cornerstone of support and love. Trust Geeks Hack Expert didn't just help me recover my assets; they helped uncover the cracks in our family dynamics, allowing us to address and fix them. I still trust in the strength of our family and am hopeful for a brighter future. ( M-ail:trustgeekshackexpert{@}fastservice.com ) ( What's-App  +1.7.1.9.4.9.2.2.6.9.3 )

williamskurtis1206df93c0f3a4441d3

I want to give this testimony in respect of Dr. Odunga who made me win $2 Million Dollars in the Lottery by matching the 5 numbers for me. I am happy to be out of financial debt and be able to help my family in this seasonal period of fun and cheer. I contacted Dr. Odunga through Whats-App (+2348167159012) when I told him to help me win the Mega Millions and He told me that it would be spiritually checked if I will win the Lottery. When he informed me that I will not be able to win the Jackpot but I will win a huge amount in the lottery I was not completely sad but had great faith in him. I live in Freeland, Saginaw County, Michigan and I would say it was pretty hard to send him the money for the spell before he gave me the winning numbers to play. He sent me the numbers and I played. The next morning after the drawing, I matched the five white balls in the Aug. 4 drawing to win $1 million: 11-30-45-52-56. Thanks to the Megaplier X2, my prize was multiplied to $2 million. Thank You Dr Odunga for this wonderful experience with you. You too can contact Dr. Odunga at his Whats-App +2348167159012 or Email: [email protected]

davidgerard5361bab585f635f4d9f

My name is David Gerard, and I desperately need to raise my credit score, I had a lot of issues with my credit, and no one has been able to help me until I came across PINNACLE CREDIT SPECIALIST. I used to be 573 but it's not my fault. My ex-wife used my credit to the point that I couldn’t get approved for any credit card. I implore you to get in touch with PINNACLE CREDIT SPECIALIST, he promised to fix my credit within 10 days. He got my scores up to 800’s across the three credit bureaus in less than 10 days and deleted all negative marks and collections including the public record. His fee is very affordable, the most interesting thing is that he kept to his words. Kindly hit him up on email: [email protected] Or call +1 (409) 231-0041.

zam405121a7ad94db819c4e68

BE SMART AND BECOME RICH IN LESS THAN 3DAYS....It all depends on how fast  you can be to get the new PROGRAMMED blank ATM card that is capable of hacking into any ATM machine,anywhere in the world. I got to know about  this BLANK ATM CARD when I was searching for job online about a month  ago..It has really changed my life for good and now I can say I'm rich and  I can never be poor again. The least money I get in a day with it is about  $50,000.(fifty thousand USD) Every now and then I keeping pumping money  into my account. Though is illegal,there is no risk of being caught  ,because it has been programmed in such a way that it is not traceable,it  also has a technique that makes it impossible for the CCTVs to detect  you..For details on how to get yours today, email the hackers on : ( [email protected] < Tell your  loved once too, and start to live large. That's the simple testimony of how  my life changed for good...Love you all .

hendrixheather938b2f8971da804654

Hey myFICO community, I woke up this morning to an incredible surprise-PINNACLE CREDIT SPECIALIST hit my report, and my scores jumped from 564 to 792!!! I applied for and got approved for a CAP1 Quicksilver one with a $4,000 SL (wish I would have waited another day. Lol). This is my first time ever reaching a score this high-I’ve always been in the low to mid- 500s at most, I really appreciate PINNACLE CREDIT SPECIALIST for helping me get this high. Contact him now if you need help on your credit: [email protected] Or call +1 (409) 231-0041. What cards would you recommend I apply for, given my current situation? Any tips on maximizing my credit profile from here would be greatly appreciated! Thanks in advance for your advice and recommendation!

alexisscorpio120643317a1ad84ac2

I always have cold sores outbreaks when on my periods and they were very terrible, when I went for test the doctor said I had herpes virus. I just want to share a brief testimony of how Dr happy completely cured me from herpes virus with his natural medicine. It became a burden to me having outbreaks all time and it was so terrible to look upon while on mirror than going out with it so would rather lock up myself indoors all times of outbreak. I stumbled upon a testimony of someone this Herbal doctor has cured on the internet and took the doctor's email: [email protected] or WhatsApp him +234 (706) (8494) (711) to contact him. I'm completely whole today free from this virus and horrible outbreaks All thanks to Dr happy!! His Web Site....https://happylovespell2.webnode.com/

Managerial Economics: Importance, Significance, Nature, Scope, and Role

Meaning of managerial economics.

Managerial economics refers to the management of business using economic theories, tools, and concepts. It is simply the amalgamation of management principles and economic theories for better problem solving and decision making. It is a branch of economics that applies economic theories for analysis, assumption, and prediction of business conditions.

Managerial economics performs three important roles for business organizations : Demand analysis and forecasting, capital management and profit management. Firms with the application of managerial economics optimally decide what to produce, how to produce and for whom to produce.

Role of Managerial Economics

Importance of Managerial Economics

Significance of Managerial Economics

Nature of Managerial Economics

Scope of Managerial Economics

Managerial Economics: Importance, Significance, Nature, Scope, and Role PDF

Related posts:, add commercemates to your homescreen.

A Managerial Problem Solving Methodology (MPSM)

Cite this chapter.

• Samir Chakraborty 2  

Part of the book series: NATO Conference Series ((SYSC,volume 5))

175 Accesses

A managerial problem solving methodology (MPSM) has been developed and extensively used [1–7] to solve Process problems. A Process is defined as an operational combination of man-machine systems which transforms basic (to the organization) inputs ($’s) to primary (to survival) outputs (products/services). A problem is defined by state-space constraints [8] which threaten Process survival. A threat to survival is said to exist when the distance [11] between actual-performance and ideal-performance exceeds a given threshold.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save.

• Get 10 units per month
• Download Article/Chapter or eBook
• 1 Unit = 1 Article or 1 Chapter
• Cancel anytime
• Available as PDF
• Read on any device
• Instant download
• Own it forever
• Compact, lightweight edition
• Dispatched in 3 to 5 business days
• Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Unable to display preview.  Download preview PDF.

Similar content being viewed by others

Advancement of Decision Support Systems, Complex Systems and Empirical Studies Based on the Fifteenth ICMSEM Proceedings

Challenges in the application of mathematical programming in the enterprise-wide optimization of process industries

Engineering the Decision-Making Process Using Multiple Markov Theories and DEMO

S. Chakraborty, “Problem Solving for the Central Office Equipment Provisioning Process,” Project Report #ASE1 . NBTel, 1974.

Google Scholar  

S. Chakraborty, “Problem Solving for the Maintenance Process,” Project Report #ASE2 . NBTel, 1975.

S. Chakraborty, “Problem Solving for the Switched Network Analysis Centre Interface System and Text Board System,” CSE Project Guidelines . NBTel, 1976.

S. Chakraborty, “Problem Solving for the Station Equipment Provisioning System,” SEPS Feasibility and Implementation Report . NBTel, 1976.

S. Chakraborty, “Management Performance—the Acid Tests,” Position Paper #MRE . NBTel, 1976.

S. Chakraborty, “Considerations and Notes on Proposed Organization Change,” Organization Change Project Report . NBTel, 1977.

S. Chakraborty, “Adaptive Organizations—Hybrid Structures,” Research Paper #100475–2 . Centre for Advanced Engineering Study, Massachusetts Institute of Technology, Boston, Mass., 1975.

G. J. Friedman, “Constraint Theory: an overview.” International Journal of Systems Science , Vol. 7, No. 10, 1113–1151, 1976.

Article   Google Scholar  

P. G. Jollymore, “Memo—Engineering Technical Committee,” TCTS Memo . NBTel, 1974.

G. J. Klir, An Approach to General Systems Theory . Van Nostrand Reinhold, New York, 1969.

G. J. Klir, “Identification of Generative Structures in Empirical Data,” International Journal of General Systems , Vol. 3, No. 2, pp. 89–104, 1976.

G. J. Klir and H. J. J. Uyttenhove, “Computerized Methodology for Structure Modelling,” Annals of Systems Research , 5 (1976), 29–66.

R. Rosen, “Complexity and Error in Social Dynamics,” International Journal of General Systems , Vol. 2, pp. 145–148, 1975.

Download references

Author information

Authors and affiliations.

New Brunswick Telephone Company, One Brunswick Square, Saint John, N.B., Canada, E2L 4K2

Samir Chakraborty ( Engineering Manager )

You can also search for this author in PubMed   Google Scholar

Editor information

Editors and affiliations.

State University of New York, Binghamton, New York, USA

George J. Klir

Rights and permissions

Reprints and permissions

Copyright information

© 1978 Springer Science+Business Media New York

About this chapter

Chakraborty, S. (1978). A Managerial Problem Solving Methodology (MPSM). In: Klir, G.J. (eds) Applied General Systems Research. NATO Conference Series, vol 5. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-0555-3_54

Download citation

DOI : https://doi.org/10.1007/978-1-4757-0555-3_54

Publisher Name : Springer, Boston, MA

Print ISBN : 978-1-4757-0557-7

Online ISBN : 978-1-4757-0555-3

eBook Packages : Springer Book Archive

Share this chapter

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Publish with us

Policies and ethics

• Find a journal
• Track your research

Detailed contents

Solving Managerial Problems Systematically

• Industrial Engineering & Business Information Systems

Research output : Book/Report › Book › Professional

Other files and links

• http://ho.noordhoff.nl/boek/solving-managerial-problems-systematically

Fingerprint

• User Computer Science 100%
• Higher Education Computer Science 100%
• Checklists Psychology 100%

T1 - Solving Managerial Problems Systematically

AU - Heerkens, Hans

AU - van Winden, Arnold

N1 - Translated into English by Jan-Willem Tjooitink

N2 - Solving Managerial Problems Systematically describes the Seven Steps of the Managerial Problem-Solving Method. With this It helps trouble-shooters arrive at solutions by ticking the boxes on a methodological checklist, and teaches them to differentiate between knowledge and action problems. The Language of Variables ensures that researchers remain concrete, helping them to consciously weigh up alternatives and obtain answers to questions they had not yet thought to ask. The MPSM encourages its users to take advantage of their intuition. Solving Managerial Problems Systematically is meant for higher education where students deal with problems in individual courses, and graduate projects.

AB - Solving Managerial Problems Systematically describes the Seven Steps of the Managerial Problem-Solving Method. With this It helps trouble-shooters arrive at solutions by ticking the boxes on a methodological checklist, and teaches them to differentiate between knowledge and action problems. The Language of Variables ensures that researchers remain concrete, helping them to consciously weigh up alternatives and obtain answers to questions they had not yet thought to ask. The MPSM encourages its users to take advantage of their intuition. Solving Managerial Problems Systematically is meant for higher education where students deal with problems in individual courses, and graduate projects.

UR - http://ho.noordhoff.nl/boek/solving-managerial-problems-systematically

SN - 9789001887957

BT - Solving Managerial Problems Systematically

PB - Noordhoff Uitgevers

1.3 The Nature of Management

• What is expected of a manager?

If organizations are to be successful in meeting these challenges, management must lead the way. With effective management, contemporary companies can accomplish a great deal toward becoming more competitive in the global environment. On the other hand, ineffective management dooms the organization to mediocrity and sometimes outright failure. Because of this, we turn now to a look at the nature of management. However, we want to point out that even though our focus is on managers, what we discuss is also relevant to the actions of nonmanagers. On the basis of this examination, we should be ready to begin our analysis of what managers can learn from the behavioral sciences to improve their effectiveness in a competitive environment.

What Is Management?

Many years ago, Mary Parker Follett defined management as “the art of getting things done through people.” A manager coordinates and oversees the work of others to accomplish ends they could not attain alone. Today this definition has been broadened. Management is generally defined as the process of planning, organizing, directing, and controlling the activities of employees in combination with other resources to accomplish organizational objectives. In a broad sense, then, the task of management is to facilitate the organization’s effectiveness and long-term goal attainment by coordinating and efficiently utilizing available resources. Based on this definition, it is clear that the topics of effectively managing individuals, groups, or organizational systems is relevant to anyone who must work with others to accomplish organizational objectives.

Management exists in virtually all goal-seeking organizations, whether they are public or private, large or small, profit-making or not-for-profit, socialist or capitalist. For many, the mark of an excellent company or organization is the quality of its managers.

Managerial Responsibilities

An important question often raised about managers is: What responsibilities do managers have in organizations? According to our definition, managers are involved in planning, organizing, directing, and controlling. Managers have described their responsibilities that can be aggregated into nine major types of activities. These include:

• Long-range planning . Managers occupying executive positions are frequently involved in strategic planning and development.
• Controlling . Managers evaluate and take corrective action concerning the allocation and use of human, financial, and material resources.
• Environmental scanning . Managers must continually watch for changes in the business environment and monitor business indicators such as returns on equity or investment, economic indicators, business cycles, and so forth.
• Supervision . Managers continually oversee the work of their subordinates.
• Coordinating . Managers often must coordinate the work of others both inside the work unit and out.
• Customer relations and marketing . Certain managers are involved in direct contact with customers and potential customers.
• Community relations . Contact must be maintained and nurtured with representatives from various constituencies outside the company, including state and federal agencies, local civic groups, and suppliers.
• Internal consulting. Some managers make use of their technical expertise to solve internal problems, acting as inside consultants for organizational change and development.
• Monitoring products and services . Managers get involved in planning, scheduling, and monitoring the design, development, production, and delivery of the organization’s products and services.

As we shall see, not every manager engages in all of these activities. Rather, different managers serve different roles and carry different responsibilities, depending upon where they are in the organizational hierarchy. We will begin by looking at several of the variations in managerial work.

Variations in Managerial Work

Although each manager may have a diverse set of responsibilities, including those mentioned above, the amount of time spent on each activity and the importance of that activity will vary considerably. The two most salient perceptions of a manager are (1) the manager’s level in the organizational hierarchy and (2) the type of department or function for which they are responsible. Let us briefly consider each of these.

Management by Level. We can distinguish three general levels of management: executives, middle management , and first-line management (see Exhibit 1.6 ). Executive managers are at the top of the hierarchy and are responsible for the entire organization, especially its strategic direction. Middle managers, who are at the middle of the hierarchy, are responsible for major departments and may supervise other lower-level managers. Finally, first-line managers supervise rank-and-file employees and carry out day-to-day activities within departments.

Exhibit 1.7 shows differences in managerial activities by hierarchical level. Senior executives will devote more of their time to conceptual issues, while first-line managers will concentrate their efforts on technical issues. For example, top managers rate high on such activities as long-range planning , monitoring business indicators, coordinating, and internal consulting. Lower-level managers, by contrast, rate high on supervising because their responsibility is to accomplish tasks through rank-and-file employees. Middle managers rate near the middle for all activities. We can distinguish three types of managerial skills: 8

• Technical skills . Managers must have the ability to use the tools, procedures, and techniques of their special areas. An accountant must have expertise in accounting principles, whereas a production manager must know operations management. These skills are the mechanics of the job.
• Human relations skills . Human relations skills involve the ability to work with people and understand employee motivation and group processes. These skills allow the manager to become involved with and lead his or her group.
• Conceptual skills . These skills represent a manager’s ability to organize and analyze information in order to improve organizational performance. They include the ability to see the organization as a whole and to understand how various parts fit together to work as an integrated unit. These skills are required to coordinate the departments and divisions successfully so that the entire organization can pull together.

As shown in Exhibit 1.7 , different levels of these skills are required at different stages of the managerial hierarchy. That is, success in executive positions requires far more conceptual skill and less use of technical skills in most (but not all) situations, whereas first-line managers generally require more technical skills and fewer conceptual skills. Note, however, that human or people skills remain important for success at all three levels in the hierarchy.

Management by Department or Function. In addition to level in the hierarchy, managerial responsibilities also differ with respect to the type of department or function. There are differences found for quality assurance, manufacturing, marketing, accounting and finance, and human resource management departments. For instance, manufacturing department managers will concentrate their efforts on products and services, controlling, and supervising. Marketing managers, in comparison, focus less on planning, coordinating, and consulting but more on customer relations and external contact. Managers in both accounting and human resource management departments rate high on long-range planning, but will spend less time on the organization’s products and service offerings. Managers in accounting and finance are also concerned with controlling and with monitoring performance indicators, while human resource managers provide consulting expertise, coordination, and external contacts. The emphasis on and intensity of managerial activities varies considerably by the department the manager is assigned to.

At a personal level, knowing that the mix of conceptual, human, and technical skills changes over time and that different functional areas require different levels of specific management activities can serve at least two important functions. First, if you choose to become a manager, knowing that the mix of skills changes over time can help you avoid a common complaint that often young employees want to think and act like a CEO before they have mastered being a first-line supervisor. Second, knowing the different mix of management activities by functional area can facilitate your selection of an area or areas that best match your skills and interests.

In many firms, managers are rotated through departments as they move up in the hierarchy. In this way they obtain a well-rounded perspective on the responsibilities of the various departments. In their day-to-day tasks they must emphasize the right activities for their departments and their managerial levels. Knowing what types of activity to emphasize is the core of the manager’s job. In any event, we shall return to this issue when we address the nature of individual differences in the next chapter.

The Twenty-First Century Manager

We discussed above many of the changes and challenges facing organizations in the twenty-first century. Because of changes such as these, the managers and executives of tomorrow will have to change their approaches to their jobs if they are to succeed in meeting the new challenges. In fact, their profiles may even look somewhat different than they often do today. Consider the five skills that Fast Company predicts that successful future managers, compared to the senior manager in the year 2000, will need. The five skills are: the ability to think of new solutions, being comfortable with chaos, an understanding of technology, high emotional intelligence, and the ability to work with people and technology together.

For the past several decades, executive profiles have typically looked like this: The person started out in finance with an undergraduate degree in accounting, then methodically worked their way up through the company from the controller’s office in a division, to running that division, to the top job. The military background shows. They are used to giving orders—and to having them obeyed. As head of the philanthropic efforts, they are important in the community. However, the first time the individual traveled overseas on business was as chief executive. Computers, which became ubiquitous, make them nervous. 9

Now compare this with predictions about what a twenty-first-century executive will look like:

Their undergraduate degree might be in French literature, but they also have a joint MBA/engineering degree. The individual started in research and was quickly picked out as a potential CEO. They are able to think creatively and thrives in a chaotic environment. They zigzagged from research to marketing to finance, are comfortable with technology and people, and have a high degree of emotional intelligence. The executive proved valuable in Brazil by turning around a failing joint venture. This person speaks multiple languages and is on a first-name basis with commerce ministers in half a dozen countries.

Clearly, the future holds considerable excitement and promise for future managers and executives who are properly prepared to meet the challenges. How do we prepare them? One study suggested that the manager of the future must be able to fill at least the following four roles: 10

Global strategist. Executives of the future must understand world markets and think internationally. They must have a capacity to identify unique business opportunities and then move quickly to exploit them.

Master of technology. Executives and managers of the future must be able to get the most out of emerging technologies, whether these technologies are in manufacturing, communications, marketing, or other areas.

Leadership that embraces vulnerability. The successful executive of the future will understand how to cut through red tape to get a job done, how to build bridges with key people from highly divergent backgrounds and points of view, and how to make coalitions and joint ventures work.

Follow-from-the-front motivator. Finally, the executive of tomorrow must understand group dynamics and how to counsel, coach, and command work teams and individuals so they perform at their best. Future organizations will place greater emphasis on teams and coordinated efforts, requiring managers to understand participative management techniques.

Great communicator. To this list of four, we would add that managers of the future must be great communicators. They must be able to communicate effectively with an increasingly diverse set of employees as well as customers, suppliers, and community and government leaders.

Whether these predictions are completely accurate is difficult to know. Suffice it to say that most futurists agree that the organizational world of the twenty-first century will likely resemble, to some extent, the portrait described here. The task for future managers, then, is to attempt to develop these requisite skills to the extent possible so they will be ready for the challenges of the next decade.

Concept Check

• Define management.
• How does the nature of management change according to one’s level and function in the organization?

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/organizational-behavior/pages/1-introduction

• Authors: J. Stewart Black, David S. Bright
• Publisher/website: OpenStax
• Book title: Organizational Behavior
• Publication date: Jun 5, 2019
• Location: Houston, Texas
• Book URL: https://openstax.org/books/organizational-behavior/pages/1-introduction
• Section URL: https://openstax.org/books/organizational-behavior/pages/1-3-the-nature-of-management

© Jan 9, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

Managerial Problem Definition: A Descriptive Study of Problem Definers

PDF Version Also Available for Download.

Description

This research examines problem definition as the first step in a sequential problem solving process. Seventy-seven managers in four diverse organizations were studied to determine common characteristics of problem definers. Among the variables considered as differentiating problem definers from non-problem definers were cognitive style, personal need characteristics, preference for ideation, experience, level of management, and type and level of education. Six hypotheses were tested using the following instruments: the Problem Solving Inventory, the Myers-Briggs Type Indicator Schedule, the Preference for Ideation Scale, the Edwards Personal Preference Schedule, a Problem Definition Exercise, and a Personal Data Questionnaire. Among the managers studied, … continued below

Physical Description

ii, 136 leaves : ill.

Creation Information

Phillips Danielson, Waltraud August 1985.

This dissertation is part of the collection entitled: UNT Theses and Dissertations and was provided by the UNT Libraries to the UNT Digital Library , a digital repository hosted by the UNT Libraries . It has been viewed 2274 times. More information about this dissertation can be viewed below.

People and organizations associated with either the creation of this dissertation or its content.

• Phillips Danielson, Waltraud
• Powell, James Don Major Professor

Committee Members

• Starling, Jack Minor Professor
• Glass, James J. Minor Professor
• North Texas State University Publisher Info: www.unt.edu Place of Publication: Denton, Texas

Rights Holder

For guidance see Citations, Rights, Re-Use .

Provided By

Unt libraries.

The UNT Libraries serve the university and community by providing access to physical and online collections, fostering information literacy, supporting academic research, and much, much more.

Descriptive information to help identify this dissertation. Follow the links below to find similar items on the Digital Library.

Degree Information

• Department: College of Business
• Discipline: Organization Theory and Policy Analysis
• Level: Doctoral
• Name: Doctor of Philosophy
• PublicationType: Doctoral Dissertation
• Grantor: North Texas State University

This research examines problem definition as the first step in a sequential problem solving process. Seventy-seven managers in four diverse organizations were studied to determine common characteristics of problem definers. Among the variables considered as differentiating problem definers from non-problem definers were cognitive style, personal need characteristics, preference for ideation, experience, level of management, and type and level of education. Six hypotheses were tested using the following instruments: the Problem Solving Inventory, the Myers-Briggs Type Indicator Schedule, the Preference for Ideation Scale, the Edwards Personal Preference Schedule, a Problem Definition Exercise, and a Personal Data Questionnaire. Among the managers studied, only twelve were found to be problem definers. Such small numbers severely limit the ability to generalize about problem definers. However, it is possible that problem definers are scarce in organizations. In terms of cognitive style, problem definers were primarily thinking types who preferred evaluation to ideation in dealing with problems, making judgmental decisions on the basis of collected facts. Problem definers were not predominant at lower levels of the organization. One-third of the problem definers held upper level management positions while another one-fourth were responsible for specialized activities within their organizations, overseeing special projects and individuals much like upper level managers. Sixty-eight of the problem definers had non-business educations with none having more than a bachelors degree. As knowledge and judgment on which to base evaluation expands, managers may become less adept at defining problems and more adept at selecting and implementing alternatives. Several tentative hypotheses can be tested in future research including: 1) determining whether problem definers are scarce in organizations, 2) determining whether problem definers are more prevalent in some types of organizations than others, 3) verifying unique cognitive and personal need characteristics, 4) determining whether non-managers rather than managers have problem defining skills.

• problem definers
• sequential problem solving process

Library of Congress Subject Headings

• Problem solving
• Thesis or Dissertation

Unique identifying numbers for this dissertation in the Digital Library or other systems.

• Accession or Local Control No : 1002779272-Danielson
• Call Number : 379 N81d no. 2390
• UNT Catalog No. : b1339432 | View in Discover
• OCLC : 13703594
• Archival Resource Key : ark:/67531/metadc331384

Collections

This dissertation is part of the following collection of related materials.

UNT Theses and Dissertations

Theses and dissertations represent a wealth of scholarly and artistic content created by masters and doctoral students in the degree-seeking process. Some ETDs in this collection are restricted to use by the UNT community .

What responsibilities do I have when using this dissertation?

Digital Files

• 143 image files available in multiple sizes
• 1 file (.pdf)
• Metadata API: descriptive and downloadable metadata available in other formats

Dates and time periods associated with this dissertation.

Creation Date

• August 1985

Added to The UNT Digital Library

• Aug. 22, 2014, 6 p.m.

Description Last Updated

• Nov. 21, 2017, 10:15 a.m.

Usage Statistics

When was this dissertation last used?

Interact With This Dissertation

Here are some suggestions for what to do next.

Search Inside

• or search this site for other thesis or dissertations

Start Reading

• All Formats

Citations, Rights, Re-Use

• Citing this Dissertation
• Responsibilities of Use
• Licensing and Permissions
• Linking and Embedding
• Copies and Reproductions

International Image Interoperability Framework

We support the IIIF Presentation API

Print / Share

Links for robots.

Helpful links in machine-readable formats.

Archival Resource Key (ARK)

• ERC Record: /ark:/67531/metadc331384/?
• Persistence Statement: /ark:/67531/metadc331384/??

International Image Interoperability Framework (IIIF)

• IIIF Manifest: /ark:/67531/metadc331384/manifest/

Metadata Formats

• UNTL Format: /ark:/67531/metadc331384/metadata.untl.xml
• DC RDF: /ark:/67531/metadc331384/metadata.dc.rdf
• DC XML: /ark:/67531/metadc331384/metadata.dc.xml
• OAI_DC : /oai/?verb=GetRecord&metadataPrefix=oai_dc&identifier=info:ark/67531/metadc331384
• METS : /ark:/67531/metadc331384/metadata.mets.xml
• OpenSearch Document: /ark:/67531/metadc331384/opensearch.xml
• Thumbnail: /ark:/67531/metadc331384/thumbnail/
• Small Image: /ark:/67531/metadc331384/small/
• In-text: /ark:/67531/metadc331384/urls.txt
• Usage Stats: /stats/stats.json?ark=ark:/67531/metadc331384

Phillips Danielson, Waltraud. Managerial Problem Definition: A Descriptive Study of Problem Definers , dissertation , August 1985; Denton, Texas . ( https://digital.library.unt.edu/ark:/67531/metadc331384/ : accessed August 17, 2024 ), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu ; .

• Encyclopedia of Management
• Problem Solving

PROBLEM SOLVING

A managerial problem can be described as the gap between a given current state of affairs and a future desired state. Problem solving may then be thought of as the process of analyzing the situation and developing a solution to bridge the gap. While it is widely recognized that different diagnostic techniques are appropriate in different situations, problem solving as a formal analytical framework applies to all but the simplest managerial problems. The framework is analogous to the scientific method used in chemistry, astronomy, and the other physical sciences. In both cases, the purpose underlying the analytic process is to minimize the influence of the investigator's personal biases, maximize the likelihood of an accurate result, and facilitate communication among affected parties.

Problem solving was popularized by W. Edwards Deming and the expansion of the total quality management movement in the 1980s. While Deming described what he called the Shewhart cycle, the technique is more commonly known as the Deming Wheel or simply as the PDCA cycle. Regardless of the name, a problem solver is urged to follow a step-by-step approach to problem solving-plan, do, check, act (hence the PDCA acronym).

In the planning stage, a manager develops a working hypothesis about why a given problem exists and then develops a proposed solution to the problem. The second step is to implement, or do, the proposed remedy. Next, the manager studies or checks the result of the action taken. The focus of this review is to determine whether the proposed solution achieved the desired result-was the problem solved? The fourth step then depends upon the interpretation of the check on results. If the problem was solved, the manager acts to institutionalize the proposed solution. This might mean establishing controls or changing policy manuals to ensure that the new way of doing business continues. However, if the check indicates that the problem was not solved or was only partially corrected, the manager acts by initiating a new cycle. Indeed, the technique is represented as a cycle based on the belief that many problems are never fully solved. For example, suppose that the problem in a given manufacturing facility is determined to be that labor productivity is too low. A change in processing methods may be found to successfully increase labor productivity. However, this does not preclude additional increases in labor productivity. Therefore, the PDCA cycle suggests that managers should pursue a course of continuous improvement activity.

The problem-solving framework can be used in a wide variety of business situations, including both large-scale management-change initiatives and routine improvement or corrective activity. Indeed, management consultants may be thought of as professional problem solvers. By relying on the proven problem-solving framework, external consultants are often able to overcome their lack of specific industry experience or knowledge of an organization's internal dynamics to provide meaningful analysis and suggestions for improvement. To more fully explore the issues presented by problem solving, the four-step PDCA cycle is expanded to a nine-step framework in the next section.

Perhaps the only generalizable caveat regarding problem solving is to guard against overuse of the framework. For example, Florida Power & Light became well known for their problem-solving ability in the late 1980s. One of their most successful initiatives was to institute an aggressive tree-trimming program to anticipate and prevent power failure due to downed limbs falling on electrical lines during storms. They were so successful that they integrated the problem-solving framework into their day-to-day managerial decision making and organizational culture. While this resulted in well reasoned decisions, it also meant that implementing even simple changes like moving a filing cabinet closer to the people using it required an overly bureaucratic approval process. This phenomenon is commonly referred to as paralysis of analysis. Therefore, managers should remain aware of the costs in both time and resources associated with the problem-solving framework. Accordingly, the nine-step framework described below is offered as a suggested guide to problem solving. Managers should feel free to simplify the framework as appropriate given their particular situation.

THE PROBLEM-SOLVING FRAMEWORK

Problem identification..

Although business problems in the form of a broken piece of machinery or an irate customer are readily apparent, many problems present themselves in a more subtle fashion. For example, if a firm's overall sales are increasing, but its percentage of market share is declining, there is no attention-grabbing incident to indicate that a problem exists. However, the problem-solving framework is still helpful in analyzing the current state of affairs and developing a management intervention to guide the firm toward the future desired state. Therefore, a solid approach to problem solving begins with a solid approach to problem identification. Whatever techniques are used, a firm's approach to problem identification should address three common identification shortfalls. First and most obviously, the firm wants to avoid being blindsided. Many problems develop over time; however, unless the firm is paying attention, warning signals may go unheeded until it is too late to effectively respond. A second common error of problem identification is not appropriating properly. This means that although a firm recognizes that an issue exists, they do not recognize the significance of the problem and fail to dedicate sufficient resources to its solution. It can be argued that not prioritizing properly has kept many traditional retail firms from responding effectively to emerging internet-based competitors. Finally, a third common error in problem identification is overreaction-the Chicken Little syndrome. Just as every falling acorn does not indicate that the sky is falling, neither does every customer complaint indicates that a crisis exists. Therefore, a firm's problem identification methods should strive to present an accurate assessment of the problems and opportunities facing the firm.

While no specific problem-identification technique will be appropriate for every situation, there are several techniques that are widely applicable. Two of the most useful techniques are statistical process control (SPC) and benchmarking. SPC is commonly used in the repetitive manufacturing industries, but can also prove useful in any stable production or service-delivery setting. A well formulated SPC program serves to inform managers when their operational processes are performing as expected and when something unexpected is introducing variation in process outputs. A simplified version of SPC is to examine performance outliers-those instances when performance was unusually poor or unusually good. It is believed that determining what went wrong, or conversely what went right, may inspire process or product modifications. Competitive benchmarking allows managers to keep tabs on their competition and thereby gauge their customers' evolving expectations. For instance, benchmarking might involve reverse engineering-disassembling a competitor's product-to study its design features and estimate the competitor's manufacturing costs. Texas Nameplate Company, Inc., a 1998 Malcolm Baldrige National Quality Award winner, uses competitive benchmarking by periodically ordering products from their competitors to compare their delivery-time performance.

Additional listening and problem identification techniques include the time-tested management-by-walking-around, revamped with a Japanese influence as going to gemba. The technique suggests that managers go to where the action is-to the production floor, point of delivery, or even to the customer's facilities to directly observe how things are done and how the product is used. Other methods include active solicitation of customer complaints and feedback. Bennigan's Restaurants offer a five-dollar credit toward future purchases to randomly selected customers who respond to telephone surveys on their satisfaction with their most recent restaurant visit. Granite Rock Company, a 1992 Baldrige Award winner, goes even farther by allowing customers to choose not to pay for any item that fails to meet their expectations. All that Granite Rock asks in return is an explanation of why the product was unsatisfactory.

PROBLEM VERIFICATION.

The amount of resources that should be dedicated to verification will vary greatly depending upon how the problem itself is manifested. If the problem is straightforward and well-defined, only a cursory level of verification may be appropriate. However, many business problems are complex and ill defined. These situations may be similar to the case of a physician who is confronted with a patient that has self-diagnosed his medical condition. While considering the patient's claim, the doctor will conduct her own analysis to verify the diagnosis. Similarly, the need for verification is especially important when a manager is asked to step in and solve a problem that has been identified by someone else. The introduction of the manager's fresh perspective and the possibility of a hidden agenda on the part of the individual who initially identified the issue under consideration suggests that a "trust, but verify" approach may be prudent. Otherwise, the manager may eventually discover she has expended a great deal of time and effort pursuing a solution to the wrong problem.

In the case of particularly ambiguous problems, McKinsey & Company, a management-consulting group, uses a technique they call Forces at Work. In this analysis, McKinsey's consultants review the external pressures on the client firm arising from suppliers, customers, competitors, regulators, technology shifts, and substitute products. They then attempt to document the direction and magnitude of any changes in the various pressures on the firm. In addition, they review any internal changes, such as shifts in labor relations or changes in production technology. Finally, they look at how the various factors are impacting the way the firm designs, manufactures, distributes, sells, and services its products. Essentially, McKinsey attempts to create comprehensive before-and-after snapshots of their client's business environment. Focusing on the differences between the two, they hope to identify and clarify the nature of the challenges facing the firm.

PROBLEM DEFINITION.

The next step in problem solving is to formally define the problem to be addressed. This is a negotiation between the individuals tasked with solving the problem and the individuals who over-see their work. Essentially, the parties need to come to an agreement on what a solution to the problem will look like. Are the overseers anticipating an implementation plan, a fully operational production line, a recommendation for capital investment, or a new product design? What metrics are considered important-cycle time, material costs, market share, scrap rates, or warranty costs? Complex problems may be broken down into mutually exclusive and collectively exhaustive components, allowing each piece to be addressed separately. The negotiation should recognize that the scope of the problem that is defined will drive the resource requirements of the problem solvers. The more focused the problem definition, the fewer resources necessary to generate a solution. Finally, the time frame for problem analysis should also be established. Many business problems require an expedited or emergency response. This may mean that the problem solvers need to generate a temporary or interim solution to the problem before they can fully explore the underlying causes of the problem. Ensuring that the overseers recognize the limitations inherent in an interim solution serves to preserve the credibility of the problem solvers.

ROOT-CAUSE ANALYSIS.

Now that the problem has been formally defined, the next step is for the problem solvers to attempt to identify the causes of the problem. The ultimate goal is to uncover the root cause or causes of the problem. The root cause is defined as that condition or event that, if corrected or eliminated, would prevent the problem from occurring. However, the problem solver should focus on potential root causes they are within the realm of potential control. For example, finding that a particular weight of motor oil is insufficient to protect an engine from overheating readily leads to an actionable plan for improvement. Finding that the root cause of a problem is gravity does not.

A common technique for generating potential root causes is the cause-and-effect diagram (also known as the fishbone or Ishikawa diagram). Using the diagram as a brainstorming tool, problem solvers traditionally review how the characteristics or operation of raw materials, labor inputs, equipment, physical environment, and management policies might cause the identified problem. Each branch of the diagram then becomes a statement of a causal hypothesis. For example, one branch of the diagram might suggest that low salaries are leading to high employee turnover, which in turn results in inexperienced operators running the machinery, which leads to a high scrap rate and ultimately higher material costs. This analysis suggests that to address the problem of high material costs, the firm may have to address the root cause of insufficient salaries.

Collection and examination of data may also lead the problem solver toward causal hypotheses. Check sheets, scatter plots, Pareto diagrams, data stratification, and a number of other graphical and statistical tools can aid problem solvers as they look for relationships between the problems identified and various input variables. Patterns in the data, changes in a variable over time, or comparisons to similar systems may all be useful in developing working theories about why something is happening. The problem solver should also consider the possibility of multiple causes or interaction effects. Perhaps the problem manifests only when a specific event occurs and certain conditions are met-the temperature is above 85 degrees or the ambient humidity is abnormally low.

Once the problem solver has identified the likely root causes of the problem, an examination of the available evidence should be used to confirm or disconfirm which potential causes actually are present and impacting the performance under consideration. This might entail developing an experiment where the candidate cause is controlled to determine whether its manipulation influences the presence of the problem. At this stage of the analysis, the problem solver should remain open to disconfirming evidence. Many elegant theories fail to achieve the necessary confirmation when put to the test. At this stage of the analysis it is also common for the problem solver to discover simple, easily implemented actions that will solve all or part of the problem. If this occurs, then clearly the problem solver should grasp the opportunity to "pick the low hanging fruit." Even if only a small component of the problem is solved, these interim wins serve to build momentum and add credibility to the problem-solving process.

ALTERNATIVE GENERATION.

Once the root causes of the problem have been identified, the problem solver can concentrate on developing approaches to prevent, eliminate, or control them. This is a creative process. The problem solver should feel free to challenge assumptions about how business was conducted in the past. At times, an effective approach is to generalize the relationship between the cause and the problem. Then the problem solver can look for similar relationships between other cause and effects that might provide insight on how to address the issues at hand. In general, it is useful to attempt to generate multiple candidate solutions. By keeping the creative process going, even after a viable solution is proposed, the problem solver retains the possibility of identifying a more effective or less expensive solution to the problem.

EVALUATION OF ALTERNATIVES.

Assuming that the problem was well defined, evaluation of the effectiveness of alternative solutions should be relatively straightforward. The issue is simply to what extent each alternative alleviates the problem. Using the metrics previously identified as important for judging success, the various alternatives can generally be directly compared. However, in addition to simply measuring the end result, the problem solvers may also want to consider the resources necessary to implement each solution. Organizations are made up of real people, with real strengths and weaknesses. A given solution may require competencies or access to finite resources that simply do not exist in the organization. In addition, there may be political considerations within the organization that influence the desirability of one alternative over another. Therefore, the problem solver may want to consider both the tangible and intangible benefits and costs of each alternative.

IMPLEMENTATION.

A very common problem-solving failure is for firms to stop once the plan of action is developed. Regardless of how good the plan is, it is useless unless it is implemented. Therefore, once a specific course of action has been approved, it should continue to receive the necessary attention and support to achieve success. The work should be broken down into tasks that can be assigned and managed. Specific mile-stones with target dates for completion should be established. Traditional project management techniques, such as the critical path method (CPM) or the program evaluation and review technique (PERT) are very useful to oversee implementation efforts.

POST-IMPLEMENTATION REVIEW.

Another common failure is for firms to simply move on after a solution has been implemented. At a minimum, a post-implementation evaluation of whether or not the problem has been solved should be conducted. If appropriate and using the metrics that were established earlier, this process should again be relatively straightforward-were the expected results achieved? The review can also determine whether additional improvement activities are justified. As the PDCA cycle suggests, some problems are never solved, they are only diminished. If the issue at hand is of that nature, then initiating a new cycle of problem-solving activity may be appropriate.

A secondary consideration for the post-implementation review is a debriefing of the problem solvers themselves. By its very nature, problem solving often presents managers with novel situations. As a consequence, the problem-solving environment is generally rich in learning opportunities. To the extent that such learning can be captured and shared throughout the organization, the management capital of the firm can be enhanced. In addition, a debriefing may also provide valuable insights into the firm's problem-solving process itself. Given the firm's unique competitive environment, knowing what worked and what did not may help focus future problem-solving initiatives.

INSTITUTIONALIZATION AND CONTROL.

The final step in problem solving is to institutionalize the results of the initiative. It is natural for any system to degrade over time. Therefore, any changes made as a result of the problem-solving effort should be locked in before they are lost. This might entail amending policy manuals, establishing new control metrics, or even rewriting job descriptions. In addition, the firm should also consider whether the problem addressed in the initiative at hand is an isolated incident or whether the solution can be leveraged throughout the organization. Frequently, similar problems are present in other departments or other geographic locations. If this is the case, institutionalization might involve transferring the newly developed practices to these new settings.

SEE ALSO: Project Management

Daniel R. Heiser

Revised by Badie N. Farah

FURTHER READING:

Deming, W. Edwards. Out of the Crisis. Cambridge: Massachusetts Institute of Technology, Center for Advanced Engineering Study, 1992.

Ketola, Jeanne and Kathy Roberts. Correct! Prevent! Improve!: Driving Improvement Through Problem Solving and Corrective and Preventive Action. Milwaukee: ASQ Quality Press, 2003.

National Institute of Standards and Technology. "Award Recipients." Malcolm Baldrige National Quality Award Program, 1999. Available from http://www.quality.nist.gov.

Rasiel, Ethan M. The McKinsey Mind: Using the Techniques of the World's Top Strategic Consultants to Help You and Your Business. New York: McGraw-Hill, 2001.

——. The McKinsey Way—Understanding and Implementing the Problem-Solving Tools and Management Techniques of the World's Top Strategic Consulting Firm. New York: McGraw-Hill, 1999.

Smith, Gerald F. Quality Problem Solving. Milwaukee: ASQ Quality Press, 1998.

User Contributions:

Comment about this article, ask questions, or add new information about this topic:.

Problem Solving 101 for Managers: 5 Essential Skills and Tips

Understanding problem solving, the 5 essential skills for effective problem solving, tips for successful problem solving, case studies of successful problem solving in the business world, developing your problem-solving skills and mindset as a manager.

Other Related Blogs

What is problem solving for managers?

The importance of problem solving for managers, analytical thinking, communication skills, emotional intelligence, creative thinking, adaptability and flexibility.

• Goal Pyramids: Building One Step at a Time
• Leader Competence: The Cornerstone of Effective Leadership Development
• Best Decision Coaches To Guide You Toward Great Choices
• Creating an inclusive workplace: How to welcome new team members effectively
• What Does A Well-Organized Manager Look Like? 8 Signs
• 5 Secrets to Effectively Managing a Training Program at Work
• Leadership Gaps: Identifying and Filling the Loopholes as a Manager
• How Can You Prevent A Negative Conversation At Work From Escalating?
• How to Coach an Underperforming Employee? 5 Manager Hacks to Save Your Team
• The Top 10 Team Management Tasks You Should Start Today

Brainstorm Possible Solutions

Evaluate and choose the best solution, monitor the progress of implemented solutions, learn from the outcome and make adjustments.

How Amazon used problem-solving Skills to Launch its Amazon Go Stores

The importance of problem-solving in the growth of zoom, the power of collaborative problem solving, practicing computational thinking for better problem solving, test your problem-solving skills, ready to take your problem-solving skills to the next level.

Download our free toolkit on developing effective problem-solving skills for managers to get started today!

Download Now

What are strong problem solving skills?

What are problem-solving skills of leaders, why problem-solving is important for managers.

Top 15 Tips for Effective Conflict Mediation at Work

Top 10 games for negotiation skills to make you a better leader, manager effectiveness: a complete guide for managers in 2024, 5 proven ways managers can build collaboration in a team.

How to master the seven-step problem-solving process

In this episode of the McKinsey Podcast , Simon London speaks with Charles Conn, CEO of venture-capital firm Oxford Sciences Innovation, and McKinsey senior partner Hugo Sarrazin about the complexities of different problem-solving strategies.

Podcast transcript

Simon London: Hello, and welcome to this episode of the McKinsey Podcast , with me, Simon London. What’s the number-one skill you need to succeed professionally? Salesmanship, perhaps? Or a facility with statistics? Or maybe the ability to communicate crisply and clearly? Many would argue that at the very top of the list comes problem solving: that is, the ability to think through and come up with an optimal course of action to address any complex challenge—in business, in public policy, or indeed in life.

Looked at this way, it’s no surprise that McKinsey takes problem solving very seriously, testing for it during the recruiting process and then honing it, in McKinsey consultants, through immersion in a structured seven-step method. To discuss the art of problem solving, I sat down in California with McKinsey senior partner Hugo Sarrazin and also with Charles Conn. Charles is a former McKinsey partner, entrepreneur, executive, and coauthor of the book Bulletproof Problem Solving: The One Skill That Changes Everything [John Wiley & Sons, 2018].

Charles and Hugo, welcome to the podcast. Thank you for being here.

Hugo Sarrazin: Our pleasure.

Charles Conn: It’s terrific to be here.

Simon London: Problem solving is a really interesting piece of terminology. It could mean so many different things. I have a son who’s a teenage climber. They talk about solving problems. Climbing is problem solving. Charles, when you talk about problem solving, what are you talking about?

Charles Conn: For me, problem solving is the answer to the question “What should I do?” It’s interesting when there’s uncertainty and complexity, and when it’s meaningful because there are consequences. Your son’s climbing is a perfect example. There are consequences, and it’s complicated, and there’s uncertainty—can he make that grab? I think we can apply that same frame almost at any level. You can think about questions like “What town would I like to live in?” or “Should I put solar panels on my roof?”

You might think that’s a funny thing to apply problem solving to, but in my mind it’s not fundamentally different from business problem solving, which answers the question “What should my strategy be?” Or problem solving at the policy level: “How do we combat climate change?” “Should I support the local school bond?” I think these are all part and parcel of the same type of question, “What should I do?”

I’m a big fan of structured problem solving. By following steps, we can more clearly understand what problem it is we’re solving, what are the components of the problem that we’re solving, which components are the most important ones for us to pay attention to, which analytic techniques we should apply to those, and how we can synthesize what we’ve learned back into a compelling story. That’s all it is, at its heart.

I think sometimes when people think about seven steps, they assume that there’s a rigidity to this. That’s not it at all. It’s actually to give you the scope for creativity, which often doesn’t exist when your problem solving is muddled.

Simon London: You were just talking about the seven-step process. That’s what’s written down in the book, but it’s a very McKinsey process as well. Without getting too deep into the weeds, let’s go through the steps, one by one. You were just talking about problem definition as being a particularly important thing to get right first. That’s the first step. Hugo, tell us about that.

Hugo Sarrazin: It is surprising how often people jump past this step and make a bunch of assumptions. The most powerful thing is to step back and ask the basic questions—“What are we trying to solve? What are the constraints that exist? What are the dependencies?” Let’s make those explicit and really push the thinking and defining. At McKinsey, we spend an enormous amount of time in writing that little statement, and the statement, if you’re a logic purist, is great. You debate. “Is it an ‘or’? Is it an ‘and’? What’s the action verb?” Because all these specific words help you get to the heart of what matters.

Want to subscribe to The McKinsey Podcast ?

Simon London: So this is a concise problem statement.

Hugo Sarrazin: Yeah. It’s not like “Can we grow in Japan?” That’s interesting, but it is “What, specifically, are we trying to uncover in the growth of a product in Japan? Or a segment in Japan? Or a channel in Japan?” When you spend an enormous amount of time, in the first meeting of the different stakeholders, debating this and having different people put forward what they think the problem definition is, you realize that people have completely different views of why they’re here. That, to me, is the most important step.

Charles Conn: I would agree with that. For me, the problem context is critical. When we understand “What are the forces acting upon your decision maker? How quickly is the answer needed? With what precision is the answer needed? Are there areas that are off limits or areas where we would particularly like to find our solution? Is the decision maker open to exploring other areas?” then you not only become more efficient, and move toward what we call the critical path in problem solving, but you also make it so much more likely that you’re not going to waste your time or your decision maker’s time.

How often do especially bright young people run off with half of the idea about what the problem is and start collecting data and start building models—only to discover that they’ve really gone off half-cocked.

Hugo Sarrazin: Yeah.

Charles Conn: And in the wrong direction.

Simon London: OK. So step one—and there is a real art and a structure to it—is define the problem. Step two, Charles?

Charles Conn: My favorite step is step two, which is to use logic trees to disaggregate the problem. Every problem we’re solving has some complexity and some uncertainty in it. The only way that we can really get our team working on the problem is to take the problem apart into logical pieces.

What we find, of course, is that the way to disaggregate the problem often gives you an insight into the answer to the problem quite quickly. I love to do two or three different cuts at it, each one giving a bit of a different insight into what might be going wrong. By doing sensible disaggregations, using logic trees, we can figure out which parts of the problem we should be looking at, and we can assign those different parts to team members.

Simon London: What’s a good example of a logic tree on a sort of ratable problem?

Charles Conn: Maybe the easiest one is the classic profit tree. Almost in every business that I would take a look at, I would start with a profit or return-on-assets tree. In its simplest form, you have the components of revenue, which are price and quantity, and the components of cost, which are cost and quantity. Each of those can be broken out. Cost can be broken into variable cost and fixed cost. The components of price can be broken into what your pricing scheme is. That simple tree often provides insight into what’s going on in a business or what the difference is between that business and the competitors.

If we add the leg, which is “What’s the asset base or investment element?”—so profit divided by assets—then we can ask the question “Is the business using its investments sensibly?” whether that’s in stores or in manufacturing or in transportation assets. I hope we can see just how simple this is, even though we’re describing it in words.

When I went to work with Gordon Moore at the Moore Foundation, the problem that he asked us to look at was “How can we save Pacific salmon?” Now, that sounds like an impossible question, but it was amenable to precisely the same type of disaggregation and allowed us to organize what became a 15-year effort to improve the likelihood of good outcomes for Pacific salmon.

Simon London: Now, is there a danger that your logic tree can be impossibly large? This, I think, brings us onto the third step in the process, which is that you have to prioritize.

Charles Conn: Absolutely. The third step, which we also emphasize, along with good problem definition, is rigorous prioritization—we ask the questions “How important is this lever or this branch of the tree in the overall outcome that we seek to achieve? How much can I move that lever?” Obviously, we try and focus our efforts on ones that have a big impact on the problem and the ones that we have the ability to change. With salmon, ocean conditions turned out to be a big lever, but not one that we could adjust. We focused our attention on fish habitats and fish-harvesting practices, which were big levers that we could affect.

People spend a lot of time arguing about branches that are either not important or that none of us can change. We see it in the public square. When we deal with questions at the policy level—“Should you support the death penalty?” “How do we affect climate change?” “How can we uncover the causes and address homelessness?”—it’s even more important that we’re focusing on levers that are big and movable.

Would you like to learn more about our Strategy & Corporate Finance Practice ?

Simon London: Let’s move swiftly on to step four. You’ve defined your problem, you disaggregate it, you prioritize where you want to analyze—what you want to really look at hard. Then you got to the work plan. Now, what does that mean in practice?

Hugo Sarrazin: Depending on what you’ve prioritized, there are many things you could do. It could be breaking the work among the team members so that people have a clear piece of the work to do. It could be defining the specific analyses that need to get done and executed, and being clear on time lines. There’s always a level-one answer, there’s a level-two answer, there’s a level-three answer. Without being too flippant, I can solve any problem during a good dinner with wine. It won’t have a whole lot of backing.

Simon London: Not going to have a lot of depth to it.

Hugo Sarrazin: No, but it may be useful as a starting point. If the stakes are not that high, that could be OK. If it’s really high stakes, you may need level three and have the whole model validated in three different ways. You need to find a work plan that reflects the level of precision, the time frame you have, and the stakeholders you need to bring along in the exercise.

Charles Conn: I love the way you’ve described that, because, again, some people think of problem solving as a linear thing, but of course what’s critical is that it’s iterative. As you say, you can solve the problem in one day or even one hour.

Charles Conn: We encourage our teams everywhere to do that. We call it the one-day answer or the one-hour answer. In work planning, we’re always iterating. Every time you see a 50-page work plan that stretches out to three months, you know it’s wrong. It will be outmoded very quickly by that learning process that you described. Iterative problem solving is a critical part of this. Sometimes, people think work planning sounds dull, but it isn’t. It’s how we know what’s expected of us and when we need to deliver it and how we’re progressing toward the answer. It’s also the place where we can deal with biases. Bias is a feature of every human decision-making process. If we design our team interactions intelligently, we can avoid the worst sort of biases.

Simon London: Here we’re talking about cognitive biases primarily, right? It’s not that I’m biased against you because of your accent or something. These are the cognitive biases that behavioral sciences have shown we all carry around, things like anchoring, overoptimism—these kinds of things.

Both: Yeah.

Charles Conn: Availability bias is the one that I’m always alert to. You think you’ve seen the problem before, and therefore what’s available is your previous conception of it—and we have to be most careful about that. In any human setting, we also have to be careful about biases that are based on hierarchies, sometimes called sunflower bias. I’m sure, Hugo, with your teams, you make sure that the youngest team members speak first. Not the oldest team members, because it’s easy for people to look at who’s senior and alter their own creative approaches.

Hugo Sarrazin: It’s helpful, at that moment—if someone is asserting a point of view—to ask the question “This was true in what context?” You’re trying to apply something that worked in one context to a different one. That can be deadly if the context has changed, and that’s why organizations struggle to change. You promote all these people because they did something that worked well in the past, and then there’s a disruption in the industry, and they keep doing what got them promoted even though the context has changed.

Simon London: Right. Right.

Hugo Sarrazin: So it’s the same thing in problem solving.

Charles Conn: And it’s why diversity in our teams is so important. It’s one of the best things about the world that we’re in now. We’re likely to have people from different socioeconomic, ethnic, and national backgrounds, each of whom sees problems from a slightly different perspective. It is therefore much more likely that the team will uncover a truly creative and clever approach to problem solving.

Simon London: Let’s move on to step five. You’ve done your work plan. Now you’ve actually got to do the analysis. The thing that strikes me here is that the range of tools that we have at our disposal now, of course, is just huge, particularly with advances in computation, advanced analytics. There’s so many things that you can apply here. Just talk about the analysis stage. How do you pick the right tools?

Charles Conn: For me, the most important thing is that we start with simple heuristics and explanatory statistics before we go off and use the big-gun tools. We need to understand the shape and scope of our problem before we start applying these massive and complex analytical approaches.

Simon London: Would you agree with that?

Hugo Sarrazin: I agree. I think there are so many wonderful heuristics. You need to start there before you go deep into the modeling exercise. There’s an interesting dynamic that’s happening, though. In some cases, for some types of problems, it is even better to set yourself up to maximize your learning. Your problem-solving methodology is test and learn, test and learn, test and learn, and iterate. That is a heuristic in itself, the A/B testing that is used in many parts of the world. So that’s a problem-solving methodology. It’s nothing different. It just uses technology and feedback loops in a fast way. The other one is exploratory data analysis. When you’re dealing with a large-scale problem, and there’s so much data, I can get to the heuristics that Charles was talking about through very clever visualization of data.

You test with your data. You need to set up an environment to do so, but don’t get caught up in neural-network modeling immediately. You’re testing, you’re checking—“Is the data right? Is it sound? Does it make sense?”—before you launch too far.

Simon London: You do hear these ideas—that if you have a big enough data set and enough algorithms, they’re going to find things that you just wouldn’t have spotted, find solutions that maybe you wouldn’t have thought of. Does machine learning sort of revolutionize the problem-solving process? Or are these actually just other tools in the toolbox for structured problem solving?

Charles Conn: It can be revolutionary. There are some areas in which the pattern recognition of large data sets and good algorithms can help us see things that we otherwise couldn’t see. But I do think it’s terribly important we don’t think that this particular technique is a substitute for superb problem solving, starting with good problem definition. Many people use machine learning without understanding algorithms that themselves can have biases built into them. Just as 20 years ago, when we were doing statistical analysis, we knew that we needed good model definition, we still need a good understanding of our algorithms and really good problem definition before we launch off into big data sets and unknown algorithms.

Simon London: Step six. You’ve done your analysis.

Charles Conn: I take six and seven together, and this is the place where young problem solvers often make a mistake. They’ve got their analysis, and they assume that’s the answer, and of course it isn’t the answer. The ability to synthesize the pieces that came out of the analysis and begin to weave those into a story that helps people answer the question “What should I do?” This is back to where we started. If we can’t synthesize, and we can’t tell a story, then our decision maker can’t find the answer to “What should I do?”

Simon London: But, again, these final steps are about motivating people to action, right?

Charles Conn: Yeah.

Simon London: I am slightly torn about the nomenclature of problem solving because it’s on paper, right? Until you motivate people to action, you actually haven’t solved anything.

Charles Conn: I love this question because I think decision-making theory, without a bias to action, is a waste of time. Everything in how I approach this is to help people take action that makes the world better.

Simon London: Hence, these are absolutely critical steps. If you don’t do this well, you’ve just got a bunch of analysis.

Charles Conn: We end up in exactly the same place where we started, which is people speaking across each other, past each other in the public square, rather than actually working together, shoulder to shoulder, to crack these important problems.

Simon London: In the real world, we have a lot of uncertainty—arguably, increasing uncertainty. How do good problem solvers deal with that?

Hugo Sarrazin: At every step of the process. In the problem definition, when you’re defining the context, you need to understand those sources of uncertainty and whether they’re important or not important. It becomes important in the definition of the tree.

You need to think carefully about the branches of the tree that are more certain and less certain as you define them. They don’t have equal weight just because they’ve got equal space on the page. Then, when you’re prioritizing, your prioritization approach may put more emphasis on things that have low probability but huge impact—or, vice versa, may put a lot of priority on things that are very likely and, hopefully, have a reasonable impact. You can introduce that along the way. When you come back to the synthesis, you just need to be nuanced about what you’re understanding, the likelihood.

Often, people lack humility in the way they make their recommendations: “This is the answer.” They’re very precise, and I think we would all be well-served to say, “This is a likely answer under the following sets of conditions” and then make the level of uncertainty clearer, if that is appropriate. It doesn’t mean you’re always in the gray zone; it doesn’t mean you don’t have a point of view. It just means that you can be explicit about the certainty of your answer when you make that recommendation.

Simon London: So it sounds like there is an underlying principle: “Acknowledge and embrace the uncertainty. Don’t pretend that it isn’t there. Be very clear about what the uncertainties are up front, and then build that into every step of the process.”

Hugo Sarrazin: Every step of the process.

Simon London: Yeah. We have just walked through a particular structured methodology for problem solving. But, of course, this is not the only structured methodology for problem solving. One that is also very well-known is design thinking, which comes at things very differently. So, Hugo, I know you have worked with a lot of designers. Just give us a very quick summary. Design thinking—what is it, and how does it relate?

Hugo Sarrazin: It starts with an incredible amount of empathy for the user and uses that to define the problem. It does pause and go out in the wild and spend an enormous amount of time seeing how people interact with objects, seeing the experience they’re getting, seeing the pain points or joy—and uses that to infer and define the problem.

Simon London: Problem definition, but out in the world.

Hugo Sarrazin: With an enormous amount of empathy. There’s a huge emphasis on empathy. Traditional, more classic problem solving is you define the problem based on an understanding of the situation. This one almost presupposes that we don’t know the problem until we go see it. The second thing is you need to come up with multiple scenarios or answers or ideas or concepts, and there’s a lot of divergent thinking initially. That’s slightly different, versus the prioritization, but not for long. Eventually, you need to kind of say, “OK, I’m going to converge again.” Then you go and you bring things back to the customer and get feedback and iterate. Then you rinse and repeat, rinse and repeat. There’s a lot of tactile building, along the way, of prototypes and things like that. It’s very iterative.

Simon London: So, Charles, are these complements or are these alternatives?

Charles Conn: I think they’re entirely complementary, and I think Hugo’s description is perfect. When we do problem definition well in classic problem solving, we are demonstrating the kind of empathy, at the very beginning of our problem, that design thinking asks us to approach. When we ideate—and that’s very similar to the disaggregation, prioritization, and work-planning steps—we do precisely the same thing, and often we use contrasting teams, so that we do have divergent thinking. The best teams allow divergent thinking to bump them off whatever their initial biases in problem solving are. For me, design thinking gives us a constant reminder of creativity, empathy, and the tactile nature of problem solving, but it’s absolutely complementary, not alternative.

Simon London: I think, in a world of cross-functional teams, an interesting question is do people with design-thinking backgrounds really work well together with classical problem solvers? How do you make that chemistry happen?

Hugo Sarrazin: Yeah, it is not easy when people have spent an enormous amount of time seeped in design thinking or user-centric design, whichever word you want to use. If the person who’s applying classic problem-solving methodology is very rigid and mechanical in the way they’re doing it, there could be an enormous amount of tension. If there’s not clarity in the role and not clarity in the process, I think having the two together can be, sometimes, problematic.

The second thing that happens often is that the artifacts the two methodologies try to gravitate toward can be different. Classic problem solving often gravitates toward a model; design thinking migrates toward a prototype. Rather than writing a big deck with all my supporting evidence, they’ll bring an example, a thing, and that feels different. Then you spend your time differently to achieve those two end products, so that’s another source of friction.

Now, I still think it can be an incredibly powerful thing to have the two—if there are the right people with the right mind-set, if there is a team that is explicit about the roles, if we’re clear about the kind of outcomes we are attempting to bring forward. There’s an enormous amount of collaborativeness and respect.

Simon London: But they have to respect each other’s methodology and be prepared to flex, maybe, a little bit, in how this process is going to work.

Hugo Sarrazin: Absolutely.

Simon London: The other area where, it strikes me, there could be a little bit of a different sort of friction is this whole concept of the day-one answer, which is what we were just talking about in classical problem solving. Now, you know that this is probably not going to be your final answer, but that’s how you begin to structure the problem. Whereas I would imagine your design thinkers—no, they’re going off to do their ethnographic research and get out into the field, potentially for a long time, before they come back with at least an initial hypothesis.

Want better strategies? Become a bulletproof problem solver

Hugo Sarrazin: That is a great callout, and that’s another difference. Designers typically will like to soak into the situation and avoid converging too quickly. There’s optionality and exploring different options. There’s a strong belief that keeps the solution space wide enough that you can come up with more radical ideas. If there’s a large design team or many designers on the team, and you come on Friday and say, “What’s our week-one answer?” they’re going to struggle. They’re not going to be comfortable, naturally, to give that answer. It doesn’t mean they don’t have an answer; it’s just not where they are in their thinking process.

Simon London: I think we are, sadly, out of time for today. But Charles and Hugo, thank you so much.

Charles Conn: It was a pleasure to be here, Simon.

Hugo Sarrazin: It was a pleasure. Thank you.

Simon London: And thanks, as always, to you, our listeners, for tuning into this episode of the McKinsey Podcast . If you want to learn more about problem solving, you can find the book, Bulletproof Problem Solving: The One Skill That Changes Everything , online or order it through your local bookstore. To learn more about McKinsey, you can of course find us at McKinsey.com.

Charles Conn is CEO of Oxford Sciences Innovation and an alumnus of McKinsey’s Sydney office. Hugo Sarrazin is a senior partner in the Silicon Valley office, where Simon London, a member of McKinsey Publishing, is also based.

Explore a career with us

Related articles.

Strategy to beat the odds

Five routes to more innovative problem solving

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

• View all journals
• Explore content
• About the journal
• Publish with us
• Sign up for alerts
• 15 August 2024

How I’m looking to medicine’s past to heal hurt and support peace in the Middle East

• Navid Madani 0

Navid Madani is the founding director of the Science Health Education (SHE) Center at the Dana-Farber Cancer Institute of Harvard Medical School in Boston, Massachusetts.

You can also search for this author in PubMed   Google Scholar

You have full access to this article via your institution.

This month, I am in Amman, Jordan, teaching on the annual Palestine Social Medicine Course. This course, now in its second year, aims to educate educators, public-health workers, physicians and medical students about the limitations of the biological model of medicine in settings of fragmentation, violence and dispossession. It examines the effects of conflicts and violence on public health and human rights, emphasizing the need for resilience and commitment to these values in the face of adversity.

The course is organized by the Palestine Program for Health and Human Rights, a partnership between the François-Xavier Bagnoud Center for Health and Human Rights at Harvard University in Boston, Massachusetts, and the Institute of Community and Public Health at Birzeit University in the West Bank. Last year, it was taught in Birzeit. It was moved to Amman this year because of escalating violence and restrictions imposed by the Israeli military and settlers in the West Bank.

I’m a Palestinian scientist building a more inclusive future

Since violence escalated on 7 October 2023, many scientific and medical gatherings in the Middle East have been postponed or cancelled. Travel to the region is difficult, because many airlines have stopped flying there. Yet the organizers felt strongly that it was important to keep the course running, because the exchanges it enables are crucial. They provide students with access to cutting-edge knowledge and methods that help to prepare them to contribute to science and medicine — to the benefit of society.

The war in Gaza is harming thousands of people now, but will have ripple effects on all nations for decades, if not centuries, to come. Violence and war anywhere harm us all — not just in terms of people killed and places destroyed, but in the loss of capacity for exploring solutions to problems that plague humanity. People who are having to fight or run for their lives, or who spend their time finding shelter or trying to advocate for fundamental human rights and dignity, do not have time for wider problem-solving.

Scientists, physicians and health-care providers usually address the ills of the patient or population in front of us. Social medicine is occupied with a larger challenge: healing the hurts of a region or population with a long history of pain. This means identifying the social determinants of health that affect the population — including, for example, sexism, racism, economic inequality and historical, multigenerational traumas — and seeking to heal the people living under their shadow.

The Taliban ‘took my life’ — scientists who fled takeover speak out

Recent history could easily make us throw up our hands in despair. In the Middle East, especially, peace seems so far away. Progress on so many fronts — social, scientific, diplomatic — seems to be retreating while exposure to horrifying trauma increases daily.

Yet the region has a rich history of medical and scientific advancements. Crucial contributions came from ancient civilizations such as the Persian Empire, Mesopotamia and Egypt, culminating in the Islamic Golden Age from the eighth to the thirteenth century. Philosopher-scientists such as Abū Bakr al-Rāzī (often known in the West as Razi or Rhazes), al-Zahrawi (Abulcasis) and Ibn Sina (Avicenna) shaped science and medicine in the Islamic world and Europe in ways that lasted for centuries.

Years of experience in the Middle East and North Africa have shown me that scientific training and other events held in the region, rather than in Europe or the United States, can provide a valuable historical perspective and cultural context while fostering global collaboration.

For example, hosting a scientific symposium in Tehran, despite geopolitical pressures against it — as I did in 2012 — exposed participants to contemporary Iranian advances in medical research, such as work in stem-cell research and medical nanotechnology, which have since gained international recognition.

Tracking women’s mental health amid trauma in Yemen

By connecting international scholars with local practitioners, the Palestine Social Medicine Course highlights the specific health challenges faced by Palestinians, while creating a platform for cross-cultural dialogue and knowledge exchange.

Immersing ourselves in the settings where historical advances in science and medicine were made provides deeper insights into how societal values and needs have shaped scientific discoveries and medical practices. Studying pioneers such as Ibn Sina and al-Rāzī can inspire current and future practitioners to innovate and push the boundaries of their fields. And fostering global collaborations and building connections with scholars and institutions in the Middle East enriches the collective understanding and application of medical and scientific knowledge.

We scientists and medical professionals need to do what we can to change the sad trajectory of violence. Those of us who want peace, understanding and progress towards humanity’s well-being must dig in and push for that vision.

During what is sometimes called the Dark Ages in Europe, scientific and medical innovations from the Middle East and North Africa shone a guiding light to bring humanity a reasoned approach to health and problem-solving. Perhaps looking through the lens of history can inspire us to find new solutions to address contemporary challenges, in this region and worldwide.

Nature 632 , 709 (2024)

doi: https://doi.org/10.1038/d41586-024-02674-1

The views expressed are the author’s own and do not necessarily represent those of her institution.

Reprints and permissions

Competing Interests

The author declares no competing interests.

Related Articles

• Public health

Hopes dashed for drug aimed at monkeypox strain spreading in Africa

News 16 AUG 24

‘Unacceptable’: a staggering 4.4 billion people lack safe drinking water, study finds

News 15 AUG 24

What is the hottest temperature humans can survive? These labs are redefining the limit

News 14 AUG 24

Maxine Singer obituary: biologist who shaped genetic engineering and fought discrimination

Obituary 02 AUG 24

Guidelines on lab-grown embryo models are strong enough to meet ethical standards — and will build trust in science

World View 30 JUL 24

Sexual harassment in science: biologists in India speak out

News Feature 29 JUL 24

The Taliban said women could study — three years on they still can’t

‘Who will protect us from seeing the world’s largest rainforest burn?’ The mental exhaustion faced by climate scientists

Career Feature 12 AUG 24

Scientists are falling victim to deepfake AI video scams — here’s how to fight back

Career Feature 07 AUG 24

Postdoctoral Fellow in Epigenetics/RNA Biology in the Lab of Yvonne Fondufe-Mittendorf

Van Andel Institute’s (VAI) Professor Yvonne Fondufe-Mittendorf, Ph.D. is hiring a Postdoctoral Fellow to join the lab and carry out an independent...

Grand Rapids, Michigan

Van Andel Institute

Faculty Positions in Center of Bioelectronic Medicine, School of Life Sciences, Westlake University

SLS invites applications for multiple tenure-track/tenured faculty positions at all academic ranks.

Hangzhou, Zhejiang, China

School of Life Sciences, Westlake University

Faculty Positions, Aging and Neurodegeneration, Westlake Laboratory of Life Sciences and Biomedicine

Applicants with expertise in aging and neurodegeneration and related areas are particularly encouraged to apply.

Westlake Laboratory of Life Sciences and Biomedicine (WLLSB)

Faculty Positions in Chemical Biology, Westlake University

We are seeking outstanding scientists to lead vigorous independent research programs focusing on all aspects of chemical biology including...

Assistant Professor Position in Genomics

The Lewis-Sigler Institute at Princeton University invites applications for a tenure-track faculty position in Genomics.

Princeton University, Princeton, New Jersey, US

The Lewis-Sigler Institute for Integrative Genomics at Princeton University

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Quick links

• Explore articles by subject
• Guide to authors
• Editorial policies