Chapter 3

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CREATIVE DECISION MAKING AND RESEARCH

Describe the role of research in business decision

making.
Present a creative and analytical decision-making
process.
Discuss the importance of writing actionable research
questions.
Suggest techniques for being more creative.
Understand concepts related to evaluating alternatives
and choice.

Hair, Babin, Money &

Research and Decision-Making Go Together

C-A-B PROCESS
Creative-Analytical-Business Decision-Making Process

Research Questions
Creativity
Researc
h
Evaluation & Choice

Implementation
Feedback

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How much research?

Routine
decisions
require little
research.

Unfamiliar
decisions
with high
risk require
much
research.

Much
Research

Little
Research

Nature of Decision

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Research has value two ways!

Provides a more
informed answer to the
current question.
Increases the knowledge
of personnel so that
more informed decisions
can be made in general.

Hair, Babin, Money &

DECISION MAKING PROCESS

Business decision-making = selecting

from among alternative courses of
action each likely to have a
different outcome.
1. Opportunity = a situation where a
potentially advantageous outcome
is possible.
2. Crisis management = a decisionmaking situation that occurs with
little notice and has great potential
for negative implications.

Hair, Babin, Money &

IDENTIFYING DECISION-MAKING SITUATIONS

DSS

Crisis
Immediate Response
Needed
Unplanned Tactical
Preprogrammed
Solution Usually
Used

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MIS

Pure Opportunity
Response Can Be
Timed (Long-Run
Orientation)
Plan can be developed
Strategic Novel
Solution Often Desired

BUSINESS DECISION MAKING PROCESS

Decision maker identifies issues

and/or problems.
Available information is screened.
Decision maker and researcher
translate issues/problems into
researchable questions.
Knowledge is acquired through
research.
Decisions are made to reach a more
desirable future situation.

Hair, Babin, Money &

BARRIERS TO EFFECTIVE PROBLEM IDENTIFICATION

AND ACTIONABLE RESEARCH QUESTIONS:

Incorrect Assumptions
Functional Fixedness
Expedience
Communication Difficulties
The Solution
Unclear Goals

Hair, Babin, Money &

Developing better vision.

Functional Fixedness

Once one learns an effective rule or

action, increased familiarity with the
process makes it difficult to see other
ways of doing the same thing, even if
they are simpler and better. That is, it
creates tunnel vision.

Hair, Babin, Money &

BEATING FUNCTIONAL FIXEDNESS

Interrogatories.

What ___?
Why ___?
When___?
Where ___?
Who ___?
How ___?

Invite Multiple Solutions.

Identify WAYS not a WAY!

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EFFECTIVE COMMUNICATIONS

. . . are essential because multiple

people are usually involved in the
decision making process. Effective
communications make effective
research questions more likely!

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INVITING MULTIPLE SOLUTIONS

Too often we tend to work on the

most obvious question, or the first
one posed.
Considering a larger number of
potential questions and solutions
leads to better research, better
answers, and improved decision
making.

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ISSUES OR SYMPTOMS?

Issues are the things that if altered will close

the gap between the actual and the desired
situation.
Symptoms are signals that some change is
needed to avoid further problems or to take
advantage of an opportunity.
Effective communication insures that
research and decision making are directed
toward issues and not symptoms!

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ISSUES, SYMPTOMS, RESEARCH QUESTIONS

Symptom

Potential Issues

Decision Issues

Research
Questions

Stock-outs are
reduced from
last year

Shelf space
reduction has
lowered retail
inventories?

Should we
increase slotting
allowances in an
effort to gain
more shelf
space?

What is the
relationship
between shelf
space and retail
sales?

Churn-rate is
highest in the
market

Service provider
unfriendly?

Should we
change service
management
procedures?

Is service
provider
friendliness
related to churn
rate?

Labor costs
are higher than
the
competitions

Employee sick
days are too high?

Should we create Do flexible

flex- time?
schedules create
increased labor
efficiency (lower
labor costs)?

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CREATIVITY

. . . involves combining and

synthesizing information into
novel ideas.
. . . is a divergent thinking
exercise.
. . . means developing many
possible alternatives, not just
one.

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BARRIERS TO CREATIVITY

Functional Fixedness.
Group Think.
Emotional Inhibition.
Expediency.

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BUSINESS PEOPLE LACK CREATIVITY

Thus, their decision making lacks creativity too. So, tips
for adding creativity . . . .

Quantity creates quality.

Defer judgment.
Craziness should be encouraged.
Get away from the situation.
Run with your ideas.

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HEURISTIC IDEATION TECHNIQUE

. . . is a very effective way of

combining lists and forced
combinations to develop large
numbers of ideas in a very short
period of time.

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Heuristic Ideation Matrix [HIT]

What do people eat for breakfast?

How can food be cooked?

What/How:

Fried

Boiled

Raw

Baked

Cold

MW

Toasted

Frozen

Grilled

w/Fruit

Bread

10

Cereal

11

12

13

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15

16

17

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19

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Pancakes

21

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24

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27

28

29

30

Muffins

31

32

33

34

35

36

37

38

39

40

Scones

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42

43

44

45

46

47

48

49

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Bagels

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59

60

Eggs

61

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70

Bacon

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Ham

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84

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86

87

88

89

90

Yogurt

91

92

93

94

95

96

97

98

99

100

Identify possible new breakfast foods.

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EVALUATION AND CHOICE

The best decision makers avoid any

evaluation until a large set of alternatives
has been developed.
The goal of evaluation and choice is to
narrow down the alternative courses of
action to those most likely to produce a
good outcome.
Preliminary screening is used to reduce
large numbers of alternatives to a more
manageable number.

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EVALUATIVE CRITERIA

. . . characteristics used to judge the merits

of alternatives. Good alternatives generally
have high levels of some or all of the
following:
1. Advantageousness.
2. Trialability.
3. Observability.
4. Consistency.
5. Simplicity.

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FIELD TESTS

Test Market an experiment evaluating

a new product or promotion under real
market conditions.
Pilot Test small scale implementation
of an idea being considered.

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IMPLEMENTATION

Critical to success.
good idea + poor implementation =
poor result.
Often a problem unto itself.
C-A-B used again.

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MONITORING

Assessing the extent to which a decision is

accomplishing its stated objective.
MIS and DSS useful again.
Requires feedback.
Creates learning instead of failing.

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SUMMARY

1.
2.
3.
4.
5.
6.

Described the role of research in helping make

effective business decisions.
Presented a C-A-B process.
Discussed importance of actionable research
questions.
Identified approaches for better problem definition.
Suggested ways to enhance creativity.
Discussed concepts related to evaluation and choice
of alternative decisions.

Hair, Babin, Money &

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