MANAGEMENT DECISION

MAKING

By Dr. Dr. Rachman Sjarief, Dipl.- Ing, MM. MH.

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definition

●Decision : is a solution chosen from among

alternatives .
●Decision-making process : is the process of
selecting an alternative course of action that will
solve a problem.
●Problem solving: is the process of taking
corrective action in order to meet objectives.

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Decisison making Process

Rowe: Decision making is

the central activity of management

Simon: decision making is

the heart of administration

Hall: one of the most activities of leaders

is to engage in the decision making process.

Decision Making as a core and also as important

aspect in HRM
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Decision Making Process

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4
 What is involved in the decision-making
process?
Analyze Evaluat
Define Make a Take
Alter- e
Problem Choice Action
natives Results

Caution: Not Have

too broad or Determine Consider Ensure that desired
narrow exact time, cost, all affected outcomes
information impact, and parties have been
needed ethics have input attained?
Caution:
focus on
problem, not
symptom
Who makes
Has team
ID effect on the Necessary to
stake- decision? secure ‘buy performance
Caution: ID been
the right holders (team or in’ from all
effective?
problem leader)

Copyright © 2010 John Wiley & Sons, Inc. 9-5 5

Group Discussion 20 minutes

1. Find 5 normal personal problems which you have

faced and or will face in the future?
2. Find 5 difficult personal problems which you have
faced and or will face in the future?
3. From 5 difficult problems marks 2 points as
priority to be solved and decided?
4. Please identify 3 business problems?
5. Please identify 3 youth or social problems?

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CAUSE AND EFFECT ANALYSIS

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In This Module You Will…
● Understand the importance of focusing on the problem
statement

● Understand the need to organize potential causes visually

● Know when and how to construct a Cause-and-Effect (C&E)

diagram

● Understand how tree and affinity diagrams may be used for

C&E analysis

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Agenda

● Producing a focused problem statement

● Affinity Diagrams

● Cause-and-Effect (Ishikawa) Diagrams

● Using Tree Diagrams for Cause-and-Effect Analysis

● Verifying Causes

● Discussion and Review

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 Producing a
‘Focused Problem Statement’

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 Course Modules in
Analyze

Focused Cause-and-
Hypothesis Regression Design of
Problem Effect Testing Analysis Experiments
Statement Analysis

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Why do ‘cause & effect’ analysis?

● You now should have your ‘focused problem statement’

 The real problem that you want to fix

● But what is causing this problem?

● You need to find out what in the process is ‘wrong’
● The probable cause may have become obvious during the measure phase,
but it probably did not

● You will need to brainstorm potential ‘causes’ of the ‘effect’ (focused

problem) that you are working on

● You will then need to organise the potential causes

● You will then check to see which potential cause is the most important
one, (your ‘effect’ may have many causes)
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Identifying Potential Causes

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Brainstorming Potential Causes

● Brainstorming: a method of generating lots of ideas quickly

● Brainstorming Rules:
● Start with silent thinking time
● Set a time limit
● Think freely and encourage creativity
● Don’t evaluate; suspend criticism
● Build on ideas
● Post ideas
● Consider round-robin to encourage balanced participation

Encourage ‘divergent’ versus ‘convergent’ thinking

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Brainstorming Potential Causes

● Four different stages for a brainstorming session:

● Team Leader states the problem or issue (e.g., “What factor could have led
to that issue”)
● Ask to team members to restate the problem or issue using different words
to get a common understanding of the problem or issue to solve and get
people agreement on the focused problem statement
● Brainstorming itself (usually 15-20 minutes). Write down ideas
● Evaluation and discussion upon the generated ideas to identify which
appears most critical and prioritize them. Those that appear less promising
should be first eliminated from the ‘hit list”’ and stored in a ‘park list”.

● Once the final list is identified, the group can use the Affinity Diagram to
help order the information and set the stage for further analysis.

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 Use the ‘five whys’ questioning technique
Problem Problem Problem Problem Problem Problem Problem Problem Problem Problem Problem Problem Problem Etc.
A B C D E F G H I J K L M

FOCUSED
PROBLEM
STATEMENT

“Ask the question

‘Why’ five times”
Why?
1. Why did X happen?
Wider focus
Because of W. on causes

2. Why did W happen? Why?

Because of V. Wider focus
on causes

3. Why did V happen?

Why?
Because of U. Wider focus
on causes

4. Why did U happen?

Because of T. Why?
Wider focus
on causes
5. Why did T happen?
Because of S.
Why?
Wider focus
on causes

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 ‘5 Whys’ example: Orders have frequent
errors
Why?
Orders have
frequent errors Why?
Orders often
are missing Why?
Level A their labels
Labels fall off in Why?
humid weather Glue on labels
Level B doesn’t meet Why?
We have no
Level C our needs
written specs for
Level D label supplier No process for
writing vendor
Level E specs
● Problem: Orders have frequent errors
●
●
Why? Samples often are missing their labels
Why? Labels fall off in humid weather
Why? Root
●
●
Why? Glue on labels doesn’t meet our needs
Why? We have no written specs for label supplier ??? cause
● Why? No process for writing vendor specs
● Root Cause: No process for writing vendor specs

Encourage ‘divergent’ rather than ‘convergent’ thinking

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Organizing Potential Causes

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Purpose

● Graphic displays can help you structure possible causes, in order to

find relationships that will shed new light on your problem.
C&E Diagram Means/Objective
Means

Means

Means/Objective
Means
Means/Objective
Means
Problem
Statement Objective
Means
Means/Objective
Means

Means/Objective
Means
Means/Objective
Means

Tree Diagram

Affinity Diagram

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Using Affinity Diagrams for
Cause-and-Effect Analysis

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Affinity Diagrams

● Affinity Diagram: a method for organizing ideas into related groups

Methods

 Affinity diagrams can be

used for
 Dealing with complex
problems or issues
 Organizing ideas, People

issues, and opinions

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How to Create an Affinity Diagram
Step 1

● To construct an Affinity Diagram:

● Write the issue in clear view of all
Low throughput on line A
participants No material
Line not
available when
balanced
● Write each need onto index cards or needed

self-stick notes
Too much
No training
● Randomly spread cards or notes on work to do

a table or flip chart Wrong pa

Limited rt
ry location in
● If cards were brainstormed or their superviso fixture
foll ow up
meaning may be unclear to some
participants, walk trough all cards Workload Steps not in
order
and provide a short explanation uneven

before proceeding Bad suppli

ed
parts Distraction in
Workplace

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How to Create an Affinity Diagram
Step 2

● To sort the Affinity Diagram:

● Sort into piles cards that seem to
Low throughput on line A
belong together. This process is
silent and intuitive. No discussions
are allowed. No material Line not
available when balanced
needed
● If a card continues to travel between Bad suppli Workload
ed uneven
parts
files because one person wants it in Limited
ry
one pile and another person wants it s perviso
u
foll ow up
elsewhere, leave it separated. Steps not in
Too much order
work to do
Distraction in
Workplace
Wrong pa
No training rt
location in
fixture

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How to Create an Affinity Diagram
Step 3

● To complete the Affinity Diagram:

● After completing the silent sorting
Low throughput on line A
process, review results.
Material
Methods
● The number of cards per pile should
No material Line not
be no more than 10. available when
needed
balanced

Workload
● Remove duplicates. Bad suppli
ed uneven
parts
● Agree on a title for each pile. Limited
y
s ervisor
up
People foll ow up
● Optionally group piles into clusters to
Too much Steps not in
create a hierarchy 3 levels deep. work to do order

Distraction in
Workplace
Wrong pa
rt
location in
No training fixture

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Cause-and-Effect (Ishikawa) Diagrams

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Cause-and-Effect Diagrams

● Cause-and-Effect Diagrams: also known as fishbone or Ishikawa

diagrams

● Provide structure for determining cause and effect relationships

●Very useful for structuring & summarizing results of brainstorm & affinity
diagram process

● Provide a visual representation of relationships between

potential causes

● Help prevent jumping to a solution without identifying

root causes

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Constructing Cause-and-Effect
Diagrams
● Define the problem, symptom, or effect
● Place the problem or symptom at the right, enclosed in a box
● Draw the central spine as a thick line pointing to it from the left
● Identify possible causes
● Sort possible causes into major categories
● Connect categories to central spine
● Within each category ask " Why does this condition exist?"  
● Continue to add causes to each branch

Problem

Causes

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Cause-and-Effect Diagram Example

Materials Methods

er
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ord
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ot
ot

loa

sn
en

rk

p
Lin

Ste
Wo
Not available when needed
Bottlenecks
Throughput
d s

on line A is 4
ee
tn

per hour and

d ic
re

needs to be 6
’t p

Op 3 slow
per hour
n
Ca

g
k

n
or

ini
hw

tra
uc

No
om
To

People

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Using Cause-and-Effect Diagrams

● State causes, not solutions

● Show relationship between causes
● Test the causal relationships by starting from the smallest bone and
connecting each potential cause with the words “might cause”
● Take note of causes that appear repeatedly
● Review each major cause category
● Circle the most likely causes on the diagram
● Test the most likely cause and verify with data

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Why and When Use Cause-and-Effect
Diagrams
● Why Use Cause-and-Effect Diagrams
● To stimulate thinking during a brainstorm of potential causes
● To understand relationships between potential causes
● To track which potential causes have been investigated, and which proved
to contribute significantly to the problem

● When to Use Cause-and-Effect Diagrams

● A large number of potential causes makes it difficult to focus the analysis
● Lack of clarity about the relationship between different potential causes

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Example: Define the Problem, Symptom,

or Effect

Throughput
on line A is 4
per hour and
needs to be 6
per hour

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Example: Identify Possible Causes

● Bottlenecks
● No training
● Operator 3 has too much work
● The workload isn’t balanced
● The line isn’t balanced
● Process steps aren’t in order
● Warehouse doesn’t know when to release materials
● Operator 3 is too slow
● Materials aren’t available

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Example: Sort Possible Causes into
Categories
● Methods
● Bottlenecks
● The workload isn’t balanced
● The line isn’t balanced
● Process steps aren’t in order

● People
● No training
● Operator 3 has too much work
● Operator 3 is too slow

● Materials
● Materials aren’t available
● Warehouse doesn’t know when to release materials

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 Organise Possible Causes
● Have a narrowly defined problem to start
Methods

d
with

er
n
ce

ve

o rd
lan

ne

t in
ba

du

no
ot

oa
 This should come from your work in

en

ps
rkl
Li n

St e
Wo
Measure
Bottlenecks
Throughput
on line A is 4
per hour and
needs to be 6
per hour

 Capture cause-and-effect relationships between units and sub-units

 Causes on the diagram must be verified with data to confirm that they are real
causes.

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Class Exercise: C&E Diagrams
Methods Material

Machine Manpower Environment

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 Using Tree Diagrams for
Cause-and-Effect Analysis

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Tree Diagram Definition
● Another way to find structure in potential causes is to use a
tree diagram,
● This is a tool used to arrange related ideas in sequence from
broad and general to narrow and specific.
● We have used this tool before, for the VOC to CTQ process.
Rep does not have
product code No access to
Order forms system in field
incomplete

Rep does not enter

duplicate info on forms Rep assumes data
on file

Order entry Codes unavailable in

lead time is field
Wrong product No access to
too long
codes system in field

Codes changed

Contact info entered 3 System does not

times auto-fill

Unnecessary
data on forms

Obsolete data fields still Form has not been

on forms updated

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Causal Tree Diagram
Rep does not have
No access to
Order forms product code
system in field
incomplete

Rep does not enter

Rep assumes
duplicate info on
data on file
forms

Order entry Codes unavailable in

lead time is field No access to
Wrong
too long system in field
product
codes
Codes changed

Contact info entered System does not

3 times auto-fill
Unnecessary
data on forms
Obsolete data fields Form has not
still on forms been updated

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Verify Causes

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Selecting Causes to Verify
Materials Methods

er
n
ce

ve

ord
lan

ne

t in
ba

du

no
ot

oa
en

ps
rkl
Lin

Ste
Wo
Not available when needed
Bottlenecks
ds Throughput
on line A is 4
ee
tn

per hour and

dic
re

needs to be 6
p

Op 3 slow
n’t

per hour
Ca

ng
rk
ini
wo
tra
h
uc

No
om
To
● Consider all potential causes People

● Use judgment to identify most likely causes

● Focus on things that can be changed
● Consider how to measure potential causes
The cause and effect relationship must be verified with data

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Focusing

Y = ƒ (X1, X2, X3, ..., Xn)

X1, X3, X5

What vital few process and input variables (Xs) affect

critical to quality process performance or output measures (Ys)?

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Six Thinking Hats

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What Is “The Problem”

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Edward De Bono’s Thinking Hats

Facts, Figures & Information

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Nine Dot Problem

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Nine Dot Problem Revisited

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Word Search

FCIRVEEALTETITVEERS

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Personal Development Assignment – Dr. Rachman Sjarief
Please hand writing as nice as possible.
Collected at 3 pm Thursday, September 7, 2017 by Mba Rizka
1. Please make SWOT of your self
2. What do you want to do and to change to be proactive person? (5 points)
3. Write your Vision (clear …imagine your best pictures …..in 1-20 years)
4. What do you do to improve your time management using “ Quadran II “
( 10 points )
5. What is your Planning for your life ( each 5 points)
a. Short term planning 1 years
b. Mid term planning 2-5 years
c. Long term 5-10 years
6. Please mention your values and elaborate each points (10 values)
7. What do you want to do and to change to be trustful person? ( 10 points)
8. What do you want to do and to change to be a person who think win-win
and create synergy - collaboration?
9. What do you plan to improve your life to do “ sharpen the saw “ (each
aspects 5 points)
10. What do you plan to improve your “ Presentation Skills “ ( min 10 points )
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