We have looked at traditional problem solving (PDCA). It\'s an effective model f

Question

We have looked at traditional problem solving (PDCA). It's an effective model for relatively static situations (e.g. should Barnes &Noble increase its brick and mortar presence, or diminish it, expand its online presence to be more like Amazon?) It works when you have time and the variables don't change dramatically. A more dynamic situation might be that of an Army preparing for invasion. Generals know that in the first 10 minutes on the beach, the carefully thought out plan is no longer working. Sunoco has to plan to keep gas in your car's tank. Yet, in a moment civil insurrection in Nigeria, or Kuwait might cut off supplies. how do organizations facing dynamic change do their problem solving?. Be sure to include an outside source.

Explanation / Answer

In a changing business environment, an organization should not adopt the traditional problem solving tools like (PDCA). It should adopt any methods, tools or guidelines which tap the current trends of the business outcomes. Some tools which might be useful in the situation of dynamic change for problem solving can be discussed under the following headings:

1) Net Present Value Method: The probability-based net-present-value (NPV) can provide right choice in case of different portfolios into consideration. It can be calculated by subtracting the the present values (PV) of cash outflows from the present values of cash inflows over a period of time. A positive value will be beneficial for the organization mitigating the change.

2) Balanced score card approach (BSC) :

Strategically, an organization should measure its performance in the situation of a change under the four legs as per the BSC Approach:

1) Financial perspectives: In this organization should measure the indicators like operating income, sales growth and return on investment. It position to take further critical decision.

2) Customer perspectives: It provides the actual condition of organization in terms of level of customer satisfaction and retention management.

3) Internal Business Process Perspectives: It measures the effectiveness of business processes utilized to strategic goals.

4) Learning and growth Perspectives: It assesses the employee satisfaction, turnover, rate of retention, and the other metrics relevant to organization.

References:

1) https://www.mckinsey.com/business-functions/organization/our-insights/dynamic-management-better-decisions-in-uncertain-times

2) https://searchcio.techtarget.com/definition/balanced-scorecard-methodology

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