Managerial and operational problem-solving: from microfoundations to antecedents of behavior modes

Introduction: My PhD dissertation includes three papers to deal with complex problems either at shop-floor level, called operational problem-solving, or at upper-management level of the organization, known as managerial problem-solving. However, this research makes a very clear distinction between either fixing a problem by just eliminating its symptoms or overcoming it through diagnosing and altering underlying causes. Drawn from dual-process theory, the former is based on intuitive reasoning of individuals (called Intuitive Problem-Solving: IPS) with minimum cognitive efforts, whereby problem-solvers jump to a solution using prompt remedies, short-term fixes and heuristics to temporarily solve the problem. The latter, conversely, relies on analytical reasoning of individuals (called Analytical Problem-Solving: APS) with deliberate and reflective cognitive efforts to overcome the problem fundamentally using a set of structured actions. However, an analytical problem-solver is required to go through a series of stages for a comprehensive problem formulation (i.e. problem definition, problem analysis, and solution design) before the final decision is reached. Although the effectiveness of APS, as a superior behavior mode, is asserted in the management literature as a way to fundamentally solve the problems, contribute to strategic capabilities (i.e. organizational learning and continuous improvement) and ameliorate the long-term performance, little attention is placed to articulate the main supporting factors of this superior behavior mode, and thus existing literature fails to highlight the conditions through which APS pays off successfully. Moreover, many firms fail to implement this behavior mode or struggle to fully reap its benefits at both operational and strategic domains. So, in the first paper of my thesis, a systematic literature review (SLR), coupled with a document co-citation analysis, is conducted to discover the APS supporting factors as well as the enabling conditions through which APS is more likely to succeed. Based on a synthesis of the literature, three groups of (a) organizational, (b) environmental, and (c) problem nature-related factors are discussed in order to gain the most out of this behavior mode for in the context of both operational and managerial problem-solving. Second paper, motivated by a field-work at a manufacturing firm, studies the micro-foundations of each behavior mode in the context of operational problem-solving. Based on insights from the case-study conducted, IPS and APS, as two potential solutions to approach and respond to the problems, are unpacked by explication of key variables as well as the relationships among them. Moreover, despite the key role of the APS, problem-solvers are more likely to adopt IPS, a phenomenon that is called “IPS dominance” in the literature. In this paper, a system dynamic modeling is developed whose simulation results illustrate the transition dynamics between IPS and APS to shed light on the mechanisms through which “IPS dominance” occurs in the context of operational problem-solving. (1) Problem urgency due to time pressure, (2) managers with short-term horizon and (3) insufficient attention to establish and maintain a set of organizational antecedents for a successful APS adoption, emerge as three main reasons that cause IPS to take precedence over APS. Finally, this study concludes that a combination of IPS and APS (i.e. adopting both behaviors simultaneously with an emphasis on APS though) could be recognized as the best strategy for problem resolution. In this regard, IPS should be encouraged to prevent the situation from getting worse and keep the production running even in a suboptimal way, and APS, simultaneously, to solve the problems fundamentally with a less probability for the problems to recur. APS can also be adopted at the strategic level of the firm where upper-echelon executives are required to employ a rational-comprehensive behavior while making strategic decisions. Hence, in the third chapter, the attention is moved from the operational or shop-floor level to upper-management or strategic level of the organization. I argue that every single behavior thus including problem-solving behavior of CEOs is subject to the psychology in which they perceive things. However, unlike most of behavioral studies in management literature that focus on human dysfunctions and failures at the workplace, this study places more attention on positivism. More precisely, the third paper empirically investigates the relationships between CEO’s positivism in particular hope, optimism and resiliency, APS, and the firm-level performance. Based on cross-sectional data using a structural equation modeling (SEM), positively-oriented human traits (i.e. hope and resiliency) are introduced as the psychological antecedents of APS that are, in turn, influential for organizational performance. In my dissertation, I do not present novel tools and techniques for problem-solving. Instead, I adopt different theories from other research streams to scrutinize problem-solving behavior modes. For instance, in the second paper, I employ a well-known perspective in organizational studies (i.e. organizational learning), to study the micro-foundations of each mode. In the third chapter, emphasizing APS, I borrow variables from psychology (i.e. personality traits) and couple them with APS to investigate the psychological antecedents of APS, at strategic level of the firm. This attitude assists me to effectively bridge the gap between different management streams such as organizational behavior, strategic management, and operations management since I deeply believe in interdisciplinary areas as the upcoming trends in management studies. All in all, my PhD thesis consists primarily of three papers as follows: 1) Analytical Problem-Solving, More Recommended than used: A Synthesis of the Literature 2) The Dynamics of Operational Problem-Solving: A Dual-Process Approach 3) CEO’s Problem-Solving and Psychological Determinants of Success: Evidence from Iran