How big is the gap between the actual and desired state of affairs? How does this gap affect our chances of reaching or exceeding goals for the organization? If this gap is a problem, how hard will it be to fix? How quickly do we need to move to fix the problem or to take advantages of an opportunity? These are the sorts of questions managers ask when defining a situation as either a problem or an opportunity. Some of the answers can be found in standards for performance that managers set for their organizations. To answer such questions effectively managers must use their judgment based on their knowledge of the environment for their organizations. That is why information gathering through either formal or informal systems, is such an important role of an effective manager.
Though the information gathered is filtered though managers’ values and backgrounds, their values and backgrounds also influence the types of problem and opportunities they choose to work on. If managers are motivated primarily by economic values, they usually want to make decisions on practical matters, such as those involving marketing production, or profits. If they are particularly concerned about the natural environment, they might aggressively seek out problems and opportunities with ecological implications. If their orientation is political, they may be more concerned with competing with other organizations or with their own personal advancement.
With the current importance of quality and continuous improvement, benchmarking is one type of information gathering that is assuming increase in importance for organizations, For instance in 1990 top managers at Digital Equipment Corporation decided to adopt benchmarking to improve every functional area. In the public relations department a team was appointed to work with 25 practitioners under the guidance of a benchmarking manager. They established five areas of study, such as media relations, and identified 20 companies including Whirlpool, Apple, and Hewlett-Packard to interview by telephone to gather information. Even competitors cooperated in answering their 25 questions; in today’s climate of strategic alliances and partnerships, industries are more willing to open up and share information. Of the 20 companies, 4 were selected to be visited in order to get more in-depth answers in areas of expertise. After all the data was assembled and analyzed, DEC used the information as a basis for decision on new ideas and approaches.
The backgrounds and expertise of managers will also influence what they see as problems and opportunities. A study of executives revealed that managers from different departments will define the same problems in different terms. In their study, individual executives tended to be sensitive to those parts of an issue that related to their own departments, defining opportunities and problems from their own particular perspectives. For example, marketing managers want inventory to be high and view low inventory as a problem situation. Finance managers on the other hand view a high inventory situation as a problem preferring low inventory in most cases.
Setting Priorities: No manager can possibly handle every problem that arises in the daily course of business. It is important therefore, that managers learn to establish priorities can help a manager determine how quickly, how intensively and how collaboratively he or she must deal the problem. When dong this, some questions can be useful guides:
Is the problem easy to deal with? A manager who gives the same level of attention to very problem will get very little work done. Most problems, however, require only a small amount of the manager’s attention. Even if the decision turns out to be wrong correcting it will be relatively speedy and inexpensive. To avoid getting bogged down in trivial details, effective and efficient managers reserve formal decision-making techniques for problems that truly require them.
Might the problem resolve itself? Managers find that an amazing number of time wasting problems can be eliminated if they are simply ignored. Therefore, managers should rank problems in order of importance. Those at the bottom of the list usually take care of themselves or can be dealt with by others. If one of these problems worsens, it moves to a higher priority level on the list.