RDM221 - 1 - 13

Problem Solving and Decision
Making in R&D Management
Rogelio V. Cuyno and Primo Garcia
University of the Philippines

OPEN UNIVERSITY
Problem Solving and Decision Making in R&D Management
By Rogelio V. Cuyno and Primo Garcia
Copyright © 2003 by Rogelio V. Cuyno, Primo Garcia

and the UP Open University
Apart from any fair use for the purpose of research or private study,
criticism or review, this publication may be reproduced, stored
or transmitted, in any form or by any means
ONLY WITH THE PERMISSION
of the authors and the UP Open University.
Published in the Philippines by the UP Open University

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Table of Contents
Unit I Systematic Managerial Analysis (SMA), 1
Module 1 Situation Appraisal, 3

Objectives, 3
What is a Situation, 3
References, 6
Module 2 Problem Identification and Specification, 7

Objectives, 7
What is a Management Problem?, 7
Specifying the Problem, 10
The question of what, 10
The question of where, 11
The question of when, 11
The question of how much deviation, 11
References, 13
Module 3 Problem Analysis, 15

Objectives, 15
What is Problem Appraisal?, 15
Tests in appraising problems, 16
Prioritization of Problems, 17
Cause of the Problem, 19
Causal chain, 20
Summary, 21
What’s Next?, 21
References, 21
Module 4 Objective Setting, 23

Objectives, 23
Goal Setting, 23
Types of Objective, 24
The Well-Stated Objective, 25
References, 27
Module 5 Decision Analysis, 29
Objectives, 29
Decision Making: Definition and Process, 29
Setting Criteria, 31
Generating Alternatives, 31
Qualitative Decision Analysis, 32
Field Force Analysis: Strengths and Weaknesses (S-W) Analysis, 35
Determining Adverse Consequences, 36
Setting Controls, 37
Summary, 38
References, 39
Unit II Quantitative Decision Making, 41
Module 6 Probabilistic Decision Making, 43

Objectives, 43
Quantitative Decision Analysis, 44
Decision making steps and tasks, 44
Environments in which decisions are made, 47
Methods for making decisions under uncertainty, 49
Decision-Making Under Risk, 54
Advantages and Limitations of Quantitative Decision-making, 57
Summary, 58
References, 58
Unit III Planning for Implementation, 59
Module 7 Action Planning and Budgeting, 61

Objectives, 61
Activity Planning, 61
The what question, 62
The where question, 62
The when question, 62
The who question, 63
The how much question, 63
Summary, 64
References, 64
Module 8 Scheduling and Programming, 65

Objectives, 65
Scheduling and Programming: Some Basic Concepts, 66
Gantt Chart, 68
PERT, 70
Dummy activity for PERT, 75
Summary, 78
References, 78
Module 9 Potential Problem Analysis (PPA), 79
Objectives, 79
What is PPA? 79
Rationale for PPA, 80
Procedure in PPA, 80
Summary, 82
References, 82
Unit IV Information for Systematic Managerial Analysis, 83
Module 10 R&D Management Information System, 85

Objectives, 85
Computers and Information Systems, 86
MIS Outputs in Support of the Research Management Cycle, 89
Components of an R&D MIS, 90
Decision Making and Tacit Knowledge, 92
Knowledge Management, 93
Summary, 94
References, 95
Module 11 Methods for Gathering Data for Information Analysis, 97

Objectives, 97
Attributes of Data, 98
Methods of Data Gathering, 98
Form-generated data, 98
Research-based methods, 100
Survey, 101
Interviews, 104
Focused group discussions, 106
Summary, 108
References, 108
Unit I Module 1 1
Unit I
Systematic Managerial
Analysis (SMA)
Use of systems and analysis is no guarantee of success; success

without it is purely due to luck.
- Anonymous
I n the early 50’s, two social scientists, Charles H. Kepner and Benjamin
B. Tregoe, investigated what goes on in the minds of successful profes-
sional managers and what procedure they follow in solving job problems
and making decisions. Kepner and Tregoe were appalled to discover how
costly and time consuming problem-solving and decision-making were
for the managers they interviewed. They decided to work on how these
tasks can be made more efficient. They reviewed relevant literature and
did in-depth interviews and analysis of managers in action in the work-
place. They were looking for concepts and principles that could system-
atize these processes. They thought that if they can develop a system,
they can help managers do a better job of managing.
The more they read about the subject and the more they went deeper into
the processes, the clearer the operating concepts, principles, and patterns
became. These concepts, principles, and patterns in systematic problem
solving and decision-making were put into a book which they published
in 1965—The Rationale Manager: A Systematic Approach to Problem-Solving
and Decision-Making. Later, this became a textbook in the training of pro-
fessional managers all over the business sector in many countries. Those
who took the short course and read the book admitted to how inefficient
they had been in the past in their problem solving and decision making
tasks and how they had become better at these tasks after following the
Kepner and Tregoe way.
UP Open University
2 Problem Solving and Decision Making in R&D Management
In this unit, we will study the principles and processes of systematic mana-
gerial analysis with emphasis on problem solving and decision making.
The specific concepts, principles, and procedure used in SMA are dis-
cussed in the following modules:
1. Situation Appraisal
2. Problem Identification and Specification
3. Problem Analysis
4. Objective Setting
5. Decision Analysis
UP Open University
Unit I Module 1 3
Module 1
Situation Appraisal
Many of the things you can count, don’t count— many of the
things you can’t count, really count.
- Einstein
A wareness and knowledge of the situation of

a research project is the springboard for sys-
tematic managerial analysis. The more we know
Objectives
about the situation, the more solid will be the foun- After working on this
dation of our decisions. As you will find out from module, you should be able
this very first module in this course, the situation to:
is where the problem and decision analysis play
out. A situation gives rise to a problem and a de- 1. Define what a situation
cision must be reached and implemented to alle- is; and
viate the problem. 2. Describe what to
include when reporting
a project or activity
What is a Situation? situation.
We shall discuss situation here within the con-

text of a project or activity in progress that we are reviewing. If it is doing
well, the project or activity shall proceed as planned. If not, whoever is in
charge will have to find a remedy to correct whatever is flawed.
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We further assume that projects or activities, no matter how well-planned,

will encounter problems during implementation. The reasons for this may
be (Cuyno, 1991):
l The information and premises used by the planner during the plan-
ning process may be erroneous (e.g., in preparing the budget the price
used for each item of expenditure may have been too conservative).
l Circumstances in the environment may have changed, which is be-

yond the control of the implementor (e.g., a reorganization in a gov-
ernment department led to a change in leadership, with the new leader
deciding to modify the project design).
l Some internal and external forces not considered in the planning may
emerge during the implementation process (e.g., additional signatures
are required before withdrawals and purchases are considered valid).
When we review and analyze a research project or activity in progress, a

lot of information will surface (Figure 1-1). There will be information about
the technical progress of the project: How are the experiments doing?
What are the initial results? Are there surprises that are coming out? Are
the experimental design and procedures valid and sound?
Situation appraisal
l Technical
l Human End of
l Financial project
l Physical Resources
l Administrative Matters
l Leadership
l Basic Project Documents
Start of project
Figure 1-1. Situation Appraisal Diagram
Then there is information about research personnel. Are the people in-
volved in the research project delivering? Are there attitudinal and be-
havioral kinks? Do people get along well?
On financial matters: Are the fund releases regular? Is the research project
funding sufficient? Are there cost over-runs?
UP Open University
Unit I Module 1 5
On physical resources: Are the equipment for the research appropriate?

Have they been ordered, delivered, and installed? If so, are they well main-
tained?
Administratively: Are supplies and materials adequately and regularly

provided? Are support staff efficient in their work? Are they reliable, dedi-
cated? Do they relate harmoniously with each other?
On leadership: Is the research project leader providing technical guid-

ance to the researchers and assistants? Is he/she giving quality time to the
project? Does he/she have supervisory and people skills? Does he/she
relate well with other project leaders and the center/institute Director?
Does he/she get any work done?
All of the above constitute the reality of the research project.
However, this information is not enough if we want to review the total

current situation of the project. We need to know as well the background
of the project—its history, rationale, goal, potential benefits, objective, com-
ponents, technical design, budget, and the like.
A situational analysis therefore describes the total objective picture of

the status of the research project at any given time. It includes all of the
items found in Figure 1-1: technical, human, financial, physical resources,
administrative matters, leadership, and the basic project document.
A problem in an organization does not arise from nothing and nowhere.

It arises out of a situation or grows out of something that is existing. When
described, the situation shows what is going on with the project/activity
in its totality.
Activity 1-1
Choose an ongoing research project. Based on project document
and interviews with knowledgeable persons, describe the histori-
cal and technical background of the project. In addition, provide
information about the present status or condition of project imple-
mentation.
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References
Cuyno, R.V. (1992). Research Management Learning Package: Systematic

ManagerialAnalysis. Research Management Center, University of the
Philippines Los Baños.
Kepner, C.H. and Tregoe, B.B. (1965). The Rational Manager: Systematic
Approach to Problem Solving and Decision Making. Tata McGraw Hill
Publishing Co., New Delhi.
Lyles, R.I. (1982). Practical Management Problem Solving and Decision Mak-
ing. Van Nostrant Reinhold Company, New York.
_____________. (1993). Problem-Solving and Decision-Making. Texas State
Auditor’s Office, Methodology Manual, rev. 12/93. Available at http:/
/www.preciousheart.net/chaplaincy/Auditor_Manual/9probslv.pdf
[8/27/02]
UP Open University
Unit I Module 2 7
Module 2
Problem Identification
and Specification
One person’s problem is another’s opportunity.

- Anonymous
W hat we will see in this module is how to

move from describing the project situation
to identifying and specifying problems. There are
Objectives
different kinds of management problems. In this After working on this
module, we shall also discuss different ways of module, you should be able
specifying a problem when reporting it. to:
1. Define and discuss a

What is a Management management problem;
and
Problem? 2. Specify a management
problem in terms of
Problem solving requires action from the man- certain characteristics
ager to eliminate or relieve the project of some- or parameters.
thing that is not going well so that the objective is
attained in the end. The first step in this process
is to pinpoint what problem needs attention. From the point of view of
the manager, a problem is something that flows out of or is part of the
situation that we described earlier (Module 1). Lyles (1982) describes a
problem as:
a. An obstacle, condition or phenomenon which stands in the way of

achieving an objective (e.g., lack of funds, equipment, personnel, time,
support from management, receptivity of local people, etc.)
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b. As a deviation from the expected desired result. These are illustrated

below:
End End
Start Deviation=
Problem
Start
(a) Problem as obstacle (b) Problem as deviation
Figure 2-1. What a problem is
Whether it is an obstacle or a deviation from the expected, a problem is

regarded by managers as an undesirable or unwanted situation that needs
to be neutralized, eliminated, improved, or corrected. That is what man-
agement is all about.
How is a problem identified? Or how do we know a problem exists? A

problem is discovered through observation. This happens when the man-
ager notices that something is wrong or that the project/activity is not up
to expectation. When there is an observed event, phenomenon, or condi-
tion the result of which is considered undesirable or unwanted because
the expected did not happen, we can say there is a problem.
Two things must be known when determining a problematic situation:
a. What is the performance, condition, end-state, and accomplishment

that the project or activity is expected to produce (objective)?
b. In the present situation, what is the actual performance or accom-

plishment of the project?
UP Open University
Unit I Module 2 9
This can be illustrated as follows:
a) Expected performance or accomplishment
Gap = Problem
b) Actual performance or accomplishment
Figure 2-2. Problem as gap
The planner sets out what needs to be done (ought to be). Likewise the
manager works towards the attainment of the objective. But as we pointed
out earlier, the manager does not have all of the powers necessary to
control things, in nature and man-made, during project implementation.
If the gap in Fig. 2-2 is small, the problem is small. But if the gap is wide,
the problem is correspondingly large. The amount of effort or resources
called for to correct the deviation or to remedy the problem will depend
on the size of the gap. As we will discuss later, sometimes the manager in
his good judgment will consider it prudent not to do anything about the
problem because either the gap is minuscule anyway or it is too large or it
is too late to be able to save the project.
Problem solving then is narrowing the performance gap or bringing the

undesirable actual level of performance to the expectation set earlier. This
will require managerial intervention and can only prosper if the agent
causing the gap is known. We will go to this point later.
Desired performance
Problem solving =
narrowing the gap
Actual performance
Figure 2-3. Problem solving as narrowing the gap
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Specifying the Problem

To attract the attention of the manager and to justify commitment and
mobilization of resources to address it, the problem has to be precisely
described. Kepner and Tregoe (1965) suggest the following information
that managers should know about a problem:
l What is the deviation, and what is the thing or object on which the
deviation is observed?
l Where is the deviation observed to be occurring?
l When did the deviation occur?
l How much is the degree or extent of deviation?
Describing a problem precisely is like drawing a boundary or corral around

it to allow the manager to corner it, as it were, and figure out what spe-
cific solution to apply to the problem.
Lyles (1982) identified three common problems in any activity:
a. People problem (caused by individual or group behavior);

b. Technical problem (caused primarily by mechanical, technical, or sys-
tem malfunctioning); and
c. Operational problem (other than people and technical, include policy,
organizational structure, legal, financial, marketing, public relations,
etc.).
The question of what

In describing the problem precisely, the report (to the manager) has to
specify whether the deviation is about people, technical or operational as
Lyles describes it. People problem involves unwanted or troublesome be-
havior such as: absenteeism, non-cooperation, violent behavior, arrogance,
egotistic behavior, laziness, inconsiderate actions, closed mindedness, and
selfishness. For a deficiency or shortfall in behavior to be observed, it fol-
lows that the project must have a standard or desirable norm of behavior
to which actual behavior can be compared.
Technical problems are usually about system malfunctioning such as

malfunctioning of equipment, inappropriate experimental procedure in
research, wrong ingredients, overdose of input, pest and disease occur-
rence, and the like.
UP Open University
Unit I Module 2 11
An operational problem would be any disruption or defect in the conduct

of the ongoing operation or process such as: non-delivery of experimental
supplies and materials, unpaid salaries, too centralized decision making,
policy of confidentiality of experimental results, and confusion over how
to relate with local government and business enterprises.
As in the people problem, there is a need to set a desirable condition or

standard for technical and operational issues against which to compare
actual performance or events. Only then can we really say that there is
deviation or deficiency.
The question of where

As we mentioned earlier, specifying a problem is putting a boundary
around it so that attention will be zeroed in on it. The problem has a
location or setting where it happens. The analysis of the problem (to be
elaborated later) has to be done in situ. The immediate environment around
the problem has to be appreciated because it can help explain what is
causing it. Besides, we can’t fix a problem if we don’t know where it is.
The question of when

Knowing when the symptom or sign of the problem was first observed is
important because it will help troubleshoot the causal agent. Time analy-
sis would indicate the event, phenomenon, or change that occurred be-
fore the appearance of the symptom or sign of the problem. Knowing the
time of occurrence of the problem can indicate a sense of urgency for
managerial intervention or attention. Some problems are slow acting, al-
lowing the manager to temporize until action is justified. There are also
problems that get cured with time.
The question of how much deviation

The degree or extent of the deviation (the problem) indicates the serious-
ness of the problem. The rule of thumb in problem solving is: a serious
problem gets priority attention.
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Reporting on the seriousness of the problem entails quantification and

measurement. To say that the problem is big, wide, extensive, numerous,
is not precise enough. What is big, wide, extensive, or numerous to one
person may not be so to another. Instead of saying “most of our samples
were destroyed by rats,” the report must say “5 out of 10 or 50% of our
samples were destroyed.” Instead of saying “due to extensive and fre-
quent brownouts we have not been able to sustain our pure culture of the
organism,” the report must say, “in the last 4 days we have had daily
brownouts lasting 4-6 hours each time, which is why...”
SAQ 2-1
Which of the following is an operational management problem?
Why?
1. About half of the rural families are below the poverty line.
2. We are 2 hours behind schedule.
3. The experiments have become useless because of advancement
of new technology.
4. I prefer Japan-made ingredients (for an experiment) than lo-
cally made ones.
ASAQ 2-1
1. This is not an operational issue but a policy issue.
2. Yes, this is an operational management problem. It states a
gap in performance—being 2 hours behind schedule. The man-
ager is now put in a situation of trying to remedy the situation.
3. No, this is not an operational problem because its possible cause
(technological advancement) is beyond the manager’s area of
authority and responsibility.
4. No, this is not an operational problem. It is a decision making
situation; it involves making a choice.
UP Open University
Unit I Module 2 13
Activity 2-1
Interview any researcher and try to obtain an example of each of
the following problems: people, technical, and operational.
References

Philippines Los Baños
_______________. (1993). Problem-Solving and Decision-Making. Texas State
Auditor’s Office, Methodology Manual, rev. 12/93. Available at: http:/
[8/27/02]
UP Open University
UP Open University
Unit I Module 3 15
Module 3
Problem Analysis
No matter how far you have gone on a wrong road, turn back.
- Turkish proverb
Think big; start small; act now!

- Anonymous
When the boat is leaking, don’t waste your time draining the
lake. Fix the boat.
- Anonymous
T he previous module showed you how to iden-

tify and specify or describe a problem. In this
module, you will learn how to analyze a prob-
Objectives
lem. This process includes: problem appraisal, After working on this mo-
prioritizing which problems to tackle first if the dule, you should be able to:
problems are numerous and knowing the causes
of the problem. 1. Discuss problem ap-
praisal, state its rationale,
and explain the various
What is Problem Appraisal? tests for it;
2. Illustrate how a number
Appraising problems involves identifying the of problems can be pri-
problem, describing it, and deciding what action oritized; and
to take as shown below: 3. Define the cause of a
problem and discuss the
Problem appraisal conditions that should
be satisfied for some-
l Identifying the problem thing to qualify as the
l Describing the problem causal agent.
l Deciding to act or not to act
UP Open University
Cuyno (1991) explains problem appraisal in these words:
Problem solving requires intervention from the manager so

that the discrepancy or gap can be closed, the unwanted
condition corrected, or the undesirable situation stopped.
Considering that a fluctuation in performance is a com-
mon occurrence, the intervention process has to be calcu-
lated. In some cases, making changes or acting presumably
to solve the problem may even do more harm than good.
For instance, reorganization as a solution to intra-organi-
zational conflict may bring more problems rather than solve
what could be a temporary situation.
To do or not to do? Must I intervene or must I not? Now or later? These

are the questions that managers must ask before launching into action.
Appraisal of problems then is a process of evaluating the feasibility, ur-
gency and seriousness of problems, and deciding whether to act or not.
Tests in appraising problems

Cuyno (1991) has cited tests for problem appraisal. In problem appraisal
we should ask, must we intervene to solve the problem or just hope the
problem will be solved in due time? There are tests that can be used to
answer the above question, namely, seriousness, feasibility, urgency and
trend (Table 3-1).
Should I intervene
or not?
l Serious?
l Feasible?
l Urgent?
l Trend?
Figure 3-1. Tests for problem appraisal
The rule of thumb for the seriousness test is—the greater the magnitude
of the discrepancy, the greater the need to intervene to prevent further
deterioration of the condition. The adverse consequence on the system of
a problem that is large in magnitude is greater than if the magnitude is
small.
UP Open University
Unit I Module 3 17
The feasibility test is an extension of the seriousness test. At times the

magnitude of the problem is so large that the most rational and objective
action to take would be to give up on it. This is because any action on the
situation would only mean losing more because the situation has deterio-
rated so badly that it is beyond redemption. As it is said in business, ”Don’t
throw good money after bad.” In a business venture, in the face of con-
tinuing losses the sensible thing to do is to declare bankruptcy. With this
the businessman can at least be given some tax relief. In field research,
sometimes it is wiser for the researcher to abandon the experiment and
start anew because the field is completely ruined by pest or flood.
The urgency test means determining whether the problem requires in-
stant intervention. In some cases, if action is delayed, the problem would
no longer be reversible. This is known as the “life or death” test. In the
urgency test, the rule of thumb is—a problem that is urgent gets priority
attention.
A problem may be urgent but not serious, or it may be serious but not
urgent. For example, a small fire in the attic of a house is urgent, requiring
quick response, but not serious in extent because it could only involve the
burning of some waste papers. Or a patient may be seriously afflicted
with hypertension but no urgent intervention is necessary as long as the
patient does not show signs of alarmingly elevated blood pressure.
As for trend, for it to be established there has to be a pattern in the behav-

ior spread over a time period. The rule of thumb in the trend test is—
intervention is warranted if it is demonstrated that the problem is steadily
deteriorating over a time period.
Prioritization of Problems
Resources are usually short in relation to what the project/activity needs
to accomplish. As one adage goes, “the grasp is shorter than the reach.”
The reach is what needs to be done; the grasp is the resources available.
Availability of money, manpower, materials and machines limits what

can and must be done. The problem appraisal process described above
will help the manager to prioritize which problem or problems should be
given attention. How is this done? There are at least two ways: stepwise
elimination and scaling.
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In stepwise elimination, the manager ranks the various tests according to

their importance. The ranking would constitute a series of sieves that will
sort out the problems. Items are eliminated if they do not meet the test.
For instance the manager may rank the tests in the following way:
Legend:
1 st – urgency Priority problem
1 st 2 nd 3rd 4 th l Urgent
2nd – seriousness
l Serious
3rd – feasibility
l Feasible
Figure 3-2. Stepwise elemination in prioritizing problems
In the first pass, all problems that are not urgent (not a matter of life or
death) are eliminated. The surviving problems after the first cut will then
be subjected to the seriousness test. This process is repeated until the last
test. In the end the priority problems are those that are urgent, serious,
feasible, and showing a bad trend (Figure 3-2).
In the scaling method the various tests will be used as the criteria. Each
problem will be rated using a given criteria across and using the scale of
1-5 in evaluating the problems, with 1 as the highest and 5 the lowest
(Table 3-1).
Table 3-1. Prioritizing problems by scaling
Criteria
Problem
Urgent Serious Feasible Trend Total
1 3 2 3 4 11
2 1 1 2 4 8
3 4 3 2 4 13
4 1 3 1 5 10
5 2 2 1 4 9
Scale : 1- highest priority; 5- lowest priority
In the above example, problem 2 is the highest priority, followed by prob-

lem 5, and then problem 4.
There is a variation of the scaling method: the variable weight method.

Criteria items will not get the same weight (scale of 1-5). Instead, the
criteria will be assigned variable weights in a continuum of 1-100. The
most important criterion will get a bigger weight than the others.
UP Open University
Unit I Module 3 19
For example, in deciding the promotion of researchers, the Director might

use the following criteria and weights: impact of output (50%); contribu-
tion to scientific knowledge (30%); publication in refereed journals (15%);
and leadership quality (5%).
Cause of the Problem

Problems have causes; they do not spontaneously occur. When we ob-
serve a problem in an ongoing project/activity, what we see is already
the effect indicated by symptoms or signs or any physical manifestation.
A causative agent must exist, acting as a force that precipitates a change
in the course of events. This causes performance to decline or the situa-
tion to turn sour. This causal agent has to be found and incapacitated so
that it will not cause further deviation from the expected performance.
The operating logic is rooted in the scientific principle of “cause and ef-
fect”. In science a scientific conclusion is warranted only if an effect can
be empirically explained by a known and verified causal agent. Kepner
and Tregoe (1965) claim that the cause of any problem is always a change
that precedes the effect. This change leads to a consequent visible change
(deviation from standard) which appears in a specific place and not in
others. This “principle of distinction” is illustrated in the following inci-
dent:
Two of three buddies complain of stomachache at the same time. The

third person is spared. We wonder what happened with the two bud-
dies who developed a stomachache. When questioned, the two reported
that one hour ago both of them ate tuna sandwich at the corner store.
The third party was not with them. The distinction then between the
two who have stomachache and the third buddy is the tuna sandwich.
In this case it can be concluded that the tuna sandwich caused the stom-
achache. The tuna sandwich is also the change in the situation of the
two buddies.
If a cause has an effect on one situation but not on the other, there must
be something distinctive in that one situation to make this happen (Kepner
and Tregoe, 1965). To go back to our example, if all three develop stom-
achache, it cannot be said that the tuna sandwich is the culprit because
the principle distinction (the stomachache) was absent.
What is change, which is a causal condition that must occur before the
appearance of a visible problem? Kepner and Tregoe (1965) define change
as simply something new or different. They say that for a problem to
occur, there must be a certain change that has disturbed the balance of
forces and triggered the problem.
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Before After
Cause Event Effect
(change) (deviation
from standard)
Cause:
A change in situation will cause a deviation
from what is expected.
Figure 3-3. Change
Let us illustrate this with an example. For the first time in three years, Bob
got failing marks in his subjects. Last semester, he joined a fraternity and
was involved in a fraternity theater project. The change in the situation is
Bob’s joining a fraternity. The event produced an effect, which is a failing
grade in two subjects. In this example, the cause for the failing marks was
his joining a frat because this was the situation that changed, thus creat-
ing a deviation from the usual (i.e., no failing mark before).
Causal chain
The cause of a problem sometimes operates as a chain of secondary and
tertiary causes originating from a single root cause just like in falling domi-
nos (Figure 3-2). Cuyno (1991) explains causal chain in this manner: For
instance, the performance of a unit is lagging behind because of absentee-
ism. This could be caused by intense conflict within the ranks, but the root
cause is really favoritism of the boss for a worker who is more junior and
who is perceived by the others as incompetent. In this situation no amount
of disciplinary measure to curb absenteeism or to reconcile the parties at
war will work unless the root cause of the problem—favoritism—is elimi-
nated.
Sometimes the root cause is called by another term—“breeder problem”.

This is the agent producing the symptom or the force that is hampering
performance. A good example of a breeder problem is the queen of a
termite colony. Unless the queen is destroyed, termites will continue to
pester the household, notwithstanding daily spraying of pesticide.
Figure 3-4. The domino effect
UP Open University
Unit I Module 3 21
Summary
We have so far covered the follwoing steps in the systematic problem
solving and decision making process:
1. Situation analysis and appraisal—knowing what is going on

2. Problem identification and specification—describing in specific terms
the disturbing or unwanted developments/gaps in performance
3. Problem analysis
3.1 Problem appraisal—deciding whether to intervene after doing the
four tests
3.2 Identifying the root causes of the problem
What’s Next?
Five more steps in systematic problem solving and decision making will
be presented:
1. Objective setting
2. Searching for alternatives
3. Decision analysis
4. Action planning and budgeting
5. Potential problem analysis
References
Cuyno, R.V. (1992). Research Management Learning Package:Systematic

Managerial Analysis. Research Management Center, University of the
_______________. (1993). Problem-Solving and Decision Making. Texas State
[8/27/02]
UP Open University
UP Open University
Unit I Module 4 23
Module 4
Objective Setting
Unless you know where you are going, you wouldn’t know if
you have arrived.
-Anonymous
O nce a problem is analyzed and the cause(s)

known, the next step in problem solving is
to set the objectives. In this module, we will show
Objectives
how objectives are set. We will discuss how to After working on this
connect the goal to the problem identified. Then module, you should be able
we will present the different types of objectives. to:
Finally, we will show how criteria are developed.
1. Explain the relationship
between goal setting
Goal Setting and problem identifica-
tion;
In response to an observed problem in an ongoing 2. Describe each of the
project, a new objective is formulated. Without a types of objective; and
goal or destination, there is no way of knowing if 3. Give examples of well
we are successful in our problem solving effort. formulated objectives.
New goals or objectives should be set following

identification, specification, and understanding of the problem.
There are two levels of objectives: (a) the goal, which is at the general level of
the desired end-state of the organization (e.g., to be a center of quality re-
search dedicated to solving practical problems of small coconut farmers);
and (b) the project or activity objective (e.g., to bring down the contamina-
tion level in the laboratory experiment to 2%). It is the second-level objective
that this module is concerned with.
UP Open University
Types of Objective
Lyles (1982) suggests that the occurrence of a problem in an ongoing project
presents an opportunity to review and consider new objectives. But the
primary consideration is still to correct or restore the deviation. Lyles iden-
tified four types of objective in response to a problem encountered:
1. Seek. This objective breaks away from the original objective. It is

searching for new and different opportunities. It forces movement to-
wards innovation. For instance, the original objective of a research
problem might be to increase yield of rice. In the middle of the project,
the socioeconomic situation changes, creating a pressure on the re-
searcher to redirect the project toward cost cutting in production to
increase net income. This way, without spending additional money
and without waiting for one season to lapse, a relevant new objective
is achieved.
2. Avoid. A review of the past and the present situation in a project will
identify potential situations or circumstances that are likely to cause
trouble in the remaining lifespan of the project. Such potential situa-
tions or troublesome areas have to be avoided. A plan for such trouble-
some areas has to be developed. Let’s take an example. Just as a veg-
etable experiment is started, the researcher is warned that based on
past experience there might be nothing to harvest because of flagrant
thievery in the area. It is suggested that a fence be put up and a warn-
ing device installed as deterrent to burglary.
3. Resource limit. How much resource should be made available or com-

mitted to achieve the objective? Every decision or solution or course of
action entails use of the following resources: manpower (skills, num-
bers); money (funds, budget); materials (equipment, facilities, space,
supplies); time; and power (energy, transport, authority) (Kepner and
Tregoe, 1965).
4. Build. This is also called the developmental objective. In the process of

reviewing the project situation, certain project strengths or opportu-
nities might be identified which are worth exploiting for the good of
the whole project. For example, in the course of a benchmarking situ-
ation analysis it might surface that another NGO is already doing
benchmarking in that village. To avoid wasteful duplication, it is wiser
to skip this village and proceed to the next. There might be an oppor-
tunity to shift activities and resources toward something new, differ-
ent, and enriching.
UP Open University
Unit I Module 4 25
The Well Stated Objective

Precision in objective setting is paramount. A well-stated objective will
serve as the standard or benchmark against which to compare perfor-
mance. This will facilitate problem identification and specification. More-
over, in the final assessment or evaluation at the end of the project life,
what is stated as the project objectives will have to be reckoned with.
The process of formulating objectives starts from problem identification

and specification. What is the problem that needs attention and solving?
What results are not being achieved and why? How large is the perfor-
mance gap? When was this problem observed?
There are three criteria or parameters to evaluate whether an objective is

well formulated:
1. Responsiveness. This refers to specific results that have to be deliv-

ered based on the performance gap observed. Does the objective state-
ment say what response is needed to solve the problem identified and
described? We go back to what we said earlier about types of prob-
lems (behavioral, technical, or operational).
2. Target. The objective statement must have quantified parameters to

allow for more precise evaluation. The new performance level has to
indicate numbers or targets to be accomplished within a given time
frame.
3. Resource limit. How much resource should be made available or be

committed to achieve the objective? Every decision or solution or course
of action entails use of the following resources: manpower (skills, num-
bers); money (funds, budget); materials (equipment, facilities, space,
supplies); time; and power (energy, transport, authority) (Kepner and
Tregoe, 1965).
UP Open University
Example of A Well Formulated Objective
Here is an example of a well formulated objective:
To reduce to zero the bacterial infection in the samples that

are analyzed at the microbiology laboratory within a pe-
riod of 3 months without purchasing brand new equip-
ment.
Does this statement of objective satisfy the criteria? It sure does:
Responsiveness: The problem apparently is the existence of bac-

terial contamination and infection that is a big obstacle in the re-
search in which sample purity is imperative.
Target: Zero infection in 3 months
Resource limit: No purchase of brand new equipment
Before we end this module, why don’t you put into practice what you
have just learned about objective formulation by doing the SAQ below?
SAQ 4-1
Comment on what is wrong with the following objectives and sug-
gest a better formulation of each.
1. To develop a cropping scheme that will control tungro virus.
2. To increase the shelf life of the fruit by 7 days.
UP Open University
Unit I Module 4 27
ASAQ 4-1
1. What is missing here is a target and condition of resource avail-
ability and limitation. The following statement is an improved
objective: “Without changing the planting date, to develop va-
rietal rotation that is going to reduce tungro damage by 50%.”
2. What is wrong with this objective? To begin with it is not clear

what problem is being addressed. While it has a target (7 days
longer in shelf life), it does not place a limit on resource. Here is
an improved version: “To control ripening at a cost of no more
than 10% so that the fruit will not ripen in transit to the mar-
ket.”
References

_______________. (1993). Problem-Solving and Decision-Making. Texas
State Auditor’s Office, Methodology Manual, rev. 12/93. Available
at: http://www.preciousheart.net/chaplaincy/Auditor_Manual/
9probslv.pdf [8/27/02]
UP Open University
Unit I Module 5 29
Module 5
Decision Analysis
When possible make the decisions now, even if action is in the

future. A reviewed decision usually is better than one reached at
the last moment.
- William B. Given
D ecision analysis logically follows objective set-

ting. The objective only informs what level of per-
formance is expected. A solution or course of action
Objectives
has to be chosen to achieve the objective. There is a
After working on this mod-
rational way of making the best choice from an array
ule, you should be able to:
of options. In this module, you will learn about the
rational process of making a decision.
1. Describe kinds of
criteria;
2. Describe the techniques
Decision Making: Definition in generating options;
and Process 3. Illustrate qualitative
method of decision
Decision making follows objective setting. After a per- making;
formance objective is known, a solution (behavioral, 4. Discuss the determina-
technical or operational) has to be applied to the prob- tion of adverse conse-
lem. Kepner and Tregoe (1965) cite different action quence in decision
decisions, as follows: analysis; and
5. Discuss the role of
1. Interim action. This decision is done when the control systems in
cause of the problem is still being studied. This is a decision analysis.
stopgap measure to prevent escalation or spread
of the problem. Stopping the distribution of a de-
fective product is an example of such an action. The interim action ceases as
soon as the cause of the problem is known and a permanent corrective action
is found.
UP Open University
2. Adaptive action. After the cause of the problem is known and under-
stood, the manager may find that the most logical solution is too ex-
pensive for his budget or that the replacement part may not be avail-
able locally. Thus he settles for a compromise. For example, if equip-
ment replacement of a part is too expensive or if the part is unavail-
able, the manager may decide to have the defective part repaired.
3. Corrective action. This action directly and effectively addresses the

cause of the problem by correcting or giving remedy to the problem.
For example, if a defective part is the one causing the breakdown in
operation, the corrective action is to replace this part with a brand
new one.
4. Preventive action. In anticipation of a highly probable problematic

situation whose cause is historically known already, the manager can
do preemptive or preventive action. For example, entering into regu-
lar monthly preventive service maintenance of expensive analytical
laboratory equipment will prevent expensive repair and disruption of
the experiment in case of breakdown.
5. Contingency. This action is a standby solution in case a particular

problem crops up. For example, having a standby generator will give
assurance that the experiment will not stop suddenly should a brown-
out occur.
In this module, problem solving and decision making are treated as a

continuum in which decision making follows problem identification, prob-
lem specification, problem analysis, and goal setting.
Criteria are standards that are used as bases for evaluating alternatives.
While the evaluation process is essentially subjective because it involves
personal weighing of the pros and cons by a decision maker, the subjec-
tivity can be reduced by using criteria.
Setting Criteria
Criteria are standards that are used as bases for evaluating alternatives.
While the evaluation process is essentially subjective because it involves
personal weighing of the pros and cons by a decision maker, the subjec-
tivity can be reduced by using criteria.
UP Open University
Unit I Module 5 31
The formulation of decision criteria must come first before gathering al-
ternatives. Otherwise the manager will be using the criteria to justify pre
selected alternatives. A given set of criteria can in fact facilitate and make
efficient the search process for alternatives. Instead of being swamped by
options, many of which will be rejected later because of their failure to
pass the most elementary and important criteria, the search for options
can be more selective yet open. For example, in the choice of parents for a
rice breeding program, the criteria can be, high disease resistance and
excellent eating quality. In this process the breeder can channel or nar-
row his search of parents to certain known varieties possessing the de-
sired characteristics.
There are two kinds of criteria: (a) “must”, and (b) “discriminating.” The
“must” criteria are those that are the most essential to achieve the objec-
tive. They should be treated as the prerequisites or the minimum criteria
that have to be absolutely complied with. In a way they are most basic
and mandatory (Cuyno, 1991). In the bidding process, this is equivalent
to the so-called pre-qualification bidding requirements. Bidders who do
not meet the pre-qualification requirements are not allowed to participate
in the bidding.
Only alternatives that satisfy the minimum or mandatory criteria (“must”)

will be considered for evaluation using the discriminating criteria. These
criteria are called discriminating because they are the deciding factors in
the choice of the best alternative. For example, beyond the basic qualifica-
tion of BS Agriculture for the job of agricultural extension officer, the
employer may set the following discriminating or desirable criteria: expe-
rience in extension work, proficiency in speaking the local dialect, ability
to work with people, and knowledge of the local agriculture situation.
Naturally the candidate that the decision maker will choose will be the
one with the best mix of qualifications.
Generating Alternatives
Decision making is choosing the best solution out of an array of alterna-
tives, which are evaluated using must and discriminating criteria. Know-
ing what criteria to use, the manager then proceeds to looking for alterna-
tive solutions. In the search for possible solutions, the manager is always
reminded and guided by the problem to be tackled, the objective to be
attained, and the criteria to be satisfied.
UP Open University
Within the context of a project, a good manager tries to solicit inputs and
information from colleagues and staff in the process of problem solving
and decision making.
Lyles (1982) cites four techniques for generating possible alternatives to

solve a problem:
1. Brainstorming. This is best done as a group process. Each member in

the group is encouraged to contribute solutions. As ideas are sounded
out, they are put up on the board or on large flip-chart paper. But
before doing so, the group is reminded once more about the problem
being discussed, the objective to be attained, and the set of criteria for
evaluating the alternatives. As the options are mentioned, no discus-
sion and evaluation takes place. The discussion and prioritization take
place later. The process is supposed to be freewheeling, uninhibited,
open and collegial. A variation of this technique is to ask participants
to print in large letters on a card (say 4 x 8 inches) the suggestion they
want to enter. These cards are then posted on the wall for deliberation
later.
2. Copy. There is merit in copying or tapping old solutions that work. As

the saying goes, “Why reinvent the wheel”? An idea that has been
tried before and found to have worked has more credibility and reli-
ability. As more people participate in the discussion group, the more
chances of finding solutions that have worked before and elsewhere.
3. Adapt. Adaptation usually follows copying. In this technique, tested

ideas are modified or revised to suit the new conditions.
4. Combine. During the brainstorming, several possible solutions are gen-

erated. In this technique, the manager may combine features from
several alternatives.
Qualitative Decision Analysis

Decision analysis is the process of identifying and evaluating the merits
and demerits of possible solutions to the problem. The objective of deci-
sion analysis is to choose the best option based on the set criteria. We will
describe in this section one of the two techniques of doing decision analy-
sis—the qualitative technique. The quantitative method will be dealt with
in the next unit.
UP Open University
Unit I Module 5 33
Two qualitative methods of decision analysis will be presented below: (a)

comparison, and (b) field force analysis. Both methods are subjective, re-
lying on personal judgment and intuition rather than on figuring out rela-
tive success based on probabilities and mathematical model.
In the comparison method, the different alternatives are compared with
each other one-and-one. Table 5-1 shows a matrix of one-and-one com-
parison of alternatives.
Table 5-1. Comparing alternatives with each other

(Adapted from Lyles, 1982)
House # 1
House # 2
House # 3
House # 4
House # 5
Alternative Total
House # 1 1 3 1 1 3
House # 2 2 4 2 2
House # 3 3 5 2
House # 4 4 2
House # 5 1
In this example, we assume that all the five alternatives met the “must”
criteria. Choosing the best among them then becomes a matter of com-
paring the alternatives against each other. That is, house no. 1 is com-
pared with house no. 2; house no. 1 with house no. 3; and so on. In every
pair comparison, the evaluator picks his choice of which one is better. For
instance, if house no. 1 is better than house no. 2, 1 is written down in the
intersection of 1 and 2. If house no. 3 is better than house no. 1, then 3 is
written down in the 1 and 3 cells in the table. After completing the task of
comparison and making sure there is no empty cell, the total is taken at
the right end of the table. Since house no. 1 has the highest number of
“better” choice, this house is chosen as being the strongest of the alterna-
tives.
A related method of comparison is the weighing of the alternatives against

criteria. Table 5-2 shows how the alternatives and criteria are made to
relate with each other. The alternatives (job applicants) are lined up in
the rows while the criteria are listed in the columns.
UP Open University
Table 5-2. Scale method of comparison
Criteria
Alternatives Advance Relevant Computer Leadership TOTAL
Studies Experience Proficiency Ability
Candidate No. 1 5 4 4 4 17
Assuming the criteria are equal in importance, the manager can use the
scaling technique. In our example above, a scale of 1 to 5 is used, with 5 as
the highest and 1 as the lowest. The candidates are then rated by the
judge (the employer) criterion by criterion. Barring complications (we will
deal with this point later), candidate no. 1 should be the choice because
he garnered the most points (17).
In some cases, the criteria vary in their importance in achieving the objec-
tive. The criteria in this case would have to be assigned variable weights,
using a continuum of 1 to 100. In the above example, the employer may
distribute the weight of the criteria as follows:
Criteria Weight
Leadership Ability 40%
Relevant Experience 30%
Advance Studies 20%
Computer Proficiency 10%
Total 100%
This will be set in a matrix like the one below:
Table 5-3. Comparing alternatives using

criteria with variable weights
Criteria
Leadership Relevant Advance Computer
Alternatives Ability Experience Studies Proficiency TOTAL
(40%) (30%) (20%) (10%) 100%
Candidate No. 1
Candidate No. 2
Candidate No. 3
Candidate No. 4
Candidate No. 5
UP Open University
Unit I Module 5 35
Field Force Analysis: Strengths

and Weaknesses (S-W) Analysis
A much more simple qualitative method of evaluation is the “strength” –
“weakness” analysis. The alternatives are compared with each other in
terms of their relative strengths and weaknesses or advantages and dis-
advantages. One way to do this is to consider the strengths and weak-
nesses of each alternative based on what is known about them without
referring to any previous criteria. This is a more open method. The close
method makes the comparison considering set of criteria a priori. An ex-
ample of an open method is given below.
Table 5-4. Strength-Weakness analysis

Alternatives Strengths Center Weaknesses Center
Candidate No. 1 Technically competent Too young

Speaks the local dialect
Active in sports
Former student leader
Candidate No. 2 Civil service eligible Not computer literate
Extensive experience More traditional in outlook
Mature
Candidate No. 3 Bright Has been away too long (abroad)
Has advance studies Too aggressive and brash in behavior
Objective:
The objective in this exercise is to choose the best person to be supervisor.
Given the above data, the employer will decide based on his own value
system and the risk associated with each candidate. Candidate no. 3 has
good potential but is high risk at present. Candidate no. 1 is strong in
leadership qualities but might be too young to be supervisor. Candidate
no. 2 has extensive experience and stability but may be too traditional
and less dynamic.
In sociological analysis, the strengths are considered the facilitating forces

while the weaknesses are the hindering forces. They are ranged against
each other in terms of their pros and cons. The two forces appear to be in
combat, one trying to win at the expense of the other. Whichever is the
more superior force wins.
UP Open University
Weaknesses = hindering forces
Strengths = facilitating forces
Figure 5-1. Force field analysis
Determining Adverse Consequences

With the use of decision aids or tools, which may be qualitative or quanti-
tative (discussed in Unit II), the decision maker thinks of the most rational
and justifiable choice from an array of alternatives. A good manager, how-
ever, does not allow himself to be easily stampeded into action. Before
making a decision, the wise manager considers possible trouble during
implementation. This step is called determination of adverse consequences.
At this stage of decision making, the manager asks the question—what if
I finally choose this option? What is the risk involved? How crucial is this
risk in terms of the project objective? Will the project interest not be com-
promised by this risk?
In Table 5-4, if the employer has an eye for candidate no. 2, prudence
dictates that before issuing the appointment or before making the an-
nouncement, a question should first be asked—“If this guy ends up the
supervisor, what are the risks involved?” The employer may factor in this
risk: considering the candidate’s lack of computer literacy and his tradi-
tionalistic disposition, he may not get along well with the young hotshots
in the group that is the future asset of the project or the firm. This could
result in the best people leaving the project or the firm. If in the judgment
of the manager the risk is low and the risk is not really that important, he
goes ahead and reaffirms his tentative decision.
This procedure of determining potential adverse consequences of a deci-

sion before the decision is implemented reduces uncertainties and the risk
of failure and increases the manager’s control of events, leading to the
attainment of the objective.
UP Open University
Unit I Module 5 37
Setting Controls
This is the final and critical stage in decision analysis. Before it is too late,
the manager has the opportunity to prevent and control the occurrence
of negative or untoward consequences of a decision. This is done by dig-
ging deeper into the possible cause of the negative consequence. Knowing
this, the manager could then do something to remove this cause, thus
preventing it from inflicting damage.
Entertaining the possibility that the preventive intervention or control may

not be effective because of unknown variables, the manager can set a
contingency plan. A contingency plan is a fallback solution waiting to be
activated should the expected problem occur.
Finally, before the decision is implemented, the manager sets up a moni-

toring and control system or a trouble shooting mechanism. This includes
the following:
l A reporting system (what information to report, when to submit, and

in what form)
l A follow-up system for various implementers (reminders, reinforce-
ments, instructions)
l Tasking (assigning people to tasks)
l Deadlines (time schedule for delivery of certain outputs)
A manager with a good control system has good feedback information

about what is going on, delineated task assignments, and deadlines. The
absence of a good control system will leave gaping holes that will put
implementation in jeopardy.
SAQ 5-1
Formulate a set of “must” and “discriminating” criteria in buying
an all-weather service vehicle for your R&D project. What would
be the objective of an all-weather service vehicle?
UP Open University
ASAQ 5-1
First, let us be reminded of the objective of buying a 4 x 4 service
vehicle and not a regular or ordinary sedan. Apparently, the cus-
tomer is going to use this vehicle to go to the farm or the country
where the road condition is poor and the road is wet and slippery
during rainy days.
Considering the objective, a must (or essential) criterion would be

that the vehicle is a four-wheel drive. Another must criteria would
be that it is a pick-up or a “truck” because the R&D project will
require a lot of hauling of load. The third must criterion is that the
cost must not exceed P800,000 because that is what has been bud-
geted.
The discriminating or “nice to have” criteria for me would be:

l Available local service center
l Efficient air conditioning
l Automatic shift
l Comfortable ride
l Rugged look
l Economic on gas expenses
Summary
Having identified and described a problem in the project, we decided to
take appropriate action. This is clarified in the statement of performance
objective where targets are set, time frame specified, and resource param-
eters known.
Criteria for evaluating alternative solutions are then formulated. A sys-

tematic search for solutions follows. The alternative solutions are evalu-
ated using the criteria and a solution is selected.
Before the chosen solution is made final, the manager subjects the solu-
tion to final scrutiny to determine if there are hidden negative consequences
that will compromise the objective of the project. Finally, before actual
implementation, the manager has to setup a monitoring and control sys-
tem: reporting, following up, tasking and deadlines.
UP Open University
Unit I Module 5 39
References

_____________. (1993). Problem-Solving and Decision-Making. Texas State
[8/27/02]
UP Open University
UP Open University
Unit II Module 6 41
Unit II
Quantitative Decision Making
UP Open University
UP Open University
Unit II Module 6 43
Module 6
Probabilistic
Decision Making
A decision without the pressure of consequence is hardly a

decision at all.
-Eric Langmui
I n the first five modules, we discussed Strategic

Managerial Analysis as an approach for prob-
lem solving and decision making. Under situa-
Objectives
At the end of this module,
tion appraisal, you were introduced to the prin-
you are expected to:
ciples and approaches of identifying, formulat-
ing, appraising, and analyzing problems. After
1. Describe the different
identifying the problem, a manager sets out to
environments under
address it based on the present performance as
which decisions are
the new baseline by setting a new goal for the
made;
next performance period. We call this process
2. Apply the various tools
objective setting.
for making decisions in
each environment, and
With a clear idea of desired performance, the
3. Discuss the advantages
manager then decides how to resolve the identi-
and limitations of
fied problem. In the said module, we discussed
quantitative models for
how to develop criteria, generate alternative
decision making.
courses of action, and evaluate alternatives based
on the set criteria, and select the most appropri-
ate alternative. We also presented the various qualitative techniques of
evaluating alternatives. In this module, we shall be covering some quanti-
tative techniques that could aid the R&D manager in selecting the most
suitable course of action. You may be wondering what quantitative meth-
ods are we talking about here. Didn’t we just assess alternatives by as-
signing scores? Didn’t this constitute quantitative analysis?
UP Open University
Yes, it is quantitative in the sense that we used numbers instead of words

(as in the field force analysis). What differentiates this module from the
previous one is that it looks at decision analysis in terms of structuring
and analyzing a decision situation as a model, to be able to choose an
alternative that will yield the best outcome.
Quantitative Decision Analysis

Are you familiar with model cars? These are smaller versions of famous
cars, which hobbyists collect. They are usually sold in separate parts, which
a hobbyist assembles into a miniature version of an actual car. Just like a
model car, which is composed of various parts that are interrelated with
one another, a decision situation is also composed of several smaller parts.
In quantitative analysis, we are interested in modeling, which basically
involves decomposing problems into smaller parts to understand their
structure and measure their uncertainty and value. Just as a model car
represents an actual car, a quantitative model is also a graphical or math-
ematical representation of the problem-decision situation (Clemen 1996).
What is good about these models is that they help managers answer ‘what
if’ questions. If we change a certain assumption about the model, does
our decision also change? We all know that conditions under which we
make our decisions are not static. Quantitative tools can assist R&D man-
agers assess the potential results of each alternative given changes in cer-
tain conditions. Quantitative models are also useful for evaluating alter-
natives based on quantifiable outcomes like profit and costs, which are
particularly crucial in enterprise-based R&D.
Decision making steps and tasks

As discussed in the previous modules, decision making involve the fol-
lowing basic sequential steps:
1. Setting objective
2. Identifying alternatives
3. Evaluating alternatives
4. Selecting the best alternative
5. Implement the alternative
Quantitative decision analysis follows the same process. In this module,

however, the objective refers not to a goal formulated to correct a prob-
lem experienced during the implementation of an R&D project but to
‘specific thing that you want to achieve’ (Clemen, p. 20). Decision making
here is less about closing the gap between the target and the actual per-
UP Open University
Unit II Module 6 45
formance but more about setting directions or simply choosing what is

the best next step to take.
1. Setting objectives
Let’s start with the first step, setting of objectives. People have different
objectives. A painter may want to make an exquisite landscape. A mother
may wish to raise her children into responsible citizens. Yours may be to
pass this course.
To concretize our discussion, let’s consider a manager named Mr. Reyes

of Wowfoods, Inc., an agribusiness firm that is currently thinking of ven-
turing into the instant meal market. Mr. Reyes is wondering about whether
his company should do its own R&D and develop its own instant meals,
or contract it out to a research-intensive university, or license a technol-
ogy from foreign companies. What do you think is Mr. Reyes’ objective in
this case? You’re right, his aim is to determine the most appropriate new
product development strategy for his company.
2. Identifying alternatives
As we have learned, the next step for a decision maker is to determine the
possible means or actions by which he could satisfy this objective. Going
back to our previous example, Mr. Reyes has identified three alternative
strategies, namely: (1) conduct own product R&D; (2) contract out R&D;
and (3) license technology.
3. Evaluating alternatives
Having identified the objectives, the next step is to evaluate these alterna-
tives. We all know that whatever it may be, the chosen alternative will be
implemented not in a vacuum but in a real situation or context at some
future time. However, we also know that more often than not, we can
never be certain about what would happen in the future. Although a
decision maker will always be faced with uncertainty, he/she needs to
think of and assess the likelihood of future events happening. A future
that is beyond the control of the decision maker is termed here as state of
nature. A state of nature is relevant if it has a significant effect on the
decision maker’s objective. For instance, let’s assume that Mr. Reyes con-
siders the level of acceptance of the proposed instant meal in the market
as the most significant context for deciding the appropriate product de-
velopment strategy for the company. For the sake of discussion, let’s as-
sume that Mr. Reyes identifies two possible market acceptance scenarios:
high market acceptance and low market acceptance.
UP Open University
4. Selecting the best alternative
The effectiveness of an alternative lies in its ability to generate a desirable

consequence given the conditions in the environment in which it is imple-
mented. Each alternative will therefore lead to a different consequence
(or result). A consequence may come in the form of payoff (e.g., profit) or
losses (e.g., expenses). Going back to our previous example, let’s assume
that Mr. Reyes estimated the net profits his company would be receiving
for the next two years given different scenarios. Remember that Mr. Reyes
identified three strategies to develop a new instant meal product. Imple-
menting each strategy involves a certain amount of cost. He also identi-
fied two possible market scenarios and under each condition, the firm
will gene-rate different amounts of sales. By deducting the costs from the
profits gained for each strategy under a given market scenario, we could
compute for the net profits, which is the expected consequence in this
case.
We need to have criteria to determine which alternative we shall choose

given its payoff. Since Mr. Reyes computed the consequence of each alter-
native given a scenario in terms of profit, the point would be to choose the
alternative that maximizes payoffs or minimizes losses.
From this discussion, we have seen that before quantitative tools can be
used effectively, we need to have the following information:
l Specification of decision objective/goal

l Listing of viable alternatives
l Knowledge about possible future events or state of nature
l Knowledge about expected consequences or payoffs
l Specification of criteria on which choice will be based
At this stage, we have not yet subjected the alternatives to evaluation.

Before we do the assessment, we need to understand in more detail the
different environments in which we make our decisions. As we have pre-
viously pointed out, the consequence an alternative would yield depends
on the situational context such option would be made or implemented.
Environments under which decisions are made

The environments under which decisions are made are never the same or
fixed. If it had been so, decision making will not be much of a problem. In
quantitative decision making, there are three types of environments in
which decisions are made:
UP Open University
Unit II Module 6 47
1. Decision making under certainty. In this kind of environment, there

is only state of nature that exists. This situation is rare.
2. Decision making under the uncertainty. There is more than one state
of nature that exists. The decision maker does not have knowledge
about the various states or scenarios, prevents him from assigning prob-
abilities to the states of nature. Probabilities refer to the likelihood or
possibility than an event may take place. For example, the probability
of the Philippines winning the ASEAN Basketball Championship 20
years from now is not known.
3. Decision making under risk. There is more than one state of nature
but in this environment, the decision maker has sufficient information
that would enable him to assign probability values to each state of
nature. For instance, we know that the probability of getting a tail by
tossing a coin is 0.5 (1/2).
For each decision making environment, there different tools or criteria

which we can use to choose the best alternative course of action. Before
we discuss these criteria or tools, let’s do the following SAQ and see if you
have clearly understood the differences among the decision making envi-
ronments.
SAQ 6-1
Matching type. Write the letter in the right column corresponding
to the phrases in the left column.
___ 1. Decision making a. awareness on range of

under certainty possible outcomes and
___ 2. Decision making the probability associated
under the uncer- with each outcome
tainty b. associated with very rou-
___ 3. Decision making tine decisions
under risk c. result of a controllable
decision
d. the probability of out-
comes or outcomes them-
selves are unknown
UP Open University
ASAQ 6-1
Give yourself a pat on the back if you got the following answers:
1. b
2. d
3. a
Decision making under uncertainty
We’ll start our discussion of the tools or criteria in decision-making under

uncertainty and do away with decision-making under certainty which
rarely happens in real life. There are four criteria used for making deci-
sions under uncertainty: (1) maximax, (2) maximin, (3) minimax, and (4)
criterion of realism. We’ll discuss each criterion one by one. To illustrate
the application of these methods, let’s go back to our previous example—
the case of Mr. Reyes, the manager at Wowfoods.
Mr. Reyes wants to come to a decision regarding the most appropriate new
product development strategy for his company. Here are his alternatives:
1. Conduct own product R&D (denoted here as a1)

2. Contract out R&D (a2)
3. License technology (a3)
Mr. Reyes believes that the level of the product’s acceptance by the mar-
ket is the most important future event that will shape the way he will
decide. For the sake of discussion, let’s denote these two potential sce-
narios as follows:
1. High market acceptance (S1)

2. Low market acceptance (S2)
Mr. Reyes now computed the possible payoffs (net profits in the next two
years) his company will gain if he adopts an alternative given a certain
state of nature. If the company conducts its own R&D and the market
acceptance turns out to be high, the difference between what they’ll be
selling and what they’ll be spending by adopting that alternative under a
condition of high market acceptance is P10 million. If the market accep-
tance turns out to be low, the company expects to lose P1 million.
UP Open University
Unit II Module 6 49
Payoff given state of nature

Alternative High acceptance Low acceptance
(S1) (S2)
a1 P10,000,000 - P1,000,000
a2 7,500,000 1,000,000
a3 5,000,000 3,000,000
Maximax. Termed as the most optimistic criterion, the maximax tells the
decision maker to choose the best alternative out of the best outcome.
Since there are only two situations here, the better outcome would be that
in which the there is high market acceptance. Below are the payoffs for
the three alternatives given the best outcome, which is high acceptance:
Alternative High acceptance

(S1)
a1 P 10,000,000 P
a2 7,500,000
a3 5,000,000
Using this criterion, Mr. Reyes should adopt the alternative 1 which yields
the best payoff. His company should do its own product R&D.
Maximin. Dubbed as the pessimistic criterion, the goal here is to mini-

mize the losses given an unfavorable situation. The key here is to select
best alternative out of the worst outcome, which in this case is a situation
in which the market remains lukewarm to the product. As you can see
below, Mr Reyes is better off choosing alternative 3 (License technology) if
the worst outcome occurs:
Alternative Low acceptance

(S2)
a1 P 1,000,000
a2 1,000,000
a3 3,000,000 P
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Minimax regret. Let’s assume that Mr. Reyes adopted alternative 2 given
what he knew at that time. He got P7.5 million for this. As it turned out,
the market acceptance was actually high. Had he known this informa-
tion beforehand, he could have adopted alternative 1. The P2.5 million-
difference between what he actually gained (P7.5 million) and what he
could have potentially gotten had he known better (P10 million) is what
is called here as the ‘regret value’. Mr. Reyes ‘regrets’ the additional profit
he could have gained had he known better, hence the name. It is useful in
calculating the cost of making the wrong decision. According to this crite-
rion, the decision maker has to minimize his regret value, which is com-
puted by deducting the every payoff value from the highest entry in each
column, as shown on the next page.
Alternative Regret values given state of nature Maximum

High Low regret value
acceptance acceptance
(S1) (S2)
a1 P 0 P 4,000,000 P 4,000,000
a2 2,500,000 2,000,000 2,500,000 P
a3 5,000,000 0 5,000,000
As the table above shows, we simply deducted all the payoff values under
High Acceptance (S1) from the highest payoff under that column, which
is P10 million. In the Low Acceptance (S2) column, we subtracted all the
payoff values under this column from the highest value, which in this
case is P3 million.
The regret values for the three alternatives are P4 million, 2.5 million, and
P5 million, respectively. The key here is to choose the alternative with the
smallest regret values, which in this case is alternative 2 (contract our
product R&D).
In case of a cost payoff, however, one has to deduct the lowest cost payoff
from every payoff entry.
Equally likely. There are times when there are no sufficient historical
data or information that would enable to a decision maker to assign prob-
abilities to each state of nature. One option would be to assume that all
states of nature have equal probabilities of occurrence. All we have to do
is average the payoffs for each alternative, as shown below:
UP Open University
Unit II Module 6 51
Alternative High market Low market Averaged

acceptance acceptance payoff
(S1) (S2)
a1 10,000,000 + - 1,000,000 = 4,500,000 P

2
a2 7,500,000 + 1,000,000 = 4,250,000
2
a3 5,000,000 + 3,000,000 = 4,000,000
2
Also known as Laplace, the criterion chooses the alternative with best
averaged payoff average, which in this case is alternative 1 (conduct own
product R&D).
Realism criterion. Also known as the Curwicz criterion, this method takes
the middle ground by striking a compromise between pessimism and op-
timism. The compromise is achieved by setting a coefficient of optimism
(α), which is anything between 0 and 1. The closer the value to 1 the more
optimistic is the decision maker’s assumption. The decision is based on
the ‘measure of realism’, which is computed as follows:
α (maximum payoff) + (1- α ) minimum payoff
Setting α = 0.6 and using the same example, the measures of realism for
the three alternatives would appear as illustrated below:
Maximum payoff Minimum payoff Measure of realism

a1 10,000,000 (0.6) + - 1,000,000 (0.4) = 5,600,000 P
a2 7,500,000 (0.6) + 1,000,000 (0.4) = 4,900,000
a3 5,000,000 (0.6) + 3,000,000 (0.4) = 4,200,000
Mr. Reyes must adopt alternative 1, which yields the highest measure of
realism.
UP Open University
SAQ 6-2
Would you like to put into practice what you have just learned?
Read the following and answer the questions below:
Biogen’s Dilemma
Biogen, a company specializing in biotechnology R&D develop-

ing biotechnology R&D, is in a dilemma whether to sell directly
an innovative product it has recently developed, or jointly sell it
with a partner company that specializing in production and mar-
keting of such products. Direct selling would require the com-
pany to set up its own production and marketing system. If the
company decides to sell it directly, it expects to receive for the
next three years a net revenue of P50 million (if the market de-
mand turns out to be high); P14 million (if demand is medium-
level) and lose P26 million (if demand turns out to be low). If it
decides to proceed with a joint venture, it expects to get P25 mil-
lion, P17 million, and 1 million for high, medium, and low market
demand scenarios, respectively.
Using the information above, answer the following questions:
1. Construct the payoff table.

2. What alternative should Biogen choose using (a) the maximax
criterion, (b) maximin criterion and (c) minimax criterion?
UP Open University
Unit II Module 6 53
ASAQ 6-2
1. Your payoff table should contain the following:
Alternative Level of market demand

High Medium Low
1. Direct Selling 50 14 -26
2. Partnership 25 17 1
2. Biogen should:
a. Directly sell the technology based on the maximax crite-
rion.
b. Get into partnership if it follows the maximin criterion.
c. Get into partnership, according to the minimax criterion,
as illustrated in the regret values table below:
Alternative Level of market demand Maximum value

High Medium Low
1. Direct Selling 0 3 27 27
2. Partnership 25 0 0 5 P
If you were right on all questions, congratulations for a job well

done! If you missed some, why don’t you review our lessons . Don’t
worry. Making mistakes is part of the learning process.
Decision making under risk
Now that we have already discussed the criteria for decision making un-
der the condition of uncertainty, let’s now proceed to decision making
under risk. Unlike in the condition of uncertainty, a condition under risk
exists if the decision maker has enough information to assign probabilities
to each possible future event. This information may come from personal,
expert’s assessment, historical data, or personal judgment. Decision mak-
ing under risk is therefore a probabilistic situation.
Probability is derived from the verb “to probe” meaning to “find out”
what is not too easily accessible or understandable. Also, if you recall
your basic statistics course, it is simply a numerical statement about the
likelihood or possibility than an event may take place. The probability of
an event ranges from 0 to 1. A probability of 0 means that there is cer-
tainty that the event is never going to occur while a probability of 1 means
that is going to happen for sure. For instance, the probability of getting
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heads when tossing a coin is 0.5 (1 out of 2). Or a machine usually mal-
functions and cannot be used about 5 days in a year. Assuming a 240
working days in a year, the probability of the machine not functioning is
0.03 (5/240).
In this section, we shall be discussing four criteria: (1) the criterion of

maximum likelihood, (2) the expected value criterion; (3) the expected
opportunity loss; and (4) expected value with perfect information.
Criterion of likelihood. This criterion is used when one state of outcome

is significantly more probable than others and the conditional payoffs are
not tremendously different. The key here is to simply choose the best al-
ternative under the state of nature that is most likely to happen. Let’s
assume that Mr. Reyes believes that a low level of market acceptance has
a slightly greater likelihood of happening. He assigned a probability of 0.6
to S2.
Alternative High acceptance (S1) Low acceptance (S2)

a1 P10,000,000 - P1,000,000
a2 7,500,000 1,000,000
a3 5,000,000 3,000,000 P
Probability 0.40 0.60
Mr. Reyes is better off adopting alternative 3, which yields the highest
payoff under the condition of low market acceptance.
Expected value. For this criterion, probabilities are assigned to each state
of nature to determine the expected value of choosing a decision alterna-
tive. The expected value (EV) is to be computed by adding the products of
the payoff values and their corresponding probability values. Based on
his past experience, Mr. Reyes feels that could assign a probability value
of 0.3 to high market acceptance and 0.7 to low market acceptance. Given
these probabilities, the decision alternative will have the following ex-
pected values:
Alternative S1 S2 EV
a1 10,000,000 (0.3) + -1,000,000 (0.7) = 2,300,000
a2 7,500,000 (0.3) + 1,000,000 (0.7) = 2,950,000
a3 5,000,000 (0.3) + 3,000,000 (0.7) = 3,600,000 P
Alternative 3 (License technology) is the best option for Mr. Reyes as it

renders the highest EV.
UP Open University
Unit II Module 6 55
Expected opportunity loss. An alternative to EV is Expected Opportu-

nity Loss or EOL. Opportunity loss is synonymous to regret value, which
represents the opportunity lost by the decision maker for choosing the
wrong option. Using the same probability values we have used in EV and
referring back to the regret values we have computed for the minimax
regret criterion, we can compute EOL by multiplying the probability val-
ues with the regret values and summing up all the products in a row:
Alternative S1 S2 EOL
a1 0 (0.3) + 4,000,000 (0.7) = 2,800,000
a2 2,500,000 (0.3) + 2,000,000 (0.7) = 2,150,000
a3 5,000,000 (0.3) + 0 (0.7) = 1,500,000 P
Mr. Reyes should selected alternative 3 (License technology), the lowest

EOL.
Expected value of perfect information. Let’s assume that Mr. Reyes would
like to have a more accurate assessment of level of market acceptance for
their product. A certain market research company approached him to
undertake a study for P750,000 so that he could determine with certainty
the probability values for each outcome. Should Mr. Reyes acquire this
seemingly costly information?
To be able to compute the Expected Value of Perfect Information (EVoPI),

we need to calculate first the Expected Value with Perfect Information
(EVwPI). If Mr. Reyes had full information about the occurrence of each
state of nature, he would naturally choose the alternative that yields the
best outcome given that scenario. EVwPI is computed by summing up all
the products of the highest payoff under each scenario and its assigned
probability value. Referring back to our original payoff table, the highest
payoff under S1 is P10 million and P3 million under S2. Using the same
probability values of 0.3 to S1 and 0.7 to S2, our EVwPI is:
10,000,000 (0.3) + 3,000,000 (0.7) = 5,100,000
This means that if Mr. Reyes had perfect information, he could expect to
receive an average of P5.1 million if the decision could be repeated several
times.
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Now let’s get back to the Expected Value of Perfect Information or EvoPI.
Mr. Reyes can compute the value of acquiring additional information us-
ing this formula:
EvoPI = EVwPI – maximum Expected Value (EV)
Having previously computed the maximum EV at P3.6 million, Mr. Reyes’

EvoPI would be:
EvoPI = 5,100,000 – 3,600,000 = 1,500,000
This means that the value Mr. Reyes could pay to acquire additional in-
formation must not exceed P1.5 million. If you noticed this amount is also
equivalent to the best Expected Opportunity Loss (EOL) that we com-
puted earlier. Notice the relationship? You’re right, EVoPI is equal to the
minimum EOL.
SAQ 6-3
Let’s try to do some more exercises to master the techniques de-
scribed. Go back to the problem set titled Biogen’s Dilemma and
solve the following:
1. Biogen believes that a high market demand has a 25% chance

of happening, a medium-level demand has 45% likelihood, and
a low market demand has 30% probability of occurring. Given
these probability values, select the best alternative using the
expected value criterion.
2. What is the best alternative using the expected opportunity
losses criterion?
3. What is the maximum value Biogen should be willing to pay to
acquire a perfect predictor of future demand?
UP Open University
Unit II Module 6 57
ASAQ 6-3
Let’s see if you got the solutions right.
1. Get into partnership as shown below:

EVPI1 = (50)(0.25) + 14 (0.45) + (-26)(0.3) = 11
EVPI2 = (25)(0.25) + 17 (0.45) + (1)(0.3) = 14.2 P
2. Adopt the second alternative as exemplified by the following:

EOL1 = (0)(0.25) + (3)(0.45) + (27)(0.3) = 9.45
EOL2 = (25)(0.25) + (0) (0.45) + (0)(0.3) = 6.25 P
3. Since EvoPI = minimum EOL, there’s no use for Biogen paying

beyond P6.25 million.
Hope you got everything right! If you didn’t, don’t despair, just
review the items you need to improve on.
Advantages and Limitations

of Quantitative Decision Making
One of the advantages of quantitative model in decision making is that it
could assist us “find solutions to complex problems much more quickly
than if we had to examine all of the possible combinations of the variables
involved” (Levin et. al., 1989, p. 12). Especially for structured problems,
models can be used to approximate situations, predict outcomes, and
manipulate scenarios in a cost-effective manner. Quantitative models are
useful in problem situations that involve long time frame (e.g., launching
a new product) and therefore great uncertainty (Clemen, 1996).
On the other hand, models also have a tendency to represent problem

situations too simply, which could lead to oversimplification of the prob-
lems. In situations where the intertwining variables are so complex, quan-
titative models may also prove inadequate as intuition and personal expe-
rience becomes more valuable (Levin et. al., 1989).
In decision problems where a combination of actions has to be consid-

ered, (e.g., investment portfolio management), the decision analysis ap-
proach is limited by the fact that the criteria it uses always result in selec-
tion of only one course of action.
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Summary
In this module, we framed our lessons by discussing different steps in
quantitative decision analysis. We described the different environments
in which decisions are made based on the decision maker’s awareness of
the possible states of nature the probability of their occurrence. We also
discussed the various methods or criteria used for decision making in each
environment. Lastly, we discussed the advantages and limitations of quan-
titative models in decision making.
References
Clemens, R.T. (1996). Making Hard Decisions: An Introduction to Decision

Analysis. Buxbury Press, Belmont.
Curwin, J. and Slater, R. (1991). Quantitative Methods for Business Deci-
sions, 3rd edition. Chapman & Hall, New York.
Levin, R.I. et al. (1989). Quantitative Approaches to Management. McGraw
Hill Book Co., New York.
UP Open University
Unit III Module 7 59
Unit III
Planning for Implementation
M uch of the success in implementation of a chosen solution to a prob

lem depends on planning which involves imagination, preparation
and sound deployment of resources. Imagination refers to the ability to
see the flow of events in the future. Preparation involve committing one-
self to cause the flow of events. Resources here refer to time, funds, people,
materials, equipment, information/knowledge and technology. Deploy-
ment of resources means to make these available to the process to fuel
action. This is planning.
Planning may not guarantee complete success in implementation. How-

ever, no planning guarantees failure.
After working on this unit, you are expected to acquire planning technol-
ogy and tool particularly activity planning, scheduling of activities and
potential problem analysis. In the end this will increase chances of suc-
cess in implementing a decision to solve a problem.
The content of this unit on planning for implementation will be contained

in three modules:
l Action planning and budgeting

l Scheduling and programming techniques
l Potential problem analysis
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UP Open University
Module 7
Action Planning
and Budgeting
The wise man bridges the gap by laying out the path by means of
which he can get from where he wants to go.
-John Pierpont Morgan
I n this module, we will present an important

tool in for effective and efficient implementa-
tion, action planning, or activity planning and
Objectives
budgeting. The attainment of an objective or After working on this
reaching a destination entails taking small steps module, you should be able
one after another. In R&D projects, these are the to explain the five ques-
activities that are performed following acceptable tions in action planning
norms in scientific procedure. These activities will and budgeting.
not be realized if not backed up by funds. This is
the role of budgeting.
Activity Planning
Activity planning is like writing a production script of a movie. It gives
details on the flow of the shootings or production activities. It guides the
Director what scenes to shoot in a given day, in which location, who are
the actors and supporting casts involved, and what costumes they need.
Organizationally, it includes instructions on how the casts and crew will
be transported to the location of the shooting, how they will be fed, and
the like. This entails clarity in forward thinking, ability to breakdown the
total picture into segments or pieces and how the pieces will be put
together.
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Moreover, resources will have to be committed and made available to fuel

the activities and provide for the needs of the people who have roles in
the production. Also, tasks will have to be assigned to the crew or person-
nel in the production so that the Director can concentrate on the artistic
part of the work.
This type of detailed planning is different from other types of planning

such as strategic and operational. Strategic planning aims to create a
new future which is long range. Operational planning seek to translate a
long-range commitment into short to medium range plans like a 2, 3 or 5
year plans.
The what question

The what question refers to the technical activities relevant solving the
problem. The end is translated to means. It shows how to proceed from
the starting point to the final destination. A series of steps or activities are
identified and sequenced. We will show later how these activities will be
scheduled or programmed (Table 7-1). Experience is valuable in specify-
ing the activities that need to be performed so that the solution will be
effective.
The where question

The place question will specify where the activities will be performed and
where the various people with varying roles will be deployed. To answer
this question, along with the when and who questions, good organiza-
tion is required.
The when question

Time, once lost is non-recoverable. It is crucial in activity planning for a
project. In a highly volatile and dynamic world, people always move
around, doing something, at a certain time. Some sub-activities would
need more time to complete than others. An activity-timetable is con-
structed to view the relative amount of time estimated for the various
activities. An example of this activity-timetable is given below.
UP Open University
Table 7-1. Example of activity – timetable
Activity Required time (in weeks)

1.0 Site selection 5 wks
1.1 Ocular survey 2 wks
1.2 Negotiation 1 wk
1.3 Final MOA 1 wk
2.0 Mobilization 8 wks

2.1 Put up local headquarter 2 wks
2.2 Put up residence 2 wks
2.3 Purchase of office furniture and equipment 1 wk
2.4 Hire key support staff 1 month
2.5 Hire key technical staff 1 month
2.6 Set up communication system 1 wk
The who question

Sometimes people refer to this as tasking. This is done by putting an over-
lay of personnel assignment on the list of activities. In a well-organized
project, the line of reporting and coordination is well-established and re-
sponsible for various tasks/activities pinpointed.
The how much question: the budget

This is commonly referred to as the budget. Planning and budgeting al-
ways go together. A good plan (activities, time, place, people) has to be
translated into a financial statement. The items of expenditures or finan-
cial outlays are classified as: (A) personnel services (salaries, wages, hono-
rarium, benefits, etc.); (B) maintenance and operating expenses (supplies,
materials, rental, travel, etc); and (C) capital (equipment, building, facili-
ties, etc.). Each of these categories should have a sub-total so that ratios
are easily calculated or comparison with other projects easily made.
In doing the costing for the various items of expenditure, the planner-
budgeter has to make queries and surveys to get the prevailing prices in
the market. This is then multiplied by the plan requirements to get the
cost estimate.
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Summary
This module discussed the processes of translating the course action into
doable tasks and allocating resources for the completion of each task.
References

ManagerialAnalysis. Research Management Center. University of the
_________. (1993). Problem-Solving and Decision-Making. Texas State
[8/27/02]
UP Open University
Module 8
Scheduling and
Programming
Action is more important than planning.

-Anonymous
Think big, start small, act now.
-Anonymous
It takes time to save time.
-Joe Taylor
I n the last module, we have discussed the ele-

ments in action planning and budgeting. In this
module, we shall be discussing the techniques Objectives
commonly used in scheduling the tasks that we
have planned and budgeted for. While we dis- After working on this
cussed action planning and budgeting separately module, you should be able
from scheduling and programming, these two to:
phases in project implementation are actually in-
tertwined. The budget is based on the activities 1. Explain the importance
to be undertaken and how long they will be imple- of scheduling and
mented. On the other hand, a schedule can only programming in project
be created once the activities have already been management; and
identified in the action plan. In this course, we 2. Apply the Gantt Chart
shall use the terms scheduling and programming and PERT for schedul-
interchangeably. ing and programming
project activities.
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Scheduling and Programming:

Some Basic Concepts
Scheduling or programming is crucial to the effective and efficient imple-
mentation of a project or major activity in any organization. If you recall
in your previous courses, effectiveness is achieved if we are doing the
right thing while efficiency is manifested if we are doing things right. It is
not enough that we identify the appropriate strategy or alternative for
the organization’s problem; we also need to ensure that we implement
that strategy properly and with minimum inputs. To do so, the manager
must ensure that all tasks to be done contribute to the strategy and that all
these tasks are implemented on time and according to budget. Any un-
due delay in the implementation of these tasks will lessen the impact of
that strategy and bring unnecessary costs.
A schedule or program is just a more detailed and visual way of present-

ing identified activities. Since the implementation of a project is the com-
bined of several people and groups, it is important that all the people
involved are aware of how a specific task is related or linked with other
tasks. It is therefore not enough to simply list all the activities. They have
to be sequenced. Managers and subordinates alike must be clear as to
when a task starts, how long it would take to perform it, and when it will
end. It is within this context that a detailed and visual representation of
the identified activities becomes a useful tool. Moreover, scheduling tech-
niques do not only visually represent the flow of tasks but also indicate
which tasks must be carefully looked into to avoid delays in the project. In
the succeeding parts of this module, we shall discuss two of the more
commonly used formats or tools for scheduling.
UP Open University
SAQ 8-1
Before you proceed to the next section, why don’t you pause for a
short exercise. On the blanks provided below, write true if the state-
ment is correct and false if it is wrong. Good luck!
______ 1. A schedule is translating plan into sequenced activities

indicating dates.
______ 2. Scheduling or programming is a discrete and separate

activity from action planning and budgeting.
______3. A schedule is noting but a checklist of things to do.
ASAQ 8-1
1. True
2. False. Action planning, budgeting, and scheduling are inter-

connected activities. The budget relies on the activities to be
undertaken and how long they will be implemented. On the
other hand, a schedule can only be created once the activities
have already been identified in the action plan.
3. False. While scheduling involves jotting down all the task to be

undertaken just like in a check list, it goes beyond that. Sched-
uling is concerned only with the flow of tasks and anticipating
crucial tasks so that unnecessary delays are avoided.
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Gantt Chart
The Gantt Chart, which takes its name from its developer Henry Gantt, is
the most widely used technique for scheduling. It is also used for monitor-
ing activities. In a Gantt chart, project activities are represented in bars
against a time schedule. To create a Gantt chart, we need to identify all
project activities and the expected times required time for each activity.
We also have to indicate the sequence if the activities. An activity with no
predecessors is the starting point.
If you recall, we presented the following activity timetable in Module 7:
Activity Time (in weeks) Predecessor

1.0 Site selection
1.1 Ocular Survey 2
1.2 Negotiation 1
1.3 Final MOA 1 1.1
2.0 Mobilization
2.1 Put up local headquarters 2 1.3
2.2 Put up residence 2 1.3
2.3 Purchase office furniture
and equipment 1 1.3
2.4 Hire key support staff 4 2.1, 2.2
2.5 Hire key technical staff 4 2.1, 2.2
2.6 Set up communication system 1 2.1, 2.2
The time allotted for each activity is the same except for the predecessors
identified for each activity. Using Activity 2.1 as an example, we can see
that this activity can only be started once the activities under “Site selec-
tion” have been completed. Using this example, our Gantt Chart for this
timetable will appear as follows:
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Table 8-1. Sample Gantt Chart
Activity Week
1 2 3 4 5 6 7 8 9
1.0 Site selection
1.1 Ocular Survey
1.2 Negotiation
1.3 Final MOA
2.0 Mobilization
2.1 Put up local headquarters
2.2 Put up residence
2.3 Purchase office furniture and equipment
2.4 Hire key support staff
2.5 Hire key technical staff
2.6 Set up com munication system
The Gantt Chart is quite easy to make and read. It shows the expected
starting and finishing times of each activity in a fairly straightforward
manner. For example, we expect Activity 2-1 (Put up local headquarters)
to commence in the fourth week. Delays in Activity 1-3 (Final MOA), its
predecessor activity will delay Activity 2-1. A manager can use this as
guide to monitor if project activities are starting and finishing on time.
Activity 8-1
Think of a family activity that requires a lot of tasks. This could be
a birthday party, a wedding, or a picnic. Identify the tasks to be
conducted and their order of implementation, and the time dura-
tion of each task. Based on these, sketch a Gantt chart.
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Comment on Activity 8-1

There are a host of family activities you can choose from. The key
to doing a Gantt Chart is to be specific about the tasks to be com-
pleted and to combine activities that can be logically grouped to-
gether. For instance, you should not lump the tasks of getting a
caterer, renting tables and chairs, or having invitations printed at
the press under one task on the assumption all these require exter-
nal/professional services. On the other hand, tasks that can be
logically combined (e.g., buying food items, beverage) can fall un-
der one task as these can be done in one visit to the supermarket.
Lastly, make sure that your bars in the chart are properly drawn.
PERT
Developed by the US Navy and the business consulting firm Booz-Allen
Hamilton, the Program Evaluation and Review Technique (PERT) is an-
other method for scheduling activities or tasks. According to Levin (1989),
PERT could aid us in determining the following:
l the finishing time of the project

l the starting and finishing time of task or activity in the project
l the set of activities in the project that need to be finished on time to
avoid any delay in the whole project
l the activities or tasks which management should focus on during imple-
mentation
Doing a PERT network analysis involves the following steps:
1. Drawing up the activity list

2. Building the network
3. Finding the critical path
To illustrate how these steps work, let’s consider the case of an R&D project
involving the introduction of a sweet potato-based feed ration for cattle in
the province of Tarlac using participatory approaches. Sweet potato is
planted as a crop in Tarlac. It has been estimated that around 5-10 per-
cent of the sweet potato harvest is considered reject and is not sold in the
market. In the past, people simply threw the reject sweet potato tubers to
their cattle as feed. To maximize the use of these reject tubers and to pro-
vide farmers with a more economical alternative feed for their cattle, a
group of researchers from a university decided to test the technical feasi-
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bility of producing sweet potato-based feed ration. Before such technol-

ogy can be commercialized, the researchers thought that some important
preliminary activities need to be undertaken first. Given the limited bud-
get and time allocated to the project, the research team wanted to ensure
that the project activities are implemented on time.
1. Drawing up the activity list
The first step in PERT network analysis is to identify all the activities
in the project. An activity refers to a task or a set of tasks needed in
the project and which make use of time and financial resources. For
each activity, the expected time duration of each activity is estimated.
The team also identified the immediate predecessors—the activities
that must immediately precede a given activity. Below is the activity
list they prepared:
Table 8-2. Sample activity list
Activity Immediate Duration

Predecessor (days)
A Conduct farm production survey - 4
B Formulate feed treatments - 3
C Design feed mixer - 6
D Select farmer-cooperators A 3
E Design trial procedures B 5
F Build mixer C 11
G Train farmers D, E, F 3
H Feeding trial G 120
As can be seen from the table, activity D’s immediate predecessor is A.

Hence, D cannot be started unless A has been completed. Activity G
can only be commenced once activities D, E, and F are finished.
2. Building the network
Now that we have already drawn up our activity list, we can build
our network. A network is a visual representation of the project ac-
tivities. Circle nodes represent the start and finish of each activity
while an arrow represents each activity. The circles are numbered
chronologically to show the project’s progression. We always start the
network with a node marked number 1, as shown on the next page.
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2
D
4 =3
A=
B=3 E=5 G=3 H = 120

1 3 5 6 7
C
=6
11
F=
4
Figure 8-1. Sample network
Take note that the numbers shown beside the activity letters refer to
the time duration of the activity. An event is a state resulting from the
completion of one or several activities. For instance, node number 5 is
an event. It results from the completion of activities D, E, and F.
3. Finding the critical path
Before you ask me what a critical path is, let us first define what a
path is. It is simply a sequence of connected activities from the first
node to the last node in the network. The critical path is the longest
among these paths. Considering that all paths must be finished before
the project is considered finished, the critical path determines how
long would it take to complete the whole project. We can decrease the
project duration only by shortening the critical path.
Confused? This would be a lot simpler once we apply it to our previ-

ous example. PERT provides us with quick method of finding the criti-
cal path. It involves computing for the earliest starting and finishing
times as well as the latest starting and finishing times of each activity.
The first set of times is computed in the so-called forward pass while
the second set is done in the backward pass. Let’s go back to our
network and do the forward pass.
a. Forward Pass
As its name implies, we start with node 1 and designate 0 as the

earliest starting (ES) time for the said node. With an ES time of 4
days, the earliest finishing (EF) time for activity A is 4. Activity D,
which goes after A, will have an ES time of 4 and an EF time of 7
days (4+3 days). If you notice, the EF is simply computed as fol-
lows:
EF time = ES time + time
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Using the same formula, we come up with the following ES and

EF times for the project:
4
2
D
4 =3
A=
7
0 B=3 E=5 G=3 H = 120
1 3 5 6 7
8 17
3 20 140
C 17
=6 1
=1
F
4
6
Figure 8-3. Sample LS and EF times
Did you notice the ES time of activity G? Among its three immedi-
ate predecessors, this activity has the longest EF time. Since all
predecessors must be completed before the succeeding activity can
begin, the ES time of an activity entering a node is equal to the
longest EF time of all the activities leaving that node. Please bear
this mind. From the figure above, the ES time of activity G should
be 17 instead of 7 days. Anyway, as early as this stage, we can
already see that the project will be finished in 140 days.
b. Backward Pass
After doing the forward pass, let’s now do the backward pass.
You’re right. This time, we’ll start with last node. We already know
that the latest finishing (LF) time for the last node is 140 days. The
LF time represents the latest time a project can be finished without
delaying the completion of the whole project. Given our knowl-
edge of the LF time, we can compute for the latest starting (LS)
time as follows:
LS time = LF time - time
Similarly, the LS time is the latest time a project can begin without
delaying the whole project. In the case of activity H, its LS time is
20 (140-120). Using this formula, we go through our backward
pass to come up with the following LS and LF times:
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14
2
D=
4 3
A=
10 17
B=3 E=5 G=3 H = 120
1 3 5 6 7
9 17 17
0 12 20 140
C 17
=6
11
F=
4
6
Figure 8-3. Sample LS and LF times
While not evident in the network shown above, the LF time for an
activity coming into a node is the shortest LS time for all activities
leaving the said node.
Using or starting and finishing times, we can compute for the slack
or the length of time an activity can be delayed without holding
up the whole project. Slack can be computed as follows:
Slack = LS time – ES time

= LF time – EF time
As summarized in the table below, activities A, B, D, and E have

slack ranging from 9-10 days. On the other hand, activities C, F,
G, and H all have 0 slack, which means none of the said activities
can be delayed as this would delay the whole project. It is critical
that the project manager ensure that these activities are imple-
mented as scheduled. The path created by activities C-F-G-H is
what we refer to here as the critical path.
Table 8-3. Sample critical path
Activity ES LS EF LF Slack
A 0 10 4 14 10
B 0 9 3 12 9
C 0 0 6 6 0
D 4 14 7 17 10
E 3 12 8 17 9
F 6 6 17 17 0
G 17 17 20 20 0
H 20 20 140 140 0
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One advantage of the PERT over the Gantt Chart is that it could clearly
show the critical path. While the Gantt Chart is easy to make and read, it
is quite difficult to tell critical path especially for activities that begin at
the same time and with the same duration.
Dummy Activity for PERT

Another important concept one has to learn in PERT is the occasional use
of dummy activities. Before we discuss what dummy activities are, let’s
consider the following activities:
Activity Time (weeks) Immediate Predecessor

A 2 -
B 5 A
C 4 A
D 6 B,C
One way to construct the network of the said activities would be this
way:
C=4
1 2 3 4
D=6
A=2
B=5
Figure 8-4. Erroneous network
This network may look correct at the outset but in reality it is misleading.
What’s wrong with it? You’re right, it makes it appear as though A and B
have the same starting and ending nodes. To remedy this, we can intro-
duce a dummy activity as shown below:
4 3
C=
1 2 F = 0 (dummy)
A=2
B=
5 5
4
D=6
Figure 8-5. Sample dummy activity
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Activity F is the dummy activity. It is used as a device to denote that

activity D has both B and C as immediate predecessors. D cannot start
unless both B and C are completed. We do not assign any time value to F
since it is just created to establish the precedence for D, and maintain the
logic of the activity flow. In fact, it is just imaginary.
SAQ 8-2
It’s time for us to see if you have clearly understood PERT. Get a
pen and scratch paper since below is a short exercise for us to flex
our brain muscles. Below is a list of project activities, their time
durations, and immediate predecessors:
Activity Time (days) Immediate predecessor

A 6 -
B 7 -
C 2 A
D 4 A
E 5 B,C
Based on these data, answer the following:
a. Construct the network of the project.
b. How long will the project be completed without additional cost

to the implementers?
c. What is the critical path?
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ASAQ 8-2
1. Your PERT network should look something like this
3 E=
7 5
B=
C=2
4
A=
6
2 D=4
2. Using the forward pass technique, we can compute for the

following ES and EF times:
7
3 8 E=
7 5
B= As you can see
8
13 the project can
0 1
C=2
4 be finished in 13
A= days.
6
2 D=4 10
6
3. To determine the critical path, we also need to do the back-
ward pass technique and compute for the LS and LF times.
Below is an illustration of the backward pass:
7
3 8 E=
7 5
1 B= 8
1
C=2
4 13
0
A= 6
6
6 2 D=4
9
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ASAQ 8-2 continuation
Please take note of the latest finishing (LF) time of activity A, which
has two succeeding activities—C and D. Activity C has an latest
starting (LS) time of 6 while D has 9 days from the start of the
project. Of the two LS values, we chose 6 (the lower value) to be
the LF time of A. We cannot choose 9 since this would automati-
cally delay C by three days. As previously mentioned, the LF time
for an activity coming into a node is the shortest LS time for all
activities leaving the said node.
Summarizing the ES, EF, LS, and LF times in a table, we could see
that the critical path is A-C-E, as shown below:
Activity ES LS EF LF Slack
A 0 0 6 6 0
B 0 1 7 8 1
C 6 6 8 8 0
D 6 9 10 13 3
E 8 8 13 13 0
Slack was computed using the formula LS-ES or LF-EF.
Did you get all correctly answers? If yes, this is another feather on
your cap. If not, just review the parts you missed
Summary
This module discussed the importance of scheduling and programming
in the management of project activities. The application of Gantt Chart
and PERT for scheduling was also covered.
References

Doerr, A. (2000). Program Evaluation and Review Technique (PERT) and
Critical Path Method (CPM). University of Massachusetts. Available at:
http://faculty.uml.edu/adoerr/92.321/pdf/week13.pdf [8/15/2003]
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Module 9
Potential Problem
Analysis (PPA)
I t is not enough that the activities are pro-

grammed and budgeted. No matter how care-
fully planned an activity, not everything is within
Objectives
the control of the manager. Problems that could
After working on this mod-
impede the direction of activity implementation
ule, you should be able to:
may crop up. This module deals with how a man-
ager can prepare for such an eventuality.
1. Define potential prob-
lem analysis;
2. Explain the rationale
What is PPA? for potential problem
analysis;
You were introduced earlier to the subject of PPA 3. Explain the procedure
when we did decision analysis. If you recall, the in potential problem
last step in decision analysis is determination of analysis; and
possible adverse consequences if a particular de- 4. Using a prescribed
cision is implemented. This step is very similar to model (table), give an
the tool of PPA. example of potential
problem analysis.
What is PPA? It is the process of identifying the
problems that could crop up during implementa-
tion, preparing measures to prevent the problem from occurring, and pre-
paring a fallback solution in case the problem does arise (Cuyno, 1991).
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80 Problem Solving and Decision-making in R&D Management
Rationale for a PPA

No planning is fault-proof or perfect. The project manager has to assume
that something can always go wrong. Why is this? The reasons could be:
(a) the planner may have committed an honest human error; (b) there are
environmental events beyond the control of the manager; and (c) the
project objective maybe changed. Given this reality, the manager is better
off prepared or being on top of the situation rather than being reactive.
Procedure in PPA
What are the steps in PPA? Cuyno (1991) outlines the following proce-
dures in doing PPA.
The first step is brainstorming, preferably by a group. This is done by

listing all the things that could possibly go wrong (Table 9-1).
Table 9-1. Potential problem analysis worksheet

What could P and S Analysis
possibly go Hi Med Lo Hi Med Lo Possible Preventive Contingency
wrong P S Causes(s) measure(s)
P = probability
S = seriousness
The second step is to prioritize the problems listed in step one. Many of
the potential problems identified in the brainstorming exercise, on closer
examination, are incredible, wild, preposterous, and inconsequential. These
problems should be eliminated from the list. Including them in further
analysis would make the process tedious and would only complicate de-
cision-making.
Eliminating potential problems is done by doing P and S analysis. P stands

for probability of the problem occurring while S is for the seriousness of
the consequence to the objective of the project. The problems with low
probability of occurring and with low seriousness in terms of the effect on
the attainment of objective, would be dropped from the list.
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Let’s take an example. In the plan to conduct Genetically Modified Or-

ganism (GMO) corn trials, the following potential problems are listed to-
gether with probability of occurrence and seriousness:
P and S Potential Problem
(Lo P; Hi S) 1. Very young stubble is poisonous to farm animals

(Lo P; Hi S) 2. GMO corn will cause sterility in farmers
(Med P; Hi S) 3. Poor eating quality
(Hi P; Hi S) 4. The maturity is longer than existing variety
(Med P; Hi S) 5. The stubble is too tough for working animals
(Lo P; Hi S) 6. Flowers are sterile
(Hi P; Lo S) 7. Decline in sale of insecticide
(Hi P; Lo S) 8. Decline in sale of sprayers
(Hi P; Lo S) 9. Storage problem because of increase volume of pro-
duce
(Med P; Med S) 10. Price of corn in the market will decrease
(Lo P; Lo S) 11. Animals will not eat feeds with GMO feed component
because of blunt taste
From the information above the items with Lo P (Nos. 1,2,6,11) could be
crossed out from the list. Also, items with Lo S (Nos. 7,8,9,11) may be
eliminated. Item no. 7 (decline in sale of insecticide) is not going to di-
rectly affect the objective of high and reliable production and supply. In
fact, it is more advantageous for environmental cleanliness if insecticides
are not used at all. This would mean only items 3, 4, and 10 would be
examined for possible causes. This should be followed by determining
what preventive measure to take, and finally preparing contingency plans.
The third step in PPA is identifying the possible cause(s) of the poten-
tial problem. It is only when the causal agent of the problem is known
that the manager can abort or avoid the occurrence of the problem. As an
example, in the above potential problem of poor eating quality and long
maturity, the project geneticist may discover on closer examination that
these traits are inherited from a certain parent or parents. Knowing this,
the breeder can then replace the carrier parent with another parent known
to have better eating quality and early maturity. This will prevent the two
problems from creating poor acceptance of the GMO corn.
The contingency is the fallback alternative decision/solution in the event

that the potential problem becomes real. In our example above of poor
eating quality and long maturity, if the GMO line is not able to correct
these negative traits, the plant breeder-agronomist will advice as contin-
gency the use of varieties with known traits of good eating quality and
short maturity.
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Summary
In this module, we defined potential problem analysis and the rationale
for undertaking this process in problem solving and decision-making. We
also covered the various steps in PPA.
References
Clemens, R.T. (1996). Making Hard Decisions: An Introduction to Decision

Analysis. Buxbury Press, Belmont.
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Unit IV Module 10 83
Unit IV
Information for Systematic
Managerial Analysis
R esearch organizations both produce and consume information. Sci-

entists, through the research they conduct, produce scientific infor-
mation, which is then used by other sectors of the society to further knowl-
edge, solve problems, or produce an economic commodity. On the other
hand, R&D organizations need information relevant to their research. It
is in the nature of science that researchers relate their data or findings to
the available body of knowledge to strengthen theories and propositions
and in some cases revise or refute them.
In this age of globalization when everything is changing at a rapid pace,

the success of an R&D organization lies to a large extent in its capacity to
adapt to change. This adaptability in turn depends on the availability of
information on which to base actions. Just as an explorer needs a good
map to navigate unfamiliar terrain, an R&D manager needs to have to
accurate and reliable information in order to perform effectively.
In this unit we will:
1. Discuss the importance of an R&D management information system

for decision-making and problem solving; and
2. Employ various methods for gathering information for more complex
decision-making and problem-solving situations.
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Module 10
R&D Management
Information System
Rather than worrying about all the information afloat in the

world, we must ask ourselves what matters to us, what do we
want to know.
-Theordore Roszak
T he quality of a management decision pretty

much depends on information. As discussed
in previous modules, the decisions a person makes
Objectives
depends on his appraisal of the situation or what At the end of this module,
he perceives to be the state of nature and his you should be able to:
knowledge of the alternative solutions. His defi-
nition of the situation is determined by the types 1. Describe the compo-
of information the manager has. nents of R&D manage-
ment information
For an R&D manager, information takes on a system and their roles
more central role since R&D organizations are in in problem solving and
the business of generating information. Scientists decision making; and
use data to generate information or know-how. 2. Discuss the importance
R&D managers use data to come up with infor- of tacit knowledge in
mation that they can use to formulate decisions. decision making.
Depending on the fit between the information,
the decision, and the outcomes, the R&D man-
ager develops his own knowledge about how to approach certain mana-
gerial situations.
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We have been mentioning data, information, and knowledge in the same

breath. Although these three concepts all pertain to how one views real-
ity, they can actually be classified by the level of processing required in
producing them. Data is observation representing parts of the real world
(Vernon 2001). Once processed further and contextualized, data acquire
meaning and are transformed into information. When information is
meaningfully organized into a body of concepts that can be applied, it
becomes knowledge (Menou, 1993).
In this module, our focus is the information that can be organized via
electronic means so that they are made accessible to various members of
and stakeholders in the R&D organization.
Computers and Information Systems

As previously mentioned, a manager needs accurate and up-to-date in-
formation to come up with better decisions. A system that is designed to
provide people in the organization with relevant information to perform
management functions is called management information system (MIS).
According to Vernon (2001), a management information system can be
further defined as follows:
A system using formalized rules to provide management

at all levels in all functions with appropriate information,
based on data from internal, and if desired, external sources
to enable to make timely and effective decisions for plan-
ning, directing, and controlling the activities for which they
are responsible. It should be easy to use even by people
with few or no prior computer skills—learning to use it
should be no more than two days.
Management information systems have existed in one form or another in

organizations for a long time. The accounting system is an example of a
management information system. It is an information system since it has
a system of formalized rules for data gathering (from the recoding of fi-
nancial transactions down to the closing of accounts). It helps in decision
making by providing people a picture of the financial status of the firm
with reference to what is bought, what is sold, how much cash or prop-
erty is owned, how much is owed to the business, and how much the
business owes. In the past, most information systems (e.g., accounting
system and personnel information system) were managed mostly using
the pen and paper method.
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With the complexity of management decision making nowadays, the vol-

ume of information required has also increased. A computerized infor-
mation system therefore is now the more efficient alternative to the tradi-
tional MIS. It allows:
l transmission of large amounts of data at very fast speeds

l storage and replication of very large sets of data
l information access to other stakeholders
A computerized MIS provides essential services to organizations, includ-

ing processing of transactions, and keeping records. It collects data, pro-
cesses this data, stores the data and the results of processing, and dissemi-
nates information throughout the organization. It includes data, hard-
ware, software, trained personnel, and procedures.
Basically, an MIS transforms raw data to information. As shown in Fig-

ure 10-1 (next page), raw data is entered into the system, where it is pro-
cessed, and presented as information to support decision-making. An ex-
ample is data on journal articles published by an institute per year. Once
processed and presented against targets, the data can be useful to manag-
ers and decision makers.
In the same diagram, we can see that the computer configuration runs
parallel to that of the MIS. Input devices are used to instruct the computer
about what to supply data on. The central processing unit undertakes the
storage and performs the required mathematical operations through its
control unit. Information results are then released to users through the
output devices.
In the past, the potential benefits of an MIS were fully realized primarily
due to too much emphasis on technology. To be effective, an MIS must be
responsive to the information needs of managers at the lowest possible
cost and effort.
As a result of global competition, increasingly sophisticated computer

applications, and the Internet, R&D users of information are becoming
more sophisticated, demanding, and intolerant of poor service. An R&D
MIS functions not only to produce operating efficiencies but also to lever-
age intellectual capital—the skills and know-how of employees, as well as
their intellectual outputs like patents, research reports, databases. A method
of “knowledge based publishing” is developed to capture and make avail-
able the informal know-how of researches.
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More research organizations are beginning to set up their MIS in support

of R&D work. For example, in managing agriculture and natural resources
R&D, the Philippine Council for Agriculture, Forestry, and Natural Re-
sources Research and Development (PCARRD) of the Department of Sci-
ence and Technology (DOST) developed in 1994 the Agriculture and Re-
sources Management Information System (ARMIS), a database manage-
ment system developed by PCARRD in 1994 with funds from the Inter-
national Development Research Center (IDRC) and the Government of
the Philippines (GOP). (http://www.pcarrd.dost.gov.ph/databases/data-
bases.html)
MIS diagram
INPUT PROCESSING OUTPUT
Data are
Data are Data are
presented as
collected and analyzed
information to
analyzed
support
decision-making
Computer configuration
STORAGE
Where the program of

INPUT instructions is kept and where OUTPUT
DEVICE(S) data from the input devices DEVICE(S)
are sent. Can consist of disks
Used to instruct and tapes. Communicate
the computer on results to users.
what to do or to Include printers,
supply data on screens, and
which it is to CONTROL UNIT disks
operate. Include
magnetic
tapes,and Interprets the instructions
keyboards given to the computer.
Turns on the input devices
the storage, the arithmetic
unit, and the output devices
as necessary.
ARITHMETIC UNIT
Performs the ‘arithmetic’
operations required by the
program
Central Processing Unit (CPU)
Figure 10-1. MIS diagram and its parallel computer configuration

(Adapted from Levin et al. 1989)
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MIS Outputs in Support

of the Research Management Cycle
As we have learned, the R&D manager’s functions start from research
planning and end with impact analysis of the research outputs. The deci-
sion-making contexts and the information needed to support decision-
making follows the research management functions. The MIS can be de-
signed such that it produces outputs at certain stages of the research man-
agement cycle. For instance, during the project monitoring stage, the MIS
can provide managers with information on the extent of completion of
the research projects, the remaining activities to be undertaken, and the
costs so far incurred. Table 10-1 shows these research management func-
tions, and the corresponding MIS outputs.
Table 10-1. Stages in the research management cycle and the MIS
outputs that can support them
Function Definition MIS outputs
Priority setting Selecting lines of research according Agreed priorities across
and implementa- to policy commodities and non-
tion Ensuring that policy is reflected in commodity factors (may
research agenda contain subset for each
agro-ecological zone)
Commodity or factor and
discipline of all scientists and
of all research activities
Planning Turning research priorities into Agreed research priorities
practice within given resource available resources (human,
constraints financial, and physical)
Current research (includes
stage of completion)
Appraising Evaluating research proposals based Data sheet of proposed
research on a set of criteria experiments and a summary
proposal of all proposed experiments
Data sheet for appraisal
indicators for a research
proposal
Monitoring Examining the progress if an ongoing Monitoring indicators (e.g.,
research activity to identify and warn presence of research report;
of problems deviations from declared attainment of experiment
plans and objectives, or any other objectives; list of projects still
reason to intervene at a time in the active after their planned end
research activity’s life when interven- date; continued relevance,
tion is still possible future status, etc.)
Evaluation Systematically assessing the outputs Benefits (achievement of
of completed research objectives; contribution to
local and world knowledge)
Publications
Costs
Other outputs
Source: Adapted from Vernon (2001)
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Components of an R&D MIS

An MIS for an R&D organization normally stores information on the fol-
lowing elements: researchers, research activities, completed research, and
internal and external context. Table 10-2 shows the types of information
that can be gathered and processed for each of these elements.
Table 10-2. Information relating to elements in a research organization

Elements Samples of Information
Researchers Researchers’ or scientists’ educational qualifica-
tions; their scientific discipline, and the commod-
ity that they specialize in gender distribution of re-
searchers directory of researchers by commodity,
main discipline, or research station
Research activities Project/Experiment title

Project identification code
Commodity scientific discipline
Experiment descriptors (e.g., objectives, treat-
ments, study site, number of years, etc.)
Experiment results (e.g., summary of the results
data that exists; site data, etc.)
Completed research: Records of completed/past researches

data archive Information on review article or extension literature
Electronic files of previous research
Internal and external Researcher’s salary levels and scales, promotion

context records, and turnover
Budgetary (e.g., research expenditure, operational
funding per researcher)
Land, population, and economic factors
Source: Adapted from Vernon (2001)
These information are useful in setting the direction of the organization

and addressing gaps or bottlenecks in operations. R&D organizations need
to fit the educational backgrounds of their scientists with their vision,
mission, and thrusts. The MIS can provide information on how the staff
complement per discipline varies through time.
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At the very least, an MIS for a research organization must be able to do

the following (Corbett, 1998):
l Describe the research in manageable units

l Share out costs of the research
l List and profile the principal researchers involved
l Report progress in research and in spending
l Outline briefly future research intentions
l Allow retrieval of all the information aggregated in different ways
l Be revised regularly so that it is current
l Permit continuity from year to year
l Provide an estimate of benefits or other reasons for doing research
l Provide some measure of output of the research system
l Provide the information needed for management purposes with mini-
mum effort for the researchers.
It is important that in developing the R&D MIS the user is involved in

planning or in analyzing an existing system based on the new system’s
requirements. Aside from the data, hardware, software, trained person-
nel and procedures are also integral to the development and use of an
MIS.
For a detailed discussion on agricultural R&D MIS, you may read “The
Agricultural Research Management Information System” by Richard
Vernon which can be found in your Reader Volume.
Activity 10-1
Assume the role of a director of an organization specializing in
corn research and development. You are expected to assess the
outputs of your organization at the end of your three-year term.
Think of data on performance, which must be included in the MIS
to help the organization to evaluate if it has delivered in the past
three years.
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Your task here is to know the typical goals of a commodity-based
R&D program and determine the data needed for you to be able to
assess the extent to which these goals will have been met three
years from now.
Decision Making and Tacit Knowledge

Not all information useful in decision making is explicit and can be stored
in a structured system. A lot of knowledge that we use for everyday living
is a product of our complex experiences and would be difficult to repre-
sent in words or symbols. This type of knowledge is called tacit. In the
workplace, tacit knowledge is “embodied by the huge repertoire of skills,
information, and ways of working that (people) have internalized through
the years to the point of obviousness” (Stewart 1999, p. 72). For example,
people in one department in an organization would generally have a ba-
sic idea as to how they should talk to people of another department. They
might not exactly know why they prefer to deal with the other group that
way but that is just the way they it is. This is an example of tacit knowl-
edge.
According to a study conducted by Lan and Scott (1996), majority of

managers today still rely on personal knowledge for their decision mak-
ing rather than on any information media. Tacit knowledge, sometimes
referred to as ‘intuition’ or ‘gut feel’, has a great impact on the way orga-
nizations make decisions.
To facilitate the transfer of tacit knowledge for decision making, Vernon

(2001) suggests providing opportunities for informal interactions between
members of the organization. Encouraging staff to tell stories that demon-
strate the skills needed in the job also helps in making tacit knowledge
more explicit.
It must be pointed out as well that tacit knowledge has its limitations due
to the following: (1) it can be wrong; (2) it is hard to change; and (3) it is
hard to communicate (No Doubt Research, undated). The limitations of
tacit knowledge according to the same author can be addressed by talk-
ing about it in the open where it can be analyzed, challenged, or vali-
dated.
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Knowledge Management
As previously mentioned, data is just a representation of the real world.
When contextualized, data acquires meaning, which transforms it into
information. When various types of information have been systematically
organized into a pool of facts and concepts that can be applied in our
everyday lives, then it becomes knowledge (Vernon 2001). Knowledge is
the ability to distinguish natural patterns, and the understanding of their
nature as well as the cause and effect relationships intrinsic to those pat-
terns (Ubogu, 2001).
Globalization has changed the landscape where organizations operate.

With increased competition, the marketplace is in constant flux. To be
able to survive such competition, companies must have knowledge of
developments in customer’s needs, competitor’s positioning, supply chain,
technology, management systems, and the like.
Even R&D organizations which have traditionally enjoyed subsidy from

the state are now made to be more accountable for the resources they
receive, entrepreneurial in terms of resource generation, user-oriented in
terms of the products/technologies they develop, and more imaginative
in the way they disseminate their research results. This increased account-
ability placed on R&D institutions requires them to have knowledge of
the users’ needs, funding institution’s thrusts, developments in the mar-
ketplace, scientific innovations in other countries, management systems,
and the like. Such knowledge that an organization owns or needs to own
and which enables its business processes to generate profits and add value,
are what are referred to as knowledge assets (Macintosh 1999).
There is now an increasing appreciation for the role knowledge plays in

creating a competitive edge. Organizations tend to focus on the tangible
assets, thereby neglecting non-tangible ones like knowledge. Since knowl-
edge takes time to develop and acquire, there is a need to manage it. Man-
aging these assets involve applying management principles in the “devel-
opment, gathering, utilization, processing, preservation, and sharing of
organizational knowledge base in such a way as to efficiently achieve
results that match organizational strategic objectives” (Ubogu 2001, p. 2).
According to the UN Economic Commission for Africa, knowledge man-

agement provides the following benefits to organizations:
l better foundation for making decisions on choosing strategic options
and means of implementing its chosen options;
l increased responsiveness to clients or customers and other stakeholders;
l improved efficiency of people, operations and programs;
l enhanced speed and effectiveness of innovation;
l better quality of products and services;
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l enhanced competitive position by operating more intelligently;

l better continuity of the organization;
l sound financial performance of the organization;
l optimized interaction between all the arms of the organization;
l improved collective and individual competencies;
l greater capacity for professionals to learn more efficiently and more
effectively;
l communication and synergy between all knowledge-workers; and
l sharper focus on the core business and on leveraging critical knowl-
edge assets.
While individual socialization remains the primary way of passing on

knowledge between people, information and communication technolo-
gies act as useful tools in the effective construction, transmission, and
utilization of knowledge today. The MIS is therefore an important com-
ponent in knowledge management.
(For more discussion about knowledge management, please refer to the

“Knowledge Management for Decision-Making: Tools, Institutions and
Paradigms” by Felix Ubogu and “Knowledge Management” by Ann
Macintosh in your Reader Volume).
Summary
In this module we have discussed the role of computerized information
systems in decision-making. We also tacked the MIS outputs that can sup-
port decision-making and examples of information required by a research
manager in various stages of the research management cycle. Lastly, we
discussed the existence of tacit knowledge and the difficulty of represent-
ing it in a structured information system and the means by which the
sharing of this type of knowledge can be facilitated in support of more
effective decision making in an organization. The module ended with a
discussion on the role of knowledge management in decision-making.
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References
Corbett, D.CM. (1989). A current research information system for man-

agement if agricultural research. R&D Management, vol. 19, no. 3, pp.
251-263.
Lan, Z. and Scott, C.R. (1991). The relative importance of computer-me-
diated information versus conventional non-computer-mediated in-
formation in public managerial decision-making. Information Resources
Management Journal, vol. 9, no.1, pp. 27-37.
Macintosh, A. (1999). Knowledge Management. Artificial Intelligence Ap-
plications Institute, The University of Edinburgh. Available at: http:/
/www.aiai.ed.ac.uk/~alm/kamlnks.html [9/15/03].
Menou, M.J. (1993). Measuring the impact of information on development.
International Development Research Centre, Ottawa.
Stewart, T. (1999). Intellectual Capital: The New Wealth of Organizations.
Currency Books, New York.
Vernon, R. (2001). Knowing where you’re going: Information system and Ag-
ricultural Research Management. International Service for National Ag-
ricultural Research, The Hague.
Ubogu, F. (2001). Knowledge Management for Decision-Making: Tools, Insti-
tutions and Paradigms. Economic Commission for Africa. Addis Ababa,
Ethiopia. Available at: Source: http://www.uneca.org/codi/docs/
doc10EN.pdf [8/15/03]
______________. (2001). The ‘Watercooler’ as Metaphor: Getting Tacit Know-
ledge Flowing. No Doubt Research. Available at: http://
www.nodoubt.co.nz/articles watercooler_km.pdf [12/07/02]
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Module 11
Methods for Gathering Data
for Information Analysis
There is a great difference between knowing and understand-

ing: you can know a lot about something and not really under-
stand it.
-Charles F. Kettering
I n the previous modules, we emphasized

the importance of accurate and readily available
information for decision making. We learned that
Objectives
the quality of decisions made or solutions adopted After working on this mod-
to address problems depends on the quality of in- ule, you should be able to:
formation available to the manager.
1. Describe the attributes
We discussed information as a processed form of of data for effective
data, rendered meaningful and useful for deci- decision making; and
sion-making. Data exists in the real world. But 2. Discuss the different
they have to be observed, gathered, verified, and methods for data gather-
processed into reliable information for them to ing for information
inform our decisions. In this module, we shall be analysis.
discussing the different ways of gathering such
data.
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Attributes of Data
As the of quoted saying goes, “garbage in, garbage out.” No matter how
much effort is invested in system infrastructure, it doesn’t count for any-
thing if the data it generates are either unreliable or irrelevant to the deci-
sion maker.
According to Levin et al. (1989), data inputs should be characterized as

follows:
Accurate. Data should correctly represent the real world from which these
data are gathered.
Cost-effective. The cost of generating data should not be more than the
potential benefit it would yield.
Current. The data should reflect the existing environmental conditions.
Reliable. Data used by one person should generate the same results if
used by another under similar circumstances.
Usable. The data do not need to be modified further before they can be
utilized.
Methods of Data Gathering

Form-generated data
As discussed in the previous module, the data requirements of an R&D
organization may be classified into the following categories:
l Research personnel (e.g., scientists, technical staff, support staff)

l Finance (e.g., budgets, expenditures, donors)
l Physical resources (e.g., land, buildings, equipment, machinery, etc.)
l Scientific information (e.g., annual reports, scientific literature, etc.)
In consultation with people in the R&D organization and after keen ob-
servation of the information flows in the organization, MIS specialists
identify the data to be gathered and design a system for processing such
data. Once the data needs have been identified, their next task is to gather
the relevant data. Since data collection involves people rather than ma-
chines, it is considered the most difficult part in information system devel-
opment (Vernon 2001).
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Data collection for the MIS usually involves the preparation of forms or
sheets in table format, which are given to scientists and other personnel
for filling out. A data sheet for research personnel, for example, would
include the following data fields:
l Person ID: unique code for each person assigned by the organization
l Complete name: Surname, First Name, and Middle Name
l Birth date
l Gender
l Research station where researcher is based
l Date of first appointment
l Date of present appointment
l Date of discharge
l Main scientific discipline
l Sub-discipline
l Commodity involvement
l Contact details (e-mail, telephone numbers)
l Date updated
l Name of person who updated the record
A data sheet for experiment reports, on the other hand, may include the
following data fields:
l Experiment-ID: unique code for approved experiments

l Research year
l Report type: Interim, Annual, Final
l Report date
l Author: Project or study leader
l Report: Short description of experiment results
l Objectives attainment: Description of how the completed tasks have
contributed to the attainment of the research objectives
l Remaining work
l Achievements since last report
l Comment on finance
l Any difficulties encountered
(For more information on the system of data fields developed by the Inter-
national Service for National Agricultural Research (ISNAR), visit their
web site at www.cgiar.org/isnar.)
The data has to be updated regularly, adding new information or correct-

ing obsolete ones. Since data have to be current, the organization must
ensure that the lead time between the sending out of forms/sheets and
the processing of the such data into useable form is minimized.
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Research-based methods
Normally, managers make decisions based on their previous experience
and personal assessment of the situation. With the advent of MIS, manag-
ers are beginning to make use of readily available information to come up
with decisions or address problems encountered. As we have discussed,
data inputed into the MIS is usually collected using data forms/sheets
filled up by concerned staff in the organization.
In more intricate situations, however, a manager can hold a brainstorm-

ing session or a meeting with his staff to generate all of the perspectives
required to gain a deeper understanding of the organizational problems
at hand. The worst thing a manager can do is to always subject every
problem to further study and put decision making at bay.
There are instances, however, when the usual information generated by

MIS is not sufficient to come up with sound decisions. In cases where the
problem is complicated, decisions would have to be based on well-ana-
lyzed sets of information, which may not be readily available. There are
situations when a manager needs to understand variables (e.g., people’s
values, perceptions, social experiences) that are quite difficult to quantify
or structure. Such information will have to be gathered in a way that is
systematized, reliable, and valid.
Examples of decision or problem solving situations where more compli-

cated sets of data have to be gathered include the following:
Strategic planning. All organizations need to define the direction they

aim to attain at some future time. Making a strategic plan for the organi-
zation requires information on the organization’s strengths and weak-
nesses, stakeholders’ views of the organization’s outputs, and projected
developments in the field where the organization operates, among others.
R&D portfolio management. Given resource constraints, R&D organi-

zations cannot afford to fund all research ideas and projects. R&D man-
agers should give priority to projects that are not only in line with the
organization’s thrusts but also have the potential to create the most sig-
nificant impact on target clients. To be able to come up with an appropri-
ate portfolio of projects for the organization, R&D managers would need
information on target clients’ needs and preferences, clients’ views about
the technical and economic usability of the technologies the organization
has developed, and developments in the relevant industry, etc.
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Institutional building. Organizations, especially those engaged in tech-

nology development, need to be dynamic and innovative if they are to
thrive in a rapidly changing environment. Institution building is some-
times used as a vehicle to introduce certain changes in the organization
and facilitate the internalization of these new patterns of behavior. Before
any systematic changes can be introduced, there are times when manag-
ers would need information on the staff’s views about their work and
their relationships with their superiors and colleagues. In cases when the
organization has to undergo a massive change in terms of its systems and
procedures, managers may want some hard facts to justify the introduc-
tion of these changes. Such facts may require additional gathering of data.
Product development. In the case of product development, management

usually requires a full-blown feasibility study before any project can be
started. Data on marketing, technical, financial, as well as organizational
variables that would influence the viability of the proposed R&D work
have to be gathered and analyzed first.
Now that we have discussed the reasons for gathering additional infor-
mation, let’s now proceed to the various methods by which these infor-
mation can be gathered. It must be pointed out that our purpose here is
not to make you experts in these methods, but simply to introduce you to
the array of techniques that your organization can adopt.
Survey
Surveys remain the most popular way of gathering data. A survey in-
volves selecting a sample1 of respondents and administering a standard
questionnaire to them. A survey is especially useful when you want to:
l Determine the number of people who hold a certain belief (e.g., per-
centage of people who agree that a management program is effec-
tive), have undergone a specific experience (e.g., number of farmers
who adopted a technology), or fall under a specific predetermined
category (e.g., age).
l Measure how people rank or rate a certain idea, concept, person,
group, etc. (e.g., farmers are asked to rank problems in technology
adoption from most important to least important).
1
Before a survey is conducted, a relevant survey population is selected. Unless a survey
population is small, it is usually impossible to survey the entire population. Therefore,
researchers usually just survey a sample of a population from an actual list of the relevant
population, which in turn is called a sampling frame. With a carefully selected sample, research-
ers can make estimations or generalizations regarding the entire population’s attitudes or
beliefs on a particular topic (Survey Research, 2003, p.7). For example, instead of surveying the
entire population of researchers in the research system, researchers randomly select a sample
of researchers who will comprise the sample to be included in the survey.
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Based on the problem solving or decision-making goal which manage-

ment wants to achieve, a survey questionnaire is administered. Research-
ers would have to formulate questions that will enable them to elicit the
required data. As shown in Table 11-1, questions can be phrased in either
of the following formats: list, category, ranking, scale, quantity, and grid.
Table 11-1. Question Formats

Type Description Example
List A list of items is pro- What is/are your field(s) of
vided, any of which may specialization?
be selected ( ) horticulture
( ) agronomy
( ) plant breeding
( ) soil science
( ) farming system
( ) others, please
specify ____
Category The response is only one Please state your age.

of a given set of catego- ( ) 20-29 ( ) 30-39 ( ) 40-49
ries. ( ) 50-59 ( ) 60-69 ( ) over 70
Ranking The respondent is asked Please rank the following factors

to place something in in technology adoption from the
rank order. most important to the least
important.
___ Technical advantage
___ Cost of acquisition
___ Cost of maintenance
___ Ease of usage
___ Profitability
___ Availability of parts or inputs
___ Compatibility with the
existing production system
Scale The respondent is asked How would you rate the facilita-
to rate something like an tion skills of the moderator?
idea, concept, individual, 1 2 3 4 5
program, product, etc. Poor Fair Excellent
Quantity The response is a number On the average, how many

(exact or approximate), hours/day do you spend on
giving the amount some preparing laboratory samples?
characteristics. ___ hours.
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Table 11-1. continuation
Type Description Example

Grid A table or grid is provided to On the table below, please write
record answers to two or the problems you normally en-
more questions at the same counter in research and extension
time. and the efforts you have taken to
address such problems.
Area Problems Efforts

encountered taken
Research
Extension
Table 11-2. Methods of administering surveys

Type Description Advantages Disadvantages
Oral Survey Enumerator asks the Allows for clarifica- More costly to imple-
respondent the questions tion of questions and ment
and writes down the probing for detail Not suitable to
latter’s responses on the Greater control over questions where a
questionnaire response rate respondent needs to
look at a choice of
different answers on
the questionnaire
Group Respondents are gathered High rate of response Scheduling a common
Administered in one place where they since it is adminis- time may prove to be
fill out the questionnaires tered to a group difficult
themselves Allows for a variety Not useful for
of question types surveys that require
large samples
Mail Survey Questionnaires are mailed Relatively cheaper to Low response rate
to respondents who are administer Does not consider
asked to mail them back Respondents can varying capacities of
after filling them out work on the the respondents to
questionnaire at their work on the survey
leisure
Suitable to surveys
requiring large
samples
Electronic Respondents fill out the Less expensive than Sample limited to
Survey questionnaire on a mailing or hiring those with internet
computer rather than enumerators access
paper. Questionnaires are Higher response rate Difficult to guarantee
sent either via e-mail or compared to paper confidentiality
posted on the Web surveys Response rates tend
Coverage can be to dip over time
global with the speed Prone to technical
and magnitude of the glitches
internet
Faster transmission
rate to respondents
Source: Adapted from Survey Research (2003)
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In general, the survey remains one of the most commonly used tools for
data gathering due to the following:
l It can cover small as well as large samples of respondents.

l When properly designed, it is less prone to biases.
l Results from a survey involving randomly selected respondents can
be used as bases for making generalizations about the opinions, be-
liefs, and attitudes of the entire population.
l Compared to other data gathering methods, the skills for implement-
ing are easier to develop or acquire.
On the other hand, a survey approach has been said to have the follow-
ing disadvantages:
l When involving large samples, it can be very expensive to implement.

l In questions that provide respondents with a selection of possible an-
swers, respondents tend to limit their responses to the available choices.
l Due to their structured nature, surveys are less useful in probing into
people’s interpretation of complex social phenomena.
Interviews
Interviews are conversations with a purpose (Berg, 2001). Interviews are

applicable when you wish to gain an understanding of the following:
l People’s perception of other people, events, things

l Social processes (e.g., communication, organizing)
l Organizational problems (e.g., conflicts, low motivation)
From here we can see that interviews are more useful when one wants to
understand how people view or interpret complex social phenomena. If
your objective is to determine how many of your staff use the recently
installed MIS for the organization, a survey would do. On the other hand,
if you want to know people’s reactions, feelings, and perceptions of the
system and how they use or not use it in their everyday lives as workers,
an interview is a more useful tool.
Interviews are also valuable when the topic being discussed is sensitive
and where people would speak more candidly in private or when peer
pressure and other social factors (e.g., power relationship between bosses
and subordinates) may inhibit some people from freely expressing their
views.
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Unlike in surveys where the potential answers are basically predetermined,

questions asked in interviews are more open-ended. Interviewees are not
provided with a potential set of answers they can choose from. Instead of
asking them to assess their attitude towards the MIS on a scale of 1 (nega-
tive) to 5 (positive), an interview on this topic may ask the following ques-
tions:
l What do you think of the MIS?

l Has the MIS influenced your work? If yes, how? If no, why not?
Just like in a survey, an interview starts with the definition of topics to be

covered by the subject matter and the identification of questions under
each topic. The topics are chosen according to the kind of problem that
management wants to address. When combined, these guide questions
comprise what we call the interview schedule. The interview schedule is
normally piloted with a few respondents before the actual field interviews
are conducted. Interviewers use these questions to manage the conversa-
tion so that it stays within the topic at hand. It also helps the interviewer
ensure that all the topics intended to be covered are actually talked about
during the interview and that all interviewees are generally asked the
same set of questions. Experienced interviewers may re-arrange or re-
phrase these questions as they see fit, depending on the flow of the con-
versations.
The interviewer may tape the conversation with due permission of the
interviewee. A transcription of the taped interviews may be prepared ei-
ther by the interviewer or a hired transcriber. Otherwise, the interviewer
has to note down some key words during the interview and re-construct
the conversation based on these notes right after the interview.
Interviews are a good way of gathering data because of the following:
l Unlike a survey, an interview can be more interesting for both the

interviewer and interviewee as it is closer to the normal conversations
we do in everyday life.
l By asking open-ended questions, an effectively done interview enables
a subject to freely express her views about the subject matter, as op-
posed to just the researcher’s perspectives of the subject.
l With conversational turns, the interviewer can ask follow-up ques-
tions either to clarify the respondents’ statements or to probe deeper
into the subject matter.
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On the other hand, interviews can have the following disadvantages:
l An in-depth interview takes longer to undertake.

l It takes some experience to learn the art of interviewing.
l Since it is quite difficult to spend long hours of interview with many
people, the sample size of an interview would be much smaller than
that in a survey. Results from the interviews are therefore not
generalizeable to the whole population.
Focused Group Discussions
Focused group discussions (FGDs) have recently become a popular means

of eliciting and exchanging information, perceptions, and views from re-
spondents belonging to a certain group. Unlike in the interviews where
the conversation takes place one-on-one between a researcher and an
interviewee, the respondents in an FGD are a group, with the researcher
moderating the discussion.
Just like the interview, an FGD is appropriate if you want to get a deeper
understanding of the people’s interpretation of a certain phenomenon. In
an FGD, however, the researcher has the opportunity to observe the group
dynamics—how members of the group perceive each other’s views. The
group discussion creates some sort of a synergy where one respondent
could start a thread of discussion from an input shared by another re-
spondent. An FGD has also been useful in validating certain information
that may be normally misrepresented in an interview context. For ex-
ample, data about farm sizes and harvest volume can be validated better
in an FGD since members can check each other’s figures.
As any other research-based method, a researcher starts by identifying

the population from which the respondents will be drawn. An ideal group
of discussants is between 6 to 8 people. Anything more than this would
be difficult to manage. After introducing the purpose of the FGD and
setting the ground rules for discussion, the researcher/moderator starts
the discussion using certain techniques. The moderator is guided by a
discussion guide, which is similar to the interview schedule. A discussion
usually lasts between 1 to 1.5 hours. The discussion may be taped with
consent of the participants. The taped discussion becomes the basis for
the transcription, which becomes the data for information analysis.
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The FGD enjoys the following advantages:
l It is a useful way of eliciting people’s attitudes, beliefs, and experi-

ences while observing group dynamics.
l It requires less time to implement compared to an interview.
l If the researcher does the moderating and transcribing himself, it could
be cheaper to implement than an interview or survey.
On the other hand, the FGD is also constrained by the following:
l The quality of the discussion depends greatly on the skill and pre-
paredness of the moderator. A moderator must not only be knowl-
edgeable about the subject matter but also be perceptive to nonverbal
cues and adept at handling opposing views or dead silences.
l If not properly handled, there is always a tendency for the minority
views to be silenced in the discussion. A dominant personality may
bring the discussion to a different direction.
Activity 11-1
Given the following decision situations, identify the kinds of data
you need and the method you will use to collect the data:
1. You want to calculate every year the cost of a researcher’s par-

ticipation in specific research activities.
2. Your R&D organization is experiencing some problems with
regard to the dissemination of its technologies to the industry.
Of the technologies it has developed in the past 20 years, only
3% have been commercialized. You would like to know how
your research and extension system can be improved.
UP Open University

In the first situation, your task is to determine what constitutes
research activities (aside from experimenting) and determine what
data is needed so you could measure researchers’ extent of partici-
pation. In the second situation, your task is to determine who are
involved in the development and diffusion of technology and de-
termine the kind of data that needs to be collected to be able to
address the problem at hand.
Summary
In this module, we have discussed the attributes of data as well as how
data are usually collected for inputting to an MIS. In situations where the
information required to come up with sound decisions is more compli-
cated, research-based methods can be used to gather data. Aside from
giving you an overview of the application of each research-based method,
we also listed the advantages and disadvantages of adopting each method.
References
Bell, J. (1993). Developing Your Research Project: A Guide for First Time Re-
searchers in Education and Social Science. Open University Press,
Buckingham.
SEARCA. (1996). Commercializing Post Production Technologies. SEAMEO
Regional Center for Graduate Study and Research in Agriculture, Los
Baños, Laguna, Philippines.
Vernon, R. (2001). Knowing Where You’re Going: Information System and
Agricultural Research Management. International Service for National
Agricultural Research, The Hague.
_________. Undated. Survey Research. Writing @ CSU: Writing Guide.
Colorado State University. Available at http://writing.colostate.edu/
references/research/survey/index.cfm [9/15/03].
UP Open University

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Problem Solving and Decision

Making in R&D Management

Rogelio V. Cuyno and Primo Garcia

University of the Philippines

Copyright © 2003 by Rogelio V. Cuyno, Primo Garcia

Published in the Philippines by the UP Open University

First Printing, 2003

Layout by Cecilia G. Santiago

Printed in the Philippines

Unit I Systematic Managerial Analysis (SMA), 1

Module 1 Situation Appraisal, 3

Module 2 Problem Identification and Specification, 7

Module 3 Problem Analysis, 15

Module 4 Objective Setting, 23

Unit II Quantitative Decision Making, 41

Module 6 Probabilistic Decision Making, 43

Unit III Planning for Implementation, 59

Module 7 Action Planning and Budgeting, 61

Module 8 Scheduling and Programming, 65

Unit IV Information for Systematic Managerial Analysis, 83

Module 10 R&D Management Information System, 85

Module 11 Methods for Gathering Data for Information Analysis, 97

Use of systems and analysis is no guarantee of success; success

A wareness and knowledge of the situation of

We shall discuss situation here within the con-

We further assume that projects or activities, no matter how well-planned,

l Circumstances in the environment may have changed, which is be-

When we review and analyze a research project or activity in progress, a

Figure 1-1. Situation Appraisal Diagram

On physical resources: Are the equipment for the research appropriate?

Administratively: Are supplies and materials adequately and regularly

On leadership: Is the research project leader providing technical guid-

All of the above constitute the reality of the research project.

However, this information is not enough if we want to review the total

A situational analysis therefore describes the total objective picture of

A problem in an organization does not arise from nothing and nowhere.

Cuyno, R.V. (1992). Research Management Learning Package: Systematic

One person’s problem is another’s opportunity.

W hat we will see in this module is how to

1. Define and discuss a

a. An obstacle, condition or phenomenon which stands in the way of

b. As a deviation from the expected desired result. These are illustrated

(a) Problem as obstacle (b) Problem as deviation

Figure 2-1. What a problem is

Whether it is an obstacle or a deviation from the expected, a problem is

How is a problem identified? Or how do we know a problem exists? A

Two things must be known when determining a problematic situation:

a. What is the performance, condition, end-state, and accomplishment

b. In the present situation, what is the actual performance or accom-

This can be illustrated as follows:

a) Expected performance or accomplishment

b) Actual performance or accomplishment

Figure 2-2. Problem as gap

Problem solving then is narrowing the performance gap or bringing the

Figure 2-3. Problem solving as narrowing the gap

Specifying the Problem

Describing a problem precisely is like drawing a boundary or corral around

Lyles (1982) identified three common problems in any activity:

a. People problem (caused by individual or group behavior);