Managerial Decision Making

Problem Solution: USA World Bank

At some point, every corporation finds itself with a problem that needs addressing in order to remain competitive and grow. USA World Bank (UWB) is at the point now and must a decision. Using the nine-step problem-solving model, UWB can identify its opportunities and challenges, define its problem, pinpoint its desired future state, identify and assess potential solutions and weigh the risks of potential solutions to recommend an appropriate solution. Additionally, UWB can identify the expected impact and value of its solution and prepare itself to measure the solutionÐŽ¦s effectiveness. UWB has found itself at a crossroads; however, by implementing this process, UWB can remain competitive and grow into a truly universal banking resource.

Situation Analysis

Issue and Opportunity Identification

UWB faces a lack of sound statistical analysis knowledge on the part of key managers. Mary Monroe, VP New Product Development, has not been thorough in her evaluation of data compiled by Best Market (Best). She assumes the research is sound simply because the vendor has a ÐŽ§good reputationЎЁ. When the board of directors reviews the information that the vendor has compiled during the product proposal one of the board members, Bea Hansen, points out that there may be sampling errors (size and timeframe).

Mary has an employee on her staff who is proficient in statistics but she does not use him as a resource until after the product has been proposed to the board and picked apart. If Mary had given him a chance to review the data before hand much of the embarrassment and backtracking on her part and that of her boss could have been avoided. It may have been possible to spot the sampling error issues and revise the product or another project could have been proposed.

The survey questions that were used by Best to research the proposed consumer credit product may not give the company the most accurate information. On page 10 of the UWB scenario, Board Member #2 points out ÐŽ§Questions IR 3, 4, and 5 ask about both signing up for the Instant Reward card and about changing banks. It seems like these two issues should be in separate questions, doesn't it?ЎЁ There are also survey questions asking whether consumers would be more or less likely to switch banks based on whether this proposed product offered their top one, two, or three benefits. But as Bea Hansen points out, there is no equal division in such ordinal level data, because ÐŽ§we cannot say that their top-ranked benefit is twice as important as their second-ranked benefit, and three times as important as their third-ranked benefitЎЁ (UWB Scenario, 2006, p. 10). In this case, there are questions that should be separated to give more meaning. One of the characteristics of good research is that the limitations are openly revealed. In the UWB scenario, there was no upfront attempt to report potential flaws in the research design or in the findings from the vendor or from Mary Monroe.

UWB has no standard policy or procedure for establishing sound research criteria Mary has been using Best research whereas Jim Wilson, VP Marketing Development, who is proposing a small business credit card product, has been using focus groups. While either option could be used, the difficulty lies in comparing results to find which is the most successful since there is no standard approach for either. Incomplete, inconclusive or unexplained research can confuse managers, cloud decisions, impede execution and consume valuable resources. One way to establish uniform policies is to form a market research group or committee. Market research departments tackle the challenge of providing support-level data for strategic decision-making.

Stakeholder Perspectives/Ethical Dilemmas

Mary Monroe and Brian Allen, President of New Product Development, are two of the key stakeholders in the UWB scenario. Mary and Brian ultimately have the final word regarding which product will be presented to the board of directors to obtain approval to begin the yearÐŽ¦s new product launch. They are feeling pressure to show results with this yearÐŽ¦s new product and find themselves in a business dilemma when the research supporting the consumer product is questioned. Mary and Brian must decide whether to move forward with the product proposal or suggest an alternate product.

Bea Hansen, a recent member to the UWB board of directors, becomes a major stakeholder in the scenario because she is the only one who has taken time to review the research data behind the business proposal that Brian Allen presents. Bea has a background in statistics and wants decisions to be made using information that is accurate, valid, and in compliance with the highest standards. As a board member, Bea has an ethical obligation to point out any statistical discrepancies. Allowing a product to launch usng faulty information could lead to loss of profits, time, and resources.

Jim Wilson has been with the company for only four years. In that time however, he has increased the small business customer base by 40% because of his successful relationship building skills. Jim believes that launching a small business credit card product is the solution that UWB needs for this year. He has performed his own research using focus groups, which in the past has led him to launch other successful business products. Jim also believes that if the company does not launch a small business credit product this year that this segment may see customer attrition by up to 40%.

Best, a market research company is another stakeholder in this scenario. This company provided Mary Monroe with the final research results to determine the market need for a rewards-based credit card for consumers. Bea Hansen has called the data obtained by Best to question, as has reason to believe the data may be subject to sampling errors. The company must prove the information provided is valid, or possibly conduct a new study to appease the stakeholders, or the company runs the risk of losing future business with UWB.

Problem Statement

The following problem statement allows UWB to consider all the external and internal issues currently affecting the company: UWB will develop profitable new products that will expand the companyÐŽ¦s market share using statistical analysis and sound research methods.

Benchmarking

UWB has been working to offer a profitable and popular credit product for either the consumer or small business markets. Both types of accounts are important to the bank, however there are concerns that without a small business product launch this year there will