STRATHMORE BUSINESS SCHOOL

NAIROBI, KENYA

FREDDIE ACOSTA
ARLENE ACOSTA

ANALYSIS OF BUSINESS PROBLEMS AND THE CASE

METHOD
Instead of thinking outside the box, get rid of the box. Deepak Chopra

ANALYSIS OF BUSINESS PROBLEMS

We cannot solve problems by using the same kind of thinking we used when we created them. Albert Einstein

In life, as in business, you are confronted by a wide array of problems and situations, which require
you to take action. Some problems are relatively straightforward or structured. These types of
problems can generally be solved by taking a series of actions in a well-defined way.
In business, most problems are not so easy. They often involve economic, technical, and human
issues and can be quite complex or unstructured. By definition, complex or unstructured problems
do not have a unique, correct solution. Whenever persons are involved, you are faced with an
unstructured problem. Similary, management decisions are complex because they involved risk and
uncertainty, multiple objectives, multiple stakeholders and a very complex structure.
Let us look at six steps you should take, either implicitly or explicitly, when applying a rational
decision-making processes involving complex problems:
1. Define the problem. Managers often act without a thorough understanding of the problem
to be solved, leading them to solve the wrong problem. Accurate judgment is required to
identify and define the problem. Managers often err by (a) defining the problem in terms of
a proposed solution, (b) missing a bigger problem, or (c) diagnosing the problem in terms of
its symptoms. Your goal should be to solve the problem, not just eliminate its temporary
symptoms.
2. Identify and weigh the criteria. Most decisions require you to accomplish more than one
objective. When buying a car, you may want to maximize fuel economy and comfort while
minimizing cost. The rational decision-maker will identify all relevant criteria in the
decision-making process. Different criteria will vary in importance to a decision maker.
Rational decision makers will know the relative value they place on each of the criteria
identified. The value may be specified in dollars, points, or whatever scoring system that
makes sense.
Spouses Dr. Freddie Acosta and Dr. Arlene Acosta prepared this brief note from publicly available information and published materials.
1 The
Acosta couple dont claim ownership of any material included in this technical note. Moreover, this note was prepared solely as basis for class
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3. Generate alternatives. The third step in the decision-making process requires identification
of possible courses of action. Decision makers often spend an inappropriate amount of time
seeking alternatives. An optimal search continues only until the cost of the search outweighs
the value of the added information.
4. Rate each alternative on each criterion. How well will each of the alternative solutions
achieve each of the defined criteria? This is often the most difficult stage of the decisionmaking process, as it typically requires you to forecast future events. The rational decision
maker carefully assess the potential consequences of selecting each of the alternative
solutions on each of the identified criteria.
5. Determine the optimal decision. Ideally, after all of the first four steps have been
completed, the process of computing the optimal decision consists of (1) multiplying the
ratings in step four by the weight of each criterion, (2) adding up the weighted ratings
across all of the criteria for each alternative, and (3) choosing the solutions with the highest
sum of the weighted ratings.
6. Implementation. What you know is not relevant if you dont act. Therefore, the last step in
the rational decision making process is coming up with a concrete action plan.
THE CASE METHOD
I hear and I forget. I see and I remember. I do and I understand. Confucius

The case method is not only the most appropriate and practical way to learn the skills of
management, it provides the opportunity for you to have fun in the classroom. The case method is a
teaching approach that uses decision-forcing situations to put you in the role of people who were
faced with difficult decisions at sometime in the past. Every decision-forcing case has a
protagonist, the historical person who was faced with the problem that you are asked to solve.
Thus, in engaging these problems, you necessarily engage in some degree of role play.
Some professors place a great deal of emphasis on role play, to the point of addressing each student
with the name and titles of the protagonist of the case. Other professors place less emphasis on role
play, asking students what would you do if you were the protagonist of the case?
Knowing how to analyze business problems, reconcile different perspectives, decide on a course of
action, and persuade others are the key skills to successfully exercising the management profession.
The case method Strathmore Business Schools main teaching method helps you to develop
these skills by bringing real-life business problems into the classroom, training you to think and
decide like managers.
The case method asks you to put yourself in the shoes of the manager. For example:
You are the director of the marketing division of a rapidly expanding consumers company.
You need to hire a product manager for a new secret product that the company plans to
introduce to the market in fifteen months. How will you go about hiring the appropriate
individual?
As the owner of a venture capital firm, you have a number of proposals that meet your
preliminary considerations but only a limited budget with which to fund new projects.
Which projects will you fund?
2

You are on the corporate acquisition staff of a large conglomerate that is interested in
acquiring a small-to-moderate-sized firm in the oil industry. What firm, if any, will you
advise the company to acquire?

In contrast to lecture-based teaching methods, the case method is centered on the participants. Here
you do most of the talking. The professor, like the conductor in an orchestra, facilitates and guides
the discussion, asking questions and eliciting participation from 30-40 exceptionally talented
students to enrich the discussion with their contrasting viewpoints, different industry experiences,
and cultural backgrounds.

Figure 1. The case method 4-stage process.

How the case method works:

1. You prepare the case on your own, reflecting on key questions: What is the major problem?
What are the relevant criteria? What are the alternative courses of action? What would you
do if you were the manager in question?
2. Before going to class, you meet with your syndicate group to discuss and compare your
analysis and contrast viewpoints. At this point, your group is not expected to arrive to a
consensus. Individually, you can still remain with your original analysis of the case.
3. The discussion is then taken to the larger classroom context with the professor facilitating a
comprehensive discussion of the case.
4. Together the class develops an analysis, evaluates different courses of action with
conclusions and key learning points.

Conclusion
The case used in class might be recent or about a dilemma a company faced two decades ago.
However the questions highlighted in each case are relevant and universal. After participating in
many case discussions, you leave Strathmore Business School better prepared to take on the
challenges you will face as managers, as decision-makers and as leaders.