What’s the Problem? Reformulating the Problem for Balanced-Strategy Creation

Abstract: By asking “What’s the problem?” this thesis addresses the crucial relationship between how strategic decision-makers formulate organizational problems and how the relevant actors attempt to solve these problems. This thesis holds that the creation of strategy can be conceived of as a decision-making process in which the strategists find, formulate and attempt to solve problems by choosing a set of means to reduce the perceived gap between the current state and the desired state of the organization. The thesis particularly explores and postulates what is refered to as the means-end fallacy in which end-problems are treated as means-problems. In effect the decision-makers take the ends of the organization for granted and only ask “How can we fix it?” instead of critically examining the purpose of the organization by asking “What should we fix and why?”The purpose of this thesis is twofold. First, it is to explore the dysfunctional consequences of the means-end fallacy in organizational decision-making and creation of strategy. Secondly, it is to illuminate the implications of applying the problem-formulation perspective in the creation of organizational strategies. To achieve these purposes the problem-formulation phenomenon is explored in five appended papers. Paper I discusses the paradox of profitability and responsibility and the means-end fallacy in the context of strategic theory and practice. Papers II, III and IV explore the relationship between how a problem is formulated and how different actors attempt to solve it. This is done with a comprehensive case study of the substance-abuse problem and the different organizational strategies that are implemented to resolve it. Paper V offers a concrete discussion of how inappropriate formulations of organizational problems undermine the intended ends, particularly with regard to the paradox of profitability and responsibility.This thesis argues that the strategic decision-makers need both to be more problem-oriented; that they should balance the different dimensions of the problem; and, thus, that they should recognize that decision-making is an art of balance. Moreover, it suggests that the problem-formulation perspective can contribute with an insight into the black box of strategy creation, and that this can be achieved by looking back or rewinding from the organization’s strategy to the initial formulation of the organization’s problems. As a mirror image it suggests that strategic decision-makers can avoid the means-end fallacy by forwarding from an appropriate formulation of the problem to a balanced strategy.