The ability to solve problems is an essential attribute of any business manager. A "problem" is defined as any factor which causes an individual's/firm's actual outcomes to differ from the individual's/firm's desired outcomes.

Problem-solving may be quantitative in nature. With quantitative problems, there often exists a unique solution (or set of solutions) to the problem, furthermore, the ability of a given alternative to further the attainment of one's goals can be proved or disproved.

Problem-solving may also be qualitative. Unique solutions (or sets of solutions) may also exist when problems are qualitative. The distinction is that the validity of the proposed solution cannot be proven, but must be assessed in terms of comparisons of differences between actual and desired outcomes resulting from the implementation of the chosen alternative relative to the implementation of other alternatives.

Although the levels that an individual masters en route to successful problem-solving tend to parallel the steps involved in problem-solving, we emphasize that the two are not synonymous. An individual who successfully follows a set of instructions, but who fails to demonstrate an understanding of the foundation underlying those instructions, has not demonstrated a mastery of any step of problem-solving even if the unique solution is discovered and implemented.

Similarly, no step can be successfully achieved without having also attained all prior steps. For example, an individual who can adequately discern the advantages and limitations of various quantitative tools has not achieved this level if the person cannot recognize problems through which these tools can be successfully implemented.

Each of the defined steps should be present in every situation in which problem-solving is required. However, not every detail within any given step will be present in every situation. Assessors of students' problem-solving abilities must discern which aspects within each step should be present in each circumstance.