Exam 4: Foundations of Decision Making

When are groups more effective for making decisions?

James and Lucy are coworkers at Eccentron Methodologies. They are trying to assign decisions to some groups and some individuals. They have reached the conclusion that whether groups are more effective than individuals depends on the criteria you use for defining effectiveness- such as accuracy, speed, creativity, and acceptance.

Before being reimbursed for traveling expenses, the employee must file the following forms in the following order. This is an example of a

Escalation of commitment is the tendency for people to base judgments of probability on things with which they have had experience with in the past.

John invested in Dig, Inc. stock at $14 per share. The price has fallen to $6 per share, but John is sure he was right and buys additional shares. John is guilty of availability heuristic.

Describe the first step in the decision- making process.

Compare and contrast well- structured problems, ill- structured problems, programmed decision, and nonprogrammed decision.

Application of Decision Making: A Contingency Approach It seems that all Dave accomplishes is making decisions. Every time he turns around, someone wants him to decide on one more thing. Just today the secretary came in and asked if she could reorder paper for the fax machine. Somehow that seemed like a decision he really did not need to deal with. If he could avoid those types of decisions, then when the foreman came in with the news of a major piece of equipment that needs repair, in which the repair bill will be almost as much as a new machine, Dave could focus more time and attention on the more complicated issues. -If Dave were to use the eight steps in the decision making process to decided on whether to repair or replace the fax machine he would be

A policy is a series of interrelated sequential steps that a manager can use for responding to a well- structured problem.

_________is one of the disadvantages of group decisions that typically results in groups that are very cohesive.

The four decision- making styles seen in this question can be diagrammed as having two dimensions: way of thinking and

Rules, procedures, and policies are most suitable for_________ problems.

In general, the greater the risk in making a decision, the greater the

Application of Decision- Making Styles Jeremy has noticed that the people within his organization make decisions in very different ways. Jackie is rational and has a low tolerance for ambiguity. She is efficient and generally makes decisions that are applicable to the short term. Andy tends to be very broad in his outlook and looks at many alternatives before making a decision. He generally focuses on the long term. Alexandra thinks intuitively and works well with others. She is open to suggestions and concerned about her coworkers. Jeremy himself wants to have complete information before making a decision and always carefully considers many alternatives. -Alexandra seems to prefer the _________decision- making style.

Application of the Decision- Making Process Net income has fallen for the second quarter, and Amanda is understandably worried. She knows at the board of directors meeting on Wednesday she will be closely questioned and expected to have a plan to avoid any third- quarter losses. Amanda begins to read slowly over the financial documents to try and ascertain areas that may be the cause. After much consideration, it appears that expenses have risen dramatically over the last few months. Amanda wonders why. She decides a meeting of the department heads is in order first thing tomorrow morning. At the meeting, Amanda would like to generate several possible solutions to the increased expenses. She wonders how to effectively explore all the options. At the meeting, the first option that is discussed is to downsize the research and development department since it is not essential to current operations. Several managers approve this plan. Amanda suggests that they need to look further at the issue. Several suggestions are made, many of which appear to be viable. Amanda wonders what to do next. -Once alternatives have been identified, the decision maker must critically analyze the _________ and of each one, which become evident as they are compared with the criteria and weights established in steps 2 and 3.

Group decisions provide more complete information than individual decisions.

Compare and contrast the biases of availability heuristics, representative heuristics, and escalation of commitment in the decision- making process.

_________is when an alternative is chosen because the manager believes it is "good enough," to solve his or her problem.

The strap of John's backpack tears off as he starts to throw it over his shoulder. On the way to school, he stops at the first store that carries backpacks, walks in, and purchases one off the front rack. John has just made what type of a decision?

Herbert Simon, an economist and management scholar, found that within certain constraints, managers