Exam 7: Decision Making and Creativity

Escalation of commitment is likely to occur when the perceived costs of terminating the project are high or unknown.

The rational choice paradigm assumes that decision makers have limited information-processing capabilities and engage in a limited search for alternatives.

Scenario planning is a systematic process of thinking about alternative futures and what the organization should do to anticipate and react to those environments.

The prospect theory effect motivates us to avoid losses.

Cross-pollination is recommended to encourage creativity in organizations.

The concept of bounded rationality holds that:

The four main influences of escalation of commitment are self-justification effect, self-enhancement effect, prospect theory effect, and sunk costs effect.

Intuition operates independently of the programmed decision routines that speed up our response to pattern matches or mismatches.

The last step in the rational decision-making model is to evaluate the decision outcomes.

Sarine's Dolls With funding from her family, Sarine is currently developing a new line of dolls for her business which she hopes will take her company to the next level.At first, she encountered some minor problems with the construction of the dolls and spent a fair amount of money engineering a way to enable them to be like she envisioned.Unfortunately, she then found out that there was a patent protecting the way the dolls arms were connected, so she spent more money redesigning the dolls.After an unexpectedly uninterested response from the public in the dolls, she decided that they needed to be marketed differently in order to sell.So Sarine allocated more resources to marketing and had the packaging of the dolls redesigned and created new set of advertising materials.The cost of manufacturing these dolls has now exceeded four times the initial proposed cost, but she is determined to make it work.She is embarrassed by how this has gone, but continues to put on a brave front.Sarine is most likely making decisions to continue with these dolls at this point because of:

What do impromptu storytelling, morphological analysis, and artwork have in common?

During a meeting, senior executives of a consumer products company were addressing the problem of being late in detecting several consumer trends, such as the trend toward using see-through plastics in kitchenware.While trying to determine the source of this problem, one executive said: "The main problem here is that we need to find a better industrial design firm to design our products." Which of the following best describes the decision-making problem that this executive is exhibiting?

Knowledge and experience can undermine creativity because they can lead to routinization of that knowledge.

Employee involvement potentially improves both the decision-making quality and the commitment of employees.

Which of the following is NOT a reason people engage in satisficing rather than maximization?

The Director of Nursing is looking throughout the hospital for a new format of a work schedule for nurses.She evaluates each schedule system as soon as she learns about it.Eventually, she finds a schedule that is "good enough" for her needs and ends her search even though there may be better schedules available that she hasn't yet learned about.The Director of Nursing is engaging in:

A marketing specialist needed to find a new way of marketing the company's main product to its potential clients.While watching a movie one evening, the marketing specialist saw a scene that gave her inspiration for a new marketing plan.According to the creative process model, which of the following is the next stage in the creative process after such inspiration?

The rational choice paradigm selects the choice with the highest utility through the calculation of:

Decision makers have a need to reduce uncertainty, so they tend to engage in solution-focused problem identification.

High employee involvement would be difficult to achieve when conflict is likely among employees.