Exam 7: Individual and Group Decision Making: How Managers Make Things Happen

Gregory was talking with Kareem,his assistant manager,saying,"When I make a decision on which employees will do a project,I use three simple factors,which I call my decision-making 'rules of thumb.' I consider their attitude and knowledge,and how hard they work." Gregory's rules of thumb,_________,is what he uses when making a decision.

When faced with a decision,Myles asks himself "Why not just take the easiest way out?" This approach,known as relaxed change,is a form of evidence-based decision making.

Marie is a small-business owner who loves to take risks.She also enjoys going out and meeting customers and potential clients-the social aspect of her job.Marie relies on intuition and discussions with others to acquire information.As an interior decorator,Marie utilizes her imaginative strengths,taking a broad perspective to problem solving,and she likes to consider many options and future possibilities.Marie's decision-making style is best described as

Anchoring and adjustment bias-being influenced by an initial figure.It is sometimes seen in real estate sales.Before the crash in the real estate markets,many homeowners might have been inclined at first to list their houses at an extremely high (but perhaps randomly chosen)selling price.These sellers were then unwilling later to come down substantially to match offers that reflected what the marketplace thought the house was really worth.

This question contains two parts;be sure to answer both.First,explain at least five of the nine common decision-making biases,giving an example of each.Next,imagine that you are a real-estate agent who is trying to sell a huge house to a wealthy couple.Explain how the buyers may be subject to each of the biases that you list.

Which of the following is not a hindrance to perfectly rational decision making?

The larger and more diverse the group,the higher the quality of the decision.

Tom is in the marketing department with HomeMade Soups.He was given the responsibility of determining if customers liked the new spicy chicken noodle soup.According to HomeMade Soups' sales data,over 4,000 customers purchased the new soup last month.If Tom surveys 25 of those customers,he has selected an appropriate sample size for decision making.

The hindsight bias-the tendency of people to view events as being more predictable than they really are,as when at the end of watching a game we decide the outcome was obvious and predictable,even though in fact it was not.

The Safety Committee at Office Supply Mart was formed to help make the store a safer place,and some of the committee's suggestions are going to be costly.During the committee meeting,the vice president of accounting announced that company profits were much lower than expected,and she suggested that profits are more important than safety.The profit goal is now outweighing the committee's safety goal,which is an example of

Ace Manufacturing has high turnover due to issues with the corporate office.Trevor,the plant manager,is frustrated and cannot find a solution to stop it.At first he offered raises to many of the good employees who were leaving,but after a while,Paul started blaming those who were leaving,saying,"They are poor-quality employees and they are to blame for leaving." Trevor is engaged in

Style Mart uses time-series forecasts,such as past holiday sales and the strength of store sales this year,to predict future sales based on patterns of historical data.Style Mart is using

Which of the following is not a guideline that can lead to effective brainstorming?

Dwight,the general manager of a hotel,knows that one of his housekeeping employees has a serious substance-abuse issue.Dwight knows that because of the seriousness of the issue he needs to talk with the employee.However,his assistant manager asks Dwight if he would like her to deal with it.Dwight knows this is not the best option,but he agrees,knowing it is the easy way out.Dwight's decision is an example of

Sal has been in the landscaping business for over 40 years.When Jaime,his business partner,suggested adding snow removal as an extra service,Sal responded with "My gut feeling is to say yes because of my experience in the past and what I have seen other companies do over the years,both successfully and not." Sal is acting on _____ in his response to Jaime.

Rachel,the HR manager of a large publishing company,is considering if she should appoint a group to improve on the company's present diversity plan.The goal is to increase the diversity of the company's workforce.Summarize the advantages and disadvantages of using group decision making in this situation.

Patty,the CEO of an oil drilling company,and her top management team recently discovered that their facilities are damaging an Asian beach and the local wildlife.They understand that they need to decide if temporarily closing or not closing the facility is unethical.To help them make their decision,they consider the following four questions: "Is not temporarily closing the facility legal? If yes,does this proposed action maximize shareholder value? If yes,is not temporarily closing the facility ethical? If no,would it be ethical to take the proposed action?" Patty and her top managers are using ____ to help them make their decision.

Scott has a bachelor's degree in ethics and human resources,and he has extensive experience working with employees and managers regarding ethics,especially in the area of ethical dilemmas.In his current position he has assisted extensively in determining if the company's decisions are both ethical and lawful.Which position in the company does Scott's background make him ideally suited for?

Nonrational models of decision making assume that managers have complete information and are able to make the best decision for the organization.

Dave is a salesperson who takes a long time to make decisions.He loves sales because he responds well to the pressure he faces in the many new or uncertain situations he encounters as a salesperson.Like most successful salespeople,he is high in his tolerance for ambiguity.Dave likely has a(n)_____ decision-making style.