Deck 11: Decision Making

Question 1

In computer terminology, "garbage in" will result in "garbage out." This is used to describe

A)non-programmed decision making.
B)programmed decision making.
C)bounded rationality.
D)escalation of commitment.
E)satisficing.

Answer 1

B

Question 2

A rule is an example of a program for making a decision.

Answer 2

True

Question 3

At what part of an organization would an ill-structured problem most likely be encountered?

A)The top of the hierarchy
B)The middle of the hierarchy
C)The bottom of the hierarchy
D)Where the bottom of the hierarchy meets the middle
E)Ill-structured problems are equally likely throughout the organizational hierarchy.

Answer 3

A

Question 4

Which of the following problems would most likely be solved with a program (that is, using programmed decision making)?

A)Should this convict be granted parole?
B)Which candidate should we choose to be vice-president of marketing?
C)In which part of the country should we locate our new business?
D)How many workers should we call out to staff the assembly line next week?
E)Should we merge with this company or not?

Question 5

The well-structured problem does NOT exhibit which of the following characteristics?

A)Clear existing state
B)Clear desired state
C)Uncertainty about what to do
D)Certainty about what to do
E)Familiar and repetitive problem

Question 6

A characteristic of a well-structured problem is uncertainty.

Question 7

A program would most likely be used

A)to justify group decision making.
B)to solve problems dealt with by top management.
C)to solve a well-structured problem.
D)to solve an ill-structured problem.
E)to solve a risky problem.

Question 8

Which of the following is another name for a programmed problem solution technique?

A)Rules
B)Routines
C)Rules of thumb
D)Standard operating procedures
E)All of the above

Question 9

Which of the following is an example of an ill-structured problem?

A)Which of these 10 car loan applications should I approve?
B)How much assistance should this client receive?
C)How much weight should I carry?
D)In which part of the country should we build a new plant?
E)All of the above

Question 10

You have just applied for a job and when completing the application form you were surprised to see questions about your age and marital status.Such questions would seem to violate equal employment and human rights legislation and not likely to be related to the job.It made you wonder why a company would ask these questions.What is a good explanation for this?

A)Difficulties of non-programmed decision making
B)Bounded rationality
C)Cognitive biases
D)Information overload
E)Difficulties of programmed decision making

Question 11

What three things are noteworthy about the definition of decision making?

A)Choice, problem, and resources
B)Choice, problem, and process
C)Choice, process, and resources
D)Problem, process, and resources
E)Choice, problem, and program

Question 12

Which of the following is characteristic of well-structured problems?

A)They are unusual and have not been encountered before.
B)They tend to be complex and involve a high degree of uncertainty.
C)The existing state and the desired state are understood.
D)They frequently arouse controversy and conflict among those interested in the problem.
E)They often entail high risk.

Question 13

When it comes to the Phoenix payroll system, paying people their salaries is a(n)________ problem, and putting in place the system to do this was a(n)________ problem.

A)structured; structured
B)unstructured; unstructured
C)structured; unstructured
D)unstructured; structured
E)structured; programmed

Question 14

An ill-structured problem is one where the existing state is unclear and the desired state is clear.

Question 15

Programs should be used to solve ill-structured problems.

Question 16

Which of the following most clearly involves a decision program?

A)A medical ethics committee
B)A task force to improve company image
C)A standing order to a supplier
D)A billion dollar investment decision
E)A corporate merger

Question 17

Non-programmed decision making

A)may stimulate strong political considerations.
B)is used to solve well-structured problems.
C)is most likely to be required at lower levels of the organizational hierarchy.
D)tends to involve much certainty.
E)is used to solve repetitive problems.

Question 18

One is most likely to see a program used to make a(n)________ decision.

A)routine
B)unique
C)executive-level
D)important
E)ill-structured

Question 19

The ill-structured problem is one where the

A)existing state is clear, desired state is clear.
B)existing state is clear, desired state is unclear.
C)existing state is unclear, desired state is clear.
D)existing state is unclear, desired state is unclear.
E)existing state is clear, but the method of getting to the desired state is unknown.

Question 20

Which of the following is an example of an ill-structured problem?

A)The retailer must decide whether to reorder lawn chairs.
B)The sales manager must decide what to do about sales that seem sluggish.
C)The assistant bank manager must decide which automobile loan applications to approve.
D)The welfare officer must decide how much assistance a particular client should receive.
E)The production manager must decide how many workers to schedule on the line next week.

Question 21

The tendency to acquire and process information in a particular way that is prone to error is known as

A)a cognitive bias.
B)framing.
C)bounded rationality.
D)groupthink.
E)satisficing.

Question 22

Paying people their salaries is a structured problem, putting into place the Phoenix system to do this was an unstructured problem.

Question 23

Both ill-structured and well-structured problems can be solved with programmed problem-solving methods.

Question 24

Many of the problems encountered in organizations are well structured.

Question 25

What is the difference between a well-structured problem and an ill-structured problem and what is the best way to solve each type of problem?

Question 26

The existing and desired states of a well-structured problem are clear.

Question 27

Paying people their salaries is an unstructured problem, putting into place the Phoenix system to do this was a structured problem.

Question 28

Ill-structured problems can entail high risk and stimulate political considerations.

Question 29

Aspects of the presentation of information about a problem that are assumed by decision makers is called

A)perceptual defence.
B)framing.
C)confirmation bias.
D)anchoring effect.
E)satisficing.

Question 30

An Economic Person does NOT

A)make rational decisions.
B)make decisions like the average consumer or manager.
C)use economic gain to evaluate the correctness of decisions.
D)have adequate information to make good decisions.
E)use logic in making decisions.

Question 31

Rules, routines, and rules of thumb are programmed solution techniques.

Question 32

When the existing state of a situation is well-known and the desired state is also known, you are facing a ________ problem.

Question 33

A standardized way of solving a problem is a(n)________.

Question 34

For a(n)________ problem, the existing and desired states are clear, and it is obvious how to get from one to another.

Question 35

A decision strategy that relies on limited information and that reflects time constraints and political considerations is known as

A)bundled rationality.
B)limited rationality.
C)bounded rationality.
D)biased rationality.
E)bewildered rationality.

Question 36

Managers who exhibit bounded rationality

A)might be operating under time constraints.
B)might be factoring political considerations into decisions.
C)might be limited in their capacity to acquire and process information.
D)might be subject to cognitive biases.
E)All of the above

Question 37

________ frequently arouse controversy and conflict among the people who are interested in the decision.

Question 38

The perfectly rational characteristics embodied in Economic Persons exist in many decision makers.

Question 39

What did Nobel Prize winner Herbert Simon recognize?

A)The usefulness of programmed decision making
B)The usefulness of non-programmed decision making
C)The perfectly rational characteristics of Economic Person do not exist in real decision makers
D)The characteristics of Economic Person
E)The existence of groupthink

Question 40

When a gap is perceived to exist between an existing state and a desired state we have a(n)________.

Question 41

Nobel Prize winner Herbert Simon suggested that managers use perfect rationality.

Question 42

Mark has two alternatives.There is a 50 percent chance that he will earn $120,000 if he accepts a government contract.If he decides not to accept the contract and instead continues on his present project, he has an 80 percent chance of earning $100,000.If Mark is a perfectly rational decision maker, which of the following statements is TRUE?

A)He will accept the government contract.
B)His expected value of continuing on the present project is $80,000.
C)He will attempt to satisfice.
D)He will ignore economic criteria in making his decision.
E)He will revise his earnings estimate on the government contract to make it more attractive.

Question 43

Tendencies to acquire and process information in an error-prone way are known as ________.

Question 44

Political considerations, time constraints, and limited information processing capacity mean that people exhibit ________ rather than perfect rationality.

Question 45

When he heard that turnover was increasing, the human resource manager immediately told the president that salaries would have to be raised.Unfortunately, low pay wasn't the cause of the turnover.Which decision-making error did the manager commit?

A)He treated sunk costs improperly.
B)He defined the problem in terms of a solution.
C)He escalated commitment.
D)He exhibited the knew-it-all-along effect.
E)He revealed a confirmation bias.

Question 46

What is bounded rationality and how can it influence alternative development, evaluation, and choice?

Question 47

Managers must often rely upon others when making decisions and solving problems.At what stage of the rational decision-making process does reliance upon others often cause special problems?

A)Information search
B)Development of alternative solutions
C)Evaluation of alternative solutions
D)Solution choice
E)Solution implementation

Question 48

At which stage of the rational decision-making model is information overload a particular problem?

A)Problem identification
B)Search for relevant information
C)Evaluate alternative solutions
D)Implement chosen solution
E)Monitor and evaluate chosen solution

Question 49

Information overload is likely to lead to

A)fast decision making.
B)only relevant information influencing decision making.
C)greater confidence by managers in their decisions.
D)higher quality decisions.
E)lower satisfaction with the ultimate decision.

Question 50

Intelligence does not counteract biases, and both more and less smart people are equally prone to them.

Question 51

Decision makers who establish an adequate level of acceptability for a solution and then screen solutions until one that exceeds this level is found are

A)maximizers.
B)optimizers.
C)satisficers.
D)rationalizers.
E)diffusers.

Question 52

Research has shown that people tend to have a(n)________ to value information advice for which they have paid over free advice of equal quality.

A)insight bias
B)interpretation bias
C)insight forgiveness
D)cognitive bias
E)confirmation bias

Question 53

________ refers to the often subtle aspects of the presentation of information about a problem that are assumed by decision makers.

Question 54

Nobel Prize winner Herbert Simon suggested that managers use ________ rationality rather than perfect rationality.

Question 55

The perfect prototype for ________ is the Economic Person.

Question 56

Nobel Prize winner Herbert Simon suggested that managers use bounded rationality.

Question 57

________ constitute assumptions and shortcuts that can improve decision-making efficiency but lead to serious errors in judgment.

Question 58

Intelligence counteracts biases as less smart people are more prone to them.

Question 59

Framing and cognitive biases both illustrate the operation of bounded rationality.

Question 60

In evaluating alternative solutions, decision makers with bounded rationality

A)know the ultimate value of each alternative.
B)often consider the political acceptability of the solution to other organizational members.
C)know the probability that each alternative will work.
D)tend to exhibit maximization.
E)rarely engage in satisficing.

Question 61

Which of the following is NOT a difficulty that can result from bounded rationality in problem identification?

A)Perceptual defence
B)Problem defined in terms of functional specialty
C)Problem defined in terms of solution
D)Problem diagnosed in terms of symptoms
E)Problem defined as ill-structured

Question 62

Although information overload damages decisions, decision makers are usually eager to collect a large amount of information.

Question 63

At which stage of the rational decision-making model is the not-invented-here bias likely to be a particular problem?

A)Problem identification
B)Search for relevant information
C)Evaluate alternative solutions
D)Implement chosen solution
E)Monitor and evaluate chosen solution

Question 64

What does the not-invented-here bias refer to?

A)The tendency to ignore or harbor negative attitudes toward ideas from other members of one's own organization or project team
B)The tendency to admire or harbor positive attitudes toward ideas from outside one's own organization or project team
C)The tendency to ignore or harbor negative attitudes toward ideas from outside one's own organization or project team
D)The tendency to admire or harbor positive attitudes toward ideas from other members of one's own organization or project team
E)The tendency to ignore or harbor negative attitudes toward ideas from inside and outside one's own organization or project team

Question 65

Satisficing is a concept that is most associated with

A)identifying a problem.
B)searching for information.
C)choosing a solution.
D)implementing a solution.
E)monitoring a solution.

Question 66

The perfectly rational decision maker tends to satisfice.

Question 67

Absenteeism has become a problem at the Smelly Cheese Company, so the human resource manager has decided to do something about it.He has decided to choose the first solution he comes across that will get the level of absenteeism to what it was in the previous year.What is this an example of?

A)Anchoring effect
B)Satisficing
C)Sunk costs
D)Framing
E)Confirmation bias

Question 68

According to the anchoring effect, people

A)resist problem solutions developed by others.
B)depend too much on problem solutions developed by others.
C)don't adjust successive estimates enough in the face of new information.
D)rely too much on the most recent information received.
E)tend to invest additional resources in an apparently failing course of action.

Question 69

In a study on real estate agents, it was found that the agents allowed the asking price of a house to unduly influence their professional evaluation of the house.What is this an example of?

A)Satisficing
B)Anchoring effect
C)Confirmation bias
D)Hindsight
E)Risky shift

Question 70

Which of the following is a cognitive bias that contributes to the failure of decision makers to acquire enough information to make a good decision?

A)Perceptual defence
B)Anchoring effect
C)Satisficing
D)Hindsight
E)Confirmation bias

Question 71

Which of the following is a problem frame?

A)How the problem is stated
B)How the problem is solved
C)How the solution is evaluated
D)How the solution is implemented
E)How the decision makers are rewarded

Question 72

What bias has been implicated in costly and inefficient duplication of organizational efforts, such as the failure to reuse existing software developed by outside sources?

A)Framing
B)Escalation of commitment
C)Anchoring effect
D)Not-invented-here bias
E)Confirmation bias

Question 73

Sharon framed the problem as a choice between two losses.What is she likely to do now?

A)Make a conservative decision
B)Ignore sunk costs
C)Make a risky decision
D)Ignore sample sizes
E)Ignore economic considerations

Question 74

Sales at the Smelly Cheese Company had been down all year.Management met to try and identify the problem.The marketing manager was convinced that the problem was the result of poor marketing.The manager of human resources believed the problem was due to the lack of employee motivation.What is the difficulty they are having?

A)Perceptual defence
B)Problem defined in terms of solution
C)Problem diagnosed in terms of symptoms
D)Problem defined in terms of functional specialty
E)Too little information

Question 75

Decision makers violate statistical principles at what stage of the decision-making process?

A)Problem identification
B)Information search
C)Solution implementation
D)Solution evaluation
E)Alternative development, evaluation, and choice

Question 76

Research by Daniel Kahneman and Amos Tversky shows that

A)when people view a problem as a choice between losses, they tend to make conservative decisions.
B)when people view a problem as a choice between gains, they tend to make risky decisions.
C)when people view a problem as a choice between losses, they tend to make risky decisions.
D)when people view a problem as a choice between losses, they tend to make poor decisions.
E)when people view a problem as a choice between losses, they tend to make better decisions.

Question 77

When Thelma's boss said, "What we have here is a morale problem," what was she doing?

A)Defining a problem in terms of functional specialty
B)Defining a problem in terms of solution
C)Diagnosing a problem in terms of symptoms
D)Confirmation bias
E)Hindsight

Question 78

The following illustrate the operation of bounded rationality EXCEPT

A)framing.
B)cognitive biases.
C)emotions and moods.
D)political considerations.
E)maximization.

Question 79

After graduating from university, you are planning to get a job as an accountant.Your best friend Jay is planning on opening his own restaurant.He says he has thought a great deal about this and believes he will be very successful and it is a good decision.You explain to him that most new restaurants fail, but it does not factor into Jay's decision.What does this demonstrate?

A)Base rates
B)Anchoring effect
C)Perceptual defence
D)Sunk costs
E)Hindsight

Question 80

The tendency to ignore or harbor negative attitudes toward ideas from outside one's won organization or project team is known as

A)Satisficing.
B)Anchoring effect.
C)Confirmation bias.
D)Not-invented-here bias.
E)Risky shift.