Deck 8: Decision Making

Question 1

What is a common element found in both bounded rationality and satisficing?

A) Time pressure for decision
B) You are forced to act without all information
C) Subjectivity and not objectivity is used in both
D) They should be considered last resorts of problem solving

Answer 1

B
Explanation:B) In both bounded rationality and satisficing you have to act without having all of the information either because it's missing or because it doesn't exist.

Question 2

What is the behavioral economics approach?

A) The approach that represents behavior demonstrated when people decide economic problems
B) The approach that investigates why people predictably make irrational decisions
C) The approach that was named after the Nobel prize winning economic developers
D) The approach that measures behaviors economically and attempts to account for the way people actually make decisions

Answer 2

B
Explanation:B) Behavioral economics seeks to explain consistent errors in decision making such as bias and heuristics. These specific mental tricks or shortcuts people use when deciding difficult issues often result in predictably irrational behavior.

Question 3

Which type of decision do you make most frequently during a typical day?

A) Naturalistic
B) Rational
C) Programmed
D) Non-programmed

Answer 3

C
Explanation:C) Most of us will primarily make programmed decisions during the day because these are the routine decision making situations we encounter with clearly identifiable actions and outcomes that are often predictable.

Question 4

Which improvement has been suggested when addressing complex problems in naturalistic decision making?

A) Base your decision on factors you feel are most important
B) Focus on the context of the problem
C) Utilize others as a sounding board for your ideas
D) Don't eliminate variables to simplify the problem

Question 5

Sensemaking differs from rational decision making because ________.

A) Sensemaking examines past experiences to make decisions
B) Sensemaking justifies your reason for action before you do it
C) Sensemaking provides meaning to your action after you have taken it
D) Sensemaking doesn't have identifiable steps

Question 6

Which of the following is not a heuristic used to shortcut the rational decision making process?

A) You are overconfident that your opinion will be correct
B) You act with the information that you have instead of taking the time to collect better information
C) You are focused on resolving only the one factor in the problem you deem to be the most important
D) All of the above are heuristics used to shortcut the rational decision making process

Question 7

Where might incorrect information impact the decision making process?

A) Problem identification
B) Solution evaluation
C) Plan implementation
D) All of the above

Question 8

Problem solving is meant to improve a situation, but errors can thwart success and possibly make it worse. Identify five errors, describe their impact and what you can do to avoid them.

Question 9

Understanding that decisions don't always work is evidenced by the ________ failure rate of decisions.

A) 20%
B) 35%
C) 40%
D) 50%

Question 10

How does mental accounting distort our perceptions?

A) Downplay loss
B) Emphasize gain
C) Both of the above
D) None of the above

Question 11

Why do time constraints cause errors in decision making?

A) Your performance is being judged, placing far more pressure on you to quickly solve the problem successfully
B) Effective managers can quickly assess the situation and make a decision. Taking more time provides the impression that you aren't a good manager
C) Time constraints limit your ability to gather information
D) Time is money

Question 12

When you begin your new job, you are soaking in all types of information about your new work environment: some good, some bad. Mentally, you emphasize the number and importance of the good aspects and discount those of the bad as you go through your first week. What are you doing?

A) Managing your impression that you like the job
B) Maintaining a healthy outlook
C) Confirming to yourself that you made the right decision
D) Gathering information about the organization's culture

Question 13

Which type of decision making incorporates mental tricks known as mental accounting people use to help make financial and business decisions?

A) Probability accounting
B) Behavioral economics
C) Organizational psychology
D) Naturalistic

Question 14

What is the hindsight bias?

A) Changing viewpoints based on new information but not admitting the change
B) Changing viewpoints based on new information
C) The ability to objectively assess what they should or would have done after the fact (also known as Monday morning quarterbacking)
D) Only occurs in situations that end in less than optimal outcomes

Question 15

Which of the following is a non-programmed decision?

A) Deciding who to hire
B) Determining budgets
C) Dealing with changing customer demands
D) Production demands

Question 16

How is prototyping helpful for making decisions?

A) By looking for context and that can more fully inform your decision making
B) By going with what your mind automatically jumped to, prototypes speed up decision making
C) By categorizing the situation you can draw on similar experiences in the past to more accurately predict the consequences of your decision choices
D) All of the above

Question 17

How can consequences improve your decision making?

A) Reflect on negative consequences so you don't repeat your mistakes
B) Glean as much learning as you can from other people's consequences so you don't have to be the one who learns the hard way
C) Focus on how you can prevent failure to identify and address areas that could lead to these negative consequences
D) Reflect on the negative consequences to remember what could be at stake and keep you focused

Question 18

Which decision making approach incorporates emotions, politics, practical considerations, and the systematic weighing of options?

A) Rational decision making
B) Naturalistic decision making
C) Organizational psychology-based decision making
D) Behavioral economics decision making

Question 19

You have to make a decision quickly and as best you can. What model best describes your process?

A) Naturalistic
B) Rational
C) Behavioral economics
D) Garbage can

Question 20

How would the garbage can model describe organizational decision making?

A) Heavily influenced by trivial matters and chance
B) It improves as the quality of the problems and solutions improve
C) It is modeled after untrained decision makers
D) All of the above

Question 21

Which model uses one's emotions, intuition, and past experiences when deciding the best course of action?

A) Rational
B) Naturalistic
C) Organizational psychology
D) Behavioral economics

Question 22

As HR manager, you have received e-mails from nearly every member of a team asking for transfers off the team or demanding one (or more)teammates be terminated. You weren't aware of any issue with this team before, and you don't have a clear idea of what's going on, but this is clearly an issue you have to address. What type of decision making should you use?

A) Behavioral economic-based decision making
B) Rational decision making
C) Naturalistic decision making
D) Organizational psychology-based decision making

Question 23

What is meant by recommending that decision makers should focus on resilience?

A) Emotionally rebounding from poor decisions quickly
B) Learning from your mistakes so you don't make them again
C) Identify areas that may be problematic as you apply your solution and develop plans to address each before you begin
D) Prepare a plan B before you begin

Question 24

The last recommendation for improving naturalistic decision making is "decision makers should put less emphasis on organizational decision making structures and more emphasis on training decision makers who have expertise to look at a situation in its entirety." What should organizations do to implement this suggestion?

Question 25

Which decision making approach should you use if you need to make a decision using last quarter's sales data?

A) Behavioral economics
B) Organizational psychology
C) Rational model
D) All of the above