Deck 15: Decision Making

Question 1

Which of the following is the last step in rational decision making?

A) Computing the optimal decision
B) Rating each course of action on each of the objectives
C) Weighing the objectives according to importance
D) Identifying possible courses of action

Answer 1

A

Question 2

Vinita buys a stock assuming that she can make profit out of it.However,shortly thereafter the stock value drops and she loses a lot of money.Her financial planner thinks the stock value will drop further and advices her to sell the stock.However,she has lost so much money already and therefore she doesn't want to sell.Instead she holds onto the stock in hopes to regain her loss.Instead she loses more.This phenomena is referred to as:

A) intuitive decision making
B) representativeness heuristic
C) escalation of commitment
D) rational decision making

Answer 2

C

Question 3

The _____ heuristic contends that individuals tend to look for traits in another person or situation that correspond with previously formed stereotypes.

A) availability
B) adjustment
C) representativeness
D) playfulness

Answer 3

C

Question 4

Under _____,individuals have information about objectives,priorities,and potential courses of action,but they do not have all the information about the possible outcomes for each course of action.

A) conditions of certainty
B) conditions of rationality
C) conditions of risk
D) conditions of unambiguity

Question 5

The distinguishing factor between programmed and nonprogrammed decisions is that:

A) programmed decisions are made based on heuristics and intuitive judgment.
B) programmed decisions helps managers to solve organizational problems.
C) programmed decisions are highly susceptible to social and political influences.
D) programmed decisions require managers to rely on habit and rational analysis.

Question 6

The factor that distinguishes conditions of risk from conditions of uncertainty is that in conditions of risk:

A) individuals have all of the information they need to make the best possible decision.
B) individuals have information about the potential courses of action.
C) individuals have the information to make optimal decisions that are clear and obvious.
D) individuals have information about the possible outcomes for each course of action.

Question 7

The status quo bias is best described as:

A) the tendency to seek information that confirms a decision.
B) the tendency to seek information that disconfirms a decision.
C) the tendency to favor the 'here and now' and to reject potential change.
D) the tendency to make decisions using information that is more powerful and important.

Question 8

Under conditions of uncertainty:

A) individuals have complete information about alternative courses of action.
B) individuals have all of the information they need to make the best possible decision.
C) individuals have information related to an organization's objectives and priorities.
D) individuals have the information to make optimal decisions that are clear and obvious.

Question 9

Which of the following terms refers to alternative presentations of the same information that can significantly alter a decision?

A) Framing
B) Discounting
C) Satisficing
D) Defecting

Question 10

Bounded rationality refers to:

A) decisions being based on a certain starting point.
B) simple and straightforward rational decisions.
C) decisions made easily without any restrictions.
D) making decisions within a set of constraints.

Question 11

The act of choosing a solution that is good enough is called _____.

A) framing
B) reasoning
C) satisficing
D) discounting

Question 12

Which of the following is the first step in rational decision making?

A) Identifying possible courses of action
B) Identifying the objectives
C) Defining a problem or opportunity
D) Computing the optimal decision

Question 13

Peter is a senior manager in an organization that is currently laying off its employees.It is Peter's responsibility to convey this message to the laid off employees.Harry is one among them with whom Peter had a conflict a year ago.Therefore,in an attempt to avoid any such conflicts again,Peter requested a human resources representative to convey the message instead.In this case,Peter uses the _____ heuristic.

A) intuitive
B) availability
C) representativeness
D) adjustment

Question 14

Which of the following statements about nonprogrammed decisions is true?

A) These decisions generally do not require a higher-level employee to execute.
B) These decisions are made under conditions of certainty.
C) These are made in response to novel,poorly defined,or unstructured situations.
D) These decisions are made in response to recurring organizational problems.

Question 15

Which of the following statements best describes the appropriateness framework?

A) The process that individuals use to save time when making complex decisions
B) The process by which individuals make choices based on a certain starting point
C) The process of making decisions based on societal norms or expectations
D) The process of identifying issues and making choices from alternative courses of action

Question 16

_____ decisions are made in response to recurring organizational problems that require individuals to follow established rules and procedures.

A) Emotional
B) Unstructured
C) Intuitive
D) Programmed

Question 17

_____ is the process of identifying issues and making choices from alternative courses of action.

A) Problem solving
B) Environmental scanning
C) Decision making
D) Strategic positioning

Question 18

Rules of thumb or short-cuts that individuals use to save time when making complex decisions are known as _____.

A) biases
B) rationales
C) intuitions
D) heuristics

Question 19

Mary,a team leader,found that few of her team members' performance had been deteriorating.They had been coming late to work and had not been completing tasks on time.In order to improve her team's performance,Mary identified three options to deal with these underperformers: firing them,training them,or transferring them to another team.After these three options are identified,what is the next step Mary should pursue in rational decision making?

A) She should rate the options to see which one will improve her team's performance
B) She should identify the objectives and goals of her decision related to the problem.
C) She should immediately fire all the underperformers to solve the problem.
D) She should understand the problem or opportunity that has to be dealt with.

Question 20

John,a top executive,is in a situation where he has to quickly decide between two projects that came in simultaneously from two major clients.Since his team is not big enough to complete both projects at a time,he cannot accept both.He had a hunch and just like that accepted one of the clients' project without any considerations.This scenario is an example of _____.

A) rational decision making
B) bounded rationality
C) intuitive decision making
D) context-independent decisions

Question 21

Confirmation bias means that people tend to seek information that disconfirms a decision before seeking information that confirms a decision.

Question 22

List the actions that can help managers "de-bias" their judgements.

Question 23

Describe confirmation bias.

Question 24

Differentiate between programmed and nonprogrammed decisions.

Question 25

Heuristics are the short-cuts that individuals use to save time when making complex decisions.

Question 26

The deliberate,temporary relaxation of rules to explore many possible alternatives is called _____.

A) representativeness
B) framing
C) playfulness
D) satisficing

Question 27

Identifying a few possible courses of action is the first step involved in the rational decision making process.

Question 28

The classical model of decision making seeks to maximize economic outcomes using a rational choice process.

Question 29

Programmed decisions generally do not require a manager or higher-level employee to execute.

Question 30

A model of decision making that seeks to maximize economic or other outcomes using a rational choice process is known as the _____ model.

A) garbage can
B) political
C) classical
D) administrative

Question 31

Which of the following statements best describes the political model of decision making?

A) A model of decision making that seeks to maximize economic or other outcomes using a rational choice process
B) A model of decision making that acknowledges that managers may be unable to make economically rational decisions even if they want to because they lack sufficient information on which to base their decisions
C) A model of decision making that acknowledges that most organizational decisions involve many managers who have different goals and who have to share information to reach an agreement
D) A model of decision making whereby problems,solutions,participants,and choices flow throughout an organization

Question 32

The bounded rationality framework contends that individuals make decisions under conditions of certainty.

Question 33

Using SCRIPTS allows managers to increase the flexibility and speed of their decisions.

Question 34

Making a decision on how to integrate a newly acquired firm is an example of a nonprogrammed decision.

Question 35

Which of the following models should managers use while making tough calls?

A) Garbage can model
B) SCRIPTS model
C) Administrative model
D) Political model

Question 36

Which of the following models does not view a decision process as a sequence of steps that begins with a problem and ends with a solution?

A) Classical model
B) Administrative model
C) Political model
D) Garbage can model

Question 37

Outline heuristics and its types.

Question 38

Define the theory of rational choice and list the steps involved in the rational decision making process.1.Define the problem or opportunity
2.Identify the objectives
3.Weigh the objectives according to importance
4.Identify a few possible courses of action
5.Rate each course of action on each of the objectives
6.Compute the optimal decision

Question 39

The representativeness heuristic contends that individuals make choices based on a certain starting point.

Question 40

Intuitive decision making often emerges from subconscious activity.