Deck 8: Fundamentals of Decision Making

Question 1

The Ball Leadership Team gets together monthly to discuss who we are, what we are doing, and where we are going.

Answer 1

True

Question 2

The Ball Corporation recently decided to engage in systematic strategy of conglomerate diversification.

Answer 2

False

Question 3

Problem-solving underlies most managerial competencies.

Answer 3

False

Question 4

The conditions under which individuals in an organization make decisions are influenced by developments and events that they can't control but that may in the future influence the results of their decisions.

Question 5

Tim Bayyouk, an employee of Halliburton, is making decisions under a condition of being fully informed, as well as having alternative solutions the results of which are totally predictable. He is operating under the condition of certainty.

Question 6

Decision making under the condition of certainty is the exception for most managers.

Question 7

Risk generally means that the problem and the alternative solutions fall somewhere between the extremes of being unknown and ambiguous.

Question 8

Lauren De La Cruz is determining the type, amount, and reliability of information that influences the level of risk. She should look at whether she can use objective or subjective probability in estimating the outcome.

Question 9

Dealing with uncertainty is an important facet of the jobs of many managers and other professionals, including market researchers and strategic planners.

Question 10

Shoes for Crews has elected the market niche of selling shoes exclusively to airline employees.

Question 11

Shoes for Crews promoted its product by promising managers that if a worker slipped while wearing their shoes, Shoes for Crews would help them pay the claim.

Question 12

The considerations of certainty, risk, and uncertainty provide an underpinning to the basic types of decisions-routine, adaptive, and innovative.

Question 13

Decisions may be classified as routine, innovative, and adaptive.

Question 14

The bank teller with an out-of-balance cash drawer at the end of the day faces a unique and ill-defined problem.

Question 15

Alternative solutions range from the known and well defined to the untried and ambiguous.

Question 16

Routine decisions are the standard choices made in response to relatively well-defined and common problems and alternative solutions.

Question 17

Continuous improvement requires commitment toward occasional improvements year after year.

Question 18

Dunkin' Donuts executives continue to discuss dropping the word "donut" from its sign to convey that its menu is now broader.

Question 19

The changes at Dunkin' Donuts can be best characterized as making a series of innovative decisions.

Question 20

Innovative decisions are based on the discovery, identification, and diagnosis of unusual and ambiguous problems and/or the development of unique or creative alternative solutions.

Question 21

Because innovative decisions usually represent a sharp break with the past, they normally happen in a logical, orderly sequence.

Question 22

Whirlpool sees production technology as its differentiating strategy.

Question 23

Every salaried employee at Whirlpool is enrolled in an online course on business innovation.

Question 24

The bounded rationality model prescribes a set of phases that individuals or teams should follow to increase likelihood that their decisions will be logical and optimal.

Question 25

The law of small numbers bias refers to the tendency to view a few incidents or cases as representative of a larger population even when they aren't.

Question 26

Franklin Lee, a plant manager, has agreed to select an acceptable goal or alternative solution rather than searching for the best available goal or alternative solution. This concept is known as satisficing.

Question 27

The rational model describes the decision-making process in terms of the self-interests and goals of powerful external and internal shareholders.

Question 28

Power is the ability to influence or control individual, team, departmental, or organizational decisions and goals.

Question 29

Donald Mather recognizes that he must balance the conflicting goals among his various stakeholder groups as he seeks to make an important decision. Mather will likely need to use the political model of decision making.

Question 30

Stakeholders within an organization often view information as a major source of power.

Question 31

Divergence refers to bringing new stakeholder representatives into the strategic decision-making process as a way to avert threats to an organization's stability or existence.

Question 32

John Wade decided that after working for Polaroid Corporation for 2 months, he had had enough of his boss and resigned.

Question 33

John Wade's example of working with his multiple bosses demonstrates the need for an effective communication competency.

Question 34

The Ball Corporation has major business segments in:

A) North American Metal Beverage Packaging
B) Metal Food Packaging
C) North American Plastic Packaging
D) All of the above

Question 35

R. David Hoover, chairman, CEO, and president of the Ball Corporation, says he spend 75% of his time ______________.

A) understanding all of the data
B) solving problems of one sort or another
C) making sure there are no major blind spots
D) watching people grow and develop

Question 36

Every day, managers typically make decisions using a process that includes all of the following basic elements except __________.

A) develop strategies
B) generate alternatives
C) choose a course of action
D) define the problem

Question 37

_________ underlies most managerial competencies.

A) Common Sense
B) Managerial input
C) Decision making
D) Forward thinking

Question 38

The conditions under which decisions are made can be classified as __________.

A) certainty and ambiguity
B) uncertainty and creativity
C) certainty and routinization
D) certainty, risk, and uncertainty

Question 39

The condition of certainty means that the __________ and __________ are known.

A) problem; decision
B) problem; alternative solutions
C) opportunities; threats
D) strengths; weaknesses

Question 40

Liesl Lemmond is president of McFadden Industries. She needs to choose a marketing plan. Lemmond knows all about the problem, alternative plans are obvious, and the results of each plan are clear. Lemmond will make her decisions under a condition of __________.

A) risk
B) guarantee
C) loss
D) certainty

Question 41

Steven Trevino has been asked to schedule 10 of his employees for overtime. Trevino can determine the cost of the overtime in an environment of __________.

A) certainty
B) guarantee
C) loss
D) risk

Question 42

When Heather Ruyle has full knowledge of a problem, its alternative solutions, and the results of those solutions, she makes decisions under a condition of __________.

A) risk aversion
B) complexity
C) uncertainty
D) certainty

Question 43

As information dwindles and becomes ambiguous, the condition of __________ enters into decision making.

A) risk
B) satisficing
C) loss
D) certainty

Question 44

Risk generally means that the problem and alternative solutions fall somewhere between the extremes of being __________ and __________.

A) common; usual
B) certain; innovative
C) routine; non-routine
D) certain; uncertain

Question 45

The National Highway Safety Administration concluded that the probability of a seat-belted driver's death in an accident is reduced by 50 percent in a car equipped with a driver's side airbag. This statistic is an example of __________.

A) satisficing
B) a probability
C) a routine decision
D) an adaptive decision

Question 46

When John Quinn has to make decisions concerning problems that are both ambiguous and unusual, he makes decisions under a condition of __________.

A) risk
B) uncertainty
C) subjective probability
D) objective probability

Question 47

The likelihood that a specific outcome will occur, based on personal judgment and beliefs, is known as __________ probability.

A) objective
B) subjective
C) strategic
D) rational

Question 48

Life insurance underwriters cannot determine which of their clients will die this year. However, their business success depends upon their ability to predict how many of those clients will die, based on population death rates in categories of age, gender, etc. Life insurance companies are using __________ to make their decisions about whom to insure and the premiums to charge.

A) uncertainty
B) alternative risk
C) subjective probabilities
D) objective probabilities

Question 49

Shannon McGriff decided to become a flight attendant when she graduates from college in two years. She liked the number of guaranteed hours and benefits. Recently, the company has announced that benefits will no longer be offered to flight attendants, and that they will have to work standby hours. McGriff decides to become a teacher. McGriff has made her decision in part because __________.

A) the conditions under which she made her initial decision changed
B) she is certain that the employment conditions will not improve
C) she did not have information about the job when she made her initial decision
D) she did not know how to make decisions

Question 50

When an individual does not have the necessary information to assign probabilities to the outcomes of alternative solutions, a decision is made under the condition of __________.

A) risk
B) subjectiveness
C) uncertainty
D) probability

Question 51

Uncertainty suggests that the problem and the alternative solutions are both __________ and __________.

A) risky; opportunities
B) ambiguous; highly unusual
C) problems; opportunities
D) strengths; weaknesses

Question 52

Which of the following may be types of crises that create uncertainty and risk?

A) criminal crises
B) physical crises
C) personnel crises
D) all of the above

Question 53

Shoes for Crews, headquartered in West Palm Beach, Florida, developed a unique warranty as a way to reduce customers' sense of _____________ regarding the company's shoes.

A) uncertainty
B) product quality
C) future development
D) unattractive styling

Question 54

Matthew Smith, founder of Shoes for Crews, attributes the __________ as a critical factor in the company's success.

A) shoe styles
B) unique warranty
C) customer service
D) internal environment

Question 55

Which of the following considerations provide an underpinning to the basic types of decisions that managers make?

A) certainty
B) risk
C) uncertainty
D) all of the above

Question 56

In general, the decision maker should begin by defining the problem and then ________.

A) comparing it to existing problems
B) call a team meeting
C) moving on to generate and evaluate alternative solutions
D) immediately choosing a satisfactory solution

Question 57

Types of decisions may be classified as __________.

A) routine, adaptive, or innovative
B) routine or non-routine
C) known or unknown
D) risky or certain

Question 58

Paula Walker is a bank teller. At the end of her shift, her cash drawer is short by $100. Walker faces a(n) __________ problem.

A) accounting
B) bookkeeping
C) uncommon
D) common

Question 59

Paul Castaneda, a management professor, attempts to decide why women and minorities are not moving faster into management positions. Castaneda is faced with a(n) __________ problem.

A) common
B) promotion
C) ambiguous
D) racial

Question 60

The types of __________ that managers and other employees deal with range from the relatively common and well defined to the unusual and ambiguous.

A) risks
B) uncertainties
C) decisions
D) problems

Question 61

The types of __________ available to managers in trying to solve problems range from the known and well defined to the untried and ambiguous.

A) information
B) routines
C) solutions
D) human resources

Question 62

__________ is the rigid devotion to the status quo by attempting to do more of the same old thing better.

A) Inactive Response Mode (IRM)
B) Active inertia
C) Passive management
D) Idle Management Syndrome (IMS)

Question 63

A manager of a restaurant located in a shopping center that is losing popularity says, "Let's spend more on advertising because sales jumped in the last half of 2006 when we did that." This manager __________.

A) should receive a raise for seeing the connection between advertising and sales
B) is using known facts to make an adaptive decision
C) should use a routine decision
D) may be making a routine decision when a problem calls for an adaptive or innovative decision

Question 64

A(n) __________ decision is a standard choice made in response to relatively well-defined and common problems and alternative solutions.

A) strategic
B) adaptive
C) expert
D) routine

Question 65

Evan Richardson has a problem. He wants to travel to Paris and pay the lowest possible price. His travel agent uses the computerized airline reservation system to find a flight for $1,000 and a flight for $700. Richardson's choice of which flight to take is a(n) __________ decision.

A) financial slack
B) routine
C) imitable
D) adaptive

Question 66

Choices made in response to a combination of moderately unusual problems and alternative solutions are called __________ decisions.

A) adaptive
B) convergent
C) strategic
D) non-routine

Question 67

__________ improvement involves streams of adaptive decisions made over time that result in a large number of small, incremental enhancements year after year.

A) Functional
B) Corporate-level
C) Continuous
D) Market leader

Question 68

Continuous improvement is driven by all of the following goals except __________.

A) simplifying decision making
B) improving efficiency
C) being responsive to customers
D) providing better quality

Question 69

Adaptive decisions sometimes reflect the concept of __________. This is a business shift in which two connections with the customer that were previously viewed as competing (e.g., bricks-and mortar stores and Internet stores) come to be seen as complementary.

A) union
B) concurrence
C) convergence
D) concentration

Question 70

Dunkin' Donuts, one of the largest coffee and baked goods chains in the world, recently made a(n) _________ decision when they decided to partially imitate Starbucks and other firms.

A) adaptive
B) innovative
C) routine
D) cooperative

Question 71

Dunkin' Donuts kept its goal of moving customers through its cash register line in ________ minute(s).

A) one
B) two
C) three
D) four

Question 72

Choices based on the discovery, identification, and diagnosis of unusual and ambiguous problems and/or the development of unique or creative alternative solutions are called __________ decisions.

A) primary
B) operational
C) innovative
D) adaptive

Question 73

Grant Rollo is an engineer in the R&D department of Purina Foods. During the ten years he has worked for the company, he has made a series of small, interrelated decisions as part of the development of novel new pet stores. Rollo's decision making at Purina illustrates __________.

A) market segmentation
B) innovative decisions
C) economies of scale
D) efficiency

Question 74

Loretta Cortez is a judge. Her decision on the Graham case represents a sharp break with past decisions and she has been very careful to define the problem in the case and review prior court decisions. In this example, Cortez makes a(n) __________ decision.

A) risky
B) innovative
C) judgmental
D) adaptive

Question 75

__________ includes changes in the way organizations are structured, departures from traditional management principles and processes, and changes in how managers perform their functions.

A) Convergence strategy
B) Adaptive decision making
C) Management innovation
D) Bureaucratic leadership

Question 76

Whirlpool sees _______ as its differentiating strategy.

A) communication
B) innovation
C) technology
D) cost leadership

Question 77

Which of the following is (are) included in Whirlpool's five-year effort to reinvent the company's management processes?

A) making innovation a central topic in leadership development programs
B) enrolling every salaried employee in an online course on business innovation
C) establishing innovation as a large part of top management's long-term bonus plan
D) all of the above are part of the effort

Question 78

Which of the following is not one of the decision-making models discussed in the decision making chapter?

A) rational
B) bounded rationality
C) value chain
D) all of the above are decision-making models

Question 79

The __________ decision-making model prescribes a set of phases that individuals or teams should follow to increase the likelihood that decisions will be logical and optimal.

A) bounded rationality
B) rational
C) political
D) goal setting

Question 80

Roberto Olvera is a city manager. Morale at the new water treatment plant is at an all time low due to a succession of incompetent facility managers. As Olvera is called into the hiring process, it is essential that a successful job search take place this time. He is making a __________ decision.

A) rational
B) bounded rational
C) political
D) goal setting