Deck 6: Making Decisions

Question 1

Which of the following is a traditional technique for managers to use when handling a programmed decision?

A) judgment
B) rules of thumb
C) habit
D) intuition
E) training

Answer 1

C

Question 2

Trendy Garb is a retail store that sells women's apparel. The store has comprehensive rules, policies, and procedures for matters related to customer complaints and product returns. Hence, when faced with either of these situations, the store manager simply needs to refer to these guidelines and accordingly proceed. This is an example of ________.

A) overlapping responsibility
B) nonprogrammed decision
C) rule of thumb
D) decision tree
E) programmed decision

Answer 2

E

Question 3

Barney is a new manager concerned about decision making. Which of the following statements would you tell Barney is true about decisions and decision making?

A) Managers make decisions only when performing the controlling function.
B) In the process of deciding, all the alternatives are combined to form a final alternative which invariably is the choice made.
C) Organizations only have to consider significant decisions that have a major impact on business.
D) Decision making is the process of choosing the best alternative for reaching objectives.
E) All managerial decisions are of equal significance to the organization.

Answer 3

D

Question 4

Ideal decision makers ________.

A) preserve the status quo
B) allow others to make decisions for them
C) accept little outside help in making decisions
D) are characterized by reason and sound judgment
E) make decisions that will only enhance their value in the firm

Question 5

An organizational decision maker who is willing to steal ideas as necessary to make good decisions ________.

A) has a hoarding orientation
B) is a marketing-oriented decision maker
C) has an exploitative orientation
D) has a latent orientation
E) has an ideal decision-making orientation

Question 6

A manager's use of judgment, intuition, and creativity would most likely be classified as ________.

A) modern decision-making techniques appropriate for handling programmed decisions
B) traditional decision-making techniques appropriate for handling nonprogrammed decisions
C) traditional decision-making techniques appropriate for handling programmed decisions
D) modern decision-making techniques appropriate for handling nonprogrammed decisions
E) techniques that can be used for programmed as well as nonprogrammed decisions

Question 7

The ________ decision-making orientation emphasizes the realization of the organization's potential as well as that of the decision maker. Such decision makers try to use all of their talents when making decisions.

A) ideal
B) exploitative
C) receptive
D) marketing
E) tangible

Question 8

Which of the following is an example of a nonprogrammed decision?

A) determining how products will be arranged on the shelves of a supermarket
B) deciding how to handle customer complaints and product returns
C) identifying and selecting a new supplier of raw materials
D) evaluating the performance of a job applicant on a job sample test
E) writing an email requesting one's senior for a few days off

Question 9

Jack works at an advertising agency and leads a team of 8 graphic designers. Whenever he has to make a decision, he does so by himself and rarely asks his team members for their suggestions or inputs. Which of the following orientations does Jack have?

A) ideal
B) exploitative
C) receptive
D) hoarding
E) marketing-oriented

Question 10

The ________ orientation of decision makers makes them believe that the source of all good is outside themselves, and therefore makes them rely heavily on suggestions from other organization members.

A) receptive
B) exploitative
C) hoarding
D) ideal
E) marketing

Question 11

Even though Amy is the leader of a team, she finds it very hard to make decisions on her own. She often asks her colleagues for their opinion on matters that come up and relies on these inputs to make the final decision. Which of the following decision-making orientations does Amy have?

A) marketing-oriented
B) hoarding
C) indecisive
D) exploitative
E) receptive

Question 12

Peter often asks his colleagues for their ideas and suggestions in order to make a decision. However, he never gives credit to the individuals who give him the ideas and passes the ideas off as his own. Which of the following orientations does Peter have?

A) intuitive
B) exploitative
C) hoarding
D) marketing-oriented
E) ideal

Question 13

All the English teachers at Springfield High School jointly developed and agreed on the standards that students must achieve in order to graduate to the next grade. This is an example of ________.

A) bounded rationality
B) consensus
C) rules of thumb
D) intuitive decision making
E) groupthink

Question 14

Which of the following is true about decisions arrived at through consensus?

A) It occurs when the team members approve of an individual's decision.
B) It requires little involvement or assistance from the manager.
C) Its effectiveness can be hampered by poor interpersonal relations.
D) It is foolproof and successful at all times.
E) The decision group generally consists of only managers.

Question 15

The broader the scope of a decision, ________.

A) the higher the level of the manager responsible for making it
B) the higher are the number of decision makers involved
C) the lesser are the number of management levels
D) the quicker a decision is made
E) the larger is the workforce responsible for making it

Question 16

Programmed decisions are ________.

A) nonstructured
B) one-shot decisions
C) routine and repetitive
D) made by top management
E) made by computers

Question 17

A choice made between two or more available alternatives is a(n) ________.

A) directive
B) consensus
C) decision
D) alternative
E) objective

Question 18

Decision makers who feel that they are only as valuable as the decisions they make and are highly conscious of what others think about their decisions would be classified as ________.

A) having a hoarding orientation
B) being receptive
C) being exploitative
D) having an ideal orientation
E) being marketing-oriented

Question 19

The proportion of the total management system that a decision will affect is called the ________.

A) scope of the decision
B) unity of command
C) span of control
D) level of management
E) discretionary area

Question 20

The main disadvantage of arriving at decisions through consensus is ________.

A) it results in very few practical solutions
B) it reduces employees' commitment to the decision
C) it involves time-consuming discussions
D) often the manager must make the decision
E) it focuses "several heads" on the decision

Question 21

Managers know employees are more likely to be committed to a decision reached through consensus.

Question 22

A decision is a choice made between two or more available alternatives.

Question 23

The first step in the decision-making process is to ________.

A) identify possible alternatives for solving an organizational problem
B) identify organizational objectives
C) identify an existing problem
D) gather feedback about an existing problem
E) implement the selected alternative

Question 24

A programmed decision is typically a one-shot structured decision that is usually less structured than a nonprogrammed decision.

Question 25

What is a decision? Explain the difference between programmed and nonprogrammed decisions.

Question 26

Why is decision making such a difficult skill and role for all managers, but primarily difficult for new managers?

Question 27

While decisions arrived at through consensus are said to have an advantage of being better because they include the input of several individuals, which of the following is a disadvantage of consensus decisions?

A) Commitment
B) Decreased input
C) Habit
D) Increased judgment
E) Time

Question 28

Having too many alternatives may demotivate decision makers, which harms decision making. This is known as the ________.

A) bandwagon effect
B) confirmation bias
C) paradox of choice
D) loss aversion effect
E) overconfidence bias

Question 29

Jared recently sent an email to all the members of his department asking them for their opinions about where the department should have its quarterly team lunch. The response was overwhelming as Jared received more than 40 suggestions. This is an example of ________.

A) paradox of choice
B) bandwagon effect
C) confirmation bias
D) confidence bias
E) loss aversion effect

Question 30

Which of the following best describes the authority factors that limit the number of problem-solving alternatives available?

A) The orders issued by a manager's supervisor are unclear.
B) The level of organizational technology is inadequate for certain alternatives.
C) The physical facilities of an organization are inappropriate for certain alternatives.
D) A manager's superior tells the manager that a certain alternative is not feasible.
E) The chosen alternative is too costly for the organization.

Question 31

A manager who desires to maintain the status quo and therefore doesn't take input from outside sources is said to have a/an ________ decision making orientation.

A) receptive
B) exploitative
C) hoarding
D) marketing-oriented
E) self-interest

Question 32

Which of the following is the final step in the decision-making process?

A) identify organizational objectives
B) gather feedback to find out if the problem is solved
C) implement the selected alternative
D) select the most beneficial alternative
E) list alternative solutions

Question 33

Decision makers characterized by the desire to preserve the status quo as much as possible are classified as having a hoarding orientation.

Question 34

The ________ of the decision refers to the proportion of the total management system that will be affected by the decision.

A) level
B) depth
C) scope
D) width
E) breadth

Question 35

After identifying an existing problem, the next step in the decision-making process is ________.

A) selecting the best among the alternative solutions
B) listing alternative solutions
C) identifying organizational objectives
D) gathering feedback on the implemented alternative
E) implementing the selected alternative

Question 36

A manager who believes the source of good ideas is outside themself and therefore is willing to take the ideas of others as their own has a/an ________ decision making orientation.

A) receptive
B) exploitative
C) hoarding
D) marketing-oriented
E) self-interest

Question 37

Colin, a customer service manager, is making a decision that is routine and repetitive, and typically handled in a specific way and therefore this could be said to be a nonprogrammed decision.

Question 38

A donation of $1 million has been made to the hospital where Joe is CEO. In determining how to best allocate and utilize the funds, Joe will be making a ________ decision.

A) programmed
B) nonprogrammed
C) routine
D) scheduled
E) unscheduled

Question 39

Decisions which are made through consensus usually take less time than those made by a single individual.

Question 40

What are the orientations of weak decision makers?

Question 41

If Rita has too many alternatives to choose from based on the input she has received, she may find herself ________ by choosing a decision that is just "good enough" rather than optimal.

A) bounding
B) settling
C) generalizing
D) satisficing
E) rationality bounded

Question 42

________ refers to the departure from rational theory that produces suboptimal decisions.

A) Uncertainty
B) Satisficing
C) Dogmatism
D) Bias
E) Bounded rationality

Question 43

Discuss briefly the steps in the decision-making process.

Question 44

The tendency to search for information that supports one's preconceived beliefs and to ignore information that contradicts those beliefs is known as ________.

A) confirmation bias
B) loss aversion
C) the bandwagon effect
D) overconfidence
E) unrealistic optimism

Question 45

What is bounded rationality?

Question 46

Which of the following is true about the definition of bounded rationality?

A) Managers rely on their inborn ability to synthesize information quickly and effectively.
B) Managers have access to complete and accurate information for making a decision.
C) Managers adhere to rules of thumb when making decisions.
D) Statistical probabilities can be attributed to alternative potential outcomes.
E) Managers do not always have access to the resources required to make rational decisions.

Question 47

Decision making is essentially a problem-solving process that involves eliminating barriers to organizational goal attainment.

Question 48

What factors must management consider when generating problem-solving alternatives?

Question 49

Which of the following biases refers to individuals who tend to strongly prefer avoiding losses rather than acquiring gains?

A) loss leaders
B) zero-risk bias
C) self-serving bias
D) loss aversion
E) money illusion

Question 50

________ occurs when an individual makes a decision that is not optimal, but is good enough.

A) Loss aversion
B) Satisficing
C) Intuition
D) Bias
E) Unrealistic optimism

Question 51

The bandwagon effect, a common decision-making bias, is ________.

A) the characteristic of an individual who prefers to avoid losses rather than acquire gains
B) the tendency to believe certain outcomes because others believe the same
C) the tendency to believe that our forecasts for future events are better than they truly are
D) the tendency to search for information that supports one's preconceived beliefs
E) an individual's tendency to believe that he/she is less susceptible to risky events

Question 52

An individual's tendency to believe they are less susceptible to risky events than others is referred to as ________.

A) the bandwagon effect
B) the confirmation bias
C) loss aversion
D) overconfidence
E) unrealistic optimism

Question 53

The rational decision-making process offers an organized and systematic process, but can be thrown completely off and render a useless decision if which key step is incorrect?

A) Problem identification
B) Alternative generation
C) Alternative selection
D) Alternative implementation
E) Alternative evaluation

Question 54

________ refers to situations where the probability that a particular outcome will occur is not known in advance.

A) Uncertainty
B) Risk
C) Unrealistic optimism
D) Heuristics
E) Overconfidence

Question 55

________ refers to an individual's inborn ability to synthesize information quickly and effectively.

A) Bounded rationality
B) Satisficing
C) Bias
D) Intuition
E) Optimism

Question 56

Overconfidence is the tendency to ________.

A) believe certain outcomes because others believe the same
B) search for information that supports one's preconceived beliefs
C) believe that our forecasts for future events are better than they truly are
D) strongly prefer avoiding losses rather than acquiring gains
E) believe that one is less susceptible to risk than others

Question 57

Rita has a nonprogrammed decision to make so she has gathered input on alternatives from her staff, her management, and her coworkers. Now it's almost as if she has too many alternatives. Rita finds herself faced with a ________.

A) inclusion of choice
B) exclusion of choice
C) paradox of choice
D) alternative discretion
E) alternative paradox

Question 58

Implementation of the chosen alternative is the final step in the decision-making process.

Question 59

John wants to start his own pet shop and has run an ad for the post of shop assistant. He hired the first candidate he interviewed without reviewing the remaining applications because the first one fit the given criteria he had listed in the job ad. This is an example of ________.

A) confirmation bias
B) risk
C) bias
D) satisficing
E) heuristics

Question 60

In the decision-making process, it is important to accurately identify an existing problem prior to listing the possible alternatives for solving the problem.

Question 61

A group decision-making process which forbids negative feedback on any suggested alternative by any group member until all members have presented alternatives is known as ________.

A) groupthinking
B) brainstorming
C) doublethink
D) mindmapping
E) scapegoating

Question 62

A graphic decision-making tool used to evaluate decisions containing a series of steps is known as a ________.

A) decision support system
B) decision theory
C) morphological box
D) decision tree
E) Delphi chart

Question 63

________ refers to the likelihood that an event or outcome will actually occur.

A) Surety
B) Ratio
C) Probability
D) Brainstorming
E) Bias

Question 64

Managers need to be cautious about biases that can encroach and therefore impact their decisions. Which of the following biases results from believing certain outcomes because others believe the same?

A) Confirmation
B) Loss aversion
C) Bandwagon
D) Overconfidence
E) Unrealistic optimism

Question 65

The phenomenon of compromising the quality of a decision to maintain relationships within a team is referred to as ________.

A) doublethink
B) crowdsourcing
C) brainstorming
D) groupthink
E) scapegoating

Question 66

Discuss the relationship that exists between risk and uncertainty in management decision making.

Question 67

Which of the following is the first step in the process of brainstorming?

A) Members comment on ideas.
B) Group leader chooses members.
C) Ideas are evaluated.
D) Group members state ideas.
E) Ideas are recorded.

Question 68

What is the probability theory? Define probability and expected value. How are they related to each other?

Question 69

When decisions are reached using probability theory, the alternative normally chosen is the one with ________.

A) the lowest expected value
B) the highest expected value
C) the lowest cost/benefit ratio
D) the lowest risk
E) the highest risk

Question 70

Management decision makers generally choose and implement an alternative with the ________ expected value.

A) lowest
B) highest
C) average
D) positive
E) negative

Question 71

In the nominal group technique of decision making, after all the members have discussed the ideas, they ________.

A) discuss their ideas one-to-one with the group leader
B) present their personal views on each of the ideas discussed
C) write down each idea on the board for all the other members to refer to
D) take out a secret ballot to support their favorite idea
E) adopt and implement the most cost effective idea

Question 72

Naomi leads a team of software developers. Because of the sudden increase in the number of projects over the last few weeks, the team will need to work additional hours in order to meet the various deadlines. She asks her team members to write down their individual ideas on whether they should extend their daily work hours, or simply work on Saturday for the next two months. They are also encouraged to come up with other solutions that can help them solve the problem. Which of the following methods of decision making is Naomi most likely using?

A) the Delphi technique
B) the nominal group technique
C) brainstorming
D) groupthinking
E) controlled creativity

Question 73

Which of the following is an advantage of group decision making?

A) Groups take less time than individuals to arrive at a decision because of the collective and diverse mentality of groups.
B) Group decisions do not cost the organization as much as individual decisions do.
C) Group decisions are of a higher quality than individual decisions because of the friendly relationships that exist within the group.
D) Group decisions can be effectively controlled and influenced by the dominant members of the group.
E) Members of the group tend to support the implementation of the decision more fervently than they would if the decision had been made by an individual.

Question 74

________ is a decision-making tool used in risk situations - situations in which decision makers are not completely sure of the outcome of an implemented alternative.

A) Probability theory
B) Bandwagon effect
C) Loss aversion
D) Heuristics
E) Bounded rationality

Question 75

Becky is leading her team in an open discussion on the possibilities of implementing flexible work hours for her department. One of the team members keeps interrupting with negative feedback on the suggested ideas. He is breaking the cardinal rule of ________.

A) scapegoating
B) brainstorming
C) crowdsourcing
D) groupthinking
E) the Delphi technique

Question 76

Lisa is trying to decide on the location of her entrepreneurial venture - Flower Power, a specialty wedding flower service. She has three possible locations (A, B,C) in mind. Lisa has projected that in the first year of operation, under ideal conditions, her company would generate $80,000 at Location A, $55,000 at Location B, and $45,000 at Location C. However, after further analysis, Lisa has determined that there is only a 20 percent chance of ideal conditions occurring during the first year of operation in Location A. Locations B and C have a .4 and a .8 probability, respectively, for ideal conditions during the first year of operations. Based on this information, which location should Lisa choose?

A) Lisa should choose location A.
B) Lisa should choose location B.
C) Lisa should choose location C.
D) Lisa should choose either Location A or B because both are viable.
E) Lisa should choose either Location A or C because both are viable.

Question 77

The formula for expected value (EV) is ________.

A) interest rate × probability
B) income × probability
C) cost of risk × probability
D) cost of risk / probability
E) income / probability

Question 78

Lisa is trying to decide on the location of her entrepreneurial venture - Flower Power, a specialty wedding flower service. She has three possible locations (A, B,C) in mind. Lisa has projected that in the first year of operation, under ideal conditions, her company would generate $80,000 at Location A, $55,000 at Location B, and $45,000 at Location C. However, after further analysis, Lisa has determined that there is only a 20 percent chance of ideal conditions occurring during the first year of operation in Location A. Locations B and C have a .4 and a .8 probability, respectively, for ideal conditions during the first year of operations. Based on this information, the expected value for Location A is ________, while for Location B it is ________.

A) $400,000; $137,500
B) $16,000; $22,000
C) $64,000; $33,000
D) $96,000; $77,000
E) $320,000; $82,500

Question 79

The more ________ and less ________ involved, the more confidence managers tend to have in their decision making.

A) certainty; time
B) risk; certainty
C) risk; uncertainty
D) uncertainty; risk
E) certainty; risk

Question 80

The nominal group technique of decision making begins with ________.

A) members presenting their individual ideas orally
B) the entire group discussing their ideas simultaneously
C) group members writing down individual ideas on the matter being discussed
D) members writing their ideas on a board for all other members to see
E) a secret ballot which allows members to support their favorite ideas without fear