Deck 9: Managerial Decision Making

Question 1

The main difference between risk and uncertainty is that with risk you know the probabilities of the outcomes.

Answer 1

True

Question 2

Uncertainty means that a decision has clear-cut goals,and that good information is available,but the future outcomes associated with each alternative are subject to chance.

Answer 2

False

Question 3

A decision is a process of identifying problems and opportunities and then resolving them.

Answer 3

False

Question 4

The term ambiguity refers to situations where managers know what they wish to achieve,but information about any alternatives and future events is incomplete.

Question 5

The term risk refers to any situation where a decision has no clear-cut goals.

Question 6

The two classifications of management decisions are programmed and unstructured.

Question 7

A choice made from available alternatives is called a decision.

Question 8

Risk propensity refers to the willingness to undertake risk with the opportunity of gaining an increased payoff.

Question 9

Two rural banks,Morry Bank of Morrytown and Yacca Bank of Yaccatown,decided to merge their operations.This would be considered a non-programmed decision.

Question 10

Keycorp,an Australian company supplying electronic commerce solutions,has been faced with a variety of non-programmed decisions as it moves increasingly into the international arena.

Question 11

Decision making must not be done amid ever-changing factors,unclear information and conflicting points of view.

Question 12

Two employees in Linda's department resigned from their jobs.She is faced with the decision of who to select to fill these vacant positions.This would be considered a non-programmed decision.

Question 13

In circumstances that are considered to be risky,a decision has key goals but the information required to achieve the goals is unavailable.

Question 14

When the decision has a clear-cut goal and good information is available to supported,but the future outcomes associated with each alternative are subject to high variance,the decision is said to be high risk.

Question 15

Under the administrative model,managers make decisions in situations characterised by programmed decisions and high levels of certainty.

Question 16

By far the most difficult decision situation is uncertainty.

Question 17

The classical decision making model assumes that the decision maker is rational,and makes the optimal decision each time.

Question 18

Normative decision theory recognises that managers have only limited time and cognitive ability and therefore their decisions are characterised by bounded rationality.

Question 19

When Wesfarmers decided to acquire Coles Supermarkets as part of its operations,it made a programmed decision.

Question 20

The term ambiguity refers to any situation where there is disagreement between stakeholders involved in the decision activity.

Question 21

A manager with an analytical style prefers simple,clear-cut solutions to problems.

Question 22

Which of these decisions are associated with decision rules?

A) Non-programmed
B) Programmed
C) Unique
D) Ill-structured
E) Novel

Question 23

Quick apprehension of a decision situation based on past experience but without conscious thought is referred to as satisficing.

Question 24

Groups have an advantage over individuals because they bring together a broader perspective for defining the problem and diagnosing underlying causes and effects.

Question 25

Choosing between a differentiation strategy and an overall cost leadership strategy is an example of a(n)____________.

A) plan
B) objective
C) alternative
D) decision
E) strategy

Question 26

Point-counterpoint refers to an escalation of commitment by decision makers to a decision that is increasingly shown to be the wrong option.

Question 27

The characteristics of being directive,analytical,conceptual and behavioural all belong to the 'decision choice' aspect of the personal decision framework.

Question 28

The degree to which a decision maker is willing to accept a risk with the opportunity of gaining an increased payoff is known as risk propensity.

Question 29

Groupthink is a phenomenon in which people are so committed to a cohesive in-group that their willingness to express contrary opinions overrides their motivation to realistically consider alternatives.

Question 30

A decision making model that describes how managers actually make decisions in situations characterised by non-program decisions is known as the administrative model.

Question 31

The object of brainstorming is to promote freer,more flexible thinking,and to enable group members to build on one another's creativity.

Question 32

When an individual makes the optimal choice in a decision making exercise,they are said to have satisficed.

Question 33

Groupthink involves members of a group agreeing to a position in order to avoid conflict or disagreement between group members.

Question 34

The political model of decision making involves intuitive decision making within a coalition of managers.

Question 35

The generic decision making process consists of the following steps: need recognition; development of alternate actions; selection of desired action; implementation of action; evaluation of action.

Question 36

Brain-writing refers to the process of bringing people together in interactive group to suggest alternatives to a problem using a computer network.

Question 37

Which of these refers to the process of identifying problems and then resolving them?

A) Organising
B) Controlling
C) Decision making
D) Planning
E) Leading

Question 38

A manager with a behavioural style often has a deep concern for others as individuals.

Question 39

When individuals are unable to understand or correctly define a problem because of their lack of experience in a particular occupation,then they are said to be suffering from bounded rationality.

Question 40

Programmed decisions are made in response to __________ organisational problems.

A) unusual
B) recurring
C) significant
D) minor
E) unique

Question 41

When an outback community hospital decides to add a radiation therapy unit,it is considered a:

A) programmed decision
B) structured decision
C) non-programmed decision
D) poor management decision
E) certainty decision.

Question 42

Intuition is based on __________,but lacking in __________.

A) conscious thought; practicality
B) experience; applicability
C) a solid analysis; applicability
D) experience; conscious thought
E) thought-process; compassion

Question 43

The concept that people have the time and cognitive ability to process only a limited amount of information on which to base decisions is known as:

A) satisficing
B) normative approach
C) classical model of decision making
D) bounded rationality
E) scientific approach.

Question 44

Classical model of decision making includes which of these assumptions?

A) Problems are unstructured and ill defined.
B) The decision maker strives for conditions of certainty.
C) Criteria for evaluating alternatives are unknown.
D) The decision maker selects the alternatives that will minimise the economic return to the organisation.
E) The situation is always uncertain.

Question 45

The conditions under which ambiguity occurs include:

A) alternatives are difficult to define
B) objectives are well defined
C) information about outcomes is readily available
D) all the alternatives are known
E) decisions are already made.

Question 46

The immediate comprehension of a decision situation based on past experience but without conscious thought is known as:

A) bounded rationality
B) decision maximisation
C) intuition.
D) satisficing
E) the neoclassical model of decision making.

Question 47

The __________ approach defines how a decision maker should make decisions.

A) reflective
B) scientific
C) descriptive
D) normative
E) humanistic

Question 48

Each of the following assumptions of the classical decision-making model,except:

A) The decision maker operates to accomplish goals that are known and agreed upon.
B) Criteria for evaluating alternatives are generally unknown.
C) The decision maker strives for conditions of certainty, gathering complete information.
D) The decision maker is rational and uses logic to assign values, order preferences, evaluate alternatives and make the decision that will maximise the attainment of organisational goals.
E) All of these are assumptions of the classical decision making model.

Question 49

_____________ involves disagreement between stakeholders involved in a decision or activity.

A) Risk
B) Ambiguity
C) Certainty
D) Uncertainty
E) Conflict

Question 50

The __________ model of decision making describes how managers actually make decisions in situations characterised by uncertainty and ambiguity.

A) administrative
B) classical
C) administrative
D) classical

Question 51

To choose the first solution available is the essence of:

A) bounded rationality
B) creativity
C) decision maximisation
D) satisficing
E) the neoclassical model of decision making.

Question 52

The __________ model of decision making is most valuable when applied to __________.

A) administrative; programmed decisions
B) classical; non-programmed decisions
C) classical; programmed decisions
D) classical; ambiguous decisions
E) administrative; structured decisions

Question 53

A __________ approach describes how managers actually make decisions,whereas a __________ approach defines how a decision maker should make decisions.

A) normative; descriptive
B) normative; classical
C) descriptive; normative
D) descriptive; administrative
E) normative; administrative

Question 54

Statistical analyses of probabilities are a useful tool in conditions of:

A) certainty
B) ambiguity
C) risk
D) uncertainty
E) conflict.

Question 55

The classical model of decision making is based on ____________ assumptions.

A) philosophical
B) irrational
C) industrial
D) uncertainty
E) economic

Question 56

Satisficing,bounded rationality and uncertainty are all associated with the:

A) classical model of decision making
B) administrative model of decision making
C) quantitative model of decision making
D) rational model of decision making
E) political model of decision making.

Question 57

Strategic decisions are often useful examples of __________ decisions.

A) non-programmed
B) programmed
C) insignificant
D) recurring
E) structured

Question 58

__________ means that a decision has clear-cut goals and that good information is available,but the future outcomes associated with each alternative are subject to chance.

A) Risk
B) Certainty
C) Uncertainty
D) Ambiguity
E) Brainstorming

Question 59

Vincent,a product manager,wants to increase the market share of his product.He is unsure about how to go about it,not knowing for sure how costs,price,the competition and the quality of his product will interact to influence market share.Vincent is operating under a condition of:

A) risk
B) ambiguity
C) certainty
D) uncertainty
E) brainstorming.

Question 60

The lowest possibility of failure is associated with the condition of:

A) ambiguity
B) uncertainty
C) certainty
D) risk
E) Two of these choices.

Question 61

When managers like to consider complex solutions based on as much data as they can gather,they are considered as having a __________ style.

A) behavioural
B) conceptual
C) directive
D) analytical
E) classical

Question 62

The ____________ style is used by people who prefer simple,clear-cut solutions to problems.

A) behavioural
B) conceptual
C) classical
D) analytical
E) directive

Question 63

Once the problem has been recognised and analysed,the decision maker must:

A) generate alternatives
B) choose among alternatives
C) evaluate and provide feedback
D) prioritise the alternatives
E) reanalyse the problem.

Question 64

A phenomenon in which group members are so committed to the group that they are reluctant to express contrary opinions is referred to as:

A) normative phenomenon
B) groupthink
C) descriptive phenomenon
D) heterogeneous group
E) brainstorming.

Question 65

A(n)____________ is a situation which organisational accomplishments have failed to meet established goals,whereas a(n)______________ is a situation which managers see potential organisational accomplishments that exceed current goals.

A) problem, opportunity
B) opportunity, problem
C) decision, outcome
D) bounded rationality, satisfice
E) None of these choices.

Question 66

Once the desired alternative is selected,it should be:

A) analysed
B) evaluated
C) implemented
D) recognised
E) developed.

Question 67

All of these are basic assumptions of the political model,except:

A) Organisations are made up of groups with diverse interests, goals and values.
B) Information is clear and complete.
C) Managers do not have the time, resources or mental capacity to identify all dimensions of the problem.
D) Managers engage in the push and pull of debate to decide goals and discuss alternatives.
E) All of these are basic assumptions of the political model.

Question 68

John is collecting information about on how well Tassie Tours has done since their new competitor entered the market.John is in what stage of the managerial decision making process?

A) The generation of alternatives
B) Implementation of the chosen alternative
C) Evaluation and feedback
D) Recognition of the decision requirement
E) Selection of desired alternative

Question 69

Bringing people together in an interactive growth over a computer network to suggest alternatives is known as:

A) e-group work
B) electronic brainstorming
C) brainstorming
D) multiple advocacy
E) e-advocacy.

Question 70

All of the following are characteristics of classical decision making model,except:

A)clear-cut problems and goals
B)conditions of certainty
C)rational choice by an individual for maximising outcomes
D)limited information about alternatives and their outcomes
E)A and B.

Question 71

An informal alliance among managers who support a specific goal is known as a:

A) group decision making team
B) senior management team
C) coalition
D) programmed decision group
E) None of these choices.

Question 72

Which of these is the first step in the managerial decision-making process?

A) Evaluation and feedback
B) Recognition of decision requirement
C) Development of alternatives
D) Diagnosis and analysis of causes
E) Selection of desired alternatives

Question 73

The step in the decision making process in which managers analyse underlying causal factors associated with a decision situation is known as:

A) diagnosis
B) evaluation
C) recognition
D) idea generation
E) implementation.

Question 74

______________________ involves overly supporting a strategy,decision or activity even though rational thought would indicate the contrary.

A) Escalating commitment
B) Brainstorming
C) Groupthink
D) Risk aversion
E) None of these choices.

Question 75

__________ is the willingness to undertake risk with the opportunity to increase one's return.

A) Tunnel vision
B) Risk propensity
C) Risk aversity
D) Risk neutrality
E) Ineffective investment philosophy

Question 76

The ____________ style is used by people who like to consider a broad amount of information,and have a particular concern for socially oriented solutions.

A) behavioural
B) conceptual
C) directive
D) analytical
E) classical

Question 77

The primary role of __________ is to supply the decision makers with additional,creative solutions.

A) the devil's advocate
B) multiple advocacy
C) brainstorming
D) the ombudsman
E) advocacy

Question 78

The willingness to undertake risk with the opportunity of gaining an increased payoff for the organisation is known as:

A) problem definition
B) opportunity analysis
C) risk propensity
D) bounded rationality
E) None of these choices.

Question 79

All of the following would be questions relevant to the diagnosis process,except:

A) What is the interconnectedness of events?
B) What result came from which activity?
C) What is the urgency of the problem?
D) How can we minimise the harm to our bottom line?
E) What is the state of disequilibrium affecting us?

Question 80

Advantages of group decision making include:

A) groups take less time to make decisions than do individuals
B) groups are subject to groupthink
C) groups rarely reach compromise solutions
D) None of these choices.