Deck 12: Individual and Group Decision Making

Question 1

To integrate evidence-based decision-management (EBDM) into an organization's culture, one should follow the principle of treating one's organization as a finished prototype.

Answer 1

False
Explanation: One of the seven implementation principles to help companies integrate evidence-based decision-management into an organization's culture states-treat your organization as an unfinished prototype. The thrust of this principle involves creating a mindset that the organization is an unfinished prototype that may be broken and in need of repair, thus avoiding the hubris and arrogance of concluding that nothing needs to be changed in the organization.

Question 2

The nonrational model of decision making assumes that managers leave emotions out of the decision-making process and possess complete information.

Answer 2

False
Explanation: Nonrational models are based on the assumption that decision making is uncertain, that decision makers do not possess complete information, and that it is difficult for managers to make optimal decisions.

Question 3

If the solution is effective, it should reduce the difference between the actual and desired states that created the problem.

Answer 3

True
Explanation: A problem exists when the actual situation and the desired situation differ. If the solution is effective, it should reduce the difference between the actual and desired states that created the problem. If the gap is not closed, the implementation was not successful, and one of the following is true: Either the problem was incorrectly identified or the solution was inappropriate.

Question 4

The use of heuristics increases the uncertainty inherent within the decision-making process.

Question 5

According to the garbage can model, decisions result from a complex interaction between four dependent streams of events.

Question 6

The representativeness heuristic reflects the tendency to assess the likelihood of an event occurring based on one's impressions about similar occurrences.

Question 7

The confirmation bias occurs when decision makers are influenced by the first information received about a decision, even if it is irrelevant.

Question 8

Decision making entails identifying and choosing solutions that lead to a desired end result.

Question 9

The rational model is based on the assumption that decision making is uncertain and that it is difficult for managers to make optimal decisions.

Question 10

According to the concept of bounded rationality, capital availability is an internal constraint that reduces rational decision making.

Question 11

A decision-making style reflects the combination of how an individual perceives and comprehends stimuli.

Question 12

Evidence-based management can stifle employee involvement and input.

Question 13

A problem exists when the actual situation and the desired situation differ.

Question 14

The limitations of bounded rationality result in the tendency to acquire manageable rather than optimal amounts of information.

Question 15

The rational process makes the reasoning behind a decision transparent and available to scrutiny.

Question 16

Optimizing involves solving problems by choosing solutions that are "good enough."

Question 17

The hindsight bias occurs when knowledge of an outcome influences our belief about the probability that we could have predicted the outcome earlier.

Question 18

The garbage can model of decision making holds that decision makers follow a sequential series of steps beginning with a problem and ending with a solution.

Question 19

Escalation of commitment can be reduced by retaining managers in key positions throughout a project.

Question 20

Judgmental heuristics represents rules of thumb or shortcuts that people use to reduce information processing demands.

Question 21

Consensus requires unanimous agreements.

Question 22

Intuition is a practical approach when resources are limited and deadlines are tight.

Question 23

Groups tend to make more extreme decisions.

Question 24

In the face of environmental threats such as time pressure, groups use less information and fewer communication channels.

Question 25

Expertise of an individual decreases with age and experience.

Question 26

People who desire a lot of structure in their lives have a high tolerance for ambiguity.

Question 27

People with analytical style like to consider more information and alternatives than do directives.

Question 28

The Delphi technique is useful when face-to-face discussions are impractical and when disagreements and conflict are likely to impair communication.

Question 29

Behavioral types are supportive, receptive to suggestions, show warmth, and prefer verbal to written information.

Question 30

A holistic hunch represents a judgment that is based on a subconscious integration of information stored in memory.

Question 31

Computer-aided decision making increases consensus roadblocks.

Question 32

Group-aided decision making can lead to logrolling.

Question 33

People with a directive style are action oriented and decisive and like to focus on facts.

Question 34

While applying the nominal group technique, after understanding the problem, individuals silently generate ideas in writing.

Question 35

Automated experiences represent a choice that is based on a familiar situation and a partially subconscious application of previously learned information related to that situation.

Question 36

People with a conceptual style prefer to avoid risks.

Question 37

Brainstorming is not appropriate for evaluating alternatives or selecting solutions.

Question 38

A decision tree is a graphical representation of the process underlying decisions and it shows the resulting consequences of making various choices.

Question 39

Groups may not generate all relevant alternatives to a problem.

Question 40

Participants of brainstorming should go for quality over quantity.

Question 41

The _____ model proposes that managers use a four-step sequence when making decisions by identifying the problem, generating alternative solutions, selecting a solution, and implementing and evaluating the solution.

A)rational
B)normative
C)situational leadership
D)nonrational
E)contingency

Question 42

Which of the following steps in the rational model considers ethics, feasibility, and effectiveness of various choices?

A)Identifying the problem
B)Generating obvious and creative alternative solutions
C)Evaluating alternatives
D)Implementing the chosen solution
E)Evaluating the chosen solution

Question 43

Which of the following is true about the garbage can model?

A)Many decisions are made by oversight or by the presence of a salient opportunity.
B)This process avoids guidance from political motives in making decisions.
C)It proposes that decisions result from a complex interaction between streams of events that are dependent on each other.
D)This model solves both important and unimportant problems.
E)This model of decision making involves solving problems by producing the best possible solution.

Question 44

_____ represents the notion that decision makers are restricted by a variety of constraints when making decisions.

A)Confirmation bias
B)Availability heuristics
C)Bounded rationality
D)Selection bias
E)Representativeness heuristics

Question 45

_____ represent(s) rules of thumb or shortcuts that people use to reduce information processing demands.

A)Explicit knowledge
B)Evidence-based decision making
C)Escalation of commitment
D)Judgmental heuristics
E)Optimizing

Question 46

The rational model is based on the notion that:

A)decision making is uncertain.
B)decision makers do not possess complete information.
C)it is difficult for managers to make optimal decisions.
D)decision makers are restricted by a variety of constraints when making decisions.
E)managers optimize when making decisions.

Question 47

Creativity is highest when there is time pressure.

Question 48

Which of the following is true regarding judgmental heuristics?

A)They are shortcuts that increase information-processing demands.
B)They refer to decisions made purely on the basis of evidence.
C)They are used by people without conscious awareness.
D)They increase the uncertainty inherent within the decision-making process.
E)They reduce systematic errors that erode the quality of decision making.

Question 49

Which of the following is proposed by the garbage can model?

A)Decision makers follow a sequential series of steps.
B)Decisions are made step-by-step, beginning with a problem and ending with a solution.
C)Decision making is a sloppy and haphazard process.
D)Decision making is prescriptive, outlining a logical process that managers should use when making decisions.
E)Decision making involves solving problems by producing the best possible solution.

Question 50

_____ consists of choosing a solution that meets some minimum qualifications, one that is good enough.

A)Framing bias
B)Escalation of commitment
C)Morphological analysis
D)Satisficing
E)Optimizing

Question 51

Which of the following is an external constraint of bounded rationality that reduces rational decision making?

A)Capital availability
B)Plant and equipment
C)Internal processes
D)Human capital
E)Technology

Question 52

Which of the following causes decision makers to satisfice?

A)Confirmation bias
B)Availability heuristics
C)Sampling bias
D)Optimizing
E)Bounded rationality

Question 53

Which of the following is an internal constraint of bounded rationality that reduces rational decision making?

A)Employment levels in the community
B)Human capital of the organization
C)Government policies
D)Capital availability
E)Confirmation bias

Question 54

Incubation is done consciously.

Question 55

Creative individuals are usually happy with the status quo.

Question 56

The willingness to give and accept ongoing feedback in a nondefensive manner is a critical component of a culture dedicated to creativity.

Question 57

_____ entails identifying and choosing alternative solutions that lead to a desired state of affairs.

A)Decision making
B)Stereotyping
C)Performance appraisal
D)Escalation of commitment
E)Divergent thinking

Question 58

Which of the following models assumes that it is difficult for managers to make optimal decisions and is guided by a decision-maker's bounded rationality?

A)Rational model
B)Garbage can model
C)Positive model
D)Normative model
E)Optimization model

Question 59

The rational model begins with:

A)evaluating alternatives.
B)identifying the opportunity.
C)generating alternative solutions.
D)implementing solutions.
E)selecting solutions.

Question 60

Creativity is defined as the process of using imagination and skill to develop a new or unique product, object, process, or thought.

Question 61

Antony was looking to buy a used car. His friends had asked him to check the model of the year of the car before buying it. He was thus focusing extensively on the odometer reading and the model of the year of the car to evaluate the value of the car, instead of inspecting the engine or the transmission of the vehicle. This implies that Antony was engaging himself in the _____ bias.

A)representativeness
B)anchoring
C)availability
D)fundamental attribution
E)self-serving

Question 62

Which of the following is a feature of people with a conceptual style?

A)They have a low tolerance for ambiguity.
B)They focus on the technical aspects of a work situation.
C)They tend to overanalyze a situation.
D)They are willing to take risks and are good at finding creative solutions to problems.
E)They tend to be autocratic, exercise power and control, and focus on the short run.

Question 63

_____ refers to the tendency to stick to an ineffective course of action when it is unlikely that the bad situation can be reversed.

A)Fundamental attribution error
B)Bounded rationality
C)Escalation of commitment bias
D)Satisficing
E)Availability heuristic

Question 64

Oliver was known for his innovative promotional ideas. His boss loved listening to his presentations and trusted his ideas. Though Oliver's ideas started to get monotonous after a while, his boss took only his ideas and did not accept ideas from others. Which of the following biases was Oliver's boss engaging in?

A)Creativity
B)Inclusion heuristic
C)Fundamental attribution error
D)Anchoring bias
E)Availability heuristic

Question 65

Which of the following principles should be implemented to help companies integrate evidence-based management?

A)Treat your organization as a finished prototype
B)Evidence-based management is only for senior executives
C)Prohibit the system of "evidence-based misbehavior"
D)Have inflated views of your organization's talents and chances for success
E)See yourself and your organization as outsiders do

Question 66

Which of the following actions should be adopted to reduce escalation of commitment?

A)Set maximum targets for performance
B)Avoid rotation of managers
C)Keep same managers in key positions throughout a project
D)Make decision makers aware of the costs of persistence
E)Encourage decision makers to become ego-involved with a project

Question 67

_____ reflects the extent to which an individual focuses on either task and technical concerns or people and social concerns when making decisions.

A)Need for control
B)Escalation of commitment
C)Value orientation
D)Tolerance for ambiguity
E)Need for structure

Question 68

_____ represents a decision maker's tendency to base decisions on information that is readily accessible in his or her memory.

A)Creativity
B)Fundamental attribution error
C)Availability heuristic
D)Representativeness heuristic
E)Inclusion heuristic

Question 69

The senior managers of Optimum Inc., a multinational information technology firm, were concerned that people were not buying their computers. After reading the poor marketing reports, they decided to go out and buy their organization's PC's. The business head was shocked to see that customers were not impressed with Optimum PC's. They were also shocked to see a salesperson recommending customers to buy something other than an Optimum PC because they were of poor value. This small incident helped the organization to understand real customer experience and improve their products extensively. This instance is an example of _____.

A)a normative process
B)evidence-based decision making
C)satisficing
D)a nonrational process
E)escalation of commitment

Question 70

_____ represents a process of conscientiously using the best available data and proof when making managerial decisions.

A)Evidence-based decision making
B)Escalation of commitment
C)Satisficing
D)Nonrational process
E)Normative process

Question 71

_____ individuals are careful decision makers who take longer to make decisions but who also respond well to new or uncertain situations.

A)Control-oriented
B)Behavioral
C)Directive
D)Conceptual
E)Analytic

Question 72

Which of the following styles is the most people oriented style?

A)Reasoning
B)Behavioral
C)Directive
D)Conceptual
E)Analytic

Question 73

_____ indicates the extent to which a person has a high need for structure or control in his or her life.

A)Task concern
B)Escalation of commitment
C)Value orientation
D)Tolerance for ambiguity
E)Social concern

Question 74

When there was a rapid increase in valuation of housing, lenders and buyers strongly believed that prices would keep going up. The subsequent drop in housing values left both banks and borrowers with huge losses. This incident is a result of:

A)representativeness heuristic.
B)anchoring bias.
C)availability bias.
D)fundamental attribution error.
E)over-confidence bias.

Question 75

People with a(n) _____ decision-making style have a low tolerance for ambiguity and are oriented toward task and technical concerns when making decisions.

A)reasoning
B)directive
C)analytical
D)conceptual
E)behavioral

Question 76

A manager of an advertising firm appointed two employees to strike an advertising deal with one of their big clients. They were chosen as they had made a similar agreement previously with another client. Which of the following biases was the manager engaging in?

A)Representativeness heuristic
B)Anchoring heuristic
C)Framing bias
D)Fundamental attribution error
E)Self-serving bias

Question 77

Lily had finished her high school and was ready to go to university. However, she also loved sports. She wanted to join a basketball academy and become a professional basketball player. She found this situation very stressful and was psychologically uncomfortable. This implies that Lily had a(n) _____.

A)low tolerance for ambiguity.
B)conceptual decision-making style.
C)low need for structure.
D)analytical style of decision making.
E)high social concern.

Question 78

Marketing firms strive to ensure that people are aware of their products because people assume that if they have heard about certain products, the products will work well. Which of the following biases are the marketing firms trying to address?

A)Creativity
B)Availability heuristic
C)Fundamental attribution error
D)Representativeness heuristic
E)Inclusion heuristic

Question 79

People with a _____ style tend to be autocratic, exercise power and control, and focus on the short run.

A)reasoning
B)analytical
C)directive
D)conceptual
E)behavioral

Question 80

_____ reflects a decision maker's estimate of the probability of an event occurring, reflecting the tendency to assess the likelihood of an event occurring based on one's impressions about similar occurrences.

A)Fundamental attribution error
B)Explicit knowledge
C)Availability heuristic
D)Representativeness heuristic
E)Anchoring and adjustment error