Deck 7: Individual and Group Decision Making: How Managers Make Things Happen

Question 1

For implementation of a chosen solution in decision making to be successful, you need to plan carefully and be sensitive to those affected.

Answer 1

True
Explanation: For implementation to be successful, you need to do two things: Plan carefully.Especially if reversing an action will be difficult, you need to make careful plans for implementation.Also be sensitive to those affected.You need to consider how the people affected may feel about the change-inconvenienced, insecure, even fearful, all of which can trigger resistance.

Question 2

Satisficing occurs when a manager takes small, short-term steps to alleviate a problem.

Answer 2

False
Explanation: In the satisficing model, managers seek alternatives until they find one that is satisfactory, not optimal.In the incremental model, managers take small, short-term steps to alleviate a problem, rather than steps that will accomplish a long-term solution.

Question 3

Customers who experience poor customer service are more likely to tell the company about it than to tell family or friends.

Answer 3

False
Explanation: The problem with faulty customer service is that sometimes the company may be the last to hear about it, but a great many other potential customers may hear of it by word of mouth.One study found that only 6% of shoppers who experienced a problem with a retailer contacted the company.However, 31% went on to tell friends, family, and colleagues what had happened.

Question 4

The first step in the rational decision making process is to think up alternative solutions.

Question 5

If a chosen alternative is implemented and it does not appear to be working, you may need to give it more time.

Question 6

The rational model of decision making assumes that managers will choose the available alternative that best supports their existing beliefs.

Question 7

The final step in the rational decision-making process is to implement and evaluate the chosen solution.

Question 8

Analyzing the underlying causes of a problem or an opportunity is called diagnosis.

Question 9

You have surveyed all of your close friends, and they all prefer ice cream to frozen yogurt.Thus you should be confident that everyone prefers ice cream; that is, this is a representative sample of adequate size.

Question 10

Opportunities should be identified in the alternative evaluation stage of the decision-making process.

Question 11

Experts may make irrational decisions because they are unable to see things from an outsider's perspective.

Question 12

The rational model works well even with the incomplete information and uncertainty about consequences that managers often face.

Question 13

When a manager makes a decision based on the strong beliefs she already has, she is guilty of a prior-hypothesis bias.

Question 14

The process of identifying and choosing between alternative courses of action is known as option evaluation.

Question 15

Women investors make trades much less often than men, do a lot more research, and have better returns on average.

Question 16

Sandra did an Internet search for Jamaican hotels when she was setting up her vacation, but found over 7 million results, of which she could only handle looking at about two pages.Sandra is operating under conditions of bounded rationality.

Question 17

The incremental model is a nonrational model of decision making.

Question 18

Nonrational models of decision making describe how managers should make decisions rather than how they actually do.

Question 19

When evaluating alternatives in decision making, you must assess cost and quality and also ask the question, "Is it simple?"

Question 20

Politics has provided evidence that appeals to emotion are more effective than appeals to logic in decision making.

Question 21

When then-president of Chrysler Bob Lutz ordered the development of the Dodge Viper without supporting research but because it "just felt right," he was using the incremental model of decision making.

Question 22

When QVC experiments with which products it will sell on its television shopping network and follows this up with analysis of why some sell and others don't, it is using evidence-based management.

Question 23

Risk propensity is the willingness to gamble or to undertake risk for the possibility of getting an increased payoff.

Question 24

A recent study says that the world's information is doubling every seven years.

Question 25

One problem with the incremental model is that temporary steps may actually impede a beneficial long-term solution.

Question 26

A directive individual takes longer to make a decision than an analytical one.

Question 27

You can increase your ability to influence others by being aware of decision-making styles.

Question 28

People with a low tolerance for ambiguity and an orientation toward task and technical concerns in making decisions have an analytical decision-making style.

Question 29

Most managers have just one dominant decision-making style.

Question 30

To effectively use evidence-based management, the more evidence you can gather, the better.

Question 31

In time-critical situations, satisficing may be a good approach to decision making.

Question 32

Analytics have been used in baseball and basketball to find undervalued players that could help teams that had limited resources to pay superstars.

Question 33

The conceptual style of decision making is the most people oriented of the styles.

Question 34

Portfolio analysis is an example of the incremental model of decision making.

Question 35

The drawback of using the intuition model of decision making is that it can be difficult to convince others that your decision makes sense.

Question 36

Understanding how to use failure is an important implementation principle for evidence-based management.

Question 37

A person with a directive decision style is efficient, logical, practical, and systematic in her approach to solving problems.

Question 38

Capital One uses predictive modeling by conducting experiments to evaluate which customers will sign up for credit cards and pay back their debt.

Question 39

Evidence shows that firms that announce layoffs have higher stock prices than their peers, both in the near term and over time.

Question 40

Intuition based on feelings rather than expertise, or the involuntary emotional response to those feelings, is known as automated experience.

Question 41

Studies show that even severe life events have a negative impact on one's sense of well-being for no more than about three months.

Question 42

When managers use information that is readily available from memory to make judgments, it is known as a confirmation bias.

Question 43

A cost-benefit matrix is a graph of decisions and their possible consequences and is used to create a plan to reach a goal.

Question 44

Importance of the situation, the credibility of the information about it, and the urgency of it should be considered in the decision about whether to decide.

Question 45

Consensus occurs when group members are able to express their opinions and reach agreement to support the final decision.

Question 46

Smaller-sized groups make higher-quality decisions.

Question 47

Middle and supervisory managers may be a source of resistance in participatory management.

Question 48

Relaxed change is one type of effective response for a manager to take when confronted with a challenge.

Question 49

To be compliant with current federal legislation, all for-profit companies are required to have an ethics officer.

Question 50

Where time is of the essence, in most cases an individual should make the decision rather than a group.

Question 51

Participative management has a large effect on job performance and job satisfaction.

Question 52

Putting questions to a vote is a good method to help a group reach consensus.

Question 53

Fawaz is contemplating a couple of new options for the order takers that he manages.There is no great urgency in the situation; he just needs to have a procedure in place within a couple of months.Fawaz would be wise to make this decision by himself.

Question 54

The tendency for group members to agree for the sake of unanimity and thus avoid accurately assessing the decision situation is called satisficing.

Question 55

Heuristics are strategies that simplify the process of making decisions.

Question 56

Being "loss adverse" and hating to admit you're wrong can contribute to the escalation of commitment bias.

Question 57

A disadvantage of group-aided decision making is that groups tend to suppress an individual's intellectual stimulation and creativity.

Question 58

Yichao, a manager of a downtown hair salon, has been procrastinating about a problem.Over the past year, his company has seen a high rate of customer defections, and even the loss of some of its best stylists.Still, he hasn't even begun to investigate the issue.This is an indicator of relaxed avoidance.

Question 59

Groups make better decisions than most individuals acting alone.

Question 60

Keep in mind the importance of maintaining group relations; don't stand in the way of a group trying to reach consensus.

Question 61

Which of the following is true about women investors?

A)They tend to trade more often than men.
B)They do less research before investing than men.
C)Their portfolios have a higher average gain than men's.
D)They are increasingly being drawn to careers in finance.
E)They tend to chase "hot tips."

Question 62

The incremental model of decision making suggests that managers make decisions by

A)using processes that have worked in past experience.
B)experimenting with alternatives in a controlled setting, one by one.
C)choosing something that is "good enough."
D)taking small steps to alleviate a problem.
E)involving several lower-level employees.

Question 63

Heuristics is a technique in which members of a group come together over a computer network to generate ideas and alternatives.

Question 64

Which of the following is a step in the rational decision-making model?

A)Seek consensus among leadership.
B)Identify the problem or opportunity.
C)Improve the chosen solution.
D)Test solutions on a small scale.
E)Implement a holding pattern.

Question 65

Which of the following statements about biased decision making is true?

A)Hindsight helps you correctly assess what you should have known beforehand.
B)When you are making a decision and you have considerable experience in that area, you are then most likely to be overconfident.
C)When confronted with a choice, people with strong prior beliefs tend to make their decisions based on their beliefs even if their beliefs are false.
D)Sometimes a single event can allow you to determine the trend.
E)You could confidently make a decision about something by asking 20 of your friends and deciding based on their preferences.

Question 66

The concept of "bounded rationality" is most closely related to the _________ model of decision making.

A)classical
B)rational
C)satisficing
D)incremental
E)intuition

Question 67

Brainstorming is a technique used to help groups generate multiple ideas and alternatives for solving problems.

Question 68

Jerome's accounts payable department is behind schedule as the month-end close is approaching.This has been happening every month, but he hasn't found time to provide additional training.Instead he asks all of his employees to work eight hours of overtime that week and reassigns some tasks.This is an example of using the ________ model.

A)rational
B)predictive
C)intuition
D)incremental
E)coalition

Question 69

When evaluating a solution in decision making, answering yes to which of the following questions should cause you to reconsider choosing it?

A)Is there enough time?
B)Are the costs reasonable?
C)Is it ethical?
D)Is the technology available?
E)Do you consider it merely "good enough"?

Question 70

Nicole and other managers in her firm have some ties to Europe and are investigating opportunities for global expansion.They are struggling to understand the risks, given the complexity of world markets today and recent global instabilities.The difficulty Nicole's team is facing prevents perfectly rational decision making, and is an example of

A)risk aversion.
B)bounded rationality.
C)groupthink.
D)defensive avoidance.
E)anchoring and adjustment.

Question 71

Which of the following is an assumption upon which the rational model of decision making rests?

A)Decision makers can logically evaluate the alternatives.
B)Consequences of any actions cannot be known.
C)Decision makers typically have emotional blind spots.
D)A decision maker will choose the option that is most ethical.
E)Decision makers are unable to process all of the available information.

Question 72

Which of the following is NOT a recommended option when you discover that an action is not working after a decision?

A)Give the chosen solution more time.
B)Abandon the solution in favor of the status quo.
C)Try another alternative.
D)Go back to the beginning of the decision-making process.
E)Change the chosen solution slightly.

Question 73

In the final stage of the rational model of decision making, you should

A)provide justification for the choice.
B)select a solution.
C)seek high-level support.
D)evaluate the results.
E)identify the winners and losers.

Question 74

Which of the following is one of the nonrational models of decision making?

A)Boundary
B)Classical
C)Goal displacement
D)Satisficing
E)Attitudinal

Question 75

Diagnosis is used in which stage of the rational decision-making model?

A)Identify the problem or opportunity
B)Think up alternative solutions
C)Evaluate alternatives
D)Select a solution
E)Implement a solution

Question 76

Alexis manages a clothing store in the mall.They were understaffed, and she thought she would have to work all day and help close the store that evening until a young man came in for an application around noon.Alexis told him he could have the job if he could come back at 4 p.m.to begin work.Here, Alexis was engaged in

A)relaxed avoidance.
B)confirmation bias.
C)satisficing.
D)heuristics.
E)analytics.

Question 77

Jenna manages a retail store and she has been noticing long lines at checkout lately.She is unsure about increasing staffing levels right now, so she chooses to reconfigure the physical orientation of the checkout space to alleviate the problem for the time being.Jenna is using the ________ model.

A)incremental
B)coalition
C)rational
D)predictive
E)intuition

Question 78

Group-driven computer-aided decision systems ask participants to answer predetermined questions on electronic keypads or dials.

Question 79

Which of the following is NOT a hindrance to perfectly rational decision making?

A)Conflicting goals
B)Imperfect information
C)Information overload
D)Limited cognitive capacity
E)Lack of intuition

Question 80

The rational model of decision making is also called the ______ model.

A)balanced
B)satisficing
C)incremental
D)classical
E)intuitional