Deck 7: Decision Making

Question 1

Intuitive decision making is based on values and past experiences.

Answer 1

True

Question 2

Opinions, preferences, and values of decision-makers are an essential element of evidence-based management.

Answer 2

True

Question 3

Managers regularly use their intuition in decision-making.

Answer 3

True

Question 4

Once the alternatives to solving a problem have been identified, the next step in the decision-making process is selecting one of these alternatives.

Question 5

Managerial decision-making is assumed to be rational.

Question 6

A decision is a discrepancy between an existing and a desired state of affairs.

Question 7

Decision-making is considered a process rather than an act of choosing among alternatives.

Question 8

The phenomenon of escalation of commitment refers to an increased commitment to a previous decision despite evidence that it may have been wrong.

Question 9

A decision criterion defines what is important or relevant to resolving a problem.

Question 10

The final step in the decision-making process is to implement the chosen alternative.

Question 11

A satisficing decision is one that is satisfactory and sufficient in the situation, and meets an acceptable level of performance.

Question 12

The decision-making process begins by identifying decision criteria.

Question 13

A procedure is an explicit statement that tells a manager what he or she can or cannot do.

Question 14

One assumption of rationality is that time and cost constraints exist.

Question 15

All relevant criteria are equally important in decision-making.

Question 16

One assumption of rational decision making is that the decision maker is not aware of all possible alternatives and consequences.

Question 17

According to the concept of bounded rationality, managers make decisions rationally but are limited by their ability to process information.

Question 18

Intuitive decision making complements rational decision making but not bounded rational decision making.

Question 19

Evidence-based management relies heavily on the decision maker's intuition.

Question 20

It is possible that at the end of the decision-making process you may be required to start the decision process over again before making the final decision.

Question 21

Rules and policies are essentially the same.

Question 22

Highly reliable organizations (HROs) tap into their complexity to help them adapt more effectively.

Question 23

Unstructured problems require custom-made responses through programmed decision-making.

Question 24

Nonlinear thinking style is characterized by feelings, hunches and internal insights to guide decisions.

Question 25

Availability bias distorts the decision maker's ability to recall events in an objective manner and focus on events that are most recent and vivid in their memory.

Question 26

The self-serving bias occurs when decision makers take credit for their successes and blame failure on outside factors.

Question 27

Nonprogrammed decision-making relies on procedures, rules, and policies.

Question 28

Linear thinking style ignores external data and facts and relies directly on the decision maker's internal information processing.

Question 29

A programmed decision is a repetitive decision that can be handled by a routine approach.

Question 30

Heuristics are "rules of thumb" that managers use to simplify decision-making.

Question 31

Highly reliable organizations (HROs) make decisions at the executive level.

Question 32

An optimistic manager will follow a maximin approach.

Question 33

A manager who desires to minimize his maximum "regret" will opt for a minimax choice.

Question 34

The confirmation bias occurs when decision makers tend to think they know more than they actually do and hold unrealistically positive views of themselves.

Question 35

Most managerial decisions in the real world are nonprogrammed.

Question 36

A hindsight bias occurs when decision makers increase their commitment to a previous decision despite evidence that it may have been wrong.

Question 37

Risk is a condition in which a decision maker has neither certainty nor reasonable probability estimates.

Question 38

A policy is a series of interrelated sequential steps that a manager can use for responding to a structured problem.

Question 39

Managers need to understand cultural differences to make effective decisions in today's fast-moving world.

Question 40

Highly reliable organizations (HROs) are easily tricked by their success.

Question 41

Which of the following decisions involves the management function of organizing?

A) How should jobs be designed?
B) How difficult should individual goals be?
C) How do I handle employees who appear to be low in motivation?
D) When is the right time to stimulate conflict?
E) When is a performance deviation significant?

Question 42

Which of the following statements is true concerning problem identification?

A) Problems are generally obvious.
B) A symptom and a problem are basically the same.
C) Well-trained managers generally agree on what is considered a problem.
D) The problem must exert some pressure on the manager to act.
E) To be considered a problem, managers must be aware of the discrepancy but not have sufficient resources to take action.

Question 43

Which of the following must be present in order to initiate the decision-making process?

A) plenty of time
B) established criteria
C) implementation procedures
D) viable alternatives
E) pressure to act

Question 44

A __________ is a discrepancy between an existing and a desired state of affairs.

A) process
B) problem
C) scenario
D) criterion
E) decision

Question 45

When a manager finds a disparity between their current situation and a desired situation, they are at which step of the decision-making process?

A) develop alternatives
B) identify decision criteria
C) analyze alternatives
D) identify a problem
E) allocate weights to criteria

Question 46

Which of the following is important to remember in evaluating decision effectiveness?

A) Ignore criticism concerning the decision-making process.
B) You may have to start the whole decision-making process over again.
C) You should restart the decision-making process only if the decision is less than 50 percent effective.
D) 90 percent of problems with decision-making occur in the implementation step.
E) The initial problem may still exist despite the implementation of an effective decision.

Question 47

To determine the __________, a manager must identify the factors that are relevant to resolving the problem.

A) effectiveness of the decision
B) number of feasible alternatives
C) desired outcomes
D) decision criteria
E) implementation procedures

Question 48

In the purchase of a car, the assessment of factors such as speed, fuel efficiency, and price occurs at which step of the decision-making process?

A) identify a problem
B) analyze alternatives
C) identify decision criteria
D) evaluate decision effectiveness
E) develop alternatives

Question 49

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

A) identifying decision criteria
B) allocating weights to decision criteria
C) analyzing alternatives
D) developing alternatives
E) implementing alternatives

Question 50

Which of the following steps in the decision-making process occurs before developing alternatives?

A) allocate weights to criteria
B) analyze alternatives
C) select an alternative
D) implement the alternative
E) evaluate decision effectiveness

Question 51

If all the decision criteria are equally important, weighting the criteria __________.

A) is exceptionally important
B) is not necessary
C) produces excellent decisions
D) improves the criteria
E) results in more alternatives

Question 52

Design thinking is an interesting new line of thinking with broad implications for making effective business decisions by integrating emotional elements into the process.

Question 53

Which of the following is important in effectively implementing the chosen alternative in the decision-making process?

A) getting upper management support
B) double checking your analysis for potential errors
C) implementing the decision quickly through power and persuasion
D) ignoring criticism concerning the chosen alternative
E) allowing those impacted by the outcome to participate in the process

Question 54

Amanda, a single parent, is looking for a new job. Considering that she has two school-age children, she is particularly keen on finding an employer who can provide her with alternative work arrangements such as flexible work hours and telecommuting. In terms of the decision-making process, these represent Amanda's ________.

A) criteria
B) problems
C) alternatives
D) guidelines
E) perceptions

Question 55

Which step in the decision-making process involves conveying the decision to those affected by it and getting their commitment to it?

A) allocating weights to criteria
B) analyzing alternatives
C) selecting an alternative
D) implementing the alternative
E) evaluating the decision effectiveness

Question 56

In allocating weights to the decision criteria, which of the following is helpful to remember?

A) All weights must be the same.
B) Assign a weight to the most important criterion, and then assign weights to the rest against that standard.
C) Every criterion considered, regardless of its importance, must receive some weighting.
D) The most important and least important criteria should be inversely weighted.
E) The total of the weights should sum to 1.0.

Question 57

The final step in the decision-making process is to __________.

A) select the best alternative
B) reevaluate the weightings of the criteria until they indicate the correct outcome
C) evaluate the outcome of the decision
D) reassign the ratings on the criteria to find different outcomes
E) implement the alternative to solve the problem

Question 58

Max is planning on going away to college next year and is currently trying to figure out which colleges he should apply to. He would like to major in English Literature at an accredited liberal arts college but is also looking for a university that offers financial aid and student housing. In terms of the decision-making process, these represent Max's ________.

A) criteria
B) problems
C) alternatives
D) guidelines
E) perceptions

Question 59

Which of the following decisions involves the management function of planning?

A) How should jobs be designed?
B) How difficult should individual goals be?
C) How do I handle employees who appear to be low in motivation?
D) When is the right time to stimulate conflict?
E) When is a performance deviation significant?

Question 60

The process of selecting decision criteria is accomplished by __________.

A) massaging the data that will support a given decision
B) flipping a coin to produce a 50-50 chance of being right
C) determining what is relevant in making the decision
D) examining the differences between potential opportunities
E) identifying a discrepancy between an existing and a desired state of affairs

Question 61

Escalation of commitment refers to ________.

A) commitment to a bad decision due to an unwillingness to go against the opinion of the majority
B) an increased commitment to a previous decision despite evidence that it may have been wrong
C) the strengthening of commitment to a particular course of action due to greater motivation by others
D) greater commitment to a decision because of one's belief that it is "the right thing to do"
E) a decision based on external evidence that has been evaluated by experts.

Question 62

Decision-making where managers recognize and understand that the systematic use of the best available data will improve their management practices and decision-making is called ______________.

A) intuitive decision making
B) rational management
C) satisficing decision making
D) evidence based management
E) innovative management

Question 63

Relying on "gut feeling" over cognitive problem solving in decision-making is a phenomenon called __________.

A) sunk costs error
B) intuition
C) overconfidence bias
D) hindsight bias
E) escalation of commitment

Question 64

The most efficient way to handle a structured problem is through __________ decision-making.

A) linear
B) unique
C) focused
D) programmed
E) technical

Question 65

Intuitive decision-making ________.

A) is the systematic use of the best available evidence to improve decision-making practice
B) generally results in poor decisions, and hence managers should learn to ignore their gut feelings
C) is only appropriate for simple problems
D) complements rational decision-making but not bounded rational decision-making
E) is the process of making decisions based on experience, feelings, and accumulated judgment

Question 66

When managers make decisions that are rational but limited by their ability to process the information, they are exhibiting the concept of ________.

A) cognitive decision-making
B) bounded rationality
C) escalation of commitment
D) intuitive decision-making
E) objective rationality

Question 67

The assumption that managers make consistent, value-maximizing choices within specified constraints is known as which of the following?

A) rational decision-making
B) unbounded rationality
C) organized decision-making
D) optimal decision-making
E) objective rationality

Question 68

The strap on Brad's backpack broke as he lifted it. On the way to class, he stopped at the first store that carries backpacks and although it was not exactly what he wanted, he purchased a new one from the front counter because it would do the job. Brad has made a(n) __________ decision.

A) satisficing
B) irrational
C) escalating
D) optimizing
E) perfectly rational

Question 69

Which of the following decisions involves the management function of controlling?

A) How should jobs be designed?
B) How difficult should individual goals be?
C) How do I handle employees who appear to be low in motivation?
D) When is the right time to stimulate conflict?
E) When is a performance deviation significant?

Question 70

An increased commitment to a previous decision despite evidence that it may have been wrong is a phenomenon called __________.

A) confirmation bias
B) intuition
C) overconfidence bias
D) hindsight bias
E) escalation of commitment

Question 71

Problems that are straightforward, familiar, and easily defined are called __________ problems.

A) opportunity
B) structured
C) unique
D) nonprogrammed
E) technical

Question 72

A __________ decision is repetitive and can be handled by a routine approach.

A) nonprogrammed
B) linear
C) satisficing
D) programmed
E) technical

Question 73

The type of decision-making in which the solution is considered "good enough" is known as which of the following?

A) minimizing
B) rationalizing
C) maximizing
D) satisficing
E) optimizing

Question 74

Because managers can't possibly analyze all information on all alternatives, they accept solutions that __________ rather than __________ payoff.

A) maximize; satisfice
B) maximize; minimize
C) satisfice; minimize
D) satisfice; maximize
E) minimize; maximize

Question 75

A perfectly rational decision maker would __________.

A) have changing preferences
B) not consider profit maximization as an objective
C) offer inconsistent decisions
D) be objective and logical
E) have to overcome time and cost constraints

Question 76

In intuitive decision making, managers ________.

A) often tend to ignore their feelings or emotions
B) use data from their subconscious mind to help make their decisions
C) use available evidence to improve their decision-making skills
D) do not depend on their past experiences to make decisions
E) ask for opinions and values of other stakeholders

Question 77

Which of the following is an assumption of rationality?

A) The problem is ambiguous.
B) Multiple goals are to be achieved.
C) Time and cost constraints are known.
D) Preferences change quickly.
E) All alternatives and consequences are known.

Question 78

Toby is hunting for a new apartment. He is specifically looking for one that is located in the heart of the city and should be available for $600 per month. However, Toby is also willing to pay up to $850 per month for a place situated slightly away from the city centre. According to him, the second option "will also do." This is an example of ________.

A) experience-based decision-making
B) rational decision-making
C) bounded rationality
D) intuitive decision-making
E) non linear thinking

Question 79

Arthur authorizes the expenditure of an additional $100,000 for the production of a new product despite mounting concerns that it will be unprofitable. The cost of the new product has already increased far beyond the initial plans and projections. Arthur's continuing support for this project illustrates the phenomenon of __________.

A) confirmation bias
B) escalation of commitment
C) overconfidence bias
D) hindsight bias
E) intuition

Question 80

An important element in making decisions using evidence-based management (EBMgt) is to consider ______________.

A) using the rational decision making process
B) applying design thinking to problems
C) opinions, preferences and values of all stakeholders
D) alternatives that are good enough for the situation
E) using linear thinking style