Deck 11: Decision Making

Question 1

Which of the following is an example of diffusion of responsibility?

A)Paul allows his secretary to make certain decisions without consulting him.
B)After her boss's decision turned out to be wrong,Sally said she knew all along that it was wrong.
C)The surgery team decided on a more conservative operating technique when they discussed the operation face-to-face.
D)A firing squad of ten soldiers was used to execute the prisoner.
E)As Douglas accepted the award on behalf of his department,he made a point of acknowledging the contributions of his colleagues.

Answer 1

D

Question 2

Which of the following is characteristic of well-structured problems?

A)They are unusual and have not been encountered before.
B)They tend to be complex and involve a high degree of uncertainty.
C)The existing state and the desired state are understood.
D)They frequently arouse controversy and conflict among those interested in the problem.
E)They often entail high risk.

Answer 2

C

Question 3

Which of the following problems would most likely be solved with a program (that is,using programmed decision making)?

A)Should this convict be granted parole?
B)Which candidate should we choose to be vice-president of marketing?
C)In which part of the country should we locate our new business?
D)How many workers should we call out to staff the assembly line next week?
E)Should we merge with this company or not?

Answer 3

D

Question 4

At what part of an organization would an ill-structured problem most likely be encountered?

A)The top of the hierarchy
B)The middle of the hierarchy
C)The bottom of the hierarchy
D)Where the bottom of the hierarchy meets the middle
E)Ill-structured problems are equally likely throughout the organizational hierarchy.

Question 5

A program would most likely be used

A)to justify group decision making.
B)to solve problems dealt with by top management.
C)to solve a well-structured problem.
D)to solve an ill-structured problem.
E)to solve a risky problem.

Question 6

Information overload is likely to lead to

A)fast decision making.
B)only relevant information influencing decision making.
C)greater confidence by managers in their decisions.
D)higher quality decisions.
E)lower satisfaction with the ultimate decision.

Question 7

The ill-structured problem is one where the

A)existing state is clear,desired state is clear.
B)existing state is clear,desired state is unclear.
C)existing state is unclear,desired state is clear.
D)existing state is unclear,desired state is unclear.
E)existing state is clear,but the method of getting to the desired state is unknown.

Question 8

Mark has two alternatives.There is a 50 percent chance that he will earn $120,000 if he accepts a government contract.If he decides not to accept the contract and instead continues on his present project,he has an 80 percent chance of earning $100,000.If Mark is a perfectly rational decision maker,which of the following statements is true?

A)He will accept the government contract.
B)His expected value of continuing on the present project is $80,000.
C)He will attempt to satisfice.
D)He will ignore economic criteria in making his decision.
E)He will revise his earnings estimate on the government contract to make it more attractive.

Question 9

Which of the following is an example of an ill-structured problem?

A)The retailer must decide whether to reorder lawn chairs.
B)The sales manager must decide what to do about sales that seem sluggish.
C)The assistant bank manager must decide which automobile loan applications to approve.
D)The welfare officer must decide how much assistance a particular client should receive.
E)The production manager must decide how many workers to schedule on the line next week.

Question 10

Which of the following is another name for a programmed problem solution technique?

A)Rules
B)Routines
C)Rules of thumb
D)Standard operating procedures
E)All of the above

Question 11

One is most likely to see a program used to make a(n)________ decision.

A)routine
B)unique
C)executive-level
D)important
E)ill-structured

Question 12

Which of the following is an example of faulty hindsight?

A)Alan erroneously predicted that his superiors would favour the reorganization plan.
B)The small business owner could never forget how she had been let down by a particular supplier.
C)The small business owner who had been let down by a supplier gave the supplier another large order.
D)Suki decided to spend more money upgrading her old computer instead of buying a new one.
E)When it became clear that the investment was a poor one,Pierre realized that he had known it was bad all along.

Question 13

The well-structured problem does not exhibit which of the following characteristics?

A)Clear existing state
B)Clear desired state
C)Uncertainty about what to do
D)Certainty about what to do
E)Familiar and repetitive problem

Question 14

An Economic Person does not

A)make rational decisions.
B)make decisions like the average consumer or manager.
C)use economic gain to evaluate the correctness of decisions.
D)have adequate information to make good decisions.
E)use logic in making decisions.

Question 15

Non-programmed decision making

A)may stimulate strong political considerations.
B)is used to solve well-structured problems.
C)is most likely to be required at lower levels of the organizational hierarchy.
D)tends to involve much certainty.
E)is used to solve repetitive problems.

Question 16

Managers who exhibit bounded rationality

A)might be operating under time constraints.
B)might be factoring political considerations into decisions.
C)might be limited in their capacity to acquire and process information.
D)might be subject to cognitive biases.
E)All of the above

Question 17

Which of the following most clearly involves a decision program?

A)A medical ethics committee
B)A task force to improve company image
C)A standing order to a supplier
D)A billion dollar investment decision
E)A corporate merger

Question 18

In evaluating alternative solutions,decision makers with bounded rationality

A)know the ultimate value of each alternative.
B)often consider the political acceptability of the solution to other organizational members.
C)know the probability that each alternative will work.
D)tend to exhibit maximization.
E)rarely engage in satisficing.

Question 19

When he heard that turnover was increasing,the human resource manager immediately told the president that salaries would have to be raised.Unfortunately,low pay wasn't the cause of the turnover.Which decision making error did the manager commit?

A)He treated sunk costs improperly.
B)He defined the problem in terms of a solution.
C)He escalated commitment.
D)He exhibited the knew-it-all-along effect.
E)He revealed a confirmation bias.

Question 20

At which stage of the rational decision-making model is information overload a particular problem?

A)Problem identification
B)Search for relevant information
C)Evaluate alternative solutions
D)Implement chosen solution
E)Monitor and evaluate chosen solution

Question 21

After a group discussion,group members tend to make decisions that are ________ the positions of individual members before discussion.

A)more risky than
B)more conservative than
C)equal to the average risk of
D)more risky or more conservative than
E)less risky or less conservative than

Question 22

A devil's advocate is

A)a group member that everyone dislikes.
B)a person who intentionally stimulates controversy.
C)a person who smoothes over conflict.
D)a group member who bullies other members into accepting the group consensus.
E)a genuinely evil person.

Question 23

Research has shown that people tend to have a ________ to value information advice for which they have paid over free advice of equal quality.

A)insight bias
B)interpretation bias
C)insight forgiveness
D)cognitive bias
E)confirmation bias

Question 24

Satisficing is a concept that is most associated with

A)identifying a problem.
B)searching for information.
C)choosing a solution.
D)implementing a solution.
E)monitoring a solution.

Question 25

What is a strong cause of groupthink?

A)The group contains a devil's advocate.
B)Conflict exists within the group.
C)The group leader favours a particular decision.
D)Group members feel too free to speak their minds.
E)The absence of mindguards.

Question 26

Escalation of commitment

A)involves committing more and more resources to a failing course of action.
B)illustrates how decision makers often ignore sunk costs.
C)only occurs when the decision maker is responsible for beginning a course of action.
D)runs counter to the general tendency for decision makers to try to justify their actions.
E)is the most common outcome of information overload.

Question 27

Sharon framed the problem as a choice between two losses.What is she likely to do now?

A)Make a conservative decision
B)Ignore sunk costs
C)Make a risky decision
D)Ignore sample sizes
E)Ignore economic considerations

Question 28

Who failed to treat sunk costs properly?

A)The devil's advocate in the meeting
B)The leader of the group that exhibited groupthink
C)The manager who escalated commitment
D)The salesperson who acted unethically
E)The politician who cancelled the public works project

Question 29

Diffusion of responsibility might contribute to

A)hindsight.
B)risky shifts.
C)conservative shifts.
D)information overload.
E)confirmation bias.

Question 30

Escalation of commitment to a failing course of action

A)only occurs if the decision maker was personally responsible for the initial loss.
B)shows how people may treat sunk costs improperly.
C)is what defines the occurrence of a risky shift.
D)is the most common outcome of information overload.
E)only occurs in highly competitive situations.

Question 31

Illusion of invulnerability,illusion of morality,and illusion of unanimity are all characteristics of

A)hindsight.
B)risky shift.
C)groupthink.
D)maximization.
E)confirmation bias.

Question 32

According to the groupthink phenomenon,group members who are overconfident and willing to assume great risks are suffering from

A)the knew-it-all-along effect.
B)the conservative shift phenomenon.
C)an illusion of invulnerability.
D)an illusion of unanimity.
E)an escalation of commitment.

Question 33

Which of the following is not a characteristic of groupthink?

A)The group experiences much dissension and argument.
B)Much conformity occurs in the group.
C)The group sees itself as morally correct.
D)Group members censor themselves from bringing up issues which are contrary to the group consensus.
E)The group constructs unfavourable stereotypes of outsiders.

Question 34

Which of the following is a problem frame?

A)How the problem is stated
B)How the problem is solved
C)How the solution is evaluated
D)How the solution is implemented
E)How the decision makers are rewarded

Question 35

Managers must often rely upon others when making decisions and solving problems.At what stage of the rational decision making process does reliance upon others often cause special problems?

A)Information search
B)Development of alternative solutions
C)Evaluation of alternative solutions
D)Solution choice
E)Solution implementation

Question 36

Which of the following is probably an example of the irrational treatment of sunk costs?

A)Jim studied the computer output for two hours before the big meeting,but he couldn't use the information.Before the next meeting he studied the output for four hours.
B)Mary obtained much more information than she needed in order to make a decision on the leasing arrangement.
C)Janine had her travel agent book two flights for her to New York so that she was certain not to miss the big meeting.
D)The pilot feared landing on the remote airstrip because there had been an accident there the day before.
E)The company president decided to cancel the expansion project even though construction work had already begun.

Question 37

Decision makers who establish an adequate level of acceptability for a solution and then screen solutions until one that exceeds this level is found are

A)maximizers.
B)optimizers.
C)satisficers.
D)rationalizers.
E)diffusers.

Question 38

After meeting together,the members of the venture capital group decided not to fund any more projects for the year.Before the meeting,some members had been cautiously in favour of funding.What happened?

A)Groupthink
B)Diffusion of responsibility
C)Risky shift
D)Conservative shift
E)Hindsight

Question 39

The manager who wishes to diffuse responsibility for a potentially incorrect decision should

A)use non-programmed decision making.
B)make the decision herself.
C)use a group to make the decision.
D)disregard the rational decision-making model.
E)be prepared to accept the sunk costs associated with the decision.

Question 40

According to the anchoring effect,people

A)resist problem solutions developed by others.
B)depend too much on problem solutions developed by others.
C)don't adjust successive estimates enough in the face of new information.
D)rely too much on the most recent information received.
E)tend to invest additional resources in an apparently failing course of action.

Question 41

You have just applied for a job and when completing the application form you were surprised to see questions about your age and marital status.Such questions would seem to violate equal employment and human rights legislation and not likely to be related to the job.It made you wonder why a company would ask these questions.What is a good explanation for this?

A)Difficulties of non-programmed decision making
B)Bounded rationality
C)Cognitive biases
D)Information overload
E)Difficulties of programmed decision making

Question 42

When people can brainstorm electronically as an electronic group,

A)electronic brainstorming groups perform better than face-to-face groups in terms of quantity but not quality.
B)electronic brainstorming groups perform better than face-to-face groups in terms of quality but not quantity.
C)electronic brainstorming groups perform better than face-to-face groups in terms of both quantity and quality.
D)electronic brainstorming groups perform worse than face-to-face groups in terms of quantity but not quality.
E)electronic brainstorming groups perform the same as face-to-face groups in terms of both quantity and quality.

Question 43

Which is an example of a conservative shift?

A)After reading an article about the economy in Business Week,Frank decided not to expand his small business.
B)Because of the recession,the construction firm lowered its profit margin to get more of its bids accepted.
C)Coach Smith decided to play it safe and kick a field goal rather than having the injured quarterback try a pass.
D)Several board members were cautiously optimistic about the merger proposal before the meeting.During the board meeting,so many problems were cited that the proposal was unanimously defeated.
E)The individual city councilors were moderately opposed to the expensive bond issue.During the council meeting,so many negative points were raised that the bond issue was soundly defeated.

Question 44

Which of the following is a potential example of the risky shift?

A)A manager quit her secure job in a large company to start her own business even though she had to mortgage her house.
B)Steve decided to take an elective course in statistics even though he wasn't very good at quantitative subjects.
C)A drug company put a new drug on the market even though it was possible that the drug would provoke bad side effects.
D)Three partners were uncertain about expanding their business.After discussing the matter,they decided to expand even though the economy was bad.
E)The board of directors voted to proceed with the expansion even though it would cost $10 million more than originally planned.

Question 45

Which of the following is an example of an ill-structured problem?

A)Which of these 10 car loan applications should I approve?
B)How much assistance should this client receive?
C)How much weight should I carry?
D)In which part of the country should we build a new plant?
E)All of the above

Question 46

Conventional (i.e.,non-electronic)brainstorming

A)is not a very effective technique for generating ideas.
B)is a technique for evaluating solutions to problems.
C)is a decision-making technique in which the decision makers do not meet face-to-face.
D)is a method of training discussion leaders to help groups make more effective decisions.
E)is more effective at generating ideas than the nominal group technique.

Question 47

If we employ ________ to improve decisions,the participants never meet face-to-face.

A)the Delphi technique
B)brainstorming
C)group discussion
D)the nominal group technique
E)a devil's advocate

Question 48

Which technique of improving decision making involves the use of several waves of questionnaires and requires a lot of time?

A)The Delphi technique
B)Brainstorming
C)Group discussion
D)The nominal group technique
E)Electronic brainstorming

Question 49

Which of the following is not a difficulty that can result from bounded rationality in problem identification?

A)Perceptual defence
B)Problem defined in terms of functional specialty
C)Problem defined in terms of solution
D)Problem diagnosed in terms of symptoms
E)Problem defined as ill-structured

Question 50

The following illustrate the operation of bounded rationality except

A)framing.
B)cognitive biases.
C)emotions and moods.
D)political considerations.
E)maximization.

Question 51

When Thelma's boss said,"What we have here is a morale problem," what was she doing?

A)Defining a problem in terms of functional specialty
B)Defining a problem in terms of solution
C)Diagnosing a problem in terms of symptoms
D)Confirmation bias
E)Hindsight

Question 52

Which of the following is a benefit of using electronic brainstorming systems?

A)Participation is more equally distributed among members.
B)The ability to "flame" someone anonymously.
C)Impulsive communication.
D)People feel more accountable for electronic decisions.
E)Less risky decisions than face-to-face groups

Question 53

What is most likely to lead one to adopt a simplified,short-cut decision-making strategy that is likely to violate the rational model?

A)A positive emotion
B)A negative emotion
C)A positive mood
D)A negative mood
E)The lack of emotion

Question 54

Sales at the Smelly Cheese Company had been down all year.Management met to try and identify the problem.The marketing manager was convinced that the problem was the result of poor marketing.The manager of human resources believed the problem was due to the lack of employee motivation.What is the difficulty they are having?

A)Perceptual defence
B)Problem defined in terms of solution
C)Problem diagnosed in terms of symptoms
D)Problem defined in terms of functional specialty
E)Too little information

Question 55

What did Nobel Prize winner Herbert Simon recognize?

A)The usefulness of programmed decision making
B)The usefulness of non-programmed decision making
C)The perfectly rational characteristics of Economic Person do not exist in real decision makers
D)The characteristics of Economic Person
E)The existence of groupthink

Question 56

In what kind of decisions does mood have its greatest impact?

A)Uncertain and ill-structured
B)Certain and unambiguous
C)Uncertain and ambiguous
D)Well-structured and unambiguous
E)Certain and well-structured

Question 57

What three things are noteworthy about the definition of decision making?

A)Choice,problem,and resources
B)Choice,problem,and process
C)Choice,process,and resources
D)Problem,process,and resources
E)Choice,problem,and program

Question 58

Which of the following accurately describes the effect of moods on decision making?

A)Mood affects what but not how people think when making decisions.
B)Mood does not affect what or how people think when making decisions.
C)Mood affects how but not what people think when making decisions.
D)Mood affects what and how people think when making decisions.
E)Only a positive mood has an effect on how people think when making decisions.

Question 59

A key advantage of the use of electronic brainstorming groups is that

A)as group size increases,so does social loafing.
B)as group size increases,so does the idea generation.
C)as group size increases,so do individual inhibitions.
D)as group size increases,so does flaming.
E)None of the above

Question 60

In computer terminology,"garbage in" will result in "garbage out." This is used to describe

A)non-programmed decision making.
B)programmed decision making.
C)bounded rationality.
D)escalation of commitment.
E)satisficing.

Question 61

Which of the following best describes the nominal group technique (NGT)and the Delphi technique?

A)Participants engage in face-to-face interaction in both.
B)Participants do not engage in face-to-face interaction in both.
C)Participants engage in face-to-face interaction in the Delphi technique but not the NGT.
D)Participants engage in face-to-face interaction in the NGT but not the Delphi technique.
E)Participants engage in face-to-face interaction for idea generation but not evaluation in both.

Question 62

What does brainstorming focus on?

A)The generation and evaluation of ideas
B)The generation of ideas rather than the evaluation of ideas
C)The evaluation of ideas rather than the generation of ideas
D)The generation of ideas by individuals and evaluation of the ideas by groups
E)The generation of ideas by groups and the evaluation of the ideas by individuals

Question 63

Which of the following is a cognitive bias that contributes to the failure of decision makers to acquire enough information to make a good decision?

A)Perceptual defence
B)Anchoring effect
C)Satisficing
D)Hindsight
E)Confirmation bias

Question 64

Which of the following is most accurate?

A)Individuals are more prone than groups to escalate commitment.
B)Groups are more prone to escalate commitment than individuals.
C)Individuals and groups are equally likely to escalate commitment.
D)Individuals are more prone to escalate commitment than groups when the individual in question is personally responsible for the sunk costs.
E)Escalation only occurs in competitive situations.

Question 65

Escalation of commitment to a losing course of action could be an example of the improper treatment of sunk costs.

Question 66

After graduating from university your are planning to get a job as an accountant.Your best friend Jay is planning on opening his own restaurant.He says he has thought a great deal about this and believes he will be very successful and it is a good decision.You explain to him the fact that most new restaurants fail,but it does not factor into Jay's decision.What does this demonstrate?

A)Base rates
B)Anchoring effect
C)Perceptual defence
D)Sunk costs
E)Hindsight

Question 67

The knew-it-all-along effect is an example of faulty hindsight.

Question 68

Individual decision making generally results in higher quality decisions than group decision making.

Question 69

What does brainstorming and the nominal group technique (NGT)focus on?

A)Brainstorming and NGT focus on the generation of ideas.
B)Brainstorming and NGT focus on the evaluation of ideas.
C)Brainstorming focuses on the generation of ideas; NGT focuses on the evaluation of ideas.
D)Brainstorming focuses on the generation of ideas; NGT focuses on the generation and evaluation of ideas.
E)Brainstorming and NGT focus on the generation and evaluation of ideas.

Question 70

You and a friend have decided to study for your final exams together.However,time to study for your organizational behaviour exam is running out.Your friend persuades you to only study the first five of the ten chapters to be covered on the exam.When you get to the exam,you quickly read through all of the questions and are surprised to see that in fact the majority of the questions are from the first five chapters you studied.You and your friend both receive very good grades on the exam.Your friend never misses an opportunity to remind you how smart it was to only study the first five chapters.What is this an example of?

A)Escalation of commitment
B)Hindsight
C)Framing
D)Confirmation bias
E)Anchoring effect

Question 71

Absenteeism has become a problem at the Smelly Cheese Company,so the human resource manager has decided to do something about it.He has decided to choose the first solution he comes across that will get the level of absenteeism to what it was in the previous year.What is this an example of?

A)Anchoring effect
B)Satisficing
C)Sunk costs
D)Framing
E)Confirmation bias

Question 72

Devil's advocates are people who have a difficult time making a decision and sticking to it.

Question 73

The perfectly rational decision-maker tends to satisfice.

Question 74

A study of 356 decisions in medium and large organizations found that ________ of the decisions made in organizations fail.

A)over 50 percent
B)10 percent
C)half
D)one third
E)one quarter

Question 75

Decision makers violate statistical principles at what stage of the decision making process?

A)Problem identification
B)Information search
C)Solution implementation
D)Solution evaluation
E)Alternative development,evaluation,and choice

Question 76

In a study on real estate agents,it was found that the agents allowed the asking price of a house to unduly influence their professional evaluation of the house.What is this an example of?

A)Satisficing
B)Anchoring effect
C)Confirmation bias
D)Hindsight
E)Risky shift

Question 77

Which of the following represents the effectiveness of electronic brainstorming groups?

A)Once over the size of two members,electronic brainstorming groups perform better than face-to-face groups in terms of quantity but not quality of ideas.
B)Once over the size of two members,electronic brainstorming groups perform better than face-to-face groups in terms of quality but not quantity of ideas.
C)Once over the size of two members,electronic brainstorming groups perform worse than face-to-face groups in terms of quantity but not quality of ideas.
D)Once over the size of two members,electronic brainstorming groups perform better than face-to-face groups in terms of both quantity and quality of ideas.
E)Once over the size of two members,electronic brainstorming groups perform the same as face-to-face groups in terms of both the quantity and quality of ideas.

Question 78

Which of the following accurately depicts the relationship between personality and escalation?

A)People high on neuroticism and high on negative affectivity are more likely to escalate.
B)People high on neuroticism and low on negative affectivity are more likely to escalate.
C)People low on neuroticism and high on negative affectivity are more likely to escalate.
D)People high on neuroticism and high on negative affectivity are less likely to escalate.
E)People high on neuroticism and low on negative affectivity are less likely to escalate.

Question 79

Research by Daniel Kahneman and Amos Tversky shows that

A)when people view a problem as a choice between losses,they tend to make conservative decisions.
B)when people view a problem as a choice between gains,they tend to make risky decisions.
C)when people view a problem as a choice between losses,they tend to make risky decisions.
D)when people view a problem as a choice between losses,they tend to make poor decisions.
E)when people view a problem as a choice between losses,they tend to make better decisions.

Question 80

Which of the following is most accurate about electronic brainstorming groups?

A)As they get larger,they tend to produce more ideas,but the ideas-per-person decreases.
B)As they get larger,they tend to produce more ideas,but the ideas-per-person remains stable.
C)As they get larger,they tend to produce more ideas,and the ideas-per-person increases.
D)As they get larger,they tend to produce less ideas,and the ideas-per-person remains stable.
E)As they get larger,they tend to produce less ideas,and the ideas-per-person decreases.