Deck 8: Managerial Decision Making

Question 1

WorldCom, a telecommunications company, decided to buy Skytel in 1999. This would be considered a programmed decision.

Answer 1

False

Question 2

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

Answer 2

False

Question 3

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

Answer 3

False

Question 4

Uncertainty is by far the most difficult decision situation.

Question 5

The administrative model of decision making describes how manager actually make decisions in difficult situations.

Question 6

Normative means it defines how a decision maker should make decisions.

Question 7

Decision making is easy, given that everybody makes decisions everyday.

Question 8

Satisficing behavior occurs when we choose the first solution alternative that satisfies minimal decision criteria regardless of whether better solutions are expected to exist.

Question 9

Two classifications of management decisions are programmed and structured.

Question 10

The administrative model is considered to be normative.

Question 11

Goals often are vague, conflicting, and lack consensus among managers, according to the administrative model of decision making.

Question 12

A decision is a choice made from available alternatives.

Question 13

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.

Question 14

Gerald's Groceries and Marty's Market decided to merge their operations. This would be considered a nonprogrammed decision.

Question 15

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

Question 16

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

Question 17

A situation where the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcome is unavailable refers to ambiguity.

Question 18

Two employees in Stacey's department quit. She is faced with the decision to fill these positions. This would be considered a nonprogrammed decision.

Question 19

The political model represents an "ideal" model of decision making that is often unattainable by real people in real organizations.

Question 20

Programmed decisions are decisions that are made for situations that have occurred often in the past and allow decision rules to be developed to guide future decisions.

Question 21

The political model consists of vague problems and goals, limited information about alternatives and their outcomes, and a satisficing choice for resolving problem using intuition.

Question 22

According to both research and managerial experience, intuitive decisions are best and always work out.

Question 23

The best alternative is the one in which the solution best fits the overall goals and values of the organization and achieves the desired results using the fewest resources.

Question 24

Managers confront a decision requirement in the form of either a problem or an opportunity.

Question 25

In the implementation stage, decision makers gather information that tells them how well the decision was implemented and whether it was effective in achieving its goals.

Question 26

The formulation stage involves the use of managerial, administrative, and persuasive abilities to ensure that the chosen alternative is carried out.

Question 27

Managers need to take a balanced approach for effective decision making.

Question 28

Intuition is a quick apprehension of a decision situation based on past experience but without conscious thought.

Question 29

For a non-programmed decision, feasible alternatives are hard to identify and in fact are already available within the organization's rules and procedures.

Question 30

According to the administrative model of decision making, managers' searches for alternative are limited because of human, information, and resource constraints.

Question 31

The process of forming alliances among managers is called coalition building.

Question 32

Linear means to use primarily intuition to make decisions; nonlinear means using logical rationality to make decisions.

Question 33

Step one in the managerial decision-making process is recognition of decision requirement.

Question 34

Nonprogrammed decisions require six steps, however, programmed decisions being structured and well understood requires only one step.

Question 35

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

Question 36

Feedback provides decision-makers with information that can precipitate a new decision cycle.

Question 37

The administrative model closely resembles the real environment in which most managers and decision makers operate.

Question 38

Once the problem or opportunity has been recognized and analyzed, the decision-maker should implement the alternative.

Question 39

Cognitive scientist Gary Klein has found that intuition begins with goals.

Question 40

For decisions made under conditions of low uncertainty, managers may develop only one of two custom solutions that will satisfice for handling the problem.

Question 41

The rapid pace of today's business environment requires only top management to make decisions and have the information, skills, and freedom they need to respond immediately to problems and questions.

Question 42

Most bad decisions are errors in judgment that originate in the human mind's limited capacity and in the natural biases of the manager.

Question 43

Which of the following is a choice made from available alternatives?

A) Decision
B) Plan
C) Goal
D) Tactic
E) Strategy

Question 44

The most effective managers are consistent in using their own decision style rather than shifting among styles.

Question 45

Brainwriting refers to the tendency of people in groups to suppress contrary opinions.

Question 46

Managers might block or distort negative information because they don't want to be responsible for a bad decision.

Question 47

Point-counterpoint is a decision-making technique in which people are assigned to express competing points of view.

Question 48

Brainstorming uses a face-to-face interactive group to spontaneously suggest a wide range of alternatives for decision making.

Question 49

____ is a vital part of good management because decisions determine how the organization solves its problems, allocates resources, and accomplishes its goals.

A) Organizing
B) Competitive visioning
C) Proper alignment
D) Good decision making
E) Leadership

Question 50

Interestingly, major decisions in the business world are commonly made by an individual.

Question 51

People who prefer simple, clear-cut solutions to problems use the directive style.

Question 52

Justifying past decisions is a common bias of managers.

Question 53

Managers with an analytical decision style like to consider complex solutions based on as much data as they can gather.

Question 54

Devil's advocate technique is similar to brainstorming in that both techniques prevent individuals from challenging other group member's assumptions.

Question 55

The behavioral style is often adopted by managers who like to consider complex solutions based on as much data as they can gather.

Question 56

Managers are often referred to as

A) decision makers.
B) peace makers.
C) conflict creators.
D) unnecessary layer of employees.
E) profit suppressor.

Question 57

Most people underestimate their ability to predict uncertain outcomes.

Question 58

Choosing between a differentiation strategy and an overall cost leadership strategy is an example of

A) a plan.
B) an objective.
C) an alternative.
D) a decision.
E) a strategy.

Question 59

By making mistakes, people go through the process of decision learning, which means that they gain valuable experience and knowledge to perform more effectively in the future.

Question 60

Feedback is the part of monitoring that assesses whether a new decision needs to made.

Question 61

When managers know which goals they wish to achieve, but information about alternatives and future events is incomplete, the conditions of ____ exists.

A) risk
B) uncertainty
C) ambiguity
D) certainty
E) problematic

Question 62

Bierderlack has a policy that states that more than three absences in a six-month period shall result in a suspension. Colleen, the manager, has just decided to suspend one of her shift employees for violating this policy. This is an example of

A) a programmed decision.
B) a nonprogrammed decision.
C) an insignificant decision.
D) poor management.
E) personal grudge.

Question 63

____ means that managers know which goals they wish to achieve, but information about alternatives and future events is incomplete.

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

Question 64

Associated with the condition of ____ is the lowest possibility of failure.

A) ambiguity
B) uncertainty
C) certainty
D) risk
E) all of these

Question 65

____ refers to the process of identifying problems and then resolving them.

A) Organizing
B) Controlling
C) Decision-making
D) Planning
E) Leading

Question 66

Two area banks, Bank A and Bank B, decided to merge their operations. This is an example of a

A) programmed decision.
B) nonprogrammed decision.
C) decision rule.
D) structured decision.
E) bad community decision.

Question 67

____ has the highest possibility of failure.

A) The conditions of certainty
B) The conditions of ambiguity
C) The conditions of uncertainty
D) The conditions of risk
E) All of these

Question 68

Mark, a production manager at Kaylie's Kookware, recently chose to schedule his workers to work overtime. His alternative was to hire more workers. He is now monitoring the consequences of his choice. This is an example of

A) planning.
B) decision-making.
C) organizing.
D) controlling.
E) leading.

Question 69

If your instructor has an attendance policy, she/he is using a

A) programmed decision.
B) unique approach.
C) condition of ambiguity.
D) nonprogrammed decision.
E) none of these.

Question 70

Examples of nonprogrammed decisions would include the decision to

A) reorder supplies.
B) develop a new product or service.
C) perform routine maintenance on one of the machines in manufacturing.
D) terminate an employee for violation of company rules.
E) fill a position.

Question 71

Bobby, 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. Bobby is operating under a condition of

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

Question 72

Programmed decisions are made in response to ____ organizational problems.

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

Question 73

Nonprogrammed decisions are made in response to situations that are

A) unique.
B) unstructured.
C) important to the organization.
D) all of these
E) unique and important to the organization.

Question 74

Nordstrom Department store's "No questions asked - Return's Policy" is an example of a(n)

A) programmed decision.
B) nonprogrammed decision.
C) novel decision.
D) poor management.
E) unstructured decision.

Question 75

Good examples of ____ decisions are strategic decisions.

A) nonprogrammed
B) programmed
C) insignificant
D) recurring
E) structured

Question 76

Which of the following means that all the information the decision-maker needs is fully available?

A) Certainty
B) Risk
C) Uncertainty
D) Ambiguity
E) None of these

Question 77

When a small community hospital decides to add a radiation therapy unit, it is considered as a

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

Question 78

Under conditions of ____, statistical analyses are useful.

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

Question 79

Which of the following 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) Certainty
B) Risk
C) Uncertainty
D) Ambiguity
E) Brainstorming

Question 80

____ decisions are associated with decision rules.

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