Deck 3: Managers and the Strategic Decision Making in Business Firms

Question 1

A mental model is a cognitive representation of the world and ourselves in it.

Answer 1

True

Question 2

Recognizing that a product lacks features that will appeal to the product's target market is an an example of ____________.

A) causality
B) categorical knowledge
C) ingrained knowledge
D) implicit assertation
E) none of these

Answer 2

B

Question 3

"Penny wise and pound foolish" is an example of _____________.

A) practical belief
B) categorical knowledge
C) causal assertion
D) implicit assertation
E) none of these

Answer 3

C

Question 4

Which of the following is a key role that mental models play in the decision making process?

A) They focus our attention and determine what stimuli we do and do not notice.
B) They influence how we interpret the information and stimuli we do notice.
C) They determine how we act on our interpretations of the information we process.
D) all of these
E) none of these

Question 5

______________ is the filtering of information and focusing of attention component of mental models .

A) Interpretation
B) Deciding
C) Noticing
D) Reduction
E) Titration

Question 6

___________ is the step that follows noticing in mental models.

A) Interpretation
B) Deciding
C) Noticing
D) Reduction
E) Titration

Question 7

Purchasing a firm's stock after reading and interpreting a newspaper story about that particular firm is an example of ______________.

A) Interpretation
B) Deciding
C) Noticing
D) Reduction
E) Titration

Question 8

__________ knowledge is an example of knowing more than we can say.

A) Primary
B) Secondary
C) Tacit
D) Implicit
E) Explicit

Question 9

Education as a source of managerial beliefs and thinking can be broadly defined to include all of the following EXCEPT:

A) primary education
B) secondary education
C) graduate education
D) executive education
E) it includes all of these

Question 10

If managers conclude that adopting a partcular strategy leads to positive performance outcomes, they will probably develop a belief in the ___________ of that strategy.

A) prudence
B) efficiency
C) efficacy
D) imitation
E) none of these

Question 11

A strategy taken out of its context will usually not be as successful for which of the following reasons?

A) The original firm has probably been pursuing the strategy for a long period of time and will therefore will have had more time to fine-tune and hone the strategy and its implementation.
B) The original firm will have had additional time and opportunities to fully integrate the strategy into its existing structure, systems, and culture.
C) Many competitive advantages that would appear to come from observing and then adopting the attitudes, beliefs, and understandings of other firms cannot be readily transferred to competitors' cultures.
D) all of these
E) none of these

Question 12

Mental models are "________________" rather than "imprints" or pictures.

A) concepts
B) constructions
C) thoughts
D) precepts
E) analogies

Question 13

Cognitive biases undermine rational thinking so that decisions are often made more on the basis of _________ than evidence

A) hope
B) intuition
C) rationality
D) faith
E) possibility

Question 14

Mental models are "________________" rather than "imprints" or pictures.

A) concepts
B) constructions
C) thoughts
D) precepts
E) analogies

Question 15

Distinguishing firms as competitors from those that are not competitors is an example of _____________.

A) categorical knowledge
B) competitive discernment
C) causal assertion
D) competitive distinction
E) none of these

Question 16

Why would it be more likely that groupthink and escalation of commitment would occur in organizations with strong cultures?

Question 17

Why are top executives often insulated from, and out of touch with, reality?

Question 18

Why are managers more likely to trust "hunches" and "gut feelings" than objective evidence?

Question 19

Mental models that guide strategic decision making represent a manager's ____________.

A) assumptions
B) beliefs
C) understandings
D) all of these
E) none of these

Question 20

The explosive growth of information technology has been accompanied by a corresponding growth in the ability of managers to process information flows.

Question 21

Managerial decision making is typically a linear, rational, and well informed process.

Question 22

Developing a mental model allows managers the freedom to make decisions in a neutral vacuum, free of the economic, and cultural and social environments in which they live and work.

Question 23

Assumptions and understandings, but not beliefs, comprise the prinicpal elements of mental models.

Question 24

Mental models are inherently unobservable.

Question 25

Categorical knowledge is the knowledge individuals use to distinguish between and among categories of people, objects, and other phenomena.

Question 26

The well known proverb, "Early to bed and early to rise makes a person healthy, wealthy, and wise," is an example of categorical knowledge.

Question 27

Managers of business firms have causal beliefs about a wide array of phenomena.

Question 28

The quality of decision making is significantly influenced by the accuracy and completeness of mental models.

Question 29

Because mental models already contain our attitudes, beliefs, and understandings, they have little influence over our responses to the stimuli we notice.

Question 30

When business leaders hold beliefs-mental models-about their industry that differ fundamentally from most other leaders, the result will be different mental models that result in unique strategies.

Question 31

Experience as a belief component of mental models is the product of learning-by-doing or trial-and-error learning.

Question 32

Culture is a minor source of mental models as it carries with it only a few implicit beliefs and understandings.

Question 33

A strength of imitation strategies that are based on or copied from other firms is that they are more distinctive than innovative strategies.

Question 34

Researchers consider something creative if it is both novel and inappropriate.

Question 35

One key characteristic common to all mental models is their completeness.

Question 36

Cognitive biases foster rational thinking.

Question 37

Superstition can also be a source of bias and lead to poor decision making.

Question 38

Mental models tend to be used over and over again even as the environment changes, so that they become more and more accurate or appropriate over time.

Question 39

What problems can arise when mental models are not updated to keep them aligned with the pace of change in the business environment?