Deck 15: Decision Making and Organizational Learning

Question 1

According to March and Simon's administrative model of decision making, decision makers often choose satisfactory solutions rather than optimal ones.

Answer 1

True

Question 2

When universities develop policies dictating how to deal with students who cannot complete their courses, they are using a performance program to make a programmed decision.

Answer 2

True

Question 3

A performance program allows organizational members to be creative when faced with unusual situations.

Answer 3

False
A performance program is a standard sequence of behaviors that organizational members follow routinely whenever they encounter a particular type of problem or opportunity.

Question 4

There is always a clear boundary between ethical and unethical decisions in an organization.

Question 5

The administrative decision-making model prohibits decision makers from using any of the elements of the classical decision-making model.

Question 6

Satisficing is the process of making acceptable responses to opportunities and problems based on limited information available.

Question 7

While heuristics can expedite the decision-making process, it can also lead to biases that cause systematic decision-making errors.

Question 8

The classical model of decision making is based on realistic assumptions.

Question 9

Because recurring problems and opportunities require very little thought for response, nonprogrammed decisions are used to handle them.

Question 10

The concept of "bounded rationality" advocated by March and Simon disregards the cognitive limitations of the decision maker.

Question 11

Nonprogrammed decision making involves searching for the extra information that is needed to make the right choice.

Question 12

Decisions are made in response to either problems or opportunities.

Question 13

The classical decision-making model is prescriptive; it describes how decisions should be made.

Question 14

Decision making is the process by which members of an organization choose a specific course of action to respond to opportunities and problems that confront them.

Question 15

According to the classical model of decision making people should choose the easiest option possible.

Question 16

Programmed decision making responds to recurring opportunities and problems.

Question 17

The rules of thumb that help people simplify decision making are called heuristics.

Question 18

Decision making in response to problems occurs when organizations take advantage of opportunities to increase efficiency and effectiveness.

Question 19

When members of an organization choose how to respond to new or novel problems and opportunities, they engage in nonprogrammed decision making.

Question 20

Recognizing the problems with the classical model of decision making, James March and Herbert Simon developed the administrative decision-making model.

Question 21

Decision makers tend to take more risks when they frame or view decisions in positive terms rather than in negative terms.

Question 22

An enterprise resource planning (ERP) system is a company-wide intranet that allows an organization to link and coordinate functional activities and operations.

Question 23

The anchoring and adjustment heuristic reflects the tendency to make decisions based on adjustments from some initial amount (or anchor).

Question 24

Individuals seldom make decisions as quickly as groups can.

Question 25

An example of the value of diversity to group decision making is auto manufacturers including women and foreign designers on their team.

Question 26

Groupthink occurs in cohesive groups whose members strive for agreement at the expense of accurately assessing information relevant to the decision.

Question 27

When managers decide not to launch a product in a specific global market because it did not perform well in a similar market, they are using the representativeness heuristic.

Question 28

The diversity of people participating in group decision making is NOT an advantage to this kind of decision making.

Question 29

The use of information technology (IT) can reduce the effects of biases and heuristics on decision making.

Question 30

Escalation of commitment is rare in organizations, but is more common in people's personal lives.

Question 31

One source of bias emanating from the representativeness heuristic is the failure to consider the base rate, or the actual frequency with which events occur.

Question 32

Sunk costs cannot be affected by subsequent decision making.

Question 33

One of the advantages of group decision making is the availability and diversity of members' skills, knowledge, and expertise.

Question 34

The likelihood employees will accept a decision decreases when they take part in the decision-making process.

Question 35

Escalation of commitment can occur because decision makers do not want to admit that they have made a mistake.

Question 36

The management team of a toy company decided that they would begin producing children's clothes. After six months, the company had made little money on its new clothing line. They could not compete with other children's clothing lines. Still, the management team decided to spend more money marketing their new line. This is an example of escalation of commitment.

Question 37

The availability heuristic can lead to an overestimation of the frequency of vivid or extreme events and their causes.

Question 38

Group decision making has certain advantages over individual decision making when the decisions are complex and require acceptance by others for successful implementation.

Question 39

Decisions about the degree to which costs must be cut are often made using the anchoring and adjustment heuristic.

Question 40

Escalation of commitment is the tendency of decision makers to invest additional time, money, or effort into bad decisions or unproductive courses of action that are already draining the organization's resources.

Question 41

Group decisions are characterized by a diffusion of responsibility.

Question 42

In a crisis, groupthink can protect the collective interests of the group because no one person can be made a "scapegoat" for making a poor decision.

Question 43

When compared to decisions made by individuals, decisions made by groups tend to be more balanced or "middle-of-the-road."

Question 44

The illusion of invulnerability occurs when group members mistakenly believe that they are in total agreement when making decisions.

Question 45

Research suggests that brainstorming groups tend to produce more ideas than individuals who are working separately.

Question 46

When the Delphi technique is used, group members do NOT meet face to face.

Question 47

The nominal group technique can be used to overcome production blocking.

Question 48

The tendency for groups to make less extreme decisions than individuals is known as group polarization.

Question 49

Production blocking inhibits high quality brainstorming from occurring.

Question 50

Group conflict is dysfunctional when individual members become more concerned about "winning the battle" than making a good decision.

Question 51

Brainstorming is a spontaneous, participative, decision-making technique that groups use to generate a wide range of alternatives from which to make a decision.

Question 52

The people in charge of forming top-level teams to respond to sudden crises might be well advised to build devil's advocacy into the decision-making process in order to become aware of the perils hidden in the recommended course of action.

Question 53

Electronic brainstorming can prevent some of the production blocking that occurs during face-to-face brainstorming sessions.

Question 54

Total quality management (TQM) includes two group decision-making techniques: benchmarking and empowerment.

Question 55

The nominal group technique works best for complex decisions that require large amounts of information processing and repeated group meetings.

Question 56

When the Delphi technique is used experts meet face-to-face to make decisions.

Question 57

When the nominal group technique is used only the best ideas are discussed with the whole group.

Question 58

A devil's advocate should NOT raise problems when decisions are made unless he believes that he is making valid points.

Question 59

Although groupthink occurs only in cohesive groups, many cohesive groups never succumb to this faulty mode of decision making.

Question 60

Because conflict within groups is dysfunctional, the group leader needs to be sure it is always eliminated.

Question 61

Peter Senge argues that team learning is as, or even more, important than individual-level learning in promoting organizational learning.

Question 62

Benchmarking involves selecting a high-performing organization that is currently providing high-quality goods or services to its customers and using it as a model.

Question 63

Decision making in response to ________ occurs when individual, group, or organizational goal attainment and performance are threatened.

A) problems
B) opportunities
C) management directives
D) affordabilities

Question 64

Peter Senge has argued that for organizational learning to occur, each person needs to develop a sense of personal mastery.

Question 65

Decision making in response to ________ occurs when members of an organization make choices or act in ways that result in benefits or gains.

A) problems
B) opportunities
C) contingencies
D) consequences

Question 66

In order to create a learning organization, managers need to promote learning at the individual and group levels.

Question 67

Empowerment is the process of giving employees the authority to make decisions and be responsible for their outcomes.

Question 68

During the holiday season, a clothing store always hires ten more employees due to the increase in business. How is this an example of programmed decision making?

A) Hiring more employees is a response to a novel opportunity.
B) Hiring more employees is a response to a new threat.
C) Hiring more employees is a response to a recurring threat.
D) Hiring more employees is a response to a repeated opportunity.

Question 69

Organizational members are engaged in ________ when they choose how to respond to new problems or novel opportunities.

A) bounded decision making
B) performance analysis
C) nonprogrammed decision making
D) programmed decision making

Question 70

________ is the process by which members of an organization choose a specific course of action to respond to problems and opportunities.

A) Satisficing
B) Bounded rationality
C) Performance analysis
D) Decision making

Question 71

Education and experience are at the heart of a shared vision.

Question 72

A learning organization takes purposeful steps to enhance and maximize the potential for explorative and exploitative organizational learning to take place.

Question 73

Exploitation involves organizational members learning ways to refine and improve existing organizational behaviors and procedures to increase effectiveness.

Question 74

Brenda Butler, editor of the Republican, is trying to decide whether to take a job at a much larger newspaper or to become the CEO and publisher of the Republican. Brenda has to make this decision because of ________.

A) an opportunity
B) a threat
C) a problem
D) bounded rationality

Question 75

The best companies have learned everything that they need to know to be a successful company.

Question 76

Systems thinking is an ongoing mental model that all of the organization's members use to frame problems or opportunities.

Question 77

The process of organizational learning seeks to improve the decision-making ability of employees and enhance organizational efficiency and effectiveness.

Question 78

Mike Barry, editor of the Carole Creek Times, has to decide which one of two reporters he will fire because the newspaper is losing money. Mike has to make this decision MOST LIKELY because of ________.

A) an opportunity
B) a performance program
C) a problem
D) bounded rationality

Question 79

Exploration involves organizational members learning ways to refine and improve existing organizational behaviors and procedures to increase effectiveness.

Question 80

Groups allow for the creation of synergy-the idea that the whole equals the sum of its parts.