Deck 9: Managerial Decision Making

Question 1

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

Answer 1

False

Question 2

Gerald's Groceries and Marty's Market decided to merge their operations, something neither company has tried before. This would be considered a nonprogrammed decision.

Answer 2

True

Question 3

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

Answer 3

False

Question 4

Making a choice is the most significant part of the decision-making process.

Question 5

The approach that managers use to make decisions usually falls into one of three types - the classical model, the administrative model, and the political model.

Question 6

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

Question 7

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

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

Question 10

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

Question 11

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

Question 12

In the real world, few decisions are certain.

Question 13

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

Question 14

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 15

A decision is a choice made from available alternatives.

Question 16

The classical model of decision-making works best in organizations that are made up of groups with diverse interests, goals, and values.

Question 17

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

Question 18

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 19

The growth of quantitative decision techniques that use computers has reduced the use of the classical approach.

Question 20

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

Question 21

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 22

Administrative and political decision making procedures and intuition have been associated with high performance in unstable environments in which decisions must be made rapidly and under more difficult conditions.

Question 23

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

Question 24

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 25

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

Question 26

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

Question 27

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 28

Individuals with a conceptual decision-making style are more socially oriented than those with an analytical style.

Question 29

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

Question 30

Justifying past decisions is a common bias of managers.

Question 31

Good intuitive decision making is based on an ability to recognize patterns at lightning speed.

Question 32

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

Question 33

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

Question 34

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

Question 35

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

Question 36

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

Question 37

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

Question 38

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 39

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

Question 40

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

Question 41

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 42

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 43

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

Question 44

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

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

Question 45

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

Question 46

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

Question 47

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

Question 48

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 49

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 50

Managers are often referred to as:

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

Question 51

Most people underestimate their ability to predict uncertain outcomes.

Question 52

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

Question 53

_____ 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 54

Managers will frequently look for new information that contradicts their instincts or original point of view.

Question 55

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 56

Programmed decisions are made in response to _____ organizational problems.

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

Question 57

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

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

Question 58

If your instructor has an attendance policy, she/he is using a(n):

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

Question 59

_____ decisions are associated with decision rules.

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

Question 60

Good examples of _____ decisions are strategic decisions.

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

Question 61

Which of these assumptions are included in the classical model of decision making?

A) Problems are unstructured and ill defined.
B) The decision-maker strives for conditions of certainty.
C) Criteria for evaluating alternatives are unknown.
D) The decision-maker selects the alternatives that will minimize the economic return to the organization.
E) The situation is always uncertain.

Question 62

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 63

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 64

The condition under which ambiguity occurs is when:

A) alternatives are difficult to define.
B) objectives are well defined.
C) information about outcomes is readily available.
D) all the alternatives are known.
E) decisions are already made.

Question 65

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

A) philosophical
B) irrational
C) economic
D) uncertainty
E) technological

Question 66

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

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

Question 67

_____ is by far the most difficult situation for a decision-maker.

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

Question 68

Which of the following means that the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable?

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

Question 69

During the fallout of the global financial crisis of the late 2000s, finance companies had to make important decisions in a highly ambiguous environment. The decision to buyout failed banks could best be described as what type of decision?

A) Bounded
B) Programmed
C) Conventional
D) Wicked decision problem
E) Irrational decision

Question 70

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

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

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

Under conditions of _____, statistical analyses are useful.

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

Question 73

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 74

The four positions on the possibility of failure scale include certainty, risk, ambiguity, and _____.

A) uncertainty
B) conflict
C) necessity
D) indecision
E) possibility

Question 75

At the start of every shift, Carl, a delivery truck driver, plans out his route based on the addresses that he will be visiting to drop off packages. This can best be described as what kind of decision?

A) Programmed
B) Nonprogrammed
C) Wicked
D) Administrative
E) Intuitive

Question 76

_____ 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 77

Riley is a manager at the Tinker Tools. She is expected to make decisions that are in the organization's best economic interests. Her decisions should be based on which of the following models?

A) The administrative model of decision making
B) The garbage can model of decision making
C) The scientific management model of decision making
D) The classical model of decision making
E) The humanistic model of decision making

Question 78

_____ decisions are associated with conflicts over goals and decision alternatives, rapidly changing circumstances, fuzzy information, and unclear links among decision elements.

A) Nonprogrammed
B) Programmed
C) Wicked
D) Conventional
E) Irrational

Question 79

Which of the following has the highest possibility of failure?

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

Question 80

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

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