Deck 5: Decision Making, Learning, Creativity, and Entrepreneurship

Question 1

The likelihood of a manager making an error in judgment is much greater in programmed decision-making than in nonprogrammed decision-making.

Answer 1

False
Explanation: The likelihood of error is much greater in nonprogrammed decision making than in programmed decision making.

Question 2

According to the administrative model,managers can never have complete information when they are trying to make a nonprogrammed decision because the complete range of decision-making alternatives is not known.

Answer 2

True
Explanation: The administrative model is an approach to decision making that explains why decision making is inherently uncertain and risky and why managers usually make satisfactory rather than optimum decisions. Even if managers had unlimited ability to evaluate information, they still would not be able to arrive at the optimum decision because they would have incomplete information. Information is incomplete because the full range of decision-making alternatives is unknowable in most situations, and the consequences associated with known alternatives are uncertain.

Question 3

When managers know the possible outcomes of a decision and can assign probabilities to each of these outcomes in terms of their likelihood of occurrence,a situation of risk occurs.

Answer 3

True
Explanation: Risk is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them.

Question 4

When we say that managers are concerned with the legality of a decision,this is another way of saying that they are concerned with the practicality of the decision.

Question 5

Economic feasibility of alternatives states that an alternative might seem economically superior to other alternatives; but if managers realize it is likely to threaten other important projects,they might decide it is not practical after all.

Question 6

The classical decision-making model is prescriptive in the sense that it specifies how decisions should be made.

Question 7

Most day-to-day decisions in business are nonprogrammed decisions.

Question 8

In the decision-making process,to compare what actually happened to what was expected to happen as a result of the decision is a procedure of choosing among alternatives.

Question 9

Managers can be reactive or proactive in recognizing the need for a decision.

Question 10

The final step in the decision-making process is the implementation of the alternative solution.

Question 11

The first step in decision making that a manager needs to take is generate a set of feasible alternative courses of action in response to the opportunity or threat.

Question 12

When a manager chooses an acceptable alternative instead of the optimum alternative,we say that a satisficing decision has occurred.

Question 13

With regard to the decision-making process,in order to ensure that a decision is implemented,top managers must assign to middle managers the responsibility for making the follow-up decisions necessary to achieve the goal; this is a procedure related to learning from feedback.

Question 14

While assessing the practicality of alternatives,managers must decide whether they have the capabilities and resources required to implement the alternative,and they must be sure that the alternative will not threaten the attainment of other organizational goals.

Question 15

March and Simon's administrative model is consistent with the classical model of decision making.

Question 16

Programmed decisions are made in response to unusual or novel opportunities and threats.

Question 17

According to March and Simon,managerial decision making,especially when nonprogrammed decisions are involved,is frequently more of a science than an art.

Question 18

A manager who makes a decision based on his/her judgment is using a less rational process than a manager who makes a decision using his/her intuition.

Question 19

The classical decision-making model assumes that managers have all of the information they need in order to make the optimum decision.

Question 20

Decision making is programmed when managers need to repeatedly make new judgments about what should be done.

Question 21

Rationalization is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented.

Question 22

According to Senge's concept of the learning organization,team learning is less important than individual learning when trying to increase organizational learning.

Question 23

Group creativity can be increased by using brainstorming techniques.

Question 24

The ability of a decision maker to discover novel ideas that lead to feasible alternatives in decision making is known as creativity.

Question 25

In brainstorming sessions,the fewer the alternatives presented,the better the brainstorming session.

Question 26

The nominal group technique is especially useful when an issue is controversial and when different managers champion a similar course of action.

Question 27

Individuals who believe that they are responsible for what happens to them and that their own actions determine important outcomes are said to have an external locus of control.

Question 28

Brainstorming is often used to avoid production blocking.

Question 29

Intrapreneurs become entrepreneurs and found companies that often compete with the companies they left.

Question 30

Entrepreneurship encompasses all the decisions involved in planning,organizing,leading,and controlling resources.

Question 31

Contests and rewards signal the importance of coming up with creative ideas and encourage employees to share them.

Question 32

Delphi technique is a written approach to creative problem solving.

Question 33

Diversity among decision makers can be used to help reverse the effects of devil's advocacy in group decision making.

Question 34

The group leader writes a statement of the problem and a series of questions to which participating managers are to respond in a brainstorming session.

Question 35

Groupthink is an advantage for groups.

Question 36

A member of a group challenges the decision that is being made by the group in an attempt to make the group carefully consider the pros and cons of a particular alternative.We say that this member of the group is playing the role of the devil's advocate.

Question 37

When the members of a group try hard to agree,even when it is done without accurately assessing the information available to the group,we say that ambiguity has occurred.

Question 38

Entrepreneurs are likely to be high on the personality trait of openness to experience.

Question 39

Entrepreneurship is the same as management.

Question 40

Groups often take longer than individuals to make decisions.

Question 41

Action Co.is attempting to decide whether or not to launch a new $10 million advertising campaign for a product whose sales have been lagging well below the projected sales for the product.This represents which type of decision for the organization?

A) Groupthink
B) Intuitive
C) Programmed
D) Nonprogrammed
E) Satisficing

Question 42

The idea behind the product champion role is that if intrapreneurs are isolated,they will become so intensely involved in a project that development time will be relatively brief and the quality of the final product will be enhanced.

Question 43

Which of the following is a programmed decision?

A) How much to invest in a new product
B) Whether to expand into a new market
C) When to time a new advertising campaign
D) When to bill customers
E) Whether to buy another company

Question 44

An organization that has been focusing on a target market located in the eastern part of the United States is attempting to decide whether to expand its sales to the West Coast of the United States.Which of the following types of decisions is being taken by the organization?

A) Intuition decision
B) Nonprogrammed decision
C) Groupthink decision
D) Satisficing decision
E) Programmed decision

Question 45

Casey,an accountant for a small firm,pays the real estate taxes seven days before they are due.This represents which type of decision?

A) Satisficing
B) Programmed
C) Intuition
D) Nonprogrammed
E) Groupthink

Question 46

Karen,a manager,orders raw materials when the raw materials inventory reaches a certain point.This is an example of which type of decision?

A) Intuition decision
B) Satisficing decision
C) Nonprogrammed decision
D) Programmed decision
E) Groupthink decision

Question 47

An organization's finance department decides to go to the company's usual bank and take out a loan because the company's revenues for the month are projected to be less than its expenses.What type of decision does this represent?

A) Intuition decision
B) Groupthink decision
C) Programmed decision
D) Nonprogrammed decision
E) Satisficing decision

Question 48

What do managers do to regulate routine activities?

A) They create a mission statement.
B) They establish rules and guidelines.
C) They create cross-functional teams.
D) They facilitate a strong organizational culture.
E) They train workers in the use of intuition.

Question 49

Nonroutine decisions made in response to novel situations in business are known as:

A) intuitive decisions
B) creative decisions
C) programmed decisions
D) heuristic decisions
E) nonprogrammed decisions

Question 50

Decisions that have been made many times in the past and for which managers have rules and guidelines about how to make similar decisions in the future are known as:

A) nonprogrammed decisions.
B) heuristic decisions.
C) programmed decisions.
D) intuitive decisions.
E) creative decisions.

Question 51

In the administrative model of decision making,when the number of possible alternatives to a decision is so large that the manager cannot possibly evaluate all of them before making a decision,which of the following has occurred?

A) Satisficing
B) Bounded rationality
C) Brainstorming
D) Devil's advocacy
E) Optimum decision making

Question 52

Martin,a plant foreman,asks the plant superintendent to allow him to hire an additional worker whenever overtime hours for the previous month increase by more than 25 percent.This is an example of which type of decision?

A) Intuition decision
B) Groupthink decision
C) Satisficing decision
D) Programmed decision
E) Nonprogrammed decision

Question 53

A manager of a charity asks the board of directors for permission to hire temporary help when the regular secretary goes on vacation.This is an example of which type of decision?

A) Programmed
B) Groupthink
C) Nonprogrammed
D) Intuition
E) Satisficing

Question 54

Dynamic Explosives is trying to decide whether or not to launch nationally a new product that the organization has never sold previously.This represents which type of decision for the organization?

A) Programmed decision
B) Intuitive decision
C) Groupthink decision
D) Nonprogrammed decision
E) Satisficing decision

Question 55

The classical model of decision making specifies how decisions should be made by managers; this is a way of saying that this model of decision making is:

A) heuristic.
B) prescriptive.
C) incomplete.
D) intuitive.
E) satisficing.

Question 56

When fire chiefs manage firefighters battling hazardous,out-of-control fires,they frequently have to depend on their professional instincts to make on-the-spot decisions that will protect the lives of the firefighters and save the lives of others,control the fires,and preserve decisions made in emergency situations involving high ambiguity and rapidly changing conditions.This is an example of which of the following types of decision making?

A) Programmed
B) Routine
C) Groupthink
D) Intuition
E) Satisficing

Question 57

Product champions are a group of intrapreneurs who are deliberately separated from the normal operation of an organization to encourage them to devote all their attention to developing new products.

Question 58

The classical model of decision making assumes that:

A) the number of alternatives a manager must identify is so great that it is difficult for the manager to even come close to evaluating it all before making a decision.
B) managers have little information to use in making a decision.
C) managers have access to all the information they need to make the optimum decision.
D) managers have neither the time nor the money to search for all possible alternative solutions and evaluate all the potential consequences of those alternatives.
E) managers search for and choose acceptable, or satisfactory, ways to respond to problems and opportunities rather than trying to make the optimal decision.

Question 59

An organization's accounting department decides to send out a bill to a new customer.What type of decision does this represent?

A) Programmed decision
B) Nonprogrammed decision
C) Intuitive decision
D) Groupthink decision
E) Bounded rationality decision

Question 60

Star,Inc.,is attempting to decide whether or not it should change its manufacturing process to a new type of technology.This represents which type of decision for the organization?

A) Programmed decision
B) Nonprogrammed decision
C) Groupthink decision
D) Intuitive decision
E) Satisficing decision

Question 61

Kathleen,a manager,is attempting to determine whether she has both the capability and the resources to produce one of several possible new products.In the context of decision making,on which of the following criteria of alternative courses of action is Kathleen focusing?

A) Practicality
B) Ethicalness
C) Legality
D) Economic feasibility
E) Dialectical inquiry

Question 62

Dale,a manager,is assessing possible alternatives for the solution of a quality problem in his department.As Dale does so,he attempts to determine if a possible alternative will threaten other company projects.Which of the following criteria of decision-making is being implemented by Dale?

A) Economic feasibility
B) Practicality
C) Legality
D) Ethicalness
E) Groupthink

Question 63

When the meaning of the information available to a manager is unclear and can be interpreted in several ways,the information is:

A) certain.
B) ambiguous.
C) bounded.
D) irrational.
E) dialectical.

Question 64

Patrick,a manager,is assessing possible alternatives for the solution of a problem.Patrick performs a cost-benefit analysis of several alternatives in order to determine the net financial payoff of each alternative.Which of the following criteria of decision making is Patrick implementing?

A) Economic feasibility
B) Practicality
C) Ethicalness
D) Legality
E) Dialectical inquiry

Question 65

Based on the work of March and Simon's administrative model of decision making,the first step in the managerial decision-making process is to:

A) choose among alternatives.
B) assess alternatives.
C) implement the chosen alternative.
D) recognize the need for a decision.
E) generate alternatives.

Question 66

A software firm is considering introducing a new product unlike any previously on the market.Managers cannot estimate the probability of success for the new product.Which of the following best describes the situation?

A) Risk
B) Uncertainty
C) Bounded rationality
D) Incomplete information
E) Satisficing

Question 67

Margaret,a marketing manager,wants to budget the advertising for a new product launch.She is trying to determine the amount of money that her company can afford to spend on advertising this new product.In the context of decision-making,which of the following criteria of alternative courses of action is Margaret implementing?

A) Legality
B) Ethicalness
C) Economic feasibility
D) Practicality
E) Authenticity

Question 68

The marketing managers of Rudolf Ltd.strive so hard to agree on an important decision to launch a product that they ignore information that a similar product already exists in the market and that the barriers to entry into the market are high.This refers to which of the following decision-making processes?

A) Dialectical inquiry
B) Devil's advocacy
C) Groupthink
D) Intuition
E) Representative bias

Question 69

An organization decides to ask three advertising agencies to pitch a proposal to handle the organization's business,instead of asking all of the advertising agencies in the city where this organization's headquarters are located to pitch the account.What type of decision does this represent?

A) Programmed decision
B) Nonprogrammed decision
C) Satisficing decision
D) Certainty decision
E) Illusion of control decision

Question 70

Cameron,a plant manager,wants to initiate a diversity training program in his plant.He is considering whether his department has enough extra people to cover for the time his employees will be engaged in the classes.Which of the following criteria of decision making is Cameron implementing?

A) Legality
B) Ethicalness
C) Devil's advocacy
D) Economic feasibility
E) Practicality

Question 71

When managers know the possible outcomes of a decision and can assign probabilities to each of these outcomes in terms of their likelihood of occurrence in the future,this is known as:

A) uncertainty.
B) certainty.
C) risk.
D) bounded rationality.
E) dialectical inquiry.

Question 72

The purchasing manager for Telsa Motor Co.decides to call three suppliers of automobile windshields to ask for a bid on an order for 1,000 windshields for a new Ford car,instead of calling a hundred possible windshield suppliers for such a bid.What type of decision does this represent for the purchasing manager?

A) Nonprogrammed decision
B) Illusion of control decision
C) Certainty decision
D) Programmed decision
E) Satisficing decision

Question 73

A manager considers a limited sample of the potential alternative solutions for a problem and selects one that is acceptable instead of attempting to select the optimum solution.This type of decision is called:

A) programmed.
B) intuition.
C) certainty.
D) satisficing.
E) heuristics.

Question 74

Esteban,a manager,performs a financial analysis of several investment alternatives in order to determine which alternative is most likely to impact the organization's profitability.Esteban is focusing on:

A) bounded rationality.
B) ethicalness.
C) economic feasibility.
D) dialectical inquiry.
E) legality.

Question 75

With reference to the steps of decision-making process,which of the following is the last step in the managerial decision-making process?

A) Generate alternatives
B) Learn from feedback
C) Recognize the need for a decision
D) Implement the chosen alternative
E) Choose among alternatives

Question 76

When managers cannot assign probabilities of future occurrence to possible alternatives to a decision,this is known as:

A) certainty
B) risk
C) bounded rationality
D) uncertainty
E) dialectical inquiry

Question 77

When managers decide that they have the capabilities and resources required to implement an alternative,and they are sure that the alternative will not threaten the attainment of other organizational goals,they are focusing on which of the following criteria of alternative courses of action?

A) Legality
B) Ethicalness
C) Economic feasibility
D) Practicality
E) Authenticity

Question 78

Managers in biotechnology know that new drugs have a 10 percent chance of passing advanced clinical trials.This is an example of:

A) risk.
B) uncertainty.
C) bounded rationality.
D) incomplete information.
E) satisficing.

Question 79

The explosion of the space shuttle Challenger is an example of poor managerial decision making by the managers at NASA and Morton Thiokol,who considered and then downplayed the criterion of:

A) ethicalness.
B) practicality.
C) legality.
D) economic feasibility.
E) devil's advocacy.

Question 80

The pattern of faulty and biased decision making that occurs in groups whose members strive for argument at the expense of good decision making is called:

A) brainstorming.
B) groupthink.
C) devil's advocacy.
D) bounded rationality.
E) satisficing.