Deck 15: Decision Making

Question 1

 _____ is the process of identifying issues and making choices from alternative courses of action.

A) Problem solving
B) Environmental scanning
C) Decision making
D) Strategic positioning

Answer 1

C

Question 2

 Vinita buys a stock assuming that she can make profit out of it. However, shortly thereafter the stock value drops and she loses money. Her financial planner thinks the stock value will drop further and advises her to sell the stock. However, the market value has dropped so much already that Vinita believes it is due to rebound; she doesn't want to sell at the lowest point and lose money. She holds onto the stock in hopes to regain her loss. Instead she loses more money. This phenomena is referred to as

A) intuitive decision making.
B) representativeness heuristic.
C) escalation of commitment.
D) rational decision making.

Answer 2

C

Question 3

 The factor that distinguishes conditions of risk from conditions of uncertainty is that in conditions of risk:

A) individuals have all of the information they need to make the best possible decision.
B) individuals have information about the potential courses of action.
C) individuals have the information to make optimal decisions that are clear and obvious.
D) individuals have information about the possible outcomes for each course of action.

Answer 3

B

Question 4

 Under conditions of _____, individuals have information about objectives, priorities, and potential courses of action, but they do not have all the information about the possible outcomes for each course of action.

A) certainty
B) rationality
C) risk
D) unambiguity

Question 5

 Tom negotiated with the customer and priced the customer's order at a special discount within the bounds of established rules and guidelines.Tom has made a(n)  _____ decision.

A) emotional
B) unstructured
C) intuitive
D) programmed

Question 6

 The act of choosing a solution that is good enough is called

A) framing.
B) reasoning.
C) satisficing.
D) discounting.

Question 7

 John, a top executive, is in a situation where he has to quickly decide between two projects that came in simultaneously from two major clients. Since his team is not big enough to complete both projects at a time, he cannot accept both. He has a hunch and just like that accepts one of the clients' projects without any considerations. This scenario is an example of

A) rational decision making.
B) bounded rationality.
C) intuitive decision making.
D) context-independent decisions.

Question 8

 When the research team presented alternatives in terms of a chance for losses, the board chose the risk-seeking alternative, but when the team presented the alternatives in terms of opportunities for gain in the following meeting, the board switched to the risk-averse alternative. The board had succumbed to the _____ bias.

A) framing
B) discounting
C) status quo
D) confirmation

Question 9

 Martin decided to hire Ann for the associate's position because she reminded him of a former associate who had excelled in the position. Martin has used which of the following heuristics?

A) Availability
B) Adjustment
C) Representativeness
D) Playfulness

Question 10

 Mary, a team leader, found that a few of her team members' performance had been deteriorating. They had been coming late to work and had not been completing tasks on time. In order to improve her team's performance, Mary identified three options to deal with these underperformers: fire them, train them, or transfer them to another team. What is the next step Mary should pursue in rational decision making?

A) She should rate the options to see which one will improve her team's performance.
B) She should identify the objectives and goals of her decision related to the problem.
C) She should immediately fire all the underperformers to solve the problem.
D) She should understand the problem or opportunity that has to be dealt with.

Question 11

 Bounded rationality refers to

A) decisions being based on a certain starting point.
B) simple and straightforward rational decisions.
C) decisions made easily without any restrictions.
D) making decisions within a set of constraints.

Question 12

 Which of the following is the first step in rational decision making?

A) Identifying possible courses of action
B) Identifying the objectives
C) Defining a problem or opportunity
D) Computing the optimal decision

Question 13

 Top management's decision on how to integrate a newly acquired firm is most likely a(n) _____ decision.

A) emotional
B) programmed
C) intuitive
D) nonprogrammed

Question 14

 Rules of thumb or short-cuts that individuals use to save time when making complex decisions are known as

A) biases.
B) rationales.
C) intuitions.
D) heuristics.

Question 15

 A model of decision making that seeks to maximize economic or other outcomes using a rational choice process is known as the _____ model.

A) garbage can
B) political
C) classical
D) administrative

Question 16

 Which of the following statements about nonprogrammed decisions is true?

A) These decisions generally do not require a higher-level employee to execute.
B) These decisions are made under conditions of certainty.
C) These decisions are made in response to novel, poorly defined, or unstructured situations.
D) These decisions are made in response to recurring organizational problems.

Question 17

 The team members were reluctant to try a new format with which they were unfamiliar; the old format had served them well for many years. Their decision to stick with the old format is an example of the _____ bias.

A) confirmation
B) framing
C) status quo
D) discounting

Question 18

 Peter is a senior manager in an organization that is currently laying off its employees. It is Peter's responsibility to convey this message to the laid-off employees. Harry is one among them with whom Peter had a conflict a year ago. Therefore, in an attempt to avoid any such conflicts again, Peter requested a human resources representative to convey the message instead. In this case, Peter used the _____ heuristic.

A) intuitive
B) availability
C) representativeness
D) adjustment

Question 19

 Which of the following statements best describes the appropriateness framework?

A) The process that individuals use to save time when making complex decisions
B) The process by which individuals make choices based on a certain starting point
C) The process of making decisions based on societal norms or expectations
D) The process of identifying issues and making choices from alternative courses of action

Question 20

 Which of the following is the last step in rational decision making?

A) Computing the optimal decision
B) Rating each course of action on each of the objectives
C) Weighing the objectives according to importance
D) Identifying possible courses of action

Question 21

 Using SCRIPTS allows managers to increase the flexibility and speed of their decisions.

Question 22

 Which of the following models does not view a decision process as a sequence of steps that begins with a problem and ends with a solution?

A) Classical model
B) Administrative model
C) Political model
D) Garbage can model

Question 23

 Which of the following models should managers use when making tough calls?

A) Garbage can model
B) SCRIPTS model
C) Administrative model
D) Political model

Question 24

 The bounded rationality framework contends that individuals make decisions under conditions of certainty.

Question 25

 Outline heuristics and its types.

Question 26

 List the actions that can help managers "de-bias" their judgments.

Question 27

 Identifying a few possible courses of action is the first step involved in the rational decision-making process.

Question 28

 In an attempt to spark innovation and creativity, the CEO asked the executive team to temporarily abandon the rules and explore all possibilities. The CEO was

A) using the classical model of decision making.
B) satisficing as part of the administrative model of decision making.
C) adopting playfulness as part of the garbage can model of decision making.
D) using the political model of decision making.

Question 29

 Describe confirmation bias.

Question 30

 The classical model of decision making seeks to maximize economic or other outcomes using a rational choice process.

Question 31

 Intuitive decision making often emerges from subconscious activity.

Question 32

 The board's decision to relocate company headquarters to another state was most likely a(n) _____ decision.

A) emotional
B) programmed
C) intuitive
D) nonprogrammed

Question 33

 Heuristics are the short-cuts that individuals use to save time when making complex decisions.

Question 34

 The representativeness heuristic contends that individuals make choices based on a certain starting point.

Question 35

 Programmed decisions generally do not require a manager or higher-level employee to execute.

Question 36

 Define the theory of rational choice and list the steps involved in the rational decision-making process.

Question 37

 Confirmation bias means that people tend to seek information that disconfirms a decision before seeking information that confirms a decision.

Question 38

 Differentiate between programmed and nonprogrammed decisions.

Question 39

 The managers, who had bargained and built coalitions with other managers in order to arrive at a decision on how the division would be restructured, were following which model of decision making?

A) Classical model
B) Administrative model
C) Political model
D) Garbage can model

Question 40

 The managers, due to time constraints, opted for the first alternative that appeared to solve the problem even though better options may have existed. The managers were using which model of decision making?

A) Classical model
B) Administrative model
C) Political model
D) Garbage can model