Deck 4: Decision Making

Question 1

Managers regularly use their intuition in decision making.

Answer 1

True

Question 2

A manager who desires to minimize his maximum "regret" will opt for a minimax choice.

Answer 2

True

Question 3

Individuals with a conceptual style tend to be very broad in their outlook and will look at many alternatives.

Answer 3

True

Question 4

Managerial decision making is assumed to be rational.

Question 5

Accepting solutions that are "good enough" is termed satisfying.

Question 6

Risk is a condition in which a decision maker has neither certainty nor reasonable probability estimates.

Question 7

People who have a low tolerance for ambiguity and are rational in their way of thinking are said to have a directive style.

Question 8

"The customer is always right" is a good example of a rule.

Question 9

Unstructured problems require custom-made responses through programmed decision making.

Question 10

Most managerial decisions in the real world are fully programmed and global in nature.

Question 11

Decision criteria define what is relevant in making a decision.

Question 12

Decision makers with an analytic style have a much lower tolerance for ambiguity than do directive types.

Question 13

Programmed decisions tend to be repetitive and routine.

Question 14

A policy is a series of interrelated sequential steps that a manager can use for responding to a structured problem.

Question 15

Nonprogrammed decisions are unique and nonrecurring.

Question 16

In deciding whether or not to purchase a particular franchise,start-up costs and franchisor history are two possible decision criteria.

Question 17

An optimistic manager will follow a maximin approach.

Question 18

A procedure is an explicit statement that tells a manager what he or she can or cannot do.

Question 19

Managers tend to operate under assumptions of bounded rationality.

Question 20

It is possible that at the end of the decision-making process you may be required to start the decision process over again.

Question 21

Corporate social responsibility is defined as a business's obligation to obey the law and pursue long-term economic goals.

Question 22

Having a written code of ethics ensures that an organization's members will behave ethically.

Question 23

As long as it has broken no laws and done nothing unethical,a business has fulfilled its obligation to society.

Question 24

A good example of social responsiveness is a company whose managers conduct business in an ethical way and strictly follows all local laws.

Question 25

In the rights view of ethics,managers impose and enforce rules fairly and impartially in accordance with laws and regulations.

Question 26

Heuristics are "rules of thumb" that managers use to simplify decision making.

Question 27

In the socio-economic view of organizational social responsibility,management's responsibility includes protecting and improving society.

Question 28

The goal of the rights view of ethics is to provide the greatest good for the greatest number.

Question 29

The theory of justice view of ethics is concerned with protecting individual liberties and privileges.

Question 30

Ethics refers to the rules and principles that define right and wrong conduct.

Question 31

Top managers play an especially important role in business ethics because they set the tone of the culture and are role models for other managers and employees.

Question 32

The classical view of social responsibility is that management's only social responsibility is to maximize profits.

Question 33

The classical view of organizational social responsibility is that management's only social responsibility is to maximize profits.

Question 34

The integrative social contracts theory proposes that ethical decisions should be based on existing ethical norms in industries and communities.

Question 35

Long-term stability is an argument for social responsibility.

Question 36

The most outspoken advocate of the classical view of social responsibility is Milton Friedman.

Question 37

Bob works in a local sporting goods company.He spent the day telling his colleagues that he knew that the company was going to lose the account to their chief rival and kept telling everyone what he would have done to avoid it.He never mentioned his strategies before the loss of the account.Bob seems to suffer from hindsight bias.

Question 38

Any action that is illegal is unethical and any action that is legal is ethical.

Question 39

The self-serving bias occurs when decision makers take credit for their successes and blame failure on outside factors.

Question 40

In the socio-economic view of social responsibility,management's responsibility includes protecting and improving society's welfare.

Question 41

If all the decision criteria are equally important,weighting the criteria ________.

A)improves decision making when large numbers of criteria are involved
B)is not necessary
C)produces excellent decisions
D)improves the criteria
E)results in more alternatives

Question 42

The strap on Brad's briefcase broke as he lifted it.On the way to class,he stopped at the first store that carries briefcases and purchased the only available one from the front counter.Brad has made a(n)________ decision.

A)satisficing
B)irrational
C)escalating
D)optimizing
E)perfectly rational

Question 43

When managers find a disparity between their current situation and a desired situation,they are at which step of the decision-making process?

A)analyzing alternatives
B)allocating weights to criteria
C)identifying decision criteria
D)developing alternatives
E)identifying a problem

Question 44

After the decision criteria have been determined,weights have been assigned,and alternatives have been identified,the next step in the decision-making process is to ________.

A)develop an implementation process
B)analyze alternatives
C)select an alternative
D)implement the alternative
E)evaluate decision effectiveness

Question 45

Which of the following decisions involves the management function of controlling?

A)How should jobs be designed?
B)How difficult should individual goals be?
C)How do I handle employees who appear to be low in motivation?
D)When is the right time to stimulate conflict?
E)When is a performance deviation significant?

Question 46

An increased commitment to a previous decision despite evidence that it may have been wrong is a phenomenon called ________.

A)the anchoring effect
B)intuition
C)overconfidence bias
D)hindsight bias
E)escalation of commitment

Question 47

Which of the following is the step in the decision-making process that follows identifying a problem and decision criteria?

A)allocate weights to criteria
B)analyze alternatives
C)select an alternative
D)implement the alternative
E)evaluate decision effectiveness

Question 48

The final step in the decision-making process is to ________.

A)select the best alternative
B)reevaluate the weighting of the criteria until they indicate the correct outcome
C)evaluate the outcome of the decision
D)reassign the ratings on the criteria to find different outcomes
E)implement the alternative to solve the problem

Question 49

In allocating weights to the decision criteria,which of the following is helpful to remember?

A)The total of the weights should sum to 1.0.
B)Every criterion considered,regardless of its importance,must receive some weighting.
C)All weights must be the same.
D)The most important and least important criteria should be inversely weighted.
E)Assign a weight to the most important criterion,and then assign weights to the rest against that standard.

Question 50

Which of the following is an aspect of bounded rationality?

A)decreased commitment to previous decisions
B)managers are rational decision makers
C)managers accept decisions that are good enough
D)all information is analyzed for all alternatives

Question 51

Which of the following steps in the decision-making process occurs before developing alternatives?

A)allocate weights to criteria
B)analyze alternatives
C)select an alternative
D)implement the alternative
E)evaluate decision effectiveness

Question 52

In the purchase of a car,the assessment of the importance of factors such as speed,fuel efficiency,and price occurs at which step of the decision-making process?

A)identify a problem
B)analyze alternatives
C)identify decision criteria
D)evaluate decision effectiveness
E)develop alternatives

Question 53

In Step 5 of the decision-making process,each alternative is evaluated by appraising it against the ________.

A)subjective goals of the decision maker
B)availability of resources
C)problem definition
D)implementation strategy
E)weighted decision criteria

Question 54

The type of decision making in which the solution is considered "good enough" is known as which of the following?

A)minimizing
B)rationalizing
C)maximizing
D)satisficing
E)optimizing

Question 55

To determine the ________,a manager must identify the factors that are relevant to resolving the problem.

A)effectiveness of the decision
B)number of feasible alternatives
C)weighting of decision criteria
D)decision criteria
E)implementation procedures

Question 56

When managers try to make decisions rationally but within the limits of their information-processing abilities,they are operating under the assumptions of ________.

A)perfect rationality
B)bounded rationality
C)certainty
D)objective rationality
E)optimization

Question 57

The assumption that managers make consistent,value-maximizing choices within specified constraints is known as which of the following?

A)rational decision making
B)unbounded rationality
C)organized decision making
D)optimal decision making
E)objective rationality

Question 58

The process of selecting decision criteria is accomplished by ________.

A)massaging the data that will support a given decision
B)flipping a coin to produce a 50-50 chance of being right
C)determining what is relevant in making the decision
D)examining the differences between potential opportunities
E)identifying a discrepancy between an existing and a desired state of affairs

Question 59

Which step in the decision-making process involves conveying the decision to those affected by it and getting their commitment to it?

A)allocate weights to criteria
B)analyze alternatives
C)select an alternative
D)implement the alternative
E)evaluate decision effectiveness

Question 60

Because managers can't possibly analyze all information on all alternatives,they accept solutions that ________ rather than ________ payoff.

A)maximize; satisfice
B)maximize; minimize
C)satisfice; minimize
D)satisfice; maximize
E)minimize; maximize

Question 61

Arthur authorizes the expenditure of an additional $100 000 for the production of a new product despite mounting concerns that it will be unprofitable.The cost of the new product has already increased far beyond the initial plans and projections.Arthur's continuing support for this project illustrates the phenomenon of ________.

A)anchoring effect
B)intuition
C)overconfidence bias
D)hindsight bias
E)escalation of commitment

Question 62

The inflight service manager for Air Canada is authorized to distribute dry cleaning vouchers to customers who complain about spilling drinks and food on their clothes during turbulent flights.This is an example of a ________ decision to a ________ problem.

A)nonprogrammed; routine
B)nonprogrammed; technical
C)programmed; unique
D)nonprogrammed; unstructured
E)programmed; structured

Question 63

A business school's statement that it "strives for productive relationships with local organizations" is an example of a ________.

A)rule
B)precedent
C)procedure
D)policy
E)heuristic

Question 64

"We encourage the use of environmentally safe materials" is an example of a ________.

A)rule
B)policy
C)procedure
D)precedent
E)heuristic

Question 65

To receive reimbursement for their travel expenses,managers at ABC company must first list each item in chronological order on an expense form,then attach all receipts to the upper left corner,then obtain their supervisor's authorizing signature,and finally forward the form to the finance department.This is an example of a ________.

A)rule
B)precedent
C)procedure
D)policy
E)heuristic

Question 66

Whenever possible,managers at ABC company try to promote employees from within the organization before recruiting from external sources.This is an example of a ________.

A)rule
B)precedent
C)procedure
D)policy
E)heuristic

Question 67

Relying on "gut feeling" over cognitive problem solving in decision making is a phenomenon called ________.

A)anchoring effect
B)intuition
C)overconfidence bias
D)hindsight bias
E)escalation of commitment

Question 68

"Only managers with top-secret clearance are authorized to access the company database." This is an example of a ________.

A)rule
B)precedent
C)procedure
D)policy
E)heuristic

Question 69

A customer gives Jan a request that she has never heard before in her 15 years of experience at the hardware store.Since the request involves the application of a new technology,Jan is not sure what to do.This is an example of a(n)________ problem.

A)technical
B)unstructured
C)programmed
D)nonprogrammed
E)structured

Question 70

Which of the following terms is associated with non-programmed decisions?

A)unique
B)recurring
C)routine
D)repetitive
E)straightforward

Question 71

Alanna has just been given the assignment of developing the marketing strategy for the company's new product to be released in November.What type of decision making will be required of Alanna?

A)structured
B)unstructured
C)technical
D)programmed
E)nonprogrammed

Question 72

A retail clothing store manager who estimates how much to order for the current spring season based on last spring's outcomes is operating under what kind of decision-making condition?

A)reliability
B)risk
C)uncertainty
D)certainty
E)rationality

Question 73

A ________ is an explicit statement that tells a manager what he or she can or cannot do.

A)procedure
B)policy
C)precedent
D)heuristic
E)rule

Question 74

The most efficient way to handle a structured problem is through ________ decision making.

A)linear
B)unique
C)focused
D)programmed
E)technical

Question 75

If an individual knows the price of three similar cars at different dealerships,he or she is operating under what type of decision-making condition?

A)risk
B)uncertainty
C)certainty
D)factual
E)nonprogrammed

Question 76

________ is a situation in which a manager can make accurate decisions because the outcome of every alternative is known.

A)Certainty
B)Risk
C)Uncertainty
D)Maximax
E)Maximin

Question 77

"Before a health claim may be paid,the following steps must be taken." This is an example of a ________.

A)rule
B)precedent
C)procedure
D)policy
E)heuristic

Question 78

Nonprogrammed decisions are typically made under a condition of ________.

A)certainty
B)low levels of risk
C)uncertainty
D)reliability
E)rationality

Question 79

When the petty cash in Elaine's drawer falls to less than $25,she places a request for additional funds to bring the total back up to $100.This is an example of a(n)________ decision.

A)nonprogrammed
B)programmed
C)technical
D)structured
E)unstructured

Question 80

Problems that are straightforward,familiar,and easily defined are called ________ problems.

A)opportunity
B)structured
C)unique
D)nonprogrammed
E)technical