Deck 14: Managerial Decision Making

Question 1

The process of defining problems, gathering information, generating alternatives, and choosing a course of action is referred to as

A) learning.
B) goal setting.
C) task management.
D) decision making.

Answer 1

D

Question 2

Groupthink helps to reduce the likelihood that escalating commitment will occur.

Answer 2

False

Question 3

In "Change Competency: St. Clair Hospital Adopts RFID and Related Technologies," nurses who need to administer medication to a patient, can override the SoMo 650 computer if patient identification cannot be confirmed.

Answer 3

False

Question 4

Katerina knows the company's current warehouse is not large enough to house all of its inventory. She is assessing whether to open a second warehouse or move to a larger location. Katerina knows the pros and cons of each choice and has all the information she needs to make her decision. The decision that Katerina will make is based on a condition of

A) high risk.
B) certainty.
C) subjective probability.
D) uncertainty.

Question 5

The concept of problem framing would suggest that focusing on potential losses increases the importance of risk.

Question 6

In "Diversity Competency: Chubb's Business Case for Diversity," the leaders at Chubb feel that workforce diversity needs to be viewed as a competitive advantage and a business opportunity.

Question 7

Part of the reason that evidence-based management is so effective is that it takes into consideration the value of intuition and judgment, particularly in high risk situations.

Question 8

In "Learning from Experience: David Hoover, CEO of Ball Corporation," which of the following is NOT one of Ball's major business segments?

A) aerospace and technologies
B) metal beverage packaging
C) glass beverage packaging
D) plastics packaging

Question 9

In "Change Competency: Shoes for Crews Reduces Risk and Uncertainty," the firm reduced end-user uncertainty by placing a prepaid UPS Return Label in every box of shoes it sold.

Question 10

Tammy always fears making a mistake. Because of this, she often jumps at the first idea that comes along rather than generating innovative ideas herself. Tammy exhibits a perceptual block.

Question 11

In "Learning from Experience: David Hoover, CEO of Ball Corporation," Ball's leadership team came together to discuss the purpose of the company and as a result identified integrity as the company's top core value.

Question 12

When asked by management why the team did not meet its goal, the team members blamed Tristan saying that he didn't contribute to the team's efforts, when, in fact, the team members would never listen to any of the ideas Tristan offered. In this instance, Tristan is a scapegoat.

Question 13

Life insurance companies use objective probability to determine how many policyholders might die in any given year.

Question 14

The percentage of times that a specific result would occur if an individual were to make the same decision a large number of times is referred to as risk.

Question 15

The illumination stage of the creative process involves an internal and unconscious ordering of information.

Question 16

The condition under which individuals can define a problem, specify the probability of certain events, identify alternative solutions, and state the probability of each solution leading to a result is referred to as

A) certainty.
B) probability.
C) risk.
D) competency.

Question 17

The conditions under which decisions are made can be classified based on all of the following EXCEPT

A) effort.
B) certainty.
C) risk.
D) uncertainty.

Question 18

In "Teams Competency: IDEO Brainstorms," IDEO encourages its clients to participate in the brainstorming sessions of the company's design teams.

Question 19

Evidence-based management helps to reduce the mental blinders and bounded rationality that prevent leaders from seeing, seeking, using, or sharing relevant and accessible information during the decision-making process.

Question 20

Stakeholders who have a divergence in problem definition, a divergence in goals, or a divergence in preferred solutions are unlikely to use political decision making.

Question 21

The decision rule in which items are ranked one criterion at a time is known as the _______ rule.

A) alphabetical
B) practical
C) dictionary
D) objective

Question 22

_______ is what a person comes to believe and value on the basis of the systematic organized accumulation of information through experience, communication, and inference.

A) knowledge
B) data
C) information
D) instinct

Question 23

The likelihood that a specific result will occur, based on hard facts and numbers is the premise behind ______ probability.

A) subjective
B) realistic
C) factual
D) objective

Question 24

Which of the following would NOT be a factor in subjective probability?

A) intuition
B) personal judgment
C) hard facts
D) personality traits

Question 25

What component of knowledge management is being exhibited by an employee who uses the Internet to gather information?

A) explicit knowledge
B) enabling technologies
C) tacit knowledge
D) cyber knowledge

Question 26

Mahie's team had to choose between two products to develop. The team made their decision and completed the production process. After a short while it became clear that the team made the wrong decision. Even so, the team continued to allocate resources to the product despite a substantial amount of feedback indicating that their choice had been wrong. This is an example of

A) risk propensity.
B) problem framing.
C) scapegoating.
D) escalating commitment.

Question 27

_______ proceeds from the premise that using a better, deeper diagnosis and employing facts to the extent possible enables managers and leaders to do their jobs better.

A) Knowledge-based management
B) Bounded rationality
C) Evidence-based management
D) Political decision making

Question 28

Risk ______ refers to the tendency of an individual or team to make or avoid decisions in which the anticipated outcomes are unknown.

A) reinforcement
B) complexity
C) probability
D) propensity

Question 29

What concept, developed by Herbert Simon, was considered to be pioneering research into the decision-making process within economic organizations and led to Simon's winning of the 1978 Nobel Prize in economics?

A) evidence-based management
B) political decision making
C) bounded rationality
D) three-phase process of creativity

Question 30

In the bounded rationality model, the tendency to select an acceptable, rather than an optimal, goal or decision is called

A) satisficing.
B) compromising.
C) risk aversion.
D) settling.

Question 31

The use of radio-frequency identification is a type of

A) explicit knowledge.
B) tacit knowledge.
C) evidence management.
D) enabling technology.

Question 32

A person that interprets issues and options in either positive or negative terms is ______ the problem.

A) minimizing
B) escalating
C) framing
D) satisficing

Question 33

To help in her decision making, Nicki consulted reports found in trade journals and government publications. These are a form of

A) tacit knowledge.
B) explicit knowledge.
C) enabling technologies.
D) traditional technologies.

Question 34

In "Change Competency: St. Clair Hospital Adopts RFID and Related Technologies," what has been the result of the hospital utilizing RFID technology?

A) It has reduced the number of nurses the hospital needs to employ.
B) It has prevented errors in medication delivery to patients.
C) It has eliminated the use of patient information databases.
D) It has decreased the risk of patient information being stolen.

Question 35

To say that someone has a "50-50 chance" of making the right decision refers to which aspect of decision making?

A) probability
B) risk
C) certainty
D) effort

Question 36

In the bounded rationality model, when does an individual or team stop searching for alternatives?

A) after every possible alternative is evaluated
B) as soon as an acceptable solution is discovered
C) when it becomes too costly to continue the search
D) after the first alternative is evaluated

Question 37

How is tacit knowledge typically shared?

A) through storytelling and shared experiences
B) through internally-generated company reports
C) through externally-generated publications
D) through the use of the Internet, search engines, and software

Question 38

To make a decision under the condition of uncertainty means that

A) you should make an educated guess based on your gut instinct.
B) you know about the problem, the alternatives, and the outcomes, but you don't know how to implement the decision.
C) you must rely on hard facts and numbers in order to make the decision.
D) you don't have the necessary information to assign probabilities to the outcomes of alternative solutions.

Question 39

Which of the following is NOT a critical diagnostic question considered in evidence-based management?

A) What would have to be true about people and organizations for the idea to be effective?
B) Could the idea still succeed if the assumptions turned out to be wrong?
C) How quickly and inexpensively can data be gathered to test the reasonableness of the underlying assumptions?
D) How feasible is it that employees and management will agree on the course of action to be taken?

Question 40

In "Change Competency: Shoes for Crews Reduces Risk and Uncertainty," how did the company reduce their customers' risk and uncertainty regarding the company's shoes?

A) by forming a customer-driven blog
B) by providing a unique warranty
C) by promoting purchase with exclusive discounts
D) by allowing purchases to take place at the workplace

Question 41

When the marketing department exceeded its allocated budget by 20 percent, management blamed it on the marketing director even though management had drastically cut the department's budget midway through the year. In this example, the marketing director is

A) a scapegoat.
B) an innocent bystander.
C) a snitch.
D) a puppet.

Question 42

If you are in constant fear of making a mistake and genuinely fear and distrust others, your creativity will suffer from a(n)

A) perceptual block.
B) social block.
C) emotional block.
D) cultural block.

Question 43

According to Pfeffer and Sutton, "knowing what you know and knowing what you don't know" is the definition of

A) knowledge.
B) evidence.
C) intuition.
D) wisdom.

Question 44

Which of the following is NOT a limitation of evidence-based management?

A) It fails to consider the dangers of choosing the "quick fix."
B) It can be challenging to put into practice.
C) It does not adequately address the value of intuition and judgment.
D) Evidence for decision making may be contradictory.

Question 45

A person who fails to investigate the obvious or distinguish between cause and effect is exhibiting a(n) ______ block.

A) emotional
B) cultural
C) rational
D) perceptual

Question 46

Which of the following is NOT a characteristic of information in political decision making?

A) It is often piecemeal and based on informal communication.
B) It is subjective.
C) It is objective.
D) It is defined by what stakeholders deem important.

Question 47

Which of the following describes situations where the parties perceive that they have separate and different interests, goals, and values and, therefore, employ self-serving tactics?

A) evidence-based management
B) political decision making
C) bounded rationality
D) creative decision making

Question 48

In the "Diversity Competency: Chubb's Business Case for Diversity," the company views diversity as a

A) necessary evil.
B) societal but not an organizational goal.
C) hindrance to decision making.
D) competitive advantage and business opportunity.

Question 49

Which of the following is helpful in achieving constructive decisions and outcomes when using political decision making?

A) relying on aggressive influence tactics
B) adhering to basic ethical principles
C) relying on the hedonistic principle
D) removing stakeholders from the decision-making process

Question 50

A team that successfully completes the ______ stage of the creative process, usually finds they have developed new ideas and alternative solutions for tackling a problem.

A) incubation
B) verification
C) concentration
D) preparation

Question 51

The ability to visualize, generate, and implement new ideas or concepts or new associations between existing ideas or concepts that are novel and useful is referred to as

A) intuitiveness.
B) creativity.
C) productivity.
D) efficiency

Question 52

The notion in political decision making that states one should do whatever he or she finds to be in his or her self-interest is the

A) might-equals-right principle.
B) on-the-spot principle.
C) hedonistic principle.
D) me-first principle.

Question 53

When it comes to using evidence-based management, leaders should

A) embrace lone "geniuses" or gurus and enthusiastically celebrate their ideas.
B) concentrate on the virtues of a particular new idea and be less critical of its drawbacks.
C) be cautious about blindly embracing and implementing old ideas that are sold as new and novel.
D) not question the "big idea" technique claimed to create breakthroughs for the organization.

Question 54

In political decision making, an organization's choice of goals

A) is determined by consensus among all stakeholders.
B) is often clear-cut; one goal stands out as a favorite among all
C) is influenced by the relative power among stakeholders.
D) is not as important as the relative power of individual stakeholders.

Question 55

The ______ stage of the creative process involves searching for and collecting facts and ideas.

A) concentration
B) preparation
C) incubation
D) illumination

Question 56

Calvin usually likes to take a specific course of action and doesn't seek out additional information when making decisions. Which of the following would help Calvin to seek, use, and share relevant and accessible information when making decisions?

A) bounded rationality
B) evidence-based management
C) subjective probability
D) political decision making

Question 57

Confirmation and acceptance of a new idea takes place in the ______ stage of the creative process.

A) concentration
B) incubation
C) verification
D) illumination

Question 58

An example of a cultural block would be

A) an overemphasis on competition or conflict avoidance and smoothing.
B) the failure to use all of one's senses in observing.
C) grabbing the first idea that comes along.
D) a failure to investigate the obvious or not distinguishing between cause and effect.

Question 59

Mateo has just had and "ah-ha" moment. What stage of the creative process is Mateo in?

A) concentration
B) illumination
C) incubation
D) verification

Question 60

In the ______ stage of the creative process, a commitment must be made to implement a solution.

A) concentration
B) verification
C) preparation
D) illumination

Question 61

Which phase in Osborn's creativity process relies on judgment, analysis, and criticism?

A) solution-finding
B) fact-finding
C) idea-finding
D) problem-defining

Question 62

Describe Osborn's creativity process.

Question 63

What are the limitations of evidence-based management?

Question 64

Osborn's creativity is a ______-phase decision making process.

A) two
B) three
C) five
D) seven

Question 65

In "Teams Competency: IDEO Brainstorms," what is a unique feature to IDEO's brainstorming sessions?

A) The company requires multiple brainstorming sessions for each new client.
B) The company discourages sessions that encourage "wild ideas."
C) Ideas are immediately accepted or rejected in the brainstorming session.
D) The company encourages its clients to participate in the brainstorming sessions.

Question 66

Define knowledge management. Describe the difference between data, information, and knowledge.

Question 67

What is decision making and what are the three conditions under which decisions can be classified?

Question 68

Which of the following is NOT a basic rule of brainstorming?

A) Criticism is not allowed.
B) Freewheeling is welcome.
C) Quality is better than quantity.
D) Combination and improvement are welcome.

Question 69

What is the difference between objective and subjective probability?

Question 70

What is political decision making and what are the two self-serving ethical principles it is based upon?

Question 71

What is scapegoating and how does it apply to political decision making?

Question 72

Name the five stages in the creative process.

Question 73

What phase of Osborn's creativity model involves defining the issue and gathering relevant data?

A) fact-finding
B) preparation
C) idea-finding
D) concentration

Question 74

What are the five critical diagnostic questions one should consider when using evidence-based management?

Question 75

Describe bounded rationality.