Question 1

Which of the following explains the reasons for the inherently uncertain and risky nature of decision making and the making of satisfactory rather than optimum decisions by managers?
A)logical model
B)administrative model
C)perspective model
D)rational model

Accepted Answer

The administrative model explains that decision-making is inherently uncertain and risky, leading managers to make satisfactory rather than optimal decisions due to bounded rationality and incomplete information.

Question 2

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.

Accepted Answer

Risk involves situations where managers can assign probabilities to different outcomes, allowing them to anticipate and plan for various possibilities.

Question 3

The classical model of decision making assumes that
A)the number of alternatives is so great that a manager could never come close to evaluating them all.
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.

Accepted Answer

The classical model of decision making assumes that managers have access to all the information they need to make the optimum decision, allowing them to evaluate all possible alternatives and choose the best one.

Question 4

Marco is considering opening a theater in a mid-size city. However, before he does this, he wants to lower the risk of such an endeavor. Many theaters have opened before but have failed because of financial difficulties. Marco has some experience as an actor and as a stage manager, but this will be his first real foray into the business side of things. To best increase his chances of achieving his goal, Marco should
A)plan the slate of theater productions for the first year based on his gut feeling of what will be successful in this particular community.
B)conduct a survey to determine local cultural tastes, evaluate other cities as options, and search for a central location with a reasonable rent.
C)contact well-known actors who he feels certain will be a big draw in his city's theater-going community.
D)talk to a friend who works for successful theater in another state and take his advice on what shows to choose and how much to charge.

Accepted Answer

Conducting a survey to understand local cultural tastes, evaluating other cities, and finding a central location with reasonable rent will provide Marco with data-driven insights and strategic planning, reducing the risk of failure.

Question 5

You are a manager in an organization that needs to advertise a product. To do this, you decide to use satisficing. Considering this, which of the following actions would you take?
A)review all the advertising media available in the area
B)consider every advertising technique that can be used for your product
C)select three advertising agencies to pitch a proposal
D)ask all the advertising agencies in the area to make a pitch

Accepted Answer

Satisficing involves choosing an option that meets the minimum criteria or is "good enough" rather than optimizing. Selecting three agencies to pitch a proposal is a satisficing approach as it limits the options to a manageable number that meets the basic requirements.

Question 6

To use a programmed decision in dealing with occasional company overspending, a manager would
A)have a brainstorming session to gather possible solutions to the overspending.
B)listen to the opinions of various employees about why the company overspends.
C)conduct an analysis to determine the possible causes for overspending.
D)devise procedures to take depending on the amount of overspending in a month.

Accepted Answer

The answer of To use a programmed decision in dealing...

Question 7

When managers cannot assign probabilities of future occurrence to possible alternatives with a decision, this is known as
A)certainty.
B)risk.
C)bounded rationality.
D)uncertainty.

Accepted Answer

Uncertainty occurs when managers cannot predict the likelihood of future events or outcomes, making it impossible to assign probabilities to different alternatives.

Question 8

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.

Accepted Answer

Satisficing is a decision-making strategy where a manager selects an option that meets the minimum criteria of acceptability rather than seeking the optimal solution.

Question 9

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 made by the organization?
A)intuition
B)nonprogrammed
C)groupthink
D)satisficing

Accepted Answer

A nonprogrammed decision is a decision that is made in response to a unique or novel situation for which there is no established routine or procedure. In this case, the organization is considering expanding its sales to a new geographic region, which is a unique situation for which there is no established routine or procedure. Therefore, the organization is making a nonprogrammed decision.

Question 10

Apex, Ltd., is trying to decide whether or not to launch a new product nationally. This represents a(n)________ decision.
A)programmed
B)intuitive
C)groupthink
D)nonprogrammed

Accepted Answer

A nonprogrammed decision is made in response to a situation that is unique, poorly defined, and largely unstructured, which is the case with launching a new product nationally.

Question 11

The most appropriate decision in light of what managers believe to be the most desirable consequences for the organization is called the ________ decision.
A)tactical
B)optimum
C)rational
D)operational

Accepted Answer

The answer of The most appropriate decision in light of...

Question 12

Instead of calling a hundred possible windshield suppliers, the purchasing manager for Telsa Motor Co. decides to call three suppliers of automobile windshields for a bid on an order for 1,000 windshields for a new car. What type of decision does this represent?
A)nonprogrammed
B)illusion of control
C)satisficing
D)programmed

Accepted Answer

The decision represents satisficing because the manager is choosing a satisfactory solution by selecting a few suppliers to contact, rather than seeking the optimal solution by contacting all possible suppliers.

Question 13

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, save the lives of others, control the fires, and preserve property-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

Accepted Answer

Fire chiefs rely on their professional instincts and experience to make quick decisions in complex and uncertain situations, which is characteristic of intuitive decision-making.

Question 14

A software firm is considering introducing a new product on the market. However, 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

Accepted Answer

Uncertainty refers to situations where the probability of outcomes cannot be determined, which is the case here as managers cannot estimate the probability of success for the new product.

Question 15

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.

Accepted Answer

Ambiguous information is unclear and can be interpreted in multiple ways, leading to uncertainty in decision-making.

Question 16

Go-Getter, 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 its projected sales. This represents which type of decision for the organization?
A)optimum
B)intuitive
C)nonprogrammed
D)satisficing

Accepted Answer

This decision is nonprogrammed because it involves a unique, complex situation that requires a custom solution rather than a routine or programmed response.

Question 17

Managers in the field of biotechnology know that new drugs have a 10 percent chance of passing advanced clinical trials and always assign probabilities to the results of clinical trials. This is an example of
A)risk.
B)uncertainty.
C)bounded rationality.
D)incomplete information.

Accepted Answer

Risk involves situations where the probabilities of different outcomes are known, as in the case of the 10 percent chance of passing clinical trials.

Question 18

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

Accepted Answer

Bounded rationality occurs when decision-makers face limitations in processing all available information and alternatives due to constraints such as time, cognitive capacity, and resources.

Question 19

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.

Accepted Answer

The classical model of decision making is prescriptive because it specifies how decisions should be made by managers.

Question 20

Star, Inc., is attempting to decide whether or not it should change its manufacturing process to a new type of technology. This represents a(n)________ decision.
A)programmed
B)nonprogrammed
C)groupthink
D)intuitive

Accepted Answer

A nonprogrammed decision is one that is unique and requires a custom solution, often involving significant changes or new approaches, such as adopting new technology in manufacturing.

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

Which of the following explains the reasons for the inherently uncertain and risky nature of decision making and the making of satisfactory rather than optimum decisions by managers?

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

The classical model of decision making assumes that

You are a manager in an organization that needs to advertise a product. To do this, you decide to use satisficing. Considering this, which of the following actions would you take?

To use a programmed decision in dealing with occasional company overspending, a manager would

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

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

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 made by the organization?

Apex, Ltd., is trying to decide whether or not to launch a new product nationally. This represents a(n) ________ decision.

The most appropriate decision in light of what managers believe to be the most desirable consequences for the organization is called the ________ decision.

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

A software firm is considering introducing a new product on the market. However, managers cannot estimate the probability of success for the new product. Which of the following best describes the situation?

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

Go-Getter, 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 its projected sales. This represents which type of decision for the organization?

Managers in the field of biotechnology know that new drugs have a 10 percent chance of passing advanced clinical trials and always assign probabilities to the results of clinical trials. This is an example of

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?

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

Star, Inc., is attempting to decide whether or not it should change its manufacturing process to a new type of technology. This represents a(n) ________ decision.