Question 1

Renee made a bad decision. She stays with it, trying to convince others it was a good decision. This is an example of
A) bounded optimization.
B) escalation of commitment.
C) programmed decision making.
D) strategic maximization.
E) intuitive rationality.

Accepted Answer

This scenario is an example of escalation of commitment, which occurs when an individual or group continues to invest resources (time, money, energy, etc.) into a decision or course of action that is failing or has negative outcomes, in an attempt to justify or validate the initial decision. It is a common cognitive bias that leads people to become emotionally attached to their decisions and not want to admit they were wrong.

Question 2

A manager who has a low-risk propensity would
A) use the rational decision-making model.
B) rely on intuition for his or her decision making.
C) make decisions aggressively.
D) reach decisions quickly.
E) easily invest large sums of money in support of his or her decisions.

Accepted Answer

A manager with a low-risk propensity is likely to use the rational decision-making model as it involves careful consideration of all alternatives and their potential outcomes, with the aim of minimizing risks and maximizing gains. They would also be more cautious in making decisions and may take longer to arrive at a final choice. They are unlikely to make decisions quickly or invest large sums of money without careful analysis.

Question 3

Which of the following is NOT an example of an interacting group?
A) Standing committee
B) Task force
C) Delphi group
D) Functional department
E) Ad hoc committee

Accepted Answer

A Delphi group is characterized by the absence of direct interaction among its members. Instead, it relies on a process of collecting and aggregating the opinions of experts through questionnaires, often conducted in multiple rounds to reach a consensus. This method contrasts with the direct, face-to-face or collaborative interactions typical of standing committees, task forces, functional departments, and ad hoc committees.

Question 4

Groups that are used to develop a consensus of expert opinion without the members of the group ever meeting face to face are called ____ groups.
A) interacting
B) Delphi
C) nominal
D) unilateral
E) task

Accepted Answer

Delphi groups are designed to gather opinions from experts without ever having them meet in person. Interacting groups involve face-to-face interaction, nominal groups involve ranking or prioritizing ideas, unilateral groups have one leader making decisions, and task groups focus on completing a specific task rather than developing consensus.

Question 5

A disadvantage of using interacting groups to make decisions is
A) group politics.
B) void of expert opinion.
C) an increase in programmed costs.
D) faster decision making.
E) too much brainstorming.

Accepted Answer

Group politics can lead to personal biases and hidden agendas that may influence decision-making, rather than focusing on what is best for the organization or situation at hand.

Question 6

A(n) ____ group is the most common form of a decision-making group.
A) interacting
B) Delphi
C) nominal
D) unilateral
E) task

Accepted Answer

Interacting groups are the most common form of decision-making groups because they involve direct interaction among members, allowing for discussion and exchange of ideas. In this type of group, members can observe verbal and nonverbal feedback from each other and adjust their own opinions and behaviors accordingly. This form of group decision-making also provides the opportunity for social and emotional support, leading to more effective decision-making outcomes.

Question 7

The first step in using the Delphi procedure is to
A) recognize the problem.
B) collect potential alternatives.
C) agree that the decision will not be optimized.
D) obtain the cooperation of a panel of experts.
E) create staff positions for group members.

Accepted Answer

The first step in using the Delphi procedure is to obtain the cooperation of a panel of experts. This process relies heavily on the input and expertise of the panel, so securing their participation is crucial to the success of the approach.

Question 8

Which of the following statements is an advantage of group decision making?
A) Groups typically spend a lot of time interacting and discussing.
B) Groups often represent diversity of education and experience.
C) Leaders can shine in groups.
D) Groups tend to desire consensus and cohesiveness.
E) Groups typically reach compromise decisions.

Accepted Answer

One advantage of group decision making is that groups often represent diversity of education and experience, which can result in a wider range of perspectives and ideas being considered.

Question 9

Charles is a CEO.  He wants to hire Edward for a key position on his staff.  Charlie has already decided to relocate the headquarters to another state, but it has not been announced publicly.  He is afraid that if he tells Edward about the move, then Edward will not want the job.  Edward accepts the position and six months later the move is announced.  Which of the following behavioral aspects was most likely involved in Charles' decision not to tell Edward?
A) Coalition
B) Escalation of commitment
C) Political forces
D) Ethics
E) Bounded rationality

Accepted Answer

Charles' decision not to tell Edward about the move involves ethical considerations, as withholding such significant information can impact Edward's personal and professional decisions.

Question 10

Charlie feels each of the alternatives is basically the same. He decides based on his gut feeling . Which of the behavioral factors that influence decision making does Charlie's behavior reflect?
A) The optimization principle
B) The iceberg principle
C) Synergy
D) Empathy
E) Intuition

Accepted Answer

Charlie's behavior reflects the use of intuition, which is a behavioral factor that involves relying on gut feelings or hunches to make a decision, rather than analyzing information or using a formal decision-making process. This can be useful in situations where there is limited information or time constraints, but it may also lead to biased or irrational decisions.

Question 11

Which of the following statements does NOT describe a characteristic of the nominal group technique?
A) Members are not free to talk to one another.
B) Members individually write down their suggested alternatives.
C) Alternatives are listed on a flip chart.
D) The alternative with the most votes is the solution.
E) Members verbally vote for their first choice.

Accepted Answer

The answer of Which of the following statements does NOT...

Question 12

One advantage of group decision making is
A) groupthink.
B) compromise.
C) diversity of members' backgrounds.
D) lowered cost of decision making.
E) ability of a strong individual to dominate the group.

Accepted Answer

Diversity of members' backgrounds is an advantage of group decision making because it brings a variety of perspectives and ideas, leading to more comprehensive and effective solutions.

Question 13

Diaz Nesamoney is a computer scientist who founded three successful software companies. Entrepreneurs tend to have a high ____
A) bounded optimization.
B) escalation of commitment.
C) risk propensity.
D) strategic maximization.
E) intuitive rationality.

Accepted Answer

The question is asking for a trait commonly found in entrepreneurs, and the best choice for this is risk propensity. Entrepreneurs are known for taking risks and being willing to invest time, money, and energy into new ventures that may or may not succeed. The other choices are not necessarily exclusive to entrepreneurs or may not be as common among them.

Question 14

Beth and Dave are selling their home through a realtor.  The realtor's commission is 3 percent of the closing price, so the realtor should want a high selling price.  However, when the first offer came in 20 percent below asking price, the realtor pushed Beth and Dave to accept.  They declined because they felt the realtor just wanted to move on to the next sale.  Beth and Dave used ______ to make their decision.
A) the optimization principle
B) the iceberg principle
C) synergy
D) empathy
E) intuition

Accepted Answer

Beth and Dave used their intuition to make their decision. They had a feeling that the realtor's motivation was not in their best interest, so they declined the offer.

Question 15

YouTube was operating at a loss when Google bought it. Three years later it was still operating at a loss. Google may have experienced ____.
A) intuition
B) escalation of commitment
C) empathy
D) risk propensity
E) political forces

Accepted Answer

Escalation of commitment refers to the tendency to continue investing resources into a project or decision, even when it is no longer rational. In this case, Google may have continued to invest in YouTube despite the fact that it was not profitable, leading to a continued loss.

Question 16

William invested in an initial public offering. After a month he lost 5 percent. After a year he lost 50 percent. After two years he lost 80 percent. William's decision to keep the investment is an example of
A) bounded optimization.
B) escalation of commitment.
C) programmed decision making.
D) strategic maximization.
E) intuitive rationality.

Accepted Answer

William's decision to keep the investment despite the consecutive losses is an example of escalation of commitment. This is a cognitive bias where a decision maker continues to invest resources, often financial, time, and effort, into a failing investment or project because they have previously invested in it, hoping that their investment will eventually pay off.

Question 17

A Delphi group is not used daily because it has disadvantages. Which of the following is NOT its disadvantage?
A) Time
B) Expense
C) Logistics
D) Process
E) Expert cooperation

Accepted Answer

Expert cooperation is actually one of the advantages of Delphi groups, not a disadvantage. The other options (time, expense, logistics, and process) are all considered disadvantages of using a Delphi group.

Question 18

If you make a decision that does not turn out as planned Warren Buffet advises, "When you find yourself in a hole, stop digging." What behavioral influence on decision making does this advice attempt to prevent?
A) Intuition
B) Escalation of commitment
C) Empathy
D) Risk propensity
E) Political forces

Accepted Answer

Warren Buffet's advice "When you find yourself in a hole, stop digging" is aimed at preventing the escalation of commitment - the tendency to continue investing resources into a failing course of action, even when there is evidence that it is not working. By advising people to stop digging when they find themselves in a hole, Buffet is essentially telling them to cut their losses and move on rather than continuing to invest resources in a losing proposition.

Question 19

The CIO at Canon is considering an information system upgrade. He goes to each of the division heads to discuss their information needs and system capabilities. The CIO narrows the options, and contacts the executives again, reaching agreement before purchasing a system. Which group decision-making technique does this represent?
A) Interacting
B) Delphi
C) Nominal
D) Unilateral
E) Task

Accepted Answer

The answer of The CIO at Canon is considering an...

Question 20

The Blue Rooster was a restaurant near a lake.  When super storm Sandy hit New Jersey, the lake overflowed and flooded the Blue Rooster.  Because the restaurant had no flood insurance, it was never able to recover from the storm and closed a short time later.  The owner's ______ led to the bad decision about flood insurance.
A) bounded optimization.
B) escalation of commitment.
C) risk propensity.
D) strategic maximization.
E) intuitive rationality.

Accepted Answer

The owner's risk propensity, or willingness to take or avoid risk, led to the decision not to purchase flood insurance, which ultimately resulted in the restaurant's inability to recover from the flood damage caused by Super Storm Sandy.

Quiz 8: Managing Decision Making and Problem Solving

Renee made a bad decision. She stays with it, trying to convince others it was a good decision. This is an example of

A manager who has a low-risk propensity would

Which of the following is NOT an example of an interacting group?

Groups that are used to develop a consensus of expert opinion without the members of the group ever meeting face to face are called ____ groups.

A disadvantage of using interacting groups to make decisions is

A(n) ____ group is the most common form of a decision-making group.

The first step in using the Delphi procedure is to

Which of the following statements is an advantage of group decision making?

Charlie feels each of the alternatives is basically the same. He decides based on his gut feeling . Which of the behavioral factors that influence decision making does Charlie's behavior reflect?

Which of the following statements does NOT describe a characteristic of the nominal group technique?

One advantage of group decision making is

Diaz Nesamoney is a computer scientist who founded three successful software companies. Entrepreneurs tend to have a high ____

YouTube was operating at a loss when Google bought it. Three years later it was still operating at a loss. Google may have experienced ____.

William invested in an initial public offering. After a month he lost 5 percent. After a year he lost 50 percent. After two years he lost 80 percent. William's decision to keep the investment is an example of

A Delphi group is not used daily because it has disadvantages. Which of the following is NOT its disadvantage?

If you make a decision that does not turn out as planned Warren Buffet advises, "When you find yourself in a hole, stop digging." What behavioral influence on decision making does this advice attempt to prevent?