Question 1

According to the administrative model of decision making,even if managers had unlimited ability to evaluate information,they still would not be able to arrive at the optimum decision.Why?
A)Managers still have incomplete information
B)Managers have unbounded rationality
C)Managers are not capable of making an optimum decision
D)Managers have varying perspectives
E)Managers have too many alternatives

Accepted Answer

Even if managers had unlimited ability to evaluate information,they still would not be able to arrive at the optimum decision because they would have incomplete information.

Question 2

Based on guidelines established by the accounting manager,Jaime,the accounts payable clerk,makes payments to vendors in order to maximize discounts.What type of decision does this represent?
A)Programmed
B)Nonprogrammed
C)Intuition
D)Groupthink
E)Bounded rationality

Accepted Answer

Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur.

Question 3

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,this is called:
A)Satisficing
B)Bounded rationality
C)Brainstorming
D)Devil's advocacy
E)Optimizing

Accepted Answer

March and Simon coined the term bounded rationality to describe the situation in which the number of alternatives a manager must identify is so great and the amount of information so vast that it is difficult for the manager to even come close to evaluating it all before making a decision.

Question 4

Nonroutine decisions made in response to novel situations in business are known as:
A)Intuitive decisions
B)Creative decisions
C)Programmed decisions
D)Heuristic decisions
E)Nonprogrammed decisions

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.

Question 5

Jordan,the manager of JT's Tasty Treats,is trying to decide whether to introduce a new frozen dessert that has never been sold previously.This represents which type of decision for Jordan?
A)Programmed
B)Intuition
C)Optimizing
D)Nonprogrammed
E)Satisficing

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.

Question 6

WashUrCar,which operates five car washes,is attempting to decide whether or not it should purchase a new type of drying equipment.This represents which type of decision for the organization?
A)Programmed
B)Intuition
C)Optimizing
D)Nonprogrammed
E)Satisficing

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.

Question 7

In 1993,when Apple Computer introduced the Newton,its personal digital assistant (PDA),managers had no idea what the probability of a successful product launch for a PDA might be.This condition is called:
A)Risk
B)Uncertainty
C)Bounded rationality
D)Optimization
E)Satisficing

Accepted Answer

When uncertainty exists,the probabilities of alternative outcomes cannot be determined and future outcomes are unknown.

Question 8

The classical model specifies how decisions should be made.In other words it is:
A)Heuristic
B)Prescriptive
C)Optimizing
D)Intuitive
E)Satisficing

Accepted Answer

The classical model is prescriptive,which means it specifies how decisions should be made.

Question 9

In the classical model of decision-making,the most appropriate decision given the likely future consequences to the organization is known as the ____________ decision.
A)Intuitive
B)Creative
C)Heuristic
D)Obvious
E)Optimum

Accepted Answer

The optimum decision is the most appropriate decision possible in light of what they believe to be the most desirable consequences for the organization.

Question 10

When a manager makes a good decision based on a "gut feeling," this is known as:
A)A programmed decision
B)A nonprogrammed decision
C)A heuristic decision
D)An intuitive decision
E)The illusion of control

Accepted Answer

Managers rely on their intuition-feelings,beliefs,and hunches that come readily to mind,require little effort and information gathering,and result in on-the-spot decisions.

Question 11

Peggy,a plant foreman,asks the plant superintendent to hire an additional worker whenever overtime hours for the previous month increase by more than 15 percent over the headcount.This is an example of which type of decision?
A)Intuition
B)Groupthink
C)Satisficing
D)Programmed
E)Nonprogrammed

Accepted Answer

Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitablyoccur.

Question 12

Which of the following would NOT be considered a nonprogrammed decision of Jochen Zeitz,CEO of Puma?
A)Launch a new promotional campaign
B)Hire additional staff
C)Enter a new market
D)Expand internationally
E)Develop a new product line

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.

Question 13

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
E)Dialectical inquiry

Accepted Answer

Risk is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them.

Question 14

What assumption is made by the classical model?
A)There is no optimum decision
B)There is more than one alternative
C)There is only one alternative
D)Managers have access to all the information they need
E)Managers are not capable of making decisions

Accepted Answer

The classical model assumes managers have access to all the information they need to make the optimum decision.

Question 15

Which of the following does NOT contribute to incomplete information?
A)Risk
B)Uncertainty
C)Time constraints
D)Ambiguity
E)Egoism

Accepted Answer

Information is incomplete because of risk and uncertainty,ambiguity,and time constraints.

Question 16

With sales lagging due to the poor economic conditions,Abby,the manager of Photography by Abby,has decided to launch a large scale advertising campaign to promote her services.This represents which type of decision for the organization?
A)Nonprogrammed
B)Intuition
C)Optimizing
D)Programmed
E)Satisficing

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.

Question 17

Programmed decision making is a ______.
A)Novel
B)Routine
C)Intuitive
D)Unusual
E)Nonroutine

Accepted Answer

Programmed decision making is a routine,virtually automatic process.

Question 18

When managers cannot assign probabilities of future occurrence to possible alternatives to a decision,this is known as:
A)Certainty
B)Risk
C)Bounded rationality
D)Uncertainty
E)Satisficing

Accepted Answer

When uncertainty exists,the probabilities of alternative outcomes cannot be determined and future outcomes are unknown.

Question 19

Which of the following would NOT be used to describe a nonprogammed decision?
A)Unusual
B)Novel
C)Nonroutine
D)Routine
E)Intuitive

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.Programmed decisions are routine.

Question 20

A reason why information is incomplete is that much of the information managers have at their disposal is ______ information.
A)Ambiguous
B)Complicated
C)Specific
D)Heuristic
E)Satisficed

Accepted Answer

A second reason why information is incomplete is that much of the information managers have at their disposal is ambiguous information.Its meaning is not clear-it can be interpreted in multiple and often conflicting ways.

Quiz 7: Decision Making,learning,creativity,and Entrepreneurship

According to the administrative model of decision making,even if managers had unlimited ability to evaluate information,they still would not be able to arrive at the optimum decision.Why?

Based on guidelines established by the accounting manager,Jaime,the accounts payable clerk,makes payments to vendors in order to maximize discounts.What type of decision does this represent?

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,this is called:

Nonroutine decisions made in response to novel situations in business are known as:

Jordan,the manager of JT's Tasty Treats,is trying to decide whether to introduce a new frozen dessert that has never been sold previously.This represents which type of decision for Jordan?

WashUrCar,which operates five car washes,is attempting to decide whether or not it should purchase a new type of drying equipment.This represents which type of decision for the organization?

In 1993,when Apple Computer introduced the Newton,its personal digital assistant (PDA) ,managers had no idea what the probability of a successful product launch for a PDA might be.This condition is called:

The classical model specifies how decisions should be made.In other words it is:

In the classical model of decision-making,the most appropriate decision given the likely future consequences to the organization is known as the ____________ decision.

When a manager makes a good decision based on a "gut feeling," this is known as:

Peggy,a plant foreman,asks the plant superintendent to hire an additional worker whenever overtime hours for the previous month increase by more than 15 percent over the headcount.This is an example of which type of decision?

Which of the following would NOT be considered a nonprogrammed decision of Jochen Zeitz,CEO of Puma?

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:

What assumption is made by the classical model?

Which of the following does NOT contribute to incomplete information?

With sales lagging due to the poor economic conditions,Abby,the manager of Photography by Abby,has decided to launch a large scale advertising campaign to promote her services.This represents which type of decision for the organization?

Programmed decision making is a ______.

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

Which of the following would NOT be used to describe a nonprogammed decision?

A reason why information is incomplete is that much of the information managers have at their disposal is ______ information.