Question 1

__________ environments exist when managers have so little information that they cannot even assign probabilities to various alternatives and their possible outcomes.

Accepted Answer

Uncertain environments are characterized by a lack of information that makes it difficult for managers to assign probabilities to alternative courses of action and outcomes. In such environments, decision-making becomes highly subjective and dependent on intuition, experience, and guesswork. Unlike risky environments, where probabilities can be estimated to some degree of accuracy, uncertain environments have no basis for probability estimates, making it difficult to make informed decisions.

Question 2

The most difficult environment for decision makers to cope with is the __________ environment.

Accepted Answer

In an uncertain environment, decision makers do not have enough information to predict the outcomes of their decisions. This makes it difficult to weigh the risks and benefits of different options and can lead to a higher degree of unpredictability and complexity. In contrast, a certain environment is one in which decision makers have complete information and can accurately predict the outcomes of their options.

Question 3

All of the following statements about uncertain environments are correct EXCEPT:

Accepted Answer

Behavioral responses to uncertain environments often involve intuition, educated guesses, or hunches. The other statements are all correct.

Question 4

__________ is an ideal condition for managerial problem solving and Decision-Making.

Accepted Answer

Certainty is an ideal condition for managerial problem solving and decision-making because it means that all information is known and the outcome of each decision can be predicted with complete accuracy. This allows managers to make decisions based on facts and data, rather than speculation or guesswork. However, in reality, certainty is rare, and most decisions are made in conditions of risk, uncertainty, or turbulence.

Question 5

__________ are routine problems that arise on a regular basis and which can be addressed through standard responses.

Accepted Answer

Programmed decisions are routine problems that arise on a regular basis and which can be addressed through standard responses. These decisions are made based on a predetermined set of rules, procedures, or guidelines and have a structured approach. Examples of programmed decisions include processing payroll, analyzing inventory levels, and responding to customer inquiries.

Question 6

Problem-solving decisions in organizations are typically made under three different conditions or environments.These are __________.

Accepted Answer

The three conditions or environments under which problem-solving decisions are typically made in organizations are certainty, risk, and uncertainty. In the case of certainty, the outcome of a decision can be predicted with complete accuracy. In the case of risk, the decision outcome is uncertain but can be estimated based on probability or past experience. Under uncertainty, the outcome of a decision cannot be predicted accurately due to lack of information or unpredictability of events.

Question 7

The __________ model views decision makers as acting in a world of complete certainty.

Accepted Answer

The classical decision model assumes that decision-makers have complete information, are able to identify all possible alternatives, and are able to evaluate the consequences of each alternative before making a rational decision. It is based on the notion of complete certainty, which is rarely found in real-world decision-making scenarios. The other options (A, B, C, and E) all assume some degree of uncertainty in decision-making.

Question 8

When dealing with risk environments,managers may assign __________ through objective statistical procedures or through personal intuition.

Accepted Answer

When dealing with risk environments, managers may assign probabilities through objective statistical procedures or through personal intuition. This helps them assess the likelihood of a particular outcome or event occurring and plan accordingly. A, B, C, and E are not relevant terms in this context.

Question 9

Threats to overall business success are called __________ risks.

Accepted Answer

Strategic risks refer to threats to the overall direction and success of a business. These may include changes in the market, shifts in consumer behavior, or new competition. Operational risks refer to threats to the day-to-day operations of a business, financial risks refer to threats to financial stability, reputation risks refer to threats to brand image and perception, and functional risks refer to threats to specific business functions or processes. While all of these risks may impact overall business success, the question specifically asks for the term for threats to overall success, which is strategic risk.

Question 10

Acts of terrorism and IT failures are examples of which type of decision?

Accepted Answer

Acts of terrorism and IT failures are unexpected and require immediate response, making them crisis decisions.

Question 11

__________ accepts the notion of bounded rationality and assumes that decision makers act only in terms of what they perceive about a given situation.

Accepted Answer

Behavioral decision theory is the only option that accepts the notion of bounded rationality, which suggests that decision makers have limited cognitive abilities and must make decisions based on the information available to them. It also recognizes that individuals may be influenced by biases, emotions, and other psychological factors that impact their decision-making processes. The other options do not explicitly take these factors into account.

Question 12

__________ environments exist when decision makers lack complete certainty regarding the outcomes of various courses of action,but they are aware of the probabilities associated with their occurrence.

Accepted Answer

In a risky environment, decision makers have some knowledge of the probabilities associated with different outcomes, but there is still uncertainty present. This contrasts with a hazardous environment where decision makers face known negative consequences, or an uncertain environment where probabilities cannot be estimated at all. Jeopardy and assured environments do not describe situations with any degree of uncertainty or probability.

Question 13

Behavioral scientists are cautious about applying classical decision theory to many decision situations because they recognize that human beings have __________ that restrict their information-processing capabilities.

Accepted Answer

Classical decision theory assumes that individuals have unlimited cognitive capacity, which is not the case in reality. Behavioral scientists recognize that individuals have cognitive limitations, such as limited attention span and working memory, that affect their decision-making processes. Therefore, classical decision theory cannot be applied to many decision situations since it does not take into account these cognitive limitations.

Question 14

Which of the following is Cavanagh's utility question for assessing ethics in Decision-Making?

Accepted Answer

Cavanagh's utility question for assessing ethics in decision-making focuses on whether the decision satisfies all constituents or stakeholders, reflecting a utilitarian approach to ethics that seeks the greatest good for the greatest number.

Question 15

Which of the following is considered to be a spotlight question as mentioned in the text?

Accepted Answer

The answer of Which of the following is considered to...

Question 16

The __________ model accepts the notion of bounded rationality and suggests that people act only in terms of what they perceive about a given situation.

Accepted Answer

The behavioral decision theory model acknowledges that people have a limited ability to process and analyze information, and therefore may not always make perfectly rational decisions. This model suggests that people act based on what they perceive about a given situation, rather than following a strictly rational decision-making process.

Question 17

__________ decisions are specifically crafted or tailored to the situation at hand.

Accepted Answer

The answer of __________ decisions are specifically crafted or tailored...

Question 18

Examples of __________ decisions include reordering inventory automatically when stock falls below a predetermined level and issuing a written reprimand to someone who violates a specific work procedure.

Accepted Answer

Programmed decisions are routine or repetitive decisions that can be handled by a pre-established decision rule or procedure. Reordering inventory automatically when stock falls below a predetermined level and issuing a written reprimand to someone who violates a specific work procedure are examples of programmed decisions.

Question 19

KPMG's practice that focuses on helping executives identify threats to their firm and manage them is known as __________.

Accepted Answer

KPMG's practice that focuses on identifying threats to a firm and managing them is known as Enterprise Risk Management (ERM).

Question 20

A decision is exposed to public scrutiny and forces decision-makers to consider it in the context of full transparency with the use of __________.

Accepted Answer

Spotlight questions refer to the act of subjecting a decision to public scrutiny and asking questions to ensure transparency. Therefore, the use of spotlight questions aligns with the statement provided in the question. The other options (A) rational decision-making, (C) satisficing, (D) moral dilemmas, and (E) criteria questions may be relevant to decision-making, but they do not directly relate to the context of full transparency and public scrutiny.

Quiz 9: Decision-Making and Creativity