Question 1

In the type of top-management team known as the circle configuration, it is not true that:

Accepted Answer

In the circle configuration, top managers from different functions interact, communication is faster, and complex problems can be solved quickly. However, organizational learning may be decreased because the focus is on efficiency and problem-solving rather than individual learning and development.

Question 2

When managers have an illusion of control bias, they often:

Accepted Answer

When managers have an illusion of control bias, they tend to overestimate their ability to control outcomes and tend to centralize decision-making authority rather than promoting mutual adjustment or decentralizing decision-making authority. By centralizing decision-making authority, they believe they can maintain greater control over the outcomes, which reinforces their sense of control.

Question 3

A marketing manager championed expansion into Eastern Europe, but sales failed to materialize. Instead of recommending exiting from that market, he or she insisted that growth would occur. This is an example of which of the following cognitive biases?

Accepted Answer

Ego-defensiveness is a cognitive bias where individuals protect their self-esteem by refusing to accept evidence that contradicts their beliefs or decisions, as seen in the manager's insistence on future growth despite poor sales.

Question 4

A large retail store has a high level of organizational inertia. Managers and employees are highly resistant to change. Which of the following is most likely to encourage organizational learning and improve the quality of decision making?

Accepted Answer

The answer of A large retail store has a high...

Question 5

Testing new ways to serve the customer or manufacture a product is a strategy for organizational learning called ________.

Accepted Answer

The strategy mentioned in the question where an organization tests new ways to serve the customer or manufacture a product is called experimenting. It is a type of organizational learning where the organization tries different approaches to solving a problem or achieving a goal to gain knowledge and improve its processes. Groupthink, escalation of commitment, and garbage can approach are not related to this specific strategy of organizational learning.

Question 6

Managers have to unlearn old ideas and test decision-making skills by not:

Accepted Answer

Listening only to good news and ignoring bad news can lead to biased decision-making and incorrect conclusions. Therefore, managers should not suppress bad news and need to be open to negative feedback and criticisms.

Question 7

If a company needs a high level of coordination among group members:

Accepted Answer

Top management should be organized in a circle configuration to facilitate communication and collaboration among all members. This allows for a high level of coordination, as each member has equal input and can participate in decision making. A wheel configuration (A) places too much emphasis on the leader at the center, while similar backgrounds (B) can limit diversity of thought and innovation. Continuous changes in top management membership (C) can disrupt the coordination and consistency needed for effective decision making.

Question 8

A cognitive bias that leads managers to remain committed to a losing course of action and not admit mistakes is ________.

Accepted Answer

Escalation of commitment is a cognitive bias that occurs when individuals or groups continue to invest time, money, or other resources in a course of action that is clearly failing or producing negative outcomes. This bias is rooted in the desire to justify previous decisions and avoid admitting mistakes, leading managers to double down on their failing strategies rather than cut their losses and change direction. Cognitive dissonance, projection, and representativeness are other types of biases that can affect decision-making but are not specifically related to persistence in the face of failure.

Question 9

Escalation of commitment is a cognitive bias that is reinforced by which approach to decision making?

Accepted Answer

Escalation of commitment is reinforced by the incrementalist approach to decision making, where decisions are made through small, incremental steps without fully considering the potential consequences of each step. This can lead to a situation where individuals and organizations become increasingly committed to a course of action even in the face of evidence that it is not working or is causing harm. The other approaches (unstructured, rational, and garbage can) are not as closely tied to escalation of commitment.

Question 10

A manager at an automobile plant had two suppliers that delivered defective parts. He or she now thinks that all suppliers are unreliable. This is an example of which of the following cognitive biases?

Accepted Answer

This is an example of the representativeness bias, where a person forms a judgment or belief based on a stereotype or generalization rather than on actual evidence or data. In this case, the manager is generalizing that all suppliers are unreliable based on the behavior of just two suppliers.

Question 11

Game theory utilizes all of following concepts except ________.

Accepted Answer

While game theory involves the use of probabilities, simultaneous and sequential moves, it does not specifically deal with knowledge management.

Question 12

In the type of top-management team known as the wheel configuration:

Accepted Answer

The answer of In the type of top-management team known...

Question 13

To improve organizational learning, top managers should:

Accepted Answer

Listening to dissenting voices provides a diversity of perspectives and challenges assumptions, which can lead to more creative and effective solutions. Narrowing the amount of information presented, surrounding oneself with yes-men, and controlling the agenda can limit the range of ideas and perspectives considered, ultimately hindering organizational learning.

Question 14

A study of how hospitals in California responded to a doctors' strike indicated that hospitals that managed the strike more easily had:

Accepted Answer

Hospitals that managed the strike more easily likely had an organic structure, which is more flexible and adaptable to change, allowing for better management during a crisis like a strike.

Question 15

All of the following can improve the quality of an organization's decision making except:

Accepted Answer

Engaging in groupthink can actually hinder decision making by discouraging dissenting opinions and promoting conformity within the group. All of the other options can improve decision making by promoting diverse perspectives, critical evaluation of options, and consideration of alternative viewpoints.

Question 16

A CEO thinks that he or she is the only person who can oversee global expansion. This CEO has which of the following cognitive biases?

Accepted Answer

The CEO is exhibiting the cognitive bias of illusion of control, where they believe they have more control over the situation than they actually do.

Question 17

A manager catches an employee coming into work late, and therefore decides that a new companywide policy on tardiness is needed in order to improve productivity. This is an example of which of the following cognitive biases?

Accepted Answer

The manager is likely overestimating the frequency of tardiness based on a single observation, which is an example of the frequency bias.

Question 18

A friend of yours recommends a stock based upon a "hot tip." You purchase it, and it subsequently declines the following year. Your friend advises you to purchases more at the lower price, despite clear evidence that this is not a sound company. Your friend is displaying which cognitive bias?

Accepted Answer

This situation is an example of escalation of commitment, where the friend persists in their recommendation despite evidence of decline and poor performance of the stock.

Question 19

Sam is a manager of a fast-food restaurant that serves only hamburgers and french fries. He fails to realize changes in the environment, such as a trend toward health consciousness. He continues to limit his menu to greasy burgers and states that customers will return when the weather gets better. Which cognitive bias does Sam have?

Accepted Answer

The answer of Sam is a manager of a fast-food...

Question 20

The cognitive bias that causes individuals to blame others for problems is ________.

Accepted Answer

Projection is the cognitive bias that causes individuals to project their own faults or negative qualities onto others. This can lead them to blame others for problems instead of taking responsibility for their own actions.

Quiz 12: Decision Making and Organizational Learning