Deck 3: Managerial Decision Making

Question 1

Fundamental to choosing an alternative is predicting the consequences that will occur if the various options are put into effect.

Answer 1

True
Explanation: Fundamental to the alternative evaluation process is predicting the consequences that will occur if the various options are put into effect. Managers should consider several types of consequences, including quantifiable measures of success, such as lower costs, higher sales, lower employee turnover, and higher profits.

Question 2

Reggie is the owner of a new bike shop and must decide how much to withhold from employee paychecks as income tax. This is an example of a nonprogrammed decision.

Answer 2

False
Explanation: A nonprogrammed decision is a new, novel, complex decision having no proven answers. How much money Reggie must withhold from employee paychecks has an objectively correct answer and is thus a programmed decision.

Question 3

Sara, a warehouse manager, needed a fast solution when an employee asked for a day off for the following week when the whole crew was supposed to be doing inventory. For her, a ready-made alternative will be quicker than designing a custom-made solution.

Answer 3

True
Explanation: Because a ready-made solution is an idea that has been seen or tried before, it is likely to be implemented more quickly than a custom-made solution that is designed specifically for the problem at hand.

Question 4

After a decision is made and implemented, only then should contingency plans be developed.

Question 5

A school principal faces conflict when she must decide whether to give all staff an 8 percent pay cut or lay off four full-time employees.

Question 6

Risk is a fact of life in nonprogrammed management decisions.

Question 7

Managers use satisficing to achieve the best possible outcome.

Question 8

Important, difficult decisions tend to be nonprogrammed, and they demand creative approaches.

Question 9

Maximizing means that you achieve the best possible balance among several goals.

Question 10

During and after the BP oil spill, which devastated large areas in the Gulf of Mexico, the decisions made by government officials and BP were mostly programmed.

Question 11

Programmed decisions are useful when there is no predetermined structure on which to rely.

Question 12

Managers typically face structured problems they have seen before, which makes the decision process easier because there is a procedure to follow already.

Question 13

Another way of referring to "risk" is "taking a risk."

Question 14

The first stage of decision making requires the decision maker to generate alternatives.

Question 15

Managers prefer uncertainty to certainty because it makes the job more challenging and interesting.

Question 16

The "problem" in decision making may actually be an opportunity that needs to be exploited.

Question 17

Managers often avoid taking action when faced with challenges.

Question 18

Ideas that have been seen or tried before are known as ready-made solutions.

Question 19

Conflict exists when the manager must consider opposing pressures from different sources.

Question 20

When you satisfice, you compare your choice against your goal, not against other options.

Question 21

The job of a "devil's advocate" is to add a personal or emotional element to the conflict.

Question 22

Cognitive conflict is differences in perspectives or judgments about issues, whereas abject conflict is emotional and directed at other people.

Question 23

The most constructive type of conflict is affective conflict.

Question 24

One potential advantage of a group for decision making is that people are likely to be more committed to the decision.

Question 25

Following all six stages of the decision making process guarantees successful decisions.

Question 26

Governmental budget deficits, environmental destruction, and decaying urban infrastructure can be partially explained by the bias known as discounting the future.

Question 27

A condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges is called goal displacement.

Question 28

In almost every business situation, the quality of the decision is far more important than the speed at which the decision is made.

Question 29

Many organizational decisions are the result of intensive social interactions, bargaining, and politicking.

Question 30

Barriers to effective decision making include psychological biases, time pressures, and social realities.

Question 31

Evaluating the decision is always useful, whether the outcome has been positive or negative.

Question 32

The three requirements for effective group decision making are an appropriate leadership style, the constructive use of disagreement and conflict, and the enhancement of creativity.

Question 33

Patrick was disappointed when the marketing research team reported that a new product was not received well by customers in a focus group. He felt the company should go ahead with its release, convinced it was a revolutionary idea that he could make successful. Patrick could be suffering from the illusion of control.

Question 34

Framing effects refer to a decision bias influenced by the way in which a problem or decision alternative is phrased or presented.

Question 35

Decision makers should presume that with a carefully made decision, things will go smoothly during implementation.

Question 36

In brainstorming, group members generate as many ideas about a problem as they can while simultaneously critiquing them.

Question 37

One advantage of using a group for decision making is groupthink.

Question 38

The most fundamental unit of value in the creativity revolution is ideas.

Question 39

If enough time is available, groups typically make better decisions than most individuals acting alone.

Question 40

To exhibit vigilance, a decision maker must evaluate every decision he or she makes.

Question 41

Ari works for the federal government in acquisitions. Policy requires that in contracting with suppliers, at least three bids must be received and the lowest bid that meets specifications will be accepted. Ari's decisions regarding the contracts with suppliers would be classified as

A) Minimized.
B) Programmed.
C) Structured.
D) Logical.
E) Maximized.

Question 42

Characteristics of managerial decisions include which of the following?

A) Guaranteed success.
B) Certainty.
C) Conflict.
D) Structure.
E) Speed.
Figure 3.1 illustrates the four characteristics of managerial decisions: risk, uncertainty, conflict, and lack of structure.

Question 43

A manager is dealing with ________ if she is considering opposing pressures from different sources.

A) conflict
B) cooptation
C) collusion
D) cohesiveness
E) groupthink

Question 44

Managers often ignore challenges for which of the following reasons?

A) They don't agree with the outcome.
B) It's not the managers' job to solve problems, so they typically refer issues to HR.
C) Getting involved won't impress their bosses.
D) Employees actually prefer a hands-off boss who lets them handle conflict on their own.
E) Managers cannot be sure how much time, energy, or trouble lie ahead once they start working on a problem.

Question 45

Gemma, who owns the tutorial service Math Machine, is contemplating whether to let one of her experienced tutors open a second location in an adjacent town. She is facing a _______ decision.

A) routine
B) programmed
C) nonroutine
D) nonprogrammed
E) satisficing

Question 46

The state that exists when the probability of success is less than 100 percent and losses may occur is

A) Uncertainty.
B) Probability analysis.
C) Risk.
D) Certainty.
E) Policy formulation.

Question 47

The kitchen sink model of decision making occurs when people aren't sure of their goals, or disagree about the goals, and likewise are unsure of or in disagreement about what to do.

Question 48

Marisol has received two job offers. One is from a firm in Seattle, where she would like to live, but the other offer in Kansas City is near her family and friends. Marisol is having a difficult time making a decision due to experiencing

A) Internal conflict.
B) Organizational conflict.
C) Physiological conflict.
D) Psychological conflict.
E) Individual conflict.

Question 49

Casey, a middle manager at a cosmetics company, is encountering an issue between two of her departments because both want a new copier to be located in their areas. This would best be described as

A) Emotional conflict.
B) Conflict between groups.
C) Identificational conflict.
D) Psychological conflict.
E) External conflict.

Question 50

Important, difficult decisions that require creative approaches tend to be

A) Qualitative decisions.
B) Programmed decisions.
C) Noneconomic decisions.
D) Nonprogrammed decisions.
E) Policy decisions.

Question 51

Uncertainty exists when the manager

A) Faces two conflicting issues.
B) Knows the risk involved in making the decision.
C) Has accurate and comprehensive information to make the decision.
D) Has insufficient information to make the decision.
E) Knows that the probability of success is less than 100 percent.

Question 52

New, novel, complex decisions having no proven answers are

A) Nonprogrammed decisions.
B) Standing decisions.
C) Single-use decisions.
D) Corporate objectives.
E) Programmed decisions.

Question 53

__________ are those decisions encountered and made before, having objectively correct answers, and solvable by using simple rules, policies, or numerical computations.

A) Structured decisions
B) Unstructured decisions
C) Restructured decisions
D) Nonprogrammed decisions
E) Programmed decisions

Question 54

The confrontational model of decision making arises when people disagree on goals or compete with one another for resources.

Question 55

The incremental model of decision making occurs when managers make small decisions and move cautiously toward a bigger solution.

Question 56

Bounded rationality is a less-than-perfect form of rationality in which decision makers cannot be perfectly rational because decisions are complex and complete information is unavailable or cannot be fully processed.

Question 57

The state that exists when decision makers have incomplete information is known as

A) Uncertainty.
B) Probability analysis.
C) Ambiguity.
D) Policy formulation.
E) Risk.

Question 58

Complimenting one another and telling stories are examples of behaviors that can make brainstorming less effective.

Question 59

Decision making under crisis conditions will inevitably result in poor decisions and negative publicity.

Question 60

________ regarding the strength and timing of the economic recovery in 2010 and 2011 made businesses slow to start hiring.

A) Uncertainty
B) Improbability
C) Conflict
D) Policy formulation
E) Risk

Question 61

Negative feedback received during the final evaluation of the decision indicates that either the implementation will require more time or that

A) The problem cannot be solved.
B) The implementation has used too many resources.
C) The manager is not capable of rational decisions.
D) The decision was a bad one.
E) The scenarios were labeled incorrectly.

Question 62

Once a problem is identified and properly diagnosed, the next stage in the decision making process involves

A) Evaluating alternatives.
B) Evaluating consequences.
C) Evaluating information.
D) Evaluating the decision.
E) Generating alternative solutions.

Question 63

Illusion of control, discounting the future, and framing effects are all examples of

A) Social realities.
B) Psychological biases.
C) Rationality.
D) Vigilance.
E) Time pressures.

Question 64

The final stage in the decision-making process is

A) Anticipating the results.
B) Implementing the solution.
C) Diagnosing remaining issues.
D) Criteria analysis.
E) Evaluating the decision.

Question 65

Implementing a decision must be planned carefully. Adequate planning most often requires which of the following steps?

A) Determine how things will turn out before the decision is made.
B) List the resources and activities required.
C) Be sure the CEO agrees with the implementation decision.
D) Allow employees to take on responsibility once the implementation has begun.
E) Encourage vigilance.

Question 66

Vigilance in decision making means

A) The customer realizes increased value as a result of the decision.
B) The manager has carefully and conscientiously completed all stages in the decision-making process.
C) The manager has been monitored during the decision making process.
D) The employees monitor the implementation of the decision carefully.
E) The employees have been monitored to see their reactions to the decision.

Question 67

__________ requires searching thoroughly for a complete range of alternatives, carefully assessing each alternative, comparing one to another, and then choosing or creating the very best.

A) Benchmarking
B) Maximizing
C) Minimizing
D) Satisficing
E) Optimizing

Question 68

The manager of the Capitol Restaurant noted that the restaurant had experienced a decreased number of evening customers. The manager promptly ordered the chef to rewrite the evening menu. Customer feedback later indicated that the problem had not been the menu but poor service from the wait staff. The manager's decision to have the menu revised suggests that he failed to

A) Challenge the status quo.
B) Evaluate the alternatives and consequences.
C) Properly diagnose the cause of the problem.
D) Evaluate the decision and its consequences.
E) Identify a solution.

Question 69

When a solution is specifically designed for a particular problem or set of problems, it is called a

A) Designer-enhanced solution.
B) Dynamic solution.
C) Ready-made solution.
D) User-generated solution.
E) Custom-made solution.

Question 70

The initial step in the decision making process is to

A) Select an alternative.
B) Evaluate the decision.
C) Challenge the status quo.
D) Generate alternatives.
E) Identify the problem.
As Figure 3.2 illustrates, decision makers should (1) identify and diagnose the problem, (2) generate alternative solutions, (3) evaluate alternatives, (4) make the choice, (5) implement the decision, and (6) evaluate the decision.

Question 71

Nigel, a manager at Montlucon Eyewear, needed to purchase a new secure display case for his most expensive sunglasses. He wanted one that was high in quality and security, yet low in price. The case he chose was neither the highest quality available, nor the lowest in price available, yet it had a good combination of attributes. Nigel's choice illustrates

A) Maximizing.
B) Satisficing.
C) Optimizing.
D) Minimizing.
E) Programming.

Question 72

Managers who optimize their decisions will attempt to choose

A) The first minimally acceptable alternative.
B) Among those alternatives with most predictable results.
C) The least expensive alternative.
D) That alternative that produces the least conflict.
E) An alternative that achieves the best possible balance among several goals.

Question 73

Irena, the manager of Kiddy Couture, knows that the economy greatly affects her business. She has developed a plan of action for each of four possible economic outcomes may occur in her geographic area over the next four to six years. Here Irena is

A) Facing a stable environment.
B) Utilizing contingency planning.
C) Focusing on efficient decisions.
D) Engaging in satisficing.
E) An irrational decision maker.

Question 74

Alternative courses of action that can be implemented based on how the future unfolds are called

A) Single-use plans.
B) Contingency plans.
C) Standing plans.
D) Corporate objectives.
E) Shadow plans.

Question 75

Custom-made decisions most often require

A) A consultant.
B) In-depth computations.
C) Top management approval.
D) Creativity.
E) Brainstorming.

Question 76

Psychological bias in decision making is best described as

A) The effect that people's psychological capabilities have upon the decisions they must make under pressure.
B) What happens when a decision maker must balance the preferences of many interested parties, diluting effectiveness.
C) The conflict that results from too many people involved with making a decision.
D) The inability to be objective when gathering, evaluating, and applying information for decision making.
E) The fact that people are motivated by a need for power that clouds their decision making capabilities.

Question 77

Victor, an administrative assistant in accounting, orders office supplies biweekly; today he needs pens, sticky notes, and staples. He looks at the office supply catalog and quickly picks a selection for each that is priced acceptably. Here Victor is using

A) Minimizing.
B) Optimizing.
C) Satisficing.
D) Management by exception.
E) Maximizing.

Question 78

Making a decision by accepting the first option that meets your goal is referred to as

A) Optimizing.
B) Satisficing.
C) Maximizing.
D) Minimizing.
E) Accepting.

Question 79

A manager may discover that a problem exists with current company performance by comparing it with

A) Past performance.
B) The performance of other organizations.
C) Future performance forecasts.
D) Desired performance based on the business plan for the year.
E) All of these.

Question 80

To maximize a decision is to

A) Realize the largest possible production benefit.
B) Involve as many people affected by the decision as possible in its design.
C) Achieve the best possible outcome.
D) Utilize groupthink for individual decisions.
E) Generate many alternatives for evaluation.