Deck 3: Managerial Decision Making

Question 1

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

Answer 1

True
Explanation:
Some have said we are in the midst of the next great business revolution: the "creative revolution." Said to transcend the agricultural, industrial, and information revolutions, the most fundamental unit of value in the creativity revolution is ideas.

Question 2

If a manager faces a programmed decision, that means

A)a clear structure or procedure exists for arriving at the right decision.
B)the decision maker has no predetermined structure on which to rely.
C)there are a variety of possible solutions, each of which has merits or drawbacks.
D)the decision maker can be creative in choosing what to do.
E)the decision most likely carries substantial risk.

Answer 2

A
Explanation: If a manager faces a programmed decision, it means a clear procedure or structure exists for arriving at the right decision. Nonprogrammed decisions are used when there is no predetermined structure on which to rely.

Question 3

When choosing a phone plan, Max decides on the first option that meets the company's requirements rather than investigating all available options. This is an example of _____.

A)maximizing
B)compromising
C)optimizing
D)satisficing
E)framing

Answer 3

D
Explanation: Satisficing is choosing the first option that is minimally acceptable or adequate. When satisficing, individuals compare their choices against their goals, not against other options. The search for alternatives stops at the first alternative that is okay.

Question 4

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

Question 5

What is the usual state of affairs in managerial decision making?

A)Clear-cut procedures
B)Routine situations
C)Low risk
D)Automatic solutions
E)Lack of structure

Question 6

The most constructive type of conflict is affective conflict.

Question 7

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

Question 8

Fergie is the owner of a health food shop and must decide on next week's work schedule for his employees. This is an example of a

A)nonprogrammed decision.
B)programmed decision.
C)reprogrammed decision.
D)risky decision.
E)complex decision.

Question 9

All companies should have a crisis management plan.

Question 10

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

Question 11

The manager of a burger restaurant faces conflict when she must decide whether to cut hours for all employees or layoff two employees.

Question 12

When a manager must consider opposing pressures from different sources, the manager faces _____.

A)risk
B)conflict
C)certainty
D)groupthink
E)vigilance

Question 13

Contingency plans should be developed only after a decision has been made and implemented.

Question 14

Angus has been going through a decision-making process. He diagnosed a problem with the shipping service his company used, identified alternative shipping services, evaluated those companies, made a choice, and implemented it. Which of the following statements is an accurate description of Angus's decision-making process?

A)Angus has successfully completed the decision-making process.
B)Angus now needs to evaluate the decision he made.
C)Angus left out the first step of the decision-making process.
D)Angus did steps three and four of the decision-making process in reverse order.
E)Angus left out the second step of the decision-making process.

Question 15

In the decision-making process, _____ means achieving the best possible balance among several goals.

A)maximizing
B)compromising
C)optimizing
D)satisficing
E)framing

Question 16

Leila has identified a problem that consists of a gap between what her company is doing now and what it can do to create a more profitable future. The "problem" that Leila has identified is also a(n)

A)opportunity.
B)danger.
C)benefit.
D)trap.
E)secret.

Question 17

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

Question 18

When Luke words his suggestions as positively as possible, his managers are more likely to be interested in them because of the bias known as the framing effect.

Question 19

Risk exists when the probability of an action being successful is less than _____ percent and losses may be higher than gains.

A)20
B)40
C)60
D)80
E)100

Question 20

Eliana, the manager of a retail store, needs a fast solution when an employee asked for a day off during the busiest shopping week of the year. A _____ solution will be most helpful to Eliana in this situation.

A)customized
B)ready-made
C)creative
D)personal
E)one-time

Question 21

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

A)conflict
B)groupthink
C)satisficing
D)creativity
E)framing

Question 22

During a crisis that involved a toxic spill, the executives of ABC Industrial were straightforward in sharing the bad news with the public and providing daily updates on the containment and cleanup process. What is the likely long-lasting effect of this communication strategy?

A)A loss of respect for the company
B)A gain of credibility for the company
C)An increase of anger against the company
D)A decrease of trust in the company
E)An increase in the company's legal liability

Question 23

Which of the following statements about brainstorming is true?

A)Criticism of ideas during the session produces better results.
B)Praise of ideas during the session produces better results.
C)The group should generate as many ideas as possible.
D)Each person keeps his or her ideas private until the end of the session.
E)Participants should avoid building on previous ideas.

Question 24

Qing's employees have requested that he switch the office to flextime so that they can better manage their childcare and commuting schedules. Qing is reluctant to make a drastic change all at once, so he agrees to experiment with staggering the starting and ending times of the workday over a 90-minute period for three months. If, at the end of that time, productivity does not decline, he will consider implementing a more extreme version of flextime. What model of decision-making is Qing using?

A)Bounded rationality
B)Incremental
C)Coalitional
D)Garbage can
E)Crisis

Question 25

Which of the following decisions is likely to be a nonprogrammed decision?

A)Decisions with certainty regarding cause-and-effect relationship
B)Decisions concerning diversification into new products and markets
C)Decisions regarding rules and definite procedures
D)Decisions concerning merit system for promotion of state employees
E)Decisions that depend on numerical computations

Question 26

When decision makers carefully and conscientiously execute all six stages of decision making, the decision makers are said to have exercised ______.

A)optimizing
B)maximizing
C)satisficing
D)vigilance
E)diligence

Question 27

Important, difficult decisions that require creative approaches tend to be

A)vigilant decisions.
B)programmed decisions.
C)non-vigilant decisions.
D)nonprogrammed decisions.
E)structured decisions.

Question 28

Which of the following is a new area in which business crises might occur?

A)Pollution
B)Labor issues
C)Natural disasters
D)Crime
E)Information technology

Question 29

_____ conflict is differences in perspectives or judgments about issues.

A)Affective
B)Intellectual
C)Cognitive
D)Emotional
E)Judgmental

Question 30

The _____ 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.

A)bounded rationality
B)incremental
C)coalitional
D)garbage can
E)crisis

Question 31

Which of the following is a psychological bias that can act as a barrier to good decision making?

A)Framing effects
B)Affective conflict
C)Cognitive conflict
D)Groupthink
E)Dialectic

Question 32

José is trying to decide how to diversify his company so that it produces a larger variety of products and competes in new markets. This is a(n) example of a _____ decision.

A)routine
B)programmed
C)cognitive
D)nonprogrammed
E)noncognitive

Question 33

Which of the following is a disadvantage of group decision making?

A)Drawing on more perspectives
B)Having a larger pool of information
C)Understanding the decision
D)Experiencing groupthink
E)Being more committed to a decision

Question 34

Which of the following is a characteristic of managerial decisions that contributes to the difficulty in making a decision?

A)Guaranteed success
B)Certainty
C)Conflict
D)Structure
E)Speed

Question 35

According to Simon's bounded rationality, which of the following factors prevents decision makers from being truly rational?

A)They have complete information about alternatives and consequences.
B)The problems they face are too simple.
C)Human beings are not exposed to very much information.
D)People have too much time on their hands.
E)People, including those in the same organization, have conflicting goals.

Question 36

David is a small business owner who thinks it is more important to spend money on marketing his current product line than to invest in research to develop new products. Which psychological bias is David displaying?

A)Framing effects
B)Discounting the future
C)Illusion of control
D)Affective conflict
E)Cognitive conflict

Question 37

In goal displacement, a decision-making group

A)loses sight of its original goal and a new, less-important goal emerges.
B)becomes so eager to avoid conflict that it adopts a goal or decision too quickly.
C)generates as many goals as it can but does not allow criticism of people or ideas.
D)disagrees on goals, or the members compete with one another for resources.
E)is unsure about goals and is in disagreement about what to do.

Question 38

The belief that one can influence events even when one has no power over what will happen is known as _____.

A)framing effects
B)discounting the future
C)illusion of control
D)affective conflict
E)cognitive conflict

Question 39

Which of the following statements about group decision making is true?

A)Group decisions are always better than individual decisions.
B)Individual decisions are always better than group decisions.
C)If enough time is available, groups usually make higher-quality decisions than most individuals.
D)If enough time is available, most individuals usually make higher-quality decisions than a group.
E)There are far more disadvantages than advantages to group decision making.

Question 40

Which of the following decisions is likely to be a programmed decision?

A)Decisions about diversification into new products and markets
B)Decisions with uncertainty regarding cause-and-effect relationships
C)Decisions about reorganization of state government agencies
D)Decisions regarding periodic reorders of inventory
E)Decisions involving the purchase of experimental equipment

Question 41

Managers who optimize their decisions will attempt to

A)choose the first, minimally acceptable alternative.
B)fix on the decision that is fastest to make.
C)zero in on the least expensive option available in the market.
D)decide on whatever produces the least challenge or conflict.
E)achieve the best possible balance among several goals.

Question 42

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

A)social realities
B)psychological biases
C)goal displacement
D)vigilance
E)time pressures

Question 43

The psychological bias known as "illusion of control" refers to a belief that

A)the employees will always agree with the decisions made by the manager.
B)one can influence events even when one has no control over what will happen.
C)employees do not have confidence in a manager's abilities.
D)one has no control and therefore does not put any effort into the decision.
E)managers' with wider spans of control tend to perform effectively.

Question 44

The final phase 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 45

Vigilance in decision making means the

A)customer realizes increased value as a result of the decision.
B)manager has carefully completed all stages in the decision-making process.
C)manager has overdone the decision-making process.
D)employees have full control over the decision-making process.
E)employees have been monitored to see their reactions to the decision.

Question 46

In an ideal decision-making process, the initial step is to

A)select an alternative.
B)evaluate the decision.
C)challenge the status quo.
D)generate alternatives.
E)identify the problem.

Question 47

Rita, a manager at Aldens Department Store, needed to purchase a new secure display case for the jewelry department. She wanted one that was high in quality and security, yet low in price. After evaluating the options, she chooses a case that is neither the highest quality available nor the lowest in price available, but has a good combination of attributes. In this case, Rita's choice best illustrates _____.

A)the garbage can model
B)satisficing
C)optimizing
D)the coalitional model
E)bounded rationality

Question 48

Alexia is the manager of Classy Clutches, a store that sells designer purses. Alexia knows that the economy greatly affects her business. Therefore, she is developing alternative courses of action for each of the four possible economic outcomes that may occur over the next four to six years. In this scenario, Alexia is _____.

A)implementing a decision
B)generating contingency plans
C)making a programmed decision
D)engaging in satisficing
E)following the garbage can model

Question 49

Which of the following is the best definition of conflict?

A)A situation when there are opposing pressures from different sources
B)The state that exists when decision makers have accurate, comprehensive information
C)A novel, complex decision with no proven answers
D)The state that exists when the probability of success is less than 100 percent and loss may occur
E)Ideas that have never been seen or tried before

Question 50

When a solution is specifically designed for a particular problem or set of problems, it is referred to as _____.

A)groupthink
B)a programmed decision
C)a ready-made solution
D)a contingency plan
E)a custom-made solution

Question 51

Isaac, a human resources manager, has to layoff either of two department heads, Aisha or Ben, because the downsizing process that's going on in the organization calls for the merging of their two departments. However, Isaac cannot decide whom to layoff, since they are both excellent managers and he doesn't want to dismiss either of them. In this case, Isaac is having a difficult time making a decision due to experiencing _____ conflict.

A)interdependence
B)organizational
C)cognitive
D)psychological
E)affective

Question 52

Ari, a federal government employee, works in acquisition and procurement. Federal policies require that in contracting with suppliers, at least three bids must be received and the lowest bid that meets specifications will be accepted. In this case, Ari is dealing with a(n) _____.

A)cognitive conflict
B)programmed decision
C)affective conflict
D)nonprogrammed decision
E)unstructured problem

Question 53

Negative feedback received during the final evaluation of the decision either means that _____ or the decision was a bad one.

A)the problem cannot be solved
B)more financing is required to implement the changes
C)the manager is not capable of rational decisions
D)implementation will require more time
E)not enough resources were allocated to the problem

Question 54

Greta, an administrative assistant in the print shop of a large company, orders office supplies biweekly; today she needs copier paper and ink cartridges. She looks at the office supply catalog and, because the consequences are not huge, quickly picks a selection for each product that is priced acceptably. In this scenario, Greta is using _____.

A)management by exception
B)optimizing
C)satisficing
D)the garbage can model
E)maximizing

Question 55

Erik needs to hire a new landscaping service to take care of the small garden outside his dental office. He knows what tasks he wants done and how much he is willing to pay per week, and he hires the first service that agrees to his terms. Such an action is referred to as _____.

A)optimizing
B)satisficing
C)maximizing
D)minimizing
E)framing

Question 56

_____ 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)Framing
D)Satisficing
E)Optimizing

Question 57

The manager of the Glitz Hotel noticed a tremendous decrease in the number of convention bookings. He promptly ordered the redecoration of the hotel's meeting rooms. Customer feedback later indicated that the problem had not been the meeting facilities but poor service from the cleaning staff. In this scenario, to try and solve the problem, the manager should have first tried to _____.

A)generate alternate solutions
B)hire more qualified employees
C)identify the problem
D)reduce the price of all products
E)spend more on marketing and advertisement

Question 58

Alternative courses of action that can be implemented based on how the future unfolds are referred to as _____.

A)programmed decisions
B)contingency plans
C)ready-made solutions
D)satisficing plans
E)maximizing plans

Question 59

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

A)conflict
B)probability analysis
C)risk
D)certainty
E)policy formulation

Question 60

Once a solution to a problem is chosen, the next phase in the decision-making process involves _____.

A)evaluating alternatives
B)evaluating consequences
C)generating information
D)implementing the decision
E)generating alternative solutions

Question 61

Which of the following is a decision bias influenced by the way in which a problem or decision alternative is phrased or presented?

A)Groupthink
B)Satisficing
C)Goal displacement
D)Framing effects
E)Illusion of control

Question 62

Which of the following is the best example of a manager discounting the future?

A)A manager believing that he or she can control the outcome of any decision
B)A manager planning for the long-term stability of a company
C)A manager depending on programmed decisions for all issues
D)A manager framing the decision alternatives to influence selection
E)A manager focusing on quarterly profits instead of the long-term vision

Question 63

_____ is an advantage of using a group for decision making.

A)Intellectual stimulation
B)Domination by one member
C)Groupthink
D)Satisficing
E)Goal displacement

Question 64

Allowing one person to control a discussion or decision is known as _____.

A)groupthink
B)devil's advocacy
C)individual dominance
D)vigilance
E)dialectic

Question 65

Guenther's Cherry Orchard and Farm Stand in Door County, Wisconsin, is looking for ways to be more environment-friendly. Guenther interviewed frontline staff to get their opinions and ideas, and he invited everyone to participate in deciding which ideas to advance. Staff members were then aware of the various options and recognized the benefits and costs of each. In this scenario, involving the staff has helped people to _____.

A)dominate the discussion and reinforce the organizational structure
B)use groupthink to gain buy-in
C)please everyone completely
D)believe in the illusion of control
E)understand the decisions and be more committed to them

Question 66

Real-time information is information that

A)is obtained with little or no delay.
B)is based only on past performance.
C)focuses on futuristic forecasts.
D)is based on adjusted predictions.
E)is discounted for the future.

Question 67

A phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus is known as _____.

A)goal displacement
B)domination
C)intuition
D)groupthink
E)satisficing

Question 68

Everett believes that as long as he pays good wages and treats his workers fairly, he can keep employee turnover to a minimum even though his store is located in a community that is known for having a transient population. Everett's belief is an example of which of the following psychological biases?

A)Illusion of control
B)Framing effects
C)Discounting the future
D)Time pressure
E)Social realities

Question 69

Which of the following is a disadvantage of group decisions?

A)People tend to settle for satisficing.
B)There is a smaller pool of information.
C)The employees are not intellectually stimulated.
D)There are multiple perspectives to the decision.
E)There is more transparency among employees.

Question 70

Randi, a manager at Greener Cleaners Inc., was disappointed with her team's discussion regarding next year's marketing campaign. Kwan, a fellow manager, pushed all his ideas through; they were good, but nobody else got a word in or had the opportunity to share. This group experienced _____.

A)vigilance
B)individual dominance
C)satisficing
D)intellectual stimulation
E)goal displacement

Question 71

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

A)goal displacement
B)groupthink
C)a framing effect
D)goal alignment
E)goal realization

Question 72

Leaders of decision-making groups should _____.

A)discourage cognitive conflict
B)encourage groupthink
C)help the group satisfice
D)ask for members' opinions
E)dominate the discussion

Question 73

Alana and Robert disagree sharply about a proposed solution because their backgrounds have given them radically different perspectives. This is an example of _____.

A)goal displacement
B)affective conflict
C)cognitive conflict
D)bounded rationality
E)framing effect

Question 74

Groups that are excessively concerned with maintaining a positive team spirit are likely to experience _____.

A)individual dominance
B)goal displacement
C)brainstorming
D)groupthink
E)maximizing

Question 75

Which of the following involves weighting short-term costs and benefits more heavily than longer-term costs and benefits?

A)Framing effects
B)Cognitive conflict
C)Illusion of control
D)Social realities
E)Discounting the future

Question 76

Discounting the future refers to

A)valuing long-term benefits and costs more heavily than short-term benefits and costs.
B)overestimating the long-term effects of the decision.
C)underestimating the short-term effects of the decision.
D)valuing short-term benefits and costs more heavily than longer-term benefits and costs.
E)making quick decisions with whatever information is at hand.

Question 77

Emotional disagreement directed toward other people is known as _____.

A)psychological bias
B)affective conflict
C)cognitive conflict
D)bounded rationality
E)framing effect

Question 78

Each morning, Complete Office Supply's CEO has a computer-based conference with all store managers. The previous day's data and challenges are discussed so that problems can be quickly and effectively resolved or even avoided. In this case, Complete Office Supply is utilizing _____ to retain a competitive edge.

A)social realities
B)real-time information
C)psychological biases
D)framing effects
E)nonprogrammed decisions

Question 79

_____ occurs when a group member is more interested in winning an argument than solving a problem.

A)Framing
B)Goal displacement
C)Groupthink
D)Satisficing
E)Synergy

Question 80

When a group accepts an alternative that seems to please the members of the group, but the group has not taken the time or effort to explore many options, the group has _____.

A)exercised groupthink
B)stimulated the intellects of its members
C)made an optimizing decision
D)exercised vigilance
E)participated in goal displacement