Deck 3: Managing Decision Making

Question 1

Uncertainty occurs when the outcomes of various actions can be reasonably predicted.

Answer 1

False

Question 2

The administrative model is based on three important concepts: bounded rationality,complete information,and satisficing.

Answer 2

False

Question 3

The administrative model of decision making recognizes that the assumptions underlying the rational model are realistic.

Answer 3

False

Question 4

When Ford Canada limits its search for new suppliers to an existing set of alternatives known to the purchasing manager,they are using a satisficing strategy.

Question 5

The premise of the classical or rational model is that once managers recognize the need to make a decision they should be able to generate a complete list of alternatives and consequences,from which they can make the best choice.

Question 6

Satisficing is when managers fail to explore all the possible alternatives and choose one that only minimally solves the problem.

Question 7

The rational or classical model of decision making assumes that managers have all the information they need to make an optimal decision in the best interests of the organization.

Question 8

The ability to make sound decisions based on one's experience and immediate feelings about the information at hand is known as judgment.

Question 9

Bounded rationality refers to the inability of managers to be completely rational when processing information.

Question 10

The administrative model was developed by March and Simon.

Question 11

The administrative model of decision making recognizes that the assumptions underlying the rational model are rarely accurate.

Question 12

Decision making involves analyzing options and making determinations about specific organizational goals and courses of action.

Question 13

Decision making is done every time a manager plans,organizes,directs,or controls organizational activities.

Question 14

Routine,virtually automatic decision making that follows established rules or guidelines is known as programmed decision making.

Question 15

Ordering basic office supplies by the office manager whenever the inventory on hand drops below a certain level,is an example of nonprogrammed decision making.

Question 16

Satisficing is when managers make lightning-quick calculations of costs and benefits that lead to optimal decisions.

Question 17

Decision making in response to opportunities occurs when managers search for ways to improve organizational performance to benefit customers,employees,and other stakeholder groups.

Question 18

When generating alternatives,managers must never generate a set of feasible alternative courses of action to take in response to the opportunity or threat.

Question 19

The first step in the decision-making process is to generate alternatives.

Question 20

The last step in the decision-making process is to learn from feedback.

Question 21

Decision-making styles vary in terms of a person's way of thinking and on the tolerance for ambiguity.

Question 22

The tendency of decision makers to overestimate their ability is known as representativeness bias.

Question 23

The tendency to overestimate one's own ability to control events is called escalating commitment.

Question 24

When Walmart tried to use the same model that worked for them in the USA in the rest of the world,they were acting on a representative bias.

Question 25

The error of considering the most recent data to have the most relevance to a problem is known as a confirmation bias.

Question 26

A representative bias occurs when decision makers generalize from an isolated or individual case.

Question 27

The tendency to see patterns in data where none exist is known as a confirmation bias.

Question 28

It is the responsibility of middle managers to implement the chosen alternative.

Question 29

An ethical decision is a decision that reasonable or typical stakeholders would find acceptable because it aids shareholders,the organization,or society.

Question 30

Ethics help people determine moral responses to situations in which the best course of action is unclear.

Question 31

Managers who use a high degree of intuition when making decisions and have a high degree of tolerance for ambiguity are conceptual decision makers.

Question 32

One criterion for evaluating the pros and cons of alternative courses of action is "practicality".

Question 33

Managers who use a high degree of intuition and have a low tolerance for ambiguity have a behavioural decision-making style.

Question 34

Rules of thumb that simplify decision making are called heuristics.

Question 35

Analyzing the costs and benefits of each alternative falls under ethical criteria.

Question 36

Prior hypothesis bias occurs when managers make decisions based on strong beliefs that they think apply to the situation even when they don't.

Question 37

When a sales manager views the poor performance of his or her sales agents as resulting from their laziness rather than to the innovative product line of a competitor,this is a fundamental attribution error.

Question 38

Managers with the analytic style are rational in their way of thinking and have a low tolerance for ambiguity.

Question 39

A manager decided to continue to purchase insurance from a company that charged high premiums,even though the manager knew that he or she could get the same coverage for less.This is an example of illusion of control.

Question 40

When a manager has trouble deciding what to do,they may be facing an ethical dilemma.

Question 41

Having a minimal commitment to social responsibility,and a willingness to do what the law requires and no more is known as what type of approach to social responsibility?

A)Obstruction approach
B)Defensive approach
C)Accommodative approach
D)Proactive approach
E)Distributive approach

Question 42

Which of the following is the second step in the decision-making process?

A)Assess alternatives
B)Identify decision criteria
C)Choose from alternatives
D)Recognize the need for a decision
E)Learn from feedback

Question 43

Being proactive in terms of social responsibility includes thinking beyond what the law requires.

Question 44

If a manager is not sure if a certain business practice is ethical,he or she should seek advice,if possible,from the company's ethics ombudsperson.

Question 45

Managers who have a moderate commitment to social responsibility,and a willingness to do more than the law requires if asked is known as a(n):

A)Obstruction approach
B)Defensive approach
C)Accommodative approach
D)Proactive approach
E)Distributive justice

Question 46

A regional manager decided to increase production based on random data that were interpreted to show a pattern of increased sales.Which type of bias does this reflect?

A)Systematic errors
B)Representative bias
C)Clustering illusion
D)Illusion of control and overconfidence bias
E)Prior hypothesis bias

Question 47

Decisions that protect the environment,promote social responsibility,respect cultural differences,and provide an economic benefit are known as sustainability decisions.

Question 48

Arguments against being socially responsible include all but which of the following?

A)Social responsibility benefits some stakeholders and not others
B)Socially responsible businesses gain a reputation
C)Business should only use its resources to increase profits
D)Business should only use its resources to reward stockholders
E)Business should only be responsible to stockholders

Question 49

Canadian companies who locate in the Third world do not have to consider the host country's societal ethics.

Question 50

Managers who have a strong commitment to social responsibility,an eagerness to do more than the law requires and to use organizational resources to promote the interest of all organizational stakeholders is known as what type of approach to social responsibility?

A)Obstruction approach
B)Defensive approach
C)Accommodative approach
D)Proactive approach
E)Distributive justice

Question 51

Codes of ethics are formal standards and rules that managers use to make decisions in the best interests of their stakeholders.

Question 52

When managers are making decisions where the outcomes of alternatives are not known,they are working under conditions of:

A)Risk
B)Uncertainty
C)Certainty
D)Satisficing
E)Bounded rationality

Question 53

Creativity is the ability of the decision maker to discover original ideas.

Question 54

A company that takes a defensive approach to social responsibility will comply with the law but not go above and beyond its requirements.

Question 55

Creativity is at the heart of organizational learning.

Question 56

A company with an obstructionist approach to social responsibility has a high social responsibility.

Question 57

A sustainability strategy has three elements.

Question 58

Individual ethics are derived from family,peers,and upbringing,but not personality and experience.

Question 59

An organization in which managers try to maximize the ability of individuals and groups to think and behave creatively and thus maximize the potential for organizational learning to take place is known as:

A)a learning organization
B)a groupthink organization
C)a privately held organization
D)a heuristic organization
E)an ergonomic organization

Question 60

Showing disregard for social responsibility,and a willingness to engage in and cover up unethical and illegal behaviour is known as a(n):

A)Obstructionist approach
B)Defensive approach
C)Accommodative approach
D)Proactive approach
E)Distributive approach

Question 61

All of the following are examples of nonprogrammed decisions,except:

A)Changing the light bulbs when they burn out
B)Investing in new technology
C)Developing a new product
D)Launching a new promotional campaign
E)Entering a new market or expanding internationally

Question 62

A cognitive bias resulting from the tendency to generalize inappropriately from a small sample or from a single vivid event or episode is known as:

A)systematic errors
B)representative bias
C)escalating commitment
D)recency effect
E)prior hypothesis bias

Question 63

The ability to make sound decisions based on one's experience and immediate feelings about the information at hand is called:

A)Judgment
B)Bounded rationality
C)Heuristics
D)Satisficing
E)Intuition

Question 64

According to the text,when Richard Branson launched the Pulse MP3 to compete with Apple's iPod,this was an example of:

A)systematic errors
B)representative bias
C)escalating commitment
D)illusion of control and overconfidence bias
E)prior hypothesis bias

Question 65

The administrative model of decision making was developed by:

A)Mary Parker Follet
B)Kahneman and Tversky
C)Fredrick Taylor
D)March and Simon
E)Peter Senge

Question 66

When Ford Canada limits its search for new suppliers to an existing set of alternatives known to the purchasing manager,they are using which decision-making strategy?

A)Bounded rationality
B)Satisficing
C)Incomplete information
D)Uncertainty
E)Groupthink

Question 67

A decision maker's ability to discover original and novel ideas that lead to feasible alternative courses of action is known as:

A)groupthink
B)creativity
C)illusion of control
D)brainstorming
E)intuition

Question 68

Errors that people make over and over and that result in poor decision making are known as:

A)systematic errors
B)representative bias
C)confirmation bias
D)illusion of control and overconfidence bias
E)recency effect

Question 69

Managers who are rational in their way of thinking and have a low tolerance for ambiguity have which decision-making style?

A)Analytic
B)Conceptual
C)Directive
D)Behavioural
E)Disruptive

Question 70

When Walmart tried to use the same model that worked for them in the USA in the rest of the world,they were acting on which type of cognitive bias?

A)Systematic errors
B)Representative bias
C)Fundamental attribution error
D)Illusion of control and overconfidence bias
E)Prior hypothesis bias

Question 71

Managers who use a high degree of intuition when making decisions and have a high degree of tolerance for ambiguity have which type of decision-making style?

A)Analytic
B)Conceptual
C)Directive
D)Behavioural
E)Intuitive

Question 72

A cognitive bias resulting from the tendency to base decisions on strong prior beliefs even if evidence shows that those beliefs are wrong is known as:

A)systematic errors
B)representative bias
C)escalating commitment
D)illusion of control and overconfidence bias
E)prior hypothesis bias

Question 73

Managers who use a high degree of intuition and have a low tolerance for ambiguity have a(n)___________ decision-making style.

A)analytic
B)conceptual
C)directive
D)behavioural
E)pragmatic

Question 74

Which of the following is NOT one of the criteria used by managers to evaluate the pros and cons of alternative courses of action?

A)Prior hypothesis bias
B)Legal
C)Ethical
D)Economical
E)Practical

Question 75

Managers who are rational in the way they process information but can handle more ambiguity and uncertainty have which decision-making style?

A)Analytic
B)Conceptual
C)Directive
D)Behavioural
E)Intuitive

Question 76

The ability to develop a sound opinion based on one's evaluation of the importance of the information at hand is known as:

A)Judgment
B)Bounded rationality
C)Heuristics
D)Satisficing
E)Intuition

Question 77

A manager decided to continue to purchase insurance from a company that charged high premiums,even though the manager knew that he or she could get the same coverage for less.This is an example of what type of cognitive bias?

A)Systematic errors
B)Representative bias
C)Escalating commitment
D)Illusion of control and overconfidence bias
E)Prior hypothesis bias

Question 78

Decision making occurs in all of the following activities of managing,except:

A)Planning
B)Organizing
C)Directing
D)Controlling
E)Tasking

Question 79

A source of cognitive bias resulting from the tendency to overestimate one's own ability to control activities and events is known as:

A)systematic errors
B)representative bias
C)escalating commitment
D)illusion of control and overconfidence bias
E)fundamental attribution error

Question 80

Rules of thumb that simplify decision making are known as:

A)systematic errors
B)representative bias
C)heuristics
D)illusion of control and overconfidence bias
E)prior hypothesis bias