Deck 3: Managing Decision Making

Question 1

The administrative model recognizes that decision makers act under the following circumstances, except:

A)With time constraints
B)With the best interests of the organization in mind
C)With incomplete information
D)With bounded rationality
E)With a tendency to satisfice

Answer 1

B

Question 2

Decision makers who seek and use information that is consistent with their prior beliefs and ignore information that contradicts those beliefs are suffering from:

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

Answer 2

B

Question 3

Searching for and choosing an acceptable, or satisfactory response to problems and opportunities, rather than trying to make the best decision, is known as:

A)Prior hypothesis bias
B)Satisficing
C)Bounded rationality
D)Dialectic inquiry
E)Groupthink

Answer 3

B

Question 4

When a manager performs a cost benefit analysis of the various alternatives he/she is considering, on which criteria for decision making is this manager focusing?

A)Practicality
B)Economic feasibility
C)Ethnicity
D)Legality
E)All of these choices are incorrect

Question 5

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

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

Question 6

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

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

Question 7

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)Directive
B)Behavioural
C)Analytic
D)Conceptual
E)None of the choices are correct

Question 8

An organization's code of ethics is derived from which of the following?

A)Individual ethics
B)Professional ethics
C)Societal, professional, and individual ethics
D)Societal ethics
E)Professional and individual ethics

Question 9

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

Question 10

Nonprogrammed decision making occurs when:

A)The outcomes of the alternatives can be known
B)The decision can be made automatically
C)The decision question is routine
D)Rules and policies can be used to make the decision
E)None of the choices are correct

Question 11

Which of the following is one of the criteria used by managers to evaluate the pros and cons of alternative courses of action?

A)Ethical
B)Economical
C)Practical
D)Legal
E)All of these choices are criteria to be used

Question 12

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

Question 13

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

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

Question 14

Ethical choices or decisions must effectively satisfy which of the following stakeholder interests?

A)High quality products at reasonable prices for customers
B)Dividends to shareholders
C)Only the first two choices are correct
D)Salaries and stable employment for managers and employees
E)All of the choices are correct

Question 15

The process through which managers seek to improve employees' desire and ability to understand and manage the organization and its task environment is known as:

A)intuition
B)brainstorming
C)organizational learning
D)production blocking
E)creativity

Question 16

Nonroutine decision making that occurs in response to unusual, unpredictable opportunities, and threats is known as:

A)Nonprogrammed decision making
B)Heuristic decision making
C)Groupthink decision making
D)Programmed decision making
E)Creative decision making

Question 17

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

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

Question 18

The process by which managers respond to opportunities and threats that confront their organization by analyzing options and taking actions is known as:

A)Heuristics
B)Intuition
C)Decision making
D)Bounded rationality
E)Systematic error

Question 19

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

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

Question 20

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

Question 21

The administrative model of decision making was developed by:

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

Question 22

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

A)Analytic
B)Directive
C)Behavioural
D)Conceptual
E)None of the choices are correct

Question 23

argued that "rules of thumb" simplify decision making.

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

Question 24

Which of the following is not a step in the decision-making process?

A)Choosing among alternatives
B)Generating alternatives
C)Learning from feedback
D)Assessing alternatives
E)All of these choices are steps in the decision-making process

Question 25

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

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

Question 26

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

Question 27

The cognitive limitations that constrain one's ability to interpret, process, and act on information is known as:

A)Satisficing
B)Dialectic inquiry
C)Groupthink
D)Bounded rationality
E)Prior hypothesis bias

Question 28

Learning from the results of past decisions should include the following steps:

A)Develop guidelines that will help in future decision making
B)Compare what actually happened to what was expected to happen
C)Explore why any expectations for the decision were not met
D)All of these steps should be involved
E)None of these steps should be involved

Question 29

A manager's duty or obligation to make decisions that promotes the welfare and well-being of stakeholders and society, as a whole is known as:

A)Social audit
B)Procedural justice
C)Proactive approach
D)Social responsibility
E)Ethical behaviour

Question 30

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

Question 31

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 privately held organization
B)a learning organization
C)a heuristic organization
D)a groupthink organization
E)all of these choices are incorrect

Question 32

A sustainability strategy has all of the following characteristics, except:

A)It must have an economic benefit
B)It must protect the environment
C)It must respect cultural differences
D)It must promote social responsibility
E)It relies on programmed decision making

Question 33

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

A)behavioural
B)directive
C)conceptual
D)analytic
E)none of the choices are correct

Question 34

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

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

Question 35

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

Question 36

When a manager must decide whether he/she has the capabilities and resources required to implement the alternate causes of action, upon which criteria for decision making is this manager focusing?

A)Economic feasibility
B)Legality
C)Ethnicity
D)Practicality
E)All of these choices are incorrect

Question 37

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)illusion of control and overconfidence bias
C)prior hypothesis bias
D)escalating commitment
E)representative bias

Question 38

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

Question 39

The administrative model of decision making is based on which of the following concepts?

A)Uncertainty of the consequences of every alternative
B)Cognitive limitations of managers
C)Choosing barely satisfactory solutions to problems
D)None of these choices are correct
E)All of these choices are correct

Question 40

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

Question 41

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

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

Question 42

Compare and contrast the four decision making styles.

Question 43

Discuss the assumptions that underlie the classical or rational model of decision making.

Question 44

Decision making has all but which of the following characteristics?

A)It is a process of making determinations about organizational goals
B)It is a process to respond to opportunities and threats
C)It is a process of making determinations about courses of action
D)It is a process that only managers embark upon
E)It is a process of analyzing options

Question 45

Compare and contrast the approaches to social responsibility.

Question 46

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

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

Question 47

Explain the role that organizational learning and creativity play in helping managers to improve their decisions.

Question 48

Discuss how managers can improve their decision making abilities by adopting a sustainability strategy.

Question 49

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

A)Conceptual
B)Directive
C)Behavioural
D)Analytic
E)None of the choices are correct

Question 50

Differentiate between programmed and nonprogrammed decisions and include two examples of each type of decision.

Question 51

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

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

Question 52

The rational or classical model of decision making assumes:

A)That managers tend to satisfice
B)That managers often make decisions under conditions of uncertainty
C)That a manager's ability to be rational is limited or bounded
D)That managers have all the information they need to make an optimal decision
E)That managers often do not act in the best interests of the organization

Question 53

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

Question 54

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

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

Question 55

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)Proactive approach
C)Defensive approach
D)Accommodative approach
E)Distributive approach SHORT ANSWER.Write the word or phrase that best completes each statement or answers the question.

Question 56

Rules of thumb that simplify decision making are known as:

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

Question 57

Routine, virtually automatic decision making that follows established rules or guidelines are known as:

A)Creative decisions
B)Groupthink decisions
C)Nonprogrammed decisions
D)Programmed decisions
E)Heuristic decisions

Question 58

The classical or rational model is , which means that it specifies how decisions should be made.

A)legal
B)heuristic
C)prescriptive
D)satisficing
E)intuitive

Question 59

March and Simon developed three important concepts in their administrative model of decision making.Discuss these three concepts and explain how they would apply to a realistic business-decision situation of your choosing.

Question 60

Managers sometimes make poor decisions because of cognitive biases in their decision-making process.Discuss four of the sources of bias that can adversely affect the ability of managers to make a good decision, and illustrate each of them with a realistic business decision-making situation.

Question 61

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

Question 62

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

Question 63

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 64

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

Question 65

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

Question 66

Researchers have identified a seven-step model that can be used by managers who are faced with an important decision.Discuss these steps as they would apply to an important and realistic business situation of your choosing.

Question 67

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

Question 68

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 69

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

Question 70

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 71

Uncertainty occurs when the outcomes of possible courses of action are known.

Question 72

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

Question 73

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

Question 74

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

Question 75

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

Question 76

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

Question 77

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

Question 78

Discuss the ways in which organizations can encourage and promote ethical behaviour.

Question 79

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

Question 80

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