Deck 6: Managerial Decision Making

Question 1

Decision making is the process by which managers identify and resolve problems and capitalize on opportunities.

Answer 1

True

Question 2

A problem occurs when some aspect of organizational performance is less than desirable.

Answer 2

True

Question 3

Pepsi's idea and decision to add a freshness date on its beverage containers represented a problem for the company.

Answer 3

False

Question 4

A situation that has the potential to provide beneficial outcomes can be referred to as an opportunity.

Question 5

Even in large organizations, a manager's personality and attitudes affect the decisions he is making for the organization.

Question 6

Discrepancies alert managers to possible problems or opportunities.

Question 7

The first step in the decision-making process is the clear identification of opportunities or the diagnosis of problems that require a decision.

Question 8

Accurate information can be interpreted different ways by different managers.

Question 9

When high-quality information is collected, it is never misinterpreted.

Question 10

Alternatives refer to the results the organization wants to attain.

Question 11

The quality of the results does not need to be specified as everyone already knows quality should be good.

Question 12

The fewer the alternatives, the better, as too many alternatives can be confusing and hard to choose among.

Question 13

The alternative courses of action in a decision-making situation are the strategies that the decision-maker might implement to solve the problem or respond to the opportunity.

Question 14

The use of focus groups would be most appropriate in the generating alternatives stage of the decision-making process.

Question 15

Generally, it is a good idea that those who will be affected by the decision must understand the choice and why it is made.

Question 16

As long as there are not too many alternatives, choosing the best is easy.

Question 17

Consideration of resources available is an important part of the implementation step of decision making.

Question 18

The planning process is a key to effective implementation.

Question 19

Monitoring of the decisions is useful whether the feedback is positive or negative.

Question 20

The rational-economic decision model is prescriptive rather than descriptive; that is, it concentrates on how decisions should be made, not on how they actually are made.

Question 21

The rational-economic decision model is descriptive rather than prescriptive in nature.

Question 22

The rational-economic model does not consider that a manager's cultural heritage as well as her personality, experiences, and values may influence the way she processes information and makes decisions.

Question 23

The rational-economic model does not address the factors that impact the decision environment or describe how managers actually make decisions.

Question 24

The behavioral model of decision-making assumes that managers have perfect information and all the information that they need to make decisions.

Question 25

The behavioral model of decision-making assumes that the manager will be rational, systematic, and logical in assessing each alternative and its associated probabilities.

Question 26

The rational-economic model of decision-making better reflects how decisions are actually made in business organizations than does the behavioral model.

Question 27

Unlike the rational-economic model, the behavioral decision model acknowledges human limitations that make rational decision-making difficult to achieve.

Question 28

The notion of bounded rationality recognizes that people cannot know everything; they are limited by such organizational constraints such as time, information, resources, and their own mental capacities.

Question 29

The notion of satisficing means that when making decisions, people have completely accurate information and that the objectives are known and agreed upon.

Question 30

Satisficers do not try to find optimal solutions to problems. Instead, they search until they find an acceptable solution and then adopt it.

Question 31

Intuition has been described as everything from an unconscious analysis based on past experience to a paranormal ability called a "sixth sense."

Question 32

Intuition means searching for and accepting something that is satisfactory rather than insisting on the perfect or optimal.

Question 33

The escalation of commitment phenomenon is the tendency to commit more to a previously selected course of action than would be expected if one followed an effective decision-making process.

Question 34

Intuition means being concerned for and attentive to the correct decision-making procedures.

Question 35

Vigilance means being concerned for and attentive to the correct decision-making procedures.

Question 36

Decision makers should assimilate and take into account any new information to which they are exposed, even when the information does not support the original preferred course of action.

Question 37

Participative decision-making is a technique that can be applied in all situations.

Question 38

Vroom and Jago developed a model for participation in decision-making that helps managers determine when group decision-making is appropriate.

Question 39

According to the rational-economic model, the effectiveness of a group decision is governed by both its quality and its acceptance.

Question 40

Group decision-making is becoming more common as organizations focus on improving customer service through quality management and push decision-making to lower levels within the organization.

Question 41

In general, a participative style is desirable when timeliness is crucial and conflict is likely.

Question 42

In general, as group size increases, rules and procedures become more formalized.

Question 43

The participation aspect of group decision-making usually leads to lower member satisfaction.

Question 44

When people have participated in making a decision, they tend to accept the decision more readily and are more satisfied with it.

Question 45

A disadvantage of group decision-making is that group discussions may be dominated by an individual or subgroup.

Question 46

In highly cohesive groups, members may not make optimal decisions because they wish to avoid disagreements.

Question 47

Groupthink is an agreement-at-all-cost mentality that results in effective group decision-making.

Question 48

Groupthink is a technique that encourages group members to generate as many novel ideas as possible on a given topic without evaluating them.

Question 49

Groupthink is common in tightly knit groups that believe in what they are doing.

Question 50

Brainstorming enhances creativity by focusing on generating ideas rather than on choosing an alternative.

Question 51

The nominal group technique is a structured process designed to stimulate creative group decision-making where agreement is lacking or the members have incomplete knowledge of the nature of the problem.

Question 52

The nominal group technique is used in situations where group members must isolate their judgments from one another to solve a problem or determine a satisfactory course of action.

Question 53

The escalation of commitment technique is a structured process designed to stimulate creative group decision-making, and overcome the tendency of group members to criticize ideas when they are offered.

Question 54

A significant advantage of the Delphi technique is that it completely avoids group interaction effects.

Question 55

Devil's advocacy and dialectical inquiry were developed to deal with simple, straightforward decisions.

Question 56

The dialectical inquiry method forces the group to confront the implications of their assumptions in the decision process.

Question 57

The devil's advocacy approach appoints an individual or subgroup to critique a proposed course of action.

Question 58

With dialectical inquiry, a decision situation is approached from two opposite viewpoints, and advocates of the conflicting views conduct a debate, presenting arguments in support of their positions.

Question 59

When the decision situation is one that has occurred in the past and the response is routine, the decision is referred to as a nonprogrammed decision.

Question 60

When decisions are made in response to situations that are unique, unstructured, or poorly defined, they are called nonprogrammed.

Question 61

Programmed decisions often require considerable creativity, cleverness, and innovation to elicit a list of reasonable alternative courses of action.

Question 62

Two important areas for strategic decision-making are strategy selection and evaluation of portfolios.

Question 63

A two-dimensional grid that compares the strategic positions of each of an organization's businesses is referred to as a strategic decision-making matrix.

Question 64

The two most frequently used portfolio matrices are the growth-share matrix (BCG) and the industry-attractiveness/business-strength matrix.

Question 65

The BCG matrix is constructed by using market growth rate on one axis and industry growth rate on the other as indicators of the firm's strategic position.

Question 66

Businesses that fall into the low-market-growth/high-market-share cell of the BCG Matrix are referred to as cash cows.

Question 67

Businesses that fall into the low-market-growth/low-market-share call are known as dogs.

Question 68

Unless there is some compelling reason to hold onto a question mark, BCG analysis suggests that such businesses be removed from the portfolio.

Question 69

Stars offer attractive growth opportunities. However, they also require a great deal of money to keep up with the market's rate of growth.

Question 70

BCG analysis can be used in both for-profit and not-for-profit organizations.

Question 71

The GE matrix uses several factors to assess both industry attractiveness and business strength, rather than just one factor for each, as does the BCG Matrix.

Question 72

The GE matrix is an improvement over the BCG matrix in that it incorporates a much wider variety of strategically relevant variables rather than just two.

Question 73

A criticism of both the BCG matrix and the GE matrix is that they are static.

Question 74

The process by which managers identify and resolve problems and capitalize on opportunities is referred to as

A) organizing.
B) motivating.
C) decision-making.
D) controlling.
E) supervision.

Question 75

A __________ is a situation where some aspect of organizational performance is less than desirable. In contrast, a/an __________ is any situation that has the potential to provide additional beneficial outcomes.

A) problem, circumstance
B) difficulty, circumstance
C) puzzle, circumstance
D) problem, opportunity
E) circumstance, opportunity

Question 76

__________ is the process by which managers identify and resolve problems and capitalize on opportunities.

A) Organizing
B) Decision-making
C) Motivating
D) Controlling
E) Supervision

Question 77

As a new business owner, Lee is often confronted with situations within his organization that are than desirable in terms of successfully running his business. This type of situation is referred to as

A) an opportunity.
B) a dog.
C) a problem.
D) uncertainty.
E) a threat.

Question 78

After a house fire, firefighter John Bartlett found that the only thing that had not burned was a box of disposable diapers. Based on that, he started a company called Barricade International that developed a gel made from the same polymers used in the diapers to use as a fire fighting agent. John Bartlett's discovering this is an example of a/an __________.

A) opportunity.
B) threat.
C) problem.
D) strength.
E) issue.

Question 79

Which of the following is the most direct definition of decision making?

A) the process by which managers identify and resolve problems and capitalize on opportunities.
B) the process of determining the tasks to be done, who will do them, and how they will be managed and coordinated.
C) a process by which managers regulate organizational activities to make them consistent with expectations and help them achieve predetermined standards of performance.
D) the process of administering and coordinating resources effectively and efficiently in an effort to achieve the goals of the organization.
E) motivating and directing the members of the organization so that they contribute to the achievement of the goals of the organization.

Question 80

For many organizations, the process by which managers identify and resolve problems and capitalize on opportunities is critical to their survival. This process is referred to as

A) controlling.
B) directing.
C) decision-making.
D) leading.
E) management.