Deck 8: Making Decisions

Question 1

A decision is a choice made between two or more available alternatives.

Answer 1

True

Question 2

Decision-making is essentially a problem-solving process that involves eliminating barriers to organizational goal attainment.

Answer 2

True

Question 3

Most organizational decisions are made under conditions of complete certainty.

Answer 3

False

Question 4

Employees are more likely to be committed to a decision reached through consensus.

Question 5

During the decision-making process, organizational goals should be kept in mind when selecting the most beneficial alternative.

Question 6

Groupthink is a group decision-making process in which negative feedback on any suggested alternative by any group member is forbidden until all members have presented alternatives that they perceive as valuable.

Question 7

In the nominal group technique, group members never meet face to face.

Question 8

In the decision-making process, it is important to accurately identify an existing problem prior to listing the possible alternatives for solving the problem.

Question 9

Decisions made through consensus usually take up lesser time than those made by a single individual.

Question 10

Decision-makers who believe the source of all good is outside of themselves, and therefore rely heavily on suggestions from others, are classified as having an exploitative orientation.

Question 11

A decision that is routine and repetitive, and typically handled in a specific way, is frequently called a non-programmed decision.

Question 12

A relevant alternative is one that is both feasible for solving an existing problem and also feasible for implementation.

Question 13

Implementation of the chosen alternative is the final step in the decision-making process.

Question 14

One of the disadvantages of group decision-making is that they cost the organization more than individual decisions.

Question 15

All decisions are either programmed or non-programmed decisions.

Question 16

The Delphi group decision-making technique is a process that involves circulating questionnaires on a specific problem among group members, sharing those results, and continuing to recirculate and refine responses until a consensus is reached.

Question 17

According to the probability theory, the expected value for an alternative equals the income that alternative would produce times its probability of producing that income.

Question 18

Decision-makers characterized by the desire to preserve the status quo as much as possible are classified as having a hoarding orientation.

Question 19

The confirmation bias is the tendency to believe certain outcomes because others believe the same.

Question 20

A programmed decision is typically a one-shot structured decision.

Question 21

A _________ is an agreement on a decision by all the individuals involved in making that decision.

A) law
B) consensus
C) fiat
D) declaration
E) clause

Question 22

Which of the following is true about decisions and decision-making?

A) Managers make decisions primarily when performing the controlling function.
B) In the process of deciding, the alternatives are as important as the choice made.
C) Organizations only have to consider significant decisions that have a major impact on business.
D) Decision making is the process of choosing the best alternative for reaching objectives.
E) All managerial decisions are of equal significance to the organization.

Question 23

Confetti Corporation is a company that manufactures and distributes confectionery to various stores around the world. They started out as a small shop on a street in Atlanta and grew into one of the biggest companies that manufacture confectionery, with a listing on the NYSE. After half a decade of successful global business, they have to decide whether to take over a major bakery giant that is in need of revival. Which of the following is most similar to the given scenario?

A) A school in suburban Indianapolis is required to take a decision on how to deal with absentees of 9ᵗʰ grade.
B) L'Antique, a chain store selling antique furniture, needs to decide whether or not to shut down unprofitable outlets.
C) A big retailer has to decide on a policy to treat purchase returns immediately after the holiday season.
D) A real estate major needs to decide how many laborers to hire from subcontractors to complete one of its residential projects.
E) The HR department at IBM has to hire 200 employees immediately for an upcoming project.

Question 24

A choice made between two or more available alternatives is a(n) ________.

A) directive
B) consensus
C) decision
D) alternative
E) objective

Question 25

Programmed decisions are ________.

A) non-structured
B) one-shot decisions
C) routine and repetitive
D) made by top management
E) made by computers

Question 26

The main disadvantage of arriving at decisions through consensus is ________.

A) it results in very few practical solutions
B) it reduces employees' commitment to the decision
C) it involves time-consuming discussions
D) often the manager must make the decision
E) it focuses "several heads" on the decision

Question 27

Peter often asks his colleagues for their ideas and suggestions in order to make a decision. However, he never gives credit to the individuals who gave him the ideas and instead passes the ideas off as his own. Which of the following orientations does Peter have?

A) legitimate
B) exploitative
C) hoarding
D) marketing-oriented
E) ideal

Question 28

Which of the following is a traditional technique for solving a programmed decision?

A) judgment
B) rules of thumb
C) habit
D) intuition
E) training

Question 29

All of the English teachers at Springfield High School jointly developed and agreed on the standards that students must achieve in order to graduate to the next grade. This is an example of ________.

A) bounded rationality
B) consensus
C) rules of thumb
D) intuitive decision making
E) groupthink

Question 30

The broader the scope of a decision, ________.

A) the higher the level of the manager who should make it
B) the fewer the number of decision makers involved
C) the lesser are the number of decision criteria
D) the faster the decision is made
E) the lesser the influence of extraneous factors

Question 31

Even though Amy is the leader of a team, she finds it very hard to make decisions on her own. She often asks her colleagues for their opinion on matters that come up and relies on these inputs to make the final decision. What type of an orientation does Amy have?

A) marketing-oriented
B) hoarding
C) indecisive
D) exploitative
E) receptive

Question 32

Judgment, intuition, and creativity would most likely be classified as ________.

A) modern decision-making techniques appropriate for programmed decisions
B) traditional decision-making techniques appropriate for nonprogrammed decisions
C) traditional decision-making techniques appropriate for programmed decisions
D) modern decision-making techniques appropriate for nonprogrammed decisions
E) techniques that can be used for programmed as well as nonprogrammed decisions

Question 33

An organizational decision-maker who is willing to steal the ideas necessary to make good decisions has a(n) ________ orientation.

A) hoarding
B) egoistic
C) exploitative
D) latent
E) ideal

Question 34

Wispy's Burgers are a large fast-food chain based in Allentown, PA. They have franchises across the US and are one of the top five fast food service restaurants. One of the responsibilities of their inventory managers is to decide when to order beef patty stocks. Which of the following is most similar to the given scenario?

A) RBX Shoes needs to take a decision on whether to build a manufacturing facility in China.
B) Restaurant managers in New York City must decide how to modify their businesses to comply with the new law.
C) A chain of restaurants serving authentic Lebanese cuisine are required to decide whether to shut down unprofitable franchises.
D) Tristate College needs to arrive at a decision to manage students who want to drop classes.
E) A chocolate manufacturer is required to decide whether they should acquire a chocolate factory based in Asia.

Question 35

Nonprogrammed decisions are ________.

A) structured
B) one-shot decisions
C) routine and repetitive
D) less time-consuming
E) made by computers

Question 36

Which of the following is true about decisions taken through consensus?

A) It occurs after a quick discussion by members of the decision group.
B) It requires little involvement or assistance from the manager.
C) Its effectiveness can be hampered by poor interpersonal relations.
D) It is foolproof and successful at all times.
E) The decision group generally consists of only managers.

Question 37

The proportion of the total management system that a decision will affect is called the ________.

A) scope of the decision
B) unity of command
C) span of control
D) level of management
E) discretionary area

Question 38

Trendy Garb is a retail store that sells women's apparel. The store has comprehensive rules, policies, and procedures for matters relating to customer complaints and product returns. Hence, when faced with either of these situations, the store manager simply needs to refer to these guidelines and proceed accordingly. This is an example of a(n) ________.

A) overlapping responsibility
B) nonprogrammed decision
C) rule of thumb
D) decision tree
E) programmed decision

Question 39

Which of the following is an example of a nonprogrammed decision?

A) Determining how products will be arranged on the shelves of a supermarket.
B) Deciding how to handle customer complaints and product returns.
C) Identifying and selecting a new supplier of raw materials.
D) Evaluating the performance of a job applicant on a job sample test.
E) Writing an e-mail requesting one's boss for a few days off.

Question 40

Decision makers who have a(n) ________ orientation believe that the source of all good is outside themselves, and therefore rely heavily on suggestions from other organization members.

A) receptive
B) exploitative
C) hoarding
D) ideal
E) marketing-oriented

Question 41

The bandwagon effect, a common decision-making bias, is ________.

A) the characteristic of an individual who prefers to avoid losses rather than acquire gains
B) the tendency to believe certain outcomes because others believe the same
C) the tendency to believe that our forecasts are better than they truly are
D) the tendency to search for information that supports one's preconceived beliefs
E) an individual's tendency to believe that he/she is less susceptible to risky events

Question 42

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

A) identify possible alternatives for solving an organizational problem
B) identify organizational objectives
C) identify an existing problem
D) gather feedback about an existing problem
E) implement the selected alternative

Question 43

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

A) identify organizational objectives
B) gather feedback to find out if the problem is solved
C) implement the selected alternative
D) select the most beneficial alternative
E) take action

Question 44

________ refers to the departure from rational theory that produces suboptimal decisions.

A) Uncertainty
B) Satisficing
C) Dogmatism
D) Bias
E) Bounded rationality

Question 45

________ refers to an individual's inborn ability to synthesize information quickly and effectively.

A) Bounded rationality
B) Satisficing
C) Bias
D) Intuition
E) Optimism

Question 46

The ________ orientation is found in decision makers who desire to preserve the status quo as much as possible.

A) receptive
B) ideal
C) exploitative
D) hoarding
E) legitimate

Question 47

________ refers to the fact that managers are constrained in terms of time, computational power, and knowledge when making decisions.

A) Intuition
B) Unrealistic optimism
C) Bounded rationality
D) Rational ignorance
E) Cognitive bias

Question 48

Which of the following best describes authority factors that limit the number of problem-solving alternatives available?

A) the orders issued by a manager's supervisor is unclear
B) the level of organizational technology is inadequate for certain alternatives
C) the physical facilities of an organization are inappropriate for certain alternatives
D) a manager's superior tells the manager that a certain alternative is not feasible
E) the chosen alternative is too costly for the organization

Question 49

An alternative that is considered feasible for solving an existing problem and for implementation is ________.

A) relevant
B) tangible
C) stable
D) certain
E) intuitive

Question 50

After identifying an existing problem, the next step in the decision-making process is ________.

A) conducting a gap analysis
B) listing alternative solutions
C) identifying organizational objectives
D) gathering problem-related feedback
E) exploring legal restrictions related to the problem

Question 51

Individuals often use ________, also known as simple rules of thumb, to make decisions.

A) bounded rationality
B) syntax
C) folksonomies
D) intuition
E) heuristics

Question 52

________ occurs when an individual makes a decision that is not optimal, but is good enough.

A) Loss aversion
B) Satisficing
C) Intuition
D) Bias
E) Unrealistic optimism

Question 53

Jared recently sent an e-mail to all the members of his department asking them for their opinions about where the department should have its quarterly team lunch. The response was overwhelming as Jared received more than 40 suggestions. This is an example of the ________.

A) paradox of choice
B) bandwagon effect
C) confirmation bias
D) confidence bias
E) loss aversion effect

Question 54

Ideal decision makers ________.

A) preserve the status quo
B) allow others to make decisions for them
C) accept little outside help in making decisions
D) are characterized by reason and sound judgment
E) take decisions that will enhance their value in the firm

Question 55

Which of the following is true about the definition of bounded rationality?

A) Managers rely on their inborn ability to synthesize information quickly and effectively.
B) Managers have access to complete and accurate information for making a decision.
C) Managers adhere to rules of the thumb when making decisions.
D) Statistical probabilities can be attributed to alternative potential outcomes.
E) Managers do not always have access to the resources required to make rational decisions.

Question 56

Having too many alternatives may demotivate decision makers, which harms decision making. This is known as the ________.

A) bandwagon effect
B) confirmation bias
C) paradox of choice
D) loss aversion effect
E) confidence bias

Question 57

The ________ decision-making orientation emphasizes the realization of the organization's potential as well as that of the decision maker. Such decision makers try to use all of their talents when making decisions.

A) ideal
B) exploitative
C) receptive
D) actualized
E) tangible

Question 58

Decision-makers who feel they are commodities and are only as valuable as the decisions they make would most likely be classified as ________.

A) having a hoarding orientation
B) being receptive
C) being exploitative
D) having an ideal orientation
E) being marketing-oriented

Question 59

Jack works at an advertising agency and leads a team of 8 graphic designers. Whenever he has to make a decision, he does so by himself and rarely asks him team members for their suggestions or inputs. Which of the following orientations does Jack have?

A) legitimate
B) exploitative
C) receptive
D) hoarding
E) marketing-oriented

Question 60

John wants to start his own pet shop and has put out an ad for the post of shop assistant. He hired the first candidate he interviewed without reviewing the remaining applications because the first one fit the given criteria. What is this an example of?

A) confirmation bias
B) risk
C) bias
D) satisficing
E) heuristics

Question 61

Individuals' tendency to believe that they are less susceptible to risky events than others is referred to as ________.

A) the bandwagon effect
B) the confirmation bias
C) loss aversion
D) overconfidence
E) unrealistic optimism

Question 62

In the nominal group technique of decision-making, after all the members have discussed the ideas, they ________.

A) discuss their ideas one-to-one with the group leader
B) present their personal views on each of the ideas discussed
C) write down each idea on the board for all the other members to refer to
D) take out a secret ballot to support their favorite idea
E) adopt and implement the most cost effective idea

Question 63

If (I) = $57,500 and (P) is .3, what is the expected value (EV)?

A) $17,250
B) $191,666
C) $74,750
D) $40,250
E) $131,466

Question 64

Becky is leading her team in an open discussion on the possibilities of implementing flexible work hours for her department. One of the team members keeps interrupting with negative feedback on the suggested ideas. He is breaking the cardinal rule of ________, one of the methods of decision-making.

A) scapegoating
B) brainstorming
C) crowdsourcing
D) groupthinking
E) the Delphi technique

Question 65

The nominal group technique of decision-making begins with ________.

A) members presenting their individual ideas orally
B) the entire group discussing their ideas simultaneously
C) group members writing down individual ideas on the matter being discussed
D) members writing their ideas on a board for all other members to see
E) a secret ballot which allows members to support their favorite ideas without fear

Question 66

The group decision-making process that involves the circulation of questionnaires on a specific problem among group members is known as ________.

A) groupthink
B) brainstorming
C) the Delphi technique
D) the nominal group technique
E) the devil's advocate technique

Question 67

The tendency to search for information that supports one's preconceived beliefs and to ignore information that contradicts those beliefs is known as ________.

A) confirmation bias
B) loss aversion
C) the bandwagon effect
D) overconfidence
E) unrealistic optimism

Question 68

The formula for expected value (EV) is ________.

A) interest rate x probability
B) income x probability
C) cost of risk x probability
D) cost of risk / probability
E) income / probability

Question 69

When decisions are reached using probability theory, the alternative normally chosen is the one with ________.

A) the lowest expected value
B) the highest expected value
C) the lowest cost/benefit ratio
D) the lowest risk
E) the highest risk

Question 70

The phenomenon of compromising the quality of a decision to maintain relationships within a team is referred to as ________.

A) doublethink
B) crowdsourcing
C) brainstorming
D) groupthink
E) scapegoating

Question 71

________ refers to the likelihood that an event or outcome will actually occur.

A) Surety
B) Ratio
C) Probability
D) Brainstorming
E) Bias

Question 72

Naomi leads a team of software developers. Because of the sudden increase in the number of projects over the last few weeks, the team will need to work additional hours in order to meet the various deadlines. She asks her team members to write down their individual ideas on whether they should extend their daily work hours, or simply work on Saturday for the next couple of months. They are also encouraged to come up with other solutions that can help them solve the problem. Which of the following methods of decision-making is Naomi most likely using?

A) the Delphi technique
B) the nominal group technique
C) brainstorming
D) groupthinking
E) controlled creativity

Question 73

A group decision-making process which forbids negative feedback on any suggested alternative by any group member until all members have presented alternatives is known as ________.

A) groupthinking
B) brainstorming
C) doublethink
D) mindmapping
E) scapegoating

Question 74

Which of the following biases refers to individuals who tend to strongly prefer avoiding losses rather than acquiring gains?

A) loss leaders
B) zero-risk bias
C) self-serving bias
D) loss aversion
E) money illusion

Question 75

________ refers to situations where the probability that a particular outcome will occur is not known in advance.

A) Uncertainty
B) Risk
C) Unrealistic optimism
D) Heuristics
E) Hazard

Question 76

Which of the following is an advantage of group decision-making?

A) Groups take lesser time than individuals to arrive at a decision because of the collective and diverse mentality of groups.
B) Group decisions do not cost the organization as much as individual decisions do.
C) Group decisions are often of a higher quality than individual decisions because of the friendly relationships that exist within the group.
D) Group decisions can be effectively controlled and influenced by the dominant members of the group.
E) Members of the group tend to support the implementation of the decision more fervently than they would if the decision had been made by an individual.

Question 77

Overconfidence is ________.

A) the tendency to believe certain outcomes because others believe the same
B) the tendency to search for information that supports one's preconceived beliefs
C) the tendency to believe that our forecasts are better than they truly are
D) the tendency to strongly prefer avoiding losses rather than acquiring gains
E) the tendency to believe that one is less susceptible to risk than others

Question 78

________ refer(s) to situations in which statistical probabilities can be attributed to alternative potential outcomes.

A) Optimism
B) Surety
C) Uncertainty
D) Risk
E) Heuristics

Question 79

A graphic decision-making tool used to evaluate decisions containing a series of steps is known as a(n) ________.

A) decision support system
B) decision theory
C) morphological box
D) decision tree
E) Delphi chart

Question 80

Which of the following is the first step in the process of brainstorming?

A) members comment on ideas
B) group leader chooses members
C) ideas are evaluated
D) group members state ideas
E) ideas are recorded