When the environment is (objectively) stable, but managers perceive it as turbulent and take (unnecessary) actions, this is knows as:
A) A type 1 error
B) A type 2 error
C) Institutional error
D) Transactional error

Question

Quizplus · Accepted Answer

A type 1 error in decision-making occurs when managers perceive a situation as problematic or turbulent when it is not, leading them to take unnecessary actions based on this incorrect perception.

When the Environment Is (Objectively) Stable, but Managers Perceive It