Question 1

A top-management team in an organization is feeling threatened by a deteriorating economic situation and doubt their ability to manage it. Feeling threatened and powerless, the team accuses other lower-level managers of being unable to control the situation or of lacking the ability or desire to do so. Which of the following biases is being experienced by the top-management team?

Accepted Answer

The bias being experienced by the top-management team is projection, which is the tendency to attribute their own unacceptable or threatening feelings, motives, or beliefs onto another person or group. The team is feeling threatened and powerless, and instead of acknowledging it, they are projecting those feelings onto lower-level managers.

Question 2

________ is a cognitive bias that leads managers to continue a losing course of action and to refuse to admit they have made a mistake.

Accepted Answer

Escalation of commitment refers to the tendency to persist with a decision or course of action, even in the face of mounting losses, rather than admitting that it was a mistake and cutting losses. This is because people often become emotionally invested in their decisions and do not want to admit that they were wrong.

Question 3

________ is a cognitive bias that causes managers to overestimate the extent to which they can manipulate the outcomes of an action.

Accepted Answer

The illusion of control is the cognitive bias that causes managers to overestimate the extent to which they can manipulate the outcomes of an action. This bias can lead to overconfidence in decision-making and an underestimation of external factors that may impact the outcome.

Question 4

An organization is employing more and more managers but profitability is not increasing. The managers of the organization are not willing to accept that the lack of increase in profitability is the result of their inefficiency. Rather, the managers argue that they are positioning the organization for future growth by putting in place the infrastructures to support future development. Which of the following cognitive biases is being experienced by these managers?

Accepted Answer

The managers are displaying ego-defensiveness bias by not accepting responsibility for lack of profitability and instead making excuses for their decisions. They are defending their egos and self-image.

Question 5

Which of the following statements is true regarding a wheel configuration of a top-management team?

Accepted Answer

The answer of Which of the following statements is true...

Question 6

Which of the following statements is true regarding a circle configuration of a top-management team?

Accepted Answer

A circle configuration is characterized by a relatively flat structure with decentralized decision-making, allowing for easier communication and more efficient decision-making. Since communication in a circle configuration can occur more freely between members, there is less reliance on the CEO for coordination. A wheel configuration, on the other hand, is a hierarchical structure with the CEO at the top, leading to slower communication and decision-making. A circle configuration may not be suitable for complex problems that require input from multiple members, but it can be effective for more routine decision-making processes. Therefore, option B is the correct choice.

Question 7

A fundamental premise of ________ theory is that when making decisions, managers need to think in two related ways. First, they need to look forward and anticipate how rivals will respond to their competitive moves and second, managers need to reason backward to determine which moves their company should pursue today given their assessment of how their rivals will respond to various future moves.

Accepted Answer

The premise described in the question is a key aspect of game theory, which focuses on strategic decision-making in competitive environments. Transaction cost theory is concerned with the costs associated with economic transactions, population ecology theory is focused on the dynamics of organizational populations in an environment, and institutional theory is focused on the norms and rules that guide organizational behavior. None of these theories specifically address the forward-thinking and backward-reasoning elements inherent in game theory.

Question 8

Dialectic inquiry involves ________.

Accepted Answer

Dialectic inquiry involves creating a final plan out of many plans proposed by various teams. It is a method used in decision-making processes to consider different perspectives and synthesize them into a cohesive strategy.

Question 9

A(n) ________ organizational structure is, an informal organization of managers set up parallel to the formal organizational structure to "shadow" the decision-making and actions of managers in the formal organization.

Accepted Answer

This type of organizational structure is called a collateral organizational structure. It is usually created when managers feel that the formal organizational structure is not working effectively and they want to create an alternative structure that will help them with decision-making and actions. This is an informal structure of management established to "shadow" the formal organization.

Question 10

Describe the garbage-can model of decision-making.

Accepted Answer

The answer of Describe the garbage-can model of decision-making....

Question 11

Which of the following terms refers to the conformity that emerges when like-minded people reinforce one another's tendencies to interpret events and information in similar ways?

Accepted Answer

Groupthink is the term used to refer to the conformity that emerges when like-minded people reinforce each other's tendencies to interpret events and information in similar ways. This can result in a lack of diversity of ideas and perspectives, and can lead to poor decision making.

Question 12

In which of the following situations is an organization most likely to use game theory?

Accepted Answer

Game theory is most useful in situations where there are interdependent players with conflicting interests, such as in a competitive market where each player's actions affect the others. Option B aligns with this scenario, as the organization competes against a limited number of rivals in its domain and they are highly interdependent.

Question 13

________ is a cognitive bias that allows managers to justify and reinforce their own preferences and values by attributing them to others.

Accepted Answer

This is the definition of projection bias. Projection bias occurs when a person assumes that others share the same beliefs or values as they do. This allows managers to justify and reinforce their own preferences and values by attributing them to others.

Question 14

The bias toward escalation of commitment is reinforced by a(n) ________ approach to decision-making.

Accepted Answer

The incrementalist approach to decision-making involves taking small steps and adjusting along the way, which can lead to the reinforcement of commitment and potential escalation of investment over time. A rational approach would weigh the costs and benefits at each stage and may not necessarily continue investing if it is not deemed worthwhile. An unstructured or garbage can approach may not necessarily have a clear decision-making process.

Question 15

Describe the incrementalist model of decision-making.

Accepted Answer

The answer of Describe the incrementalist model of decision-making....

Question 16

________ is a cognitive bias that leads managers to interpret events in such a way that their actions appear in the most favorable light.

Accepted Answer

The cognitive bias that leads managers to interpret events in a way that portrays their actions in a favorable light is known as ego-defensiveness. This bias is often exhibited when managers feel their competency or reputation is being questioned or when they are faced with negative feedback about their performance. They may distort or ignore information that does not support their self-image, making it difficult to accurately assess their own performance and make constructive adjustments.

Question 17

A friend of yours recommends a stock based upon a "hot tip." You purchase it, and it subsequently declines the following year. Your friend advises you to purchase more at the lower price, despite clear evidence that this is not a sound company. Which of the following cognitive biases is being displayed by your friend?

Accepted Answer

Your friend is displaying the cognitive bias of escalation of commitment, which is the tendency to continue investing in a failing decision or action despite negative feedback or evidence. They are doubling down on their initial bad decision instead of accepting their losses and moving on.

Question 18

What are the two principal types of organizational learning strategies proposed by James March?

Accepted Answer

The answer of What are the two principal types of...

Question 19

What are the two types of organizational decisions?

Accepted Answer

The answer of What are the two types of organizational...

Question 20

A(n) ________ is a person who is responsible for critiquing ongoing organizational learning.

Accepted Answer

A devil's advocate is responsible for critiquing ongoing organizational learning by challenging assumptions and pointing out potential weaknesses in proposed ideas, strategies, or plans. This role ensures that the organization thoroughly considers all perspectives before making decisions and can lead to improved outcomes.

Quiz 12: Decision Making, Learning, Knowledge Management, and Information Technology