Question 1

Decision makers who search for ________ solutions use ideas they have tried before or follow the advice of others who have faced similar problems.
A) ready-made
B) custom-made
C) unique
D) original
E) rare

Accepted Answer

Ready-made solutions are pre-existing, tried and tested solutions that have been successful in solving similar problems in the past. Decision makers who opt for ready-made solutions may not have the time, resources, or expertise to create custom-made or unique solutions, and may therefore rely on the advice of others who have faced similar problems. They may also prefer the certainty that comes with using a solution that has already been proven to work.

Question 2

When generating alternative solutions during the decision-making process, ________ solutions must be designed for specific problems.
A) ready-made
B) approved
C) open-ended
D) adjustable
E) custom-made

Accepted Answer

Custom-made solutions are tailored to the specific problem at hand, rather than using a generic, one-size-fits-all approach. This allows for more efficient and effective problem-solving. Ready-made solutions (A) may not fit the specific problem, approved solutions (B) may not be the best option, open-ended solutions (C) may take too long to implement, and adjustable solutions (D) may not be necessary if a custom-made solution is already designed.

Question 3

The psychological bias known as illusion of control refers to a
A) decision bias influenced by the way in which a problem or decision alternative is phrased or presented.
B) belief that one can influence events even when one has no influence over what will happen.
C) bias weighting short-term costs and benefits more heavily than longer-term costs and benefits.
D) condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges.
E) phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus.

Accepted Answer

The illusion of control is the belief that one can influence events even when one has no influence over what will happen. It is a type of cognitive bias in which individuals overestimate their ability to control or influence events that are largely determined by chance or outside forces.

Question 4

________ is a psychological bias that applies to students who do not spend sufficient time studying.
A) Illusion of control
B) Farming effects
C) Discounting the future
D) Time pressures
E) Social realities

Accepted Answer

Discounting the future refers to the tendency for individuals to prioritize immediate rewards over long-term gains, such as choosing to socialize with friends instead of studying for an exam. Students who do not spend sufficient time studying may be succumbing to this bias, as they prioritize immediate activities over studying for future success.

Question 5

With managerial decision making, decision evaluation is useful
A) only if negative feedback has been received.
B) only if positive feedback has been received.
C) whether the conclusion is positive or negative.
D) whether the manager or the employee is involved.
E) only if the employee is involved.

Accepted Answer

Decision evaluation is useful regardless of whether the conclusion is positive or negative. It helps managers determine if their decision was effective and if any changes or adjustments need to be made in the future. Feedback, whether positive or negative, can help inform the evaluation process, but it is not necessary for decision evaluation to be effective. The involvement of employees may also be helpful in some cases, but it is not a requirement for decision evaluation to be useful.

Question 6

________ is one of the six stages of formal decision making.
A) Thriving on the risks of taking a decision
B) Minimizing the consequences of a decision
C) Anticipating the outcome of a decision
D) Evaluating the decision
E) Controlling the damage caused by a wrong decision

Accepted Answer

Evaluating the decision is one of the six stages of formal decision making. This involves assessing the effectiveness of the decision and whether it achieved its intended outcome. This stage helps identify any potential areas for improvement and informs future decision making. Choices A, B, C, and E are not stages of formal decision making.

Question 7

Leona is evaluating a new customer relationship management software solution for her business. She knows several business owners and managers who have implemented the software in their organizations. Instead of conducting a trial in her own company, she asks them for their advice. Leona is most likely searching for a(n) ________ solution to her problem.
A) experimental
B) optimal
C) ready-made
D) statistical
E) custom-made

Accepted Answer

Leona is seeking advice from others who have already implemented the software, indicating that she is looking for a ready-made solution rather than experimenting with different options or customizing one specifically for her business.

Question 8

Discounting the future refers to
A) focusing on gains in the long run.
B) failing to consider inflationary costs.
C) underestimating the short-term effects of a decision.
D) weighing short-term benefits more heavily than long-term benefits.
E) failing to consider the effects of new entrants into the industry.

Accepted Answer

Discounting the future means weighing short-term benefits more heavily than long-term benefits. It's a common cognitive bias that can lead to poor decision-making, especially in situations where sacrificing immediate gratification is necessary for long-term success.

Question 9

In managerial decision making, when one can estimate the likelihood of various consequences but still does not know with certainty what will happen, he or she is facing
A) irresolution.
B) maximization.
C) risk.
D) optimization.
E) framing effects.

Accepted Answer

When a manager can estimate the likelihood of various consequences but still does not know with certainty what will happen, he or she is facing risk. Risk is the probability of an event occurring and the consequences associated with that event. Managers often have to make decisions in uncertain environments where there is a degree of risk involved.

Question 10

In the context of formal decision making, negative feedback indicates that
A) too much time has been dedicated in implementing the decision.
B) implementation of the decision may need more resources.
C) the decision has been made under undue pressure from top management.
D) the problem has been incorrectly diagnosed.
E) the decision has been unfairly beaten down by competitors.

Accepted Answer

The answer of In the context of formal decision making,...

Question 11

When making a choice, ________ requires searching thoroughly for a complete range of alternatives, carefully assessing each alternative, comparing one to another, and then choosing or creating the very best.
A) benchmarking
B) maximizing
C) forecasting
D) satisficing
E) optimizing

Accepted Answer

Maximizing involves thoroughly searching for and evaluating all possible alternatives to choose the best one, as opposed to satisficing, which involves selecting the first satisfactory option.

Question 12

For the decision-making process in an organization, those who ________ a decision must understand the choice and must be committed to its successful implementation.
A) make
B) influence
C) implement
D) finalize
E) create

Accepted Answer

Those who are responsible for implementing a decision must understand and be committed to its successful execution. It is not enough to simply make a decision or influence it; the success of the decision will ultimately depend on those who carry out its implementation.

Question 13

A company recently made changes to its organizational structure. While deciding upon the changes to be implemented, the company invited many employees to discuss the issue with the senior management. This enabled the employees to hear the relevant arguments both for the chosen alternative and against the rejected alternatives. An advantage of using employees in this group discussion was that
A) the employees dominated the discussions and promoted their ideas.
B) the phenomenon of groupthink was encouraged.
C) the satisficing method of decision making was employed.
D) goal displacement was furthered.
E) the employees understood why the decision was made.

Accepted Answer

By inviting employees to discuss the organizational structure changes, the company enabled them to understand the reasoning behind the decision. This helps to increase transparency and employee trust in the company's decision-making process.

Question 14

Managers who use the method of optimizing to make their decisions will attempt to choose
A) the first minimally acceptable alternative.
B) from those alternatives that have known results.
C) the least expensive alternative.
D) the alternative that produces the least conflict.
E) an alternative that achieves the best possible balance among several goals.

Accepted Answer

Optimizing involves selecting the alternative that achieves the best possible balance among several goals. Therefore, the best choice is E. The other options do not take into account the need to balance multiple goals and are not reflective of the optimizing method.

Question 15

________ refer(s) to a decision bias influenced by the way in which a problem or decision alternative is phrased or presented.
A) Framing effects
B) Discounting the future
C) An illusion of control
D) Social realities
E) Time pressures

Accepted Answer

Framing effects refer to how the same information presented in different ways can lead to different decisions or judgments. This bias is particularly strong when the choice is presented as a loss or gain. People tend to be more risk-seeking when presented with options framed as a loss, while they tend to be more risk-averse when presented with options framed as a gain. Thus, it is important for decision-makers to be aware of framing effects when making important decisions.

Question 16

Illusion of control, discounting the future, and framing effects are examples of
A) social realities.
B) psychological biases.
C) strategic planning steps.
D) ready-made solutions.
E) time pressures.

Accepted Answer

Illusion of control, discounting the future, and framing effects are all examples of psychological biases, which refer to the ways in which our cognitive processes can lead us to make irrational or suboptimal decisions. Social realities, strategic planning steps, ready-made solutions, and time pressures do not necessarily refer to biases in decision making.

Question 17

In managerial decision making, the state that exists when decision makers have insufficient information is known as
A) certainty.
B) uncertainty.
C) risk.
D) probability.
E) irresolution.

Accepted Answer

Uncertainty refers to the lack of information or data that decision makers face when making decisions. There is no clear outcome or predicted result, and the potential for multiple outcomes exists. This can make it difficult for decision makers to make well-informed choices. Certainty, on the other hand, means that outcomes are clear and predictable, while risk involves known potential outcomes and probabilities. Probability refers to the likelihood that a particular outcome will occur. Irresolution is not a commonly used term in the context of decision making.

Question 18

The first step in an ideal decision-making process is to
A) make a choice.
B) evaluate alternatives.
C) implement the decision.
D) generate alternative solutions.
E) identify and diagnose the problem.

Accepted Answer

The first step in an ideal decision-making process is to identify and diagnose the problem. This involves recognizing that there is a problem or an opportunity for improvement, defining it clearly, and understanding its underlying causes. Without a clear understanding of the problem, it is impossible to generate alternative solutions or evaluate alternatives in a meaningful way. Therefore, identifying and diagnosing the problem is the crucial first step in any decision-making process.

Question 19

Belinda has to select the right paper clips to purchase for her office. She looks at the office supply catalog and picks the first one that is priced reasonably. Belinda is using the ________ method of decision making.
A) forecasting
B) optimizing
C) satisficing
D) maximizing
E) brainstorming

Accepted Answer

Belinda is not looking for the best option (optimizing or maximizing), but rather just picking a reasonable option (satisficing) without considering any other alternatives or criteria.

Question 20

The manager of a restaurant noticed that the number of customers in the evening was decreasing. She promptly ordered the chef to revise the evening menu. Later, customer feedback indicated that the problem was not the menu but poor service from the waitstaff. The manager's decision to have the menu revised suggests that she failed to
A) identify and diagnose the problem.
B) evaluate alternatives.
C) generate alternative solutions.
D) evaluate the decision.
E) make a choice.

Accepted Answer

The manager failed to identify and diagnose the actual problem, which was poor service from the waitstaff. Instead, she jumped to the conclusion that the problem was the evening menu and ordered the chef to revise it. This indicates a lack of proper problem-solving skills and decision-making process.

Quiz 5: Planning and Decision Making

Decision makers who search for ________ solutions use ideas they have tried before or follow the advice of others who have faced similar problems.

When generating alternative solutions during the decision-making process, ________ solutions must be designed for specific problems.

The psychological bias known as illusion of control refers to a

________ is a psychological bias that applies to students who do not spend sufficient time studying.

With managerial decision making, decision evaluation is useful

________ is one of the six stages of formal decision making.

Discounting the future refers to

In managerial decision making, when one can estimate the likelihood of various consequences but still does not know with certainty what will happen, he or she is facing

In the context of formal decision making, negative feedback indicates that

When making a choice, ________ requires searching thoroughly for a complete range of alternatives, carefully assessing each alternative, comparing one to another, and then choosing or creating the very best.

For the decision-making process in an organization, those who ________ a decision must understand the choice and must be committed to its successful implementation.

Managers who use the method of optimizing to make their decisions will attempt to choose

________ refer(s) to a decision bias influenced by the way in which a problem or decision alternative is phrased or presented.

Illusion of control, discounting the future, and framing effects are examples of

In managerial decision making, the state that exists when decision makers have insufficient information is known as

The first step in an ideal decision-making process is to

Belinda has to select the right paper clips to purchase for her office. She looks at the office supply catalog and picks the first one that is priced reasonably. Belinda is using the ________ method of decision making.