Question 1

When decisions must be made with limited information because full knowledge of the problem is unavailable and the probability of outcomes is unknown, the condition of _________exists.

Accepted Answer

Uncertainty exists when decisions must be made without full knowledge of the problem or the probability of outcomes, as it implies a lack of surety about what is known and what the future holds.

Question 2

_________decisions deal with situations where the factors are fairly structured and occur with some frequency.

Accepted Answer

The answer of _________decisions deal with situations where the factors...

Question 3

The cultural environment affects decisions made by managers. Which of the following is not correct?

Accepted Answer

Germany is known for its structured and hierarchical approach to business, rather than being particularly flexible and organic. This is in contrast to the more flexible and adaptive approaches seen in some other cultures.

Question 4

Suppose that you need a math elective to take in order to graduate. There are five different courses you could take. You call one friend and, on the basis of her terrific experience in one course, you choose that one. What would Herbert Simon call what you have just done?

Accepted Answer

Herbert Simon would call this "bounded rationality" because you made a decision with limited information and within the constraints of limited time and cognitive resources, rather than exploring all possible options exhaustively.

Question 5

Application of the Decision- Making Process
Net income has fallen for the second quarter, and Amanda is understandably worried. She knows at the board of directors meeting on Wednesday she will be closely questioned and expected to have a plan to avoid any third- quarter losses.
Amanda begins to read slowly over the financial documents to try and ascertain areas that may be the cause. After much consideration, it appears that expenses have risen dramatically over the last few months. Amanda wonders why. She decides a meeting of the department heads is in order first thing tomorrow morning. At the meeting, Amanda would like to generate several possible solutions to the increased expenses. She wonders how to effectively explore all the options. At the meeting, the first option that is discussed is to downsize the research and development department since it is not essential to current operations. Several managers approve this plan. Amanda suggests that they need to look further at the issue. Several suggestions are made, many of which appear to be viable. Amanda wonders what to do next.
-What should Amanda do after the problem is defined?

Accepted Answer

After defining the problem, Amanda should identify the decision criteria to evaluate the potential solutions effectively.

Question 6

"Good" decisions are expected to

Accepted Answer

"Good" decisions are expected to appear to follow the rational process.

Question 7

Ivan spoke out in a meeting in favor of a potential cost savings that would result from a new employee benefits program offered by the company. He later received information that showed that his initial decision about the cost savings was incorrect, but he was too embarrassed to publicly admit he was wrong, so he is sticking by his original statement. Ivan is experiencing

Accepted Answer

Ivan is experiencing escalation of commitment, which occurs when an individual continues to support a previously chosen course of action despite new evidence showing it to be mistaken. This is often due to the desire to avoid admitting an error or to justify initial decision-making.

Question 8

Application of Decision- Making Styles
Jeremy has noticed that the people within his organization make decisions in very different ways. Jackie is rational and has a low tolerance for ambiguity. She is efficient and generally makes decisions that are applicable to the short term. Andy tends to be very broad in his outlook and looks at many alternatives before making a decision. He generally focuses on the long term. Alexandra thinks intuitively and works well with others. She is open to suggestions and concerned about her coworkers. Jeremy himself wants to have complete information before making a decision and always carefully considers many alternatives.
-The directive style of decision making is used by

Accepted Answer

Jackie's approach to decision-making is characterized by efficiency, a low tolerance for ambiguity, and a focus on short-term outcomes, which aligns with the directive style of decision-making. This style is known for quick decision-making with a focus on the immediate outcomes and a desire to move forward quickly, often with a preference for clear, straightforward solutions.

Question 9

Application of the Decision- Making Process
Net income has fallen for the second quarter, and Amanda is understandably worried. She knows at the board of directors meeting on Wednesday she will be closely questioned and expected to have a plan to avoid any third- quarter losses.
Amanda begins to read slowly over the financial documents to try and ascertain areas that may be the cause. After much consideration, it appears that expenses have risen dramatically over the last few months. Amanda wonders why. She decides a meeting of the department heads is in order first thing tomorrow morning. At the meeting, Amanda would like to generate several possible solutions to the increased expenses. She wonders how to effectively explore all the options. At the meeting, the first option that is discussed is to downsize the research and development department since it is not essential to current operations. Several managers approve this plan. Amanda suggests that they need to look further at the issue. Several suggestions are made, many of which appear to be viable. Amanda wonders what to do next.
-Which of the following would help Amanda develop a thorough list of alternative solutions to the problem?

Accepted Answer

Brainstorming is a technique used to generate a wide range of ideas and solutions to problems in a group setting, which aligns with Amanda's goal of developing a thorough list of alternative solutions to the increased expenses.

Question 10

Jill has just been given the assignment of developing the marketing strategy for the company's new product to be released at Christmas. What type of decision making will be required of Jill?

Accepted Answer

Nonprogrammed decisions are unique and require custom solutions. Jill's task is to develop a marketing strategy for a new product, which is a unique and complex task.

Question 11

_________is a situation in which a manager who is deciding how to invest excess cash gets information from the bank that can describes various options available for type of investment, each of which have a guaranteed rate of return.

Accepted Answer

The answer of _________is a situation in which a manager...

Question 12

Application of Decision Making: A Contingency Approach
It seems that all Dave accomplishes is making decisions. Every time he turns around, someone wants him to decide on one more thing. Just today the secretary came in and asked if she could reorder paper for the fax machine. Somehow that seemed like a decision he really did not need to deal with. If he could avoid those types of decisions, then when the foreman came in with the news of a major piece of equipment that needs repair, in which the repair bill will be almost as much as a new machine, Dave could focus more time and attention on the more complicated issues.
-The decision by the secretary to re- order paper from the same supplier first week of every month is an example of

Accepted Answer

The decision by the secretary to reorder paper from the same supplier first week of every month is an example of a programmed decision. Programmed decisions are routine and repetitive, often made in well-structured decision environments, and typically do not require a lot of deliberation.

Question 13

Once in place, expert systems allow employee and lower level managers to make high quality decisions that previously could have been made only by_________ .

Accepted Answer

Expert systems are designed to replicate the decision-making ability of human experts, allowing employees and lower-level managers to make decisions that would typically require the expertise of senior managers.

Question 14

How do managers know when they have a disparity or discrepancy in the decision- making process? The best way is to compare their current state and some standard. Which of the following would not be a relevant standard?

Accepted Answer

Future projections are not a standard for comparing current state to identify discrepancies in the decision-making process because they are speculative and not a fixed benchmark. Standards like previously set goals, the performance of a unit, or past performance provide concrete metrics for comparison.

Question 15

Application of Decision- Making Styles
Jeremy has noticed that the people within his organization make decisions in very different ways. Jackie is rational and has a low tolerance for ambiguity. She is efficient and generally makes decisions that are applicable to the short term. Andy tends to be very broad in his outlook and looks at many alternatives before making a decision. He generally focuses on the long term. Alexandra thinks intuitively and works well with others. She is open to suggestions and concerned about her coworkers. Jeremy himself wants to have complete information before making a decision and always carefully considers many alternatives.
-Jeremy's decision- making style can be characterized as

Accepted Answer

Jeremy's decision-making style is characterized as analytic because he wants to have complete information and carefully considers many alternatives before making a decision. This approach is typical of the analytic style, which involves a comprehensive analysis and consideration of different options.

Question 16

Price, size, gas mileage, color, options, and repair records are examples of which of the following when purchasing a new car?

Accepted Answer

These are examples of decision criteria, which are the various factors or standards that a person considers when making a decision, such as purchasing a new car.

Question 17

The fact that managers make consistent, value- maximizing choices within specified constraints is known as which of the following?

Accepted Answer

Rational decision making refers to the process where managers make consistent, value-maximizing choices within specified constraints, aiming to achieve the best possible outcome.

Question 18

_________is when an alternative is chosen because the manager believes it is "good enough," to solve his or her problem.

Accepted Answer

Satisficing is a decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution. This approach is often used when managers believe an option is "good enough" to meet their needs, especially under conditions of uncertainty or limited information.

Question 19

The tendency for people to base their judgments on information that is readily available is known as

Accepted Answer

The availability heuristic is a mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method or decision. People tend to overestimate the importance of information that is available to them.

Question 20

Which of the following is not allowed in a brainstorming session?

Accepted Answer

Criticism of poor ideas is not allowed in a brainstorming session. The purpose of brainstorming is to encourage open and uninhibited participation by all members, and criticism can stifle creativity and inhibit the free flow of ideas.

Quiz 4: Foundations of Decision Making