Question 1

Rules and policies are essentially the same.

Accepted Answer

Rules and policies have different meanings. Rules are specific instructions or actions that must be followed, while policies are overarching statements or principles that guide decision making and behavior.

Question 2

A(n)________ occurs when decision makers think they know more than they do or hold unrealistically positive views of themselves and their performance.

Accepted Answer

The described phenomenon is known as the overconfidence bias, as it involves individuals having excessive trust in their own abilities or judgments. Hindsight bias refers to the tendency to believe, after an event has occurred, that one would have predicted or expected the outcome. Confirmation bias is the tendency to seek out information that confirms one's existing beliefs or hypotheses. Self-serving bias involves attributing one's successes to internal factors and one's failures to external factors.

Question 3

A(n)________ occurs when decision makers seek out information that reaffirms their past choices and discount information that contradicts past judgments.

Accepted Answer

Confirmation bias occurs when decision makers seek out information that supports their past choices and ignore information that contradicts previous judgments. It's a cognitive bias that can lead to poor decision-making and limit a person's ability to consider alternative options. Hindsight bias is the tendency to overestimate one's ability to have predicted an event after it has occurred, while overconfidence bias is the tendency to overestimate one's own abilities and the accuracy of one's beliefs. Self-serving bias is the tendency to attribute personal success to internal factors and blame failure on external factors.

Question 4

Unstructured problems require custom-made responses through programmed decision-making.

Accepted Answer

Unstructured problems are unique and complex, requiring non-programmed decision-making that involves creativity and judgment rather than a predefined algorithm or rule.

Question 5

A(n)________ occurs when decision makers take credit for their successes and blame failures on outside factors.

Accepted Answer

The scenario described is an example of self-serving bias, where individuals tend to attribute their successes to internal factors, such as their own abilities, while attributing failures to external factors, such as the situation or other people's actions.

Question 6

A procedure is an explicit statement that tells a manager what he or she can or cannot do.

Accepted Answer

A procedure is a set of steps that explain how to perform a particular task, but it does not necessarily tell a manager what he or she can or cannot do. This would be outlined in company policies and regulations.

Question 7

Decision-Making Conditions: Keep on Truckin' (Scenario)
Fiona Lui is general manager of Westcoast Trucks, a medium-sized hauling service located in Vancouver, B.C. She is responsible for scheduling trucks, initiating new routes, and staffing both existing and new routes. She is currently struggling to find more information about the profitability of existing and future truck routes.
-Fiona knows that she is operating in an uncertain environment,but she is an optimist and will most likely follow a ________ strategy.

Accepted Answer

Fiona's optimistic attitude suggests that she is willing to take risks and try to maximize the benefits of her decisions. The maximax strategy involves identifying and selecting the option with the highest potential payoff, which aligns with Fiona's approach. Since Fiona is not risk-averse, the minimax strategy (which involves selecting the option with the lowest potential loss) would not be a good fit for her. The multimax strategy involves selecting multiple options that meet certain criteria, but there is no indication in the scenario that this would be Fiona's preferred approach. The minimin strategy involves selecting the option with the lowest possible outcome, which is also not aligned with Fiona's optimistic mindset.

Question 8

Nonprogrammed decision-making relies on procedures,rules,and policies.

Accepted Answer

Nonprogrammed decision making does not rely on procedures, rules, and policies. It involves unique and complex situations that require creative solutions and judgement.

Question 9

A policy is a series of interrelated sequential steps that a manager can use for responding to a structured problem.

Accepted Answer

A policy is a guideline for making decisions, not a series of interrelated sequential steps; procedures or processes describe sequential steps.

Question 10

Rules of thumb that managers use to simplify decision making are called ________.

Accepted Answer

Heuristics are rules of thumb that managers use to simplify decision making. Intuition is a gut feeling or an innate ability to know something without reasoning. Satisficing is making a decision that is satisfactory or 'good enough' rather than optimal. Bounded rationality is the idea that managers have limitations in processing information and making decisions due to time, cognitive limitations and incomplete information.

Question 11

In a short essay,discuss the difference between structured and unstructured problems.Include specific examples of each type of problem to support your answer.Next,discuss the type of decisions that would be used to address each of these problems.

Accepted Answer

The answer of In a short essay,discuss the difference between...

Question 12

Risk is a condition in which a decision maker has neither certainty nor reasonable probability estimates.

Accepted Answer

Risk involves situations where the decision maker can estimate probabilities of different outcomes, unlike uncertainty where probabilities are unknown.

Question 13

A manager who desires to minimize his maximum "regret" will opt for a minimax choice.

Accepted Answer

A minimax strategy involves minimizing the maximum possible loss or regret. Therefore, a manager who desires to minimize his maximum regret will opt for a minimax choice.

Question 14

Most managerial decisions in the real world are nonprogrammed.

Accepted Answer

The answer of Most managerial decisions in the real world...

Question 15

A programmed decision is a repetitive decision that can be handled by a routine approach.

Accepted Answer

Programmed decisions are routine decisions that can be repeated and handled by a set of rules or procedures without the need for significant human judgment.

Question 16

An optimistic manager will follow a maximin approach.

Accepted Answer

An optimistic manager will follow a maximax approach, not a maximin approach. The maximax approach involves choosing the option with the highest possible payoff, while the maximin approach involves choosing the option with the least possible worst outcome.

Question 17

Decision-Making Conditions: Keep on Truckin' (Scenario)
Fiona Lui is general manager of Westcoast Trucks, a medium-sized hauling service located in Vancouver, B.C. She is responsible for scheduling trucks, initiating new routes, and staffing both existing and new routes. She is currently struggling to find more information about the profitability of existing and future truck routes.
-Sylvia,Fiona's scheduling assistant,is pessimistic about the company's ability to earn a profit from the proposed new truck route.Sylvia will most likely follow a ________ strategy.

Accepted Answer

Given Sylvia's pessimistic view about the company's profitability on the proposed new truck route, she is likely to follow a maximin strategy. This approach involves choosing the option with the least negative outcome, aiming to minimize potential losses in the worst-case scenario.

Question 18

Decision-Making Conditions: Keep on Truckin' (Scenario)
Fiona Lui is general manager of Westcoast Trucks, a medium-sized hauling service located in Vancouver, B.C. She is responsible for scheduling trucks, initiating new routes, and staffing both existing and new routes. She is currently struggling to find more information about the profitability of existing and future truck routes.
-If Fiona wishes to minimize her regret about the truck route decision,she should follow a ________ strategy.

Accepted Answer

A minimax strategy involves minimizing the possible maximum regret that can occur. In other words, Fiona would need to consider the worst-case scenario for each route and choose the route that has the least regret associated with it. This strategy is ideal when there is a lot of uncertainty about the outcome of a decision and minimizing regret is important. Since Fiona is struggling to find information about the profitability of the routes, a minimax strategy would help her make a decision that minimizes her potential regret.

Question 19

A(n)________ occurs when decision makers incorrectly fixate on past expenditures of time,money,or effort in assessing choices rather than focusing on future consequences.

Accepted Answer

The scenario described in the question is an example of the sunk costs error, also known as the sunk cost fallacy. This bias occurs when decision makers factor in past investments of resources (such as time, money, or effort) instead of focusing on the future consequences of a decision. In this way, past investments become "sunk costs" that cannot be recovered, and should not be considered in future decision making. Therefore, the best answer is D, sunk costs error.

Question 20

Decision-Making Conditions: Keep on Truckin' (Scenario)
Fiona Lui is general manager of Westcoast Trucks, a medium-sized hauling service located in Vancouver, B.C. She is responsible for scheduling trucks, initiating new routes, and staffing both existing and new routes. She is currently struggling to find more information about the profitability of existing and future truck routes.
-Fiona can make accurate decisions if she is willing to pay $5,000 for research about the profitability of various truck routes.If she pays for the research,she believes that she will be operating under a condition of ________.

Accepted Answer

Paying for research provides Fiona with accurate information about the profitability of various truck routes, allowing her to make decisions with a known outcome, which is a condition of certainty.

Quiz 8: Decision Making