Question 1

William invested in an initial public offering.After a month he lost 5 percent.After a year he lost 50 percent.After two years he lost 80 percent.William's decision to keep the investment is an example of
A)bounded optimization.
B)escalation of commitment.
C)programmed decision making.
D)strategic maximization.
E)intuitive rationality.

Accepted Answer

William's decision to keep the investment despite the successive losses is an example of escalation of commitment, where the decision-maker continues to invest time or resources in a failing project or venture in hopes of turning it around, even though the rational decision is to cut losses and invest elsewhere. This behavior can often lead to sunk costs and further losses.

Question 2

Charlie feels each of the alternatives is basically the same.He decides based on his gut feeling.Which of the behavioral factors that influence decision making does Charlie's behavior reflect?
A)The optimization principle
B)The iceberg principle
C)Synergy
D)Empathy
E)Intuition

Accepted Answer

Charlie's behavior reflects intuition, where he is relying on his gut feeling to make a decision despite the alternatives being perceived as similar. Intuition refers to the quick, unconscious, and automatic thought processes that we use to make decisions, often based on past experiences and feelings.

Question 3

A(n)____ group is the most common form of a decision-making group.
A)interacting
B)Delphi
C)nominal
D)unilateral
E)task

Accepted Answer

Interacting groups involve members who actively engage with each other and openly discuss their opinions and ideas to arrive at a decision. This is the most common form of a decision-making group as it allows for effective communication and collaboration among members.

Question 4

A disadvantage of using interacting groups to make decisions is
A)group politics.
B)void of expert opinion.
C)an increase in programmed costs.
D)faster decision making.
E)too much brainstorming.

Accepted Answer

Group politics can arise when multiple groups are involved in decision making, leading to power struggles, personal agendas, and biases. This can hinder effective decision-making and prevent the group from reaching a consensus.

Question 5

If you make a decision that does not turn out as planned Warren Buffet advises,"When you find yourself in a hole,stop digging." What behavioral influence on decision making does this advice attempt to prevent?
A)Intuition
B)Escalation of commitment
C)Empathy
D)Risk propensity
E)Political forces

Accepted Answer

Warren Buffet's advice attempts to prevent escalation of commitment, where individuals continue to invest resources into a failing decision or project in the hopes of turning it around or recouping losses, even when it is clear that it is not feasible. By "stopping digging," individuals may cut their losses and move on to a better decision or project.

Question 6

Which of the following is NOT an example of an interacting group?
A)Standing committee
B)Task force
C)Delphi group
D)Functional department
E)Ad hoc committee

Accepted Answer

A Delphi group is characterized by the absence of direct interaction among its members. Instead, it relies on a process of collecting and aggregating the opinions of experts through questionnaires, often conducted in multiple rounds to reach a consensus. This method contrasts with the direct, face-to-face or collaborative interactions typical of standing committees, task forces, functional departments, and ad hoc committees.

Question 7

A Delphi group is not used daily because it has disadvantages.Which of the following is NOT its disadvantage?
A)Time
B)Expense
C)Logistics
D)Process
E)Expert cooperation

Accepted Answer

Expert cooperation is actually one of the advantages of a Delphi group, as it allows for a diverse range of perspectives and insights. The disadvantages include the factors listed in options A-D: time, expense, logistics, and process.

Question 8

YouTube was operating at a loss when Google bought it.Three years later it was still operating at a loss.Google may have experienced ____.
A)intuition
B)escalation of commitment
C)empathy
D)risk propensity
E)political forces

Accepted Answer

Escalation of commitment refers to the phenomenon of continuing to invest resources in a failing course of action, even when the evidence suggests that it may not be profitable. Google's decision to continue to invest in YouTube despite its ongoing losses could be explained by escalation of commitment.

Question 9

Diaz Nesamoney is a computer scientist who founded three successful software companies.Entrepreneurs tend to have a high ____
A)bounded optimization.
B)escalation of commitment.
C)risk propensity.
D)strategic maximization.
E)intuitive rationality.

Accepted Answer

The question asks about a trait commonly found in entrepreneurs. One such trait is risk propensity, which refers to a willingness to take on risk in pursuit of potential rewards. Diaz Nesamoney's success in founding multiple software companies suggests that he has a high risk propensity, making choice C the best answer. Bounded optimization, strategic maximization, and intuitive rationality are not necessarily associated with entrepreneurship, while escalation of commitment is associated with a tendency to stick with failing projects rather than being willing to take risks and pivot, which is not a positive trait for successful entrepreneurs.

Question 10

Ford announced that it planned to cut 10 percent of salaried work.The plan involved retirements,reorganization,and eliminations.Which of the following behavioral aspects is most likely to be involved in this decision?
A)Intuition
B)Escalation of commitment
C)Political forces
D)Ethics
E)Risk propensity

Accepted Answer

The answer of Ford announced that it planned to cut...

Question 11

A manager who has a low-risk propensity would
A)use the rational decision-making model.
B)rely on intuition for his or her decision making.
C)make decisions aggressively.
D)reach decisions quickly.
E)easily invest large sums of money in support of his or her decisions.

Accepted Answer

A manager with a low-risk propensity would likely use the rational decision-making model, which involves gathering information, analyzing options, and making a well-thought-out decision based on the available data. This approach is less risky than relying on intuition or making quick, aggressive decisions without considering all the factors involved. Additionally, a manager with a low-risk propensity would be less likely to easily invest large sums of money in support of their decisions.

Question 12

Which of the following statements is an advantage of group decision making?
A)Groups typically spend a lot of time interacting and discussing.
B)Groups often represent diversity of education and experience.
C)Leaders can shine in groups.
D)Groups tend to desire consensus and cohesiveness.
E)Groups typically reach compromise decisions.

Accepted Answer

A major advantage of group decision making is that it allows for the pooling of diverse knowledge, expertise, and opinions. By bringing together individuals with different backgrounds and perspectives, a group decision can leverage the strengths and insights of its members.

Question 13

A builder in Miami started constructing homes during the "hot" real estate market,even though he knew there were a lot of speculators in the market.The market went cold,and the builder was stuck selling for very low prices.The builder demonstrated
A)bounded optimization.
B)escalation of commitment.
C)risk propensity.
D)strategic maximization.
E)intuitive rationality.

Accepted Answer

The answer of A builder in Miami started constructing homes...

Question 14

One advantage of group decision making is
A)groupthink.
B)compromise.
C)diversity of members' backgrounds.
D)lowered cost of decision making.
E)ability of a strong individual to dominate the group.

Accepted Answer

Diversity of members' backgrounds can bring a variety of perspectives and ideas to the decision-making process, leading to a more well-rounded and informed decision.

Question 15

When Eric selected Janine for the marketing position,he had a feeling she would fit into the culture of the department.Eric used ____ to fill the position.
A)the optimization principle
B)the iceberg principle
C)synergy
D)empathy
E)intuition

Accepted Answer

Eric used his intuition to select Janine for the marketing position based on his feeling that she would fit into the department's culture. Intuition involves relying on one's instincts and feelings rather than solely on rational analysis or data-driven decision making.

Question 16

The first step in using the Delphi procedure is to
A)recognize the problem.
B)collect potential alternatives.
C)agree that the decision will not be optimized.
D)obtain the cooperation of a panel of experts.
E)create staff positions for group members.

Accepted Answer

The first step in using the Delphi procedure is to obtain the cooperation of a panel of experts. The Delphi procedure is a structured communication technique that involves a group of experts who submit their opinions anonymously, with the goal of reaching a consensus. Therefore, the cooperation of a panel of experts is crucial in this process. The other choices, such as recognizing the problem or collecting potential alternatives, may be steps that follow once the expert panel has been assembled.

Question 17

Groups that are used to develop a consensus of expert opinion without the members of the group ever meeting face to face are called ____ groups.
A)interacting
B)Delphi
C)nominal
D)unilateral
E)task

Accepted Answer

Delphi groups are used to develop a consensus of expert opinion without the members of the group ever meeting face-to-face. The group members are typically dispersed geographically and communicate with one another through surveys, questionnaires, or other forms of feedback. Interacting groups require face-to-face interaction, nominal groups meet face-to-face but do not engage in a formal discussion, unilateral groups involve one individual making all decisions, and task groups work together to complete a specific task.

Question 18

The CIO at Canon is considering an information system upgrade.He goes to each of the division heads to discuss their information needs and system capabilities.The CIO narrows the options,and contacts the executives again,reaching agreement before purchasing a system.Which group decision-making technique does this represent?
A)Interacting
B)Delphi
C)Nominal
D)Unilateral
E)Task

Accepted Answer

The answer of The CIO at Canon is considering an...

Question 19

Which of the following statements does NOT describe a characteristic of the nominal group technique?
A)Members are not free to talk to one another.
B)Members individually write down their suggested alternatives.
C)Alternatives are listed on a flip chart.
D)The alternative with the most votes is the solution.
E)Members verbally vote for their first choice.

Accepted Answer

The answer of Which of the following statements does NOT...

Question 20

Renee made a bad decision.She stays with it,trying to convince others it was a good decision.This is an example of
A)bounded optimization.
B)escalation of commitment.
C)programmed decision making.
D)strategic maximization.
E)intuitive rationality.

Accepted Answer

Escalation of commitment refers to the tendency for individuals or groups to continue investing time, money, or other resources into a decision or project that is failing or not producing the desired results. In this scenario, Renee is staying with her bad decision and trying to convince others it was good, which indicates an escalation of commitment.

Quiz 9: Managing Decision Making and Problem Solving

William invested in an initial public offering.After a month he lost 5 percent.After a year he lost 50 percent.After two years he lost 80 percent.William's decision to keep the investment is an example of

Charlie feels each of the alternatives is basically the same.He decides based on his gut feeling.Which of the behavioral factors that influence decision making does Charlie's behavior reflect?

A(n) ____ group is the most common form of a decision-making group.

A disadvantage of using interacting groups to make decisions is

If you make a decision that does not turn out as planned Warren Buffet advises,"When you find yourself in a hole,stop digging." What behavioral influence on decision making does this advice attempt to prevent?

Which of the following is NOT an example of an interacting group?

A Delphi group is not used daily because it has disadvantages.Which of the following is NOT its disadvantage?

YouTube was operating at a loss when Google bought it.Three years later it was still operating at a loss.Google may have experienced ____.

Diaz Nesamoney is a computer scientist who founded three successful software companies.Entrepreneurs tend to have a high ____

Ford announced that it planned to cut 10 percent of salaried work.The plan involved retirements,reorganization,and eliminations.Which of the following behavioral aspects is most likely to be involved in this decision?

A manager who has a low-risk propensity would

Which of the following statements is an advantage of group decision making?

A builder in Miami started constructing homes during the "hot" real estate market,even though he knew there were a lot of speculators in the market.The market went cold,and the builder was stuck selling for very low prices.The builder demonstrated

One advantage of group decision making is

When Eric selected Janine for the marketing position,he had a feeling she would fit into the culture of the department.Eric used ____ to fill the position.

The first step in using the Delphi procedure is to

Groups that are used to develop a consensus of expert opinion without the members of the group ever meeting face to face are called ____ groups.

Which of the following statements does NOT describe a characteristic of the nominal group technique?

Renee made a bad decision.She stays with it,trying to convince others it was a good decision.This is an example of