Question 1

Programmed decision making is a(n) ______ process.
A)novel
B)routine
C)intuitive
D)unusual
E)creative

Accepted Answer

Programmed decision making is a routine, virtually automatic process.

Question 2

Steven, a marketing manager, wants to budget the advertising for a new product launch.He is trying to determine the amount of money that the company can afford to spend on advertising.Which criterion of decision making is he focusing on?
A)legality
B)ethicality
C)economic feasibility
D)practicality
E)product sustainability

Accepted Answer

Managers must decide whether the alternatives are economically feasible-that is, whether they can be accomplished given the organization's performance goals.Typically managers perform a cost-benefit analysis of the various alternatives to determine which one will have the best net financial payoff.

Question 3

Eileen, a college professor, has to pick a textbook for an upcoming course.She has just enough time to review a few books from the many choices available.She settles for one of the books, even though the best book might be a book that she hasn't yet reviewed.What is this process called?
A)optimizing
B)brainstorming
C)rationality binding
D)satisficing
E)cognitive biasing

Accepted Answer

Satisficing is searching for and choosing an acceptable, or satisfactory response to problems and opportunities, rather than trying to make the best decision.

Question 4

Which of the following is an accurate description of satisficing?
A)viewing problems from a fresh perspective to come up with creative alternative solutions to specific problems
B)generating creative alternatives to solve problems and taking advantage of opportunities by abandoning existing mind-sets
C)conducting a retrospective analysis to see what can be learned from past successes or failures
D)searching for and choosing acceptable or satisfactory ways to respond to problems and opportunities rather than trying to make the optimal decision
E)seeking and using information that is consistent with prior beliefs and ignoring information that contradicts those beliefs

Accepted Answer

When managers satisfice, they search for and choose acceptable, or satisfactory, ways to respond to problems and opportunities rather than trying to make the optimum decision.

Question 5

According to the administrative model of decision making, why wouldn't managers be able to arrive at the optimum decision even if they had unlimited ability to evaluate information?
A)Managers would not have complete information.
B)Managers would not have bounded rationality.
C)Managers would have no decision-making ability.
D)Managers would have varying perspectives.
E)Managers would have too many alternatives.

Accepted Answer

Even if managers had unlimited ability to evaluate information, they still would not be able to arrive at the optimum decision because they would have incomplete information.

Question 6

According to March and Simon, humans are limited in their ability to interpret, process, and act on information.When the number of suitable alternatives are greater than what a manager can evaluate, Marc and Simon refer to this as
A)prior-hypothesis.
B)bounded rationality.
C)productive blocking.
D)illusion of control.
E)satisficing ambiguity.

Accepted Answer

March and Simon coined the term bounded rationality to describe the situation in which the number of alternatives a manager must identify is so great and the amount of information so vast that it is difficult for the manager to even come close to evaluating it all before making a decision.

Question 7

In the classical model of decision making, the most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is known as the ____________ decision.
A)intuitive
B)creative
C)heuristic
D)subjective
E)optimum

Accepted Answer

The optimum decision is the most appropriate decision possible in light of what they believe to be the most desirable consequences for the organization.

Question 8

The classical model specifies how decisions should be made.In other words it is
A)heuristic.
B)prescriptive.
C)optimizing.
D)intuitive.
E)satisficing.

Accepted Answer

The classical model is prescriptive, which means it specifies how decisions should be made.

Question 9

Wash Ur Car, which operates five car washes, has to decide whether or not it should invest in the latest drying equipment.What type of decision does this represent for the organization?
A)automatic
B)intuitive
C)bounded
D)nonprogrammed
E)rule-based

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.

Question 10

During the last several months at FSE Inc., workers' overtime hours have increased by more than 15%.Based on managers' decisions in the past, James Calloway, a top manager at FSE Inc.decided to hire additional staff.This is an example of
A)reasoned judgment.
B)programmed decision making.
C)nonprogrammed decision making.
D)intuition.
E)the classical model.

Accepted Answer

Programmed decision making occurs when managers have the information they need to create rules that will guide decision making.

Question 11

_____ is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them.
A)Uncertainty
B)Incomplete information
C)Risk
D)Ambiguity
E)Cognitive limitation

Accepted Answer

Risk is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them.

Question 12

Based on guidelines established by the accounting manager, Jaime, the accounts payable clerk, makes payments to vendors in order to maximize discounts.What type of decision does this represent?
A)programmed
B)bounded
C)intuitive
D)groupthink
E)creative

Accepted Answer

Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur.

Question 13

Jordan, the manager of JT's Tasty Treats, has to decide whether to introduce a new frozen dessert that has never been sold previously.What type of decision would this represent?
A)automatic
B)rule-based
C)predetermined
D)nonprogrammed
E)inconsequential

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.

Question 14

Managers must rely on their ______ to make the best decision when faced with uncertainty and ambiguity.
A)intuition and judgment
B)cognitive biases
C)bounded rationality
D)escalating commitment
E)illusion of control

Accepted Answer

In the real world, managers must rely on their intuition and judgment to make what seems to them to be the best decision in the face of uncertainty and ambiguity.

Question 15

Which of the following is a reason for incomplete information?
A)ambiguity
B)complexity
C)specificity
D)heuristic ability
E)satisficing ability

Accepted Answer

A second reason why information is incomplete is that much of the information managers have at their disposal is ambiguous information.Its meaning is not clear-it can be interpreted in multiple and often conflicting ways.

Question 16

The first step in the managerial decision-making process is to
A)choose between alternatives.
B)assess alternatives.
C)learn from feedback.
D)recognize the need for a decision.
E)conduct a retrospective analysis.

Accepted Answer

The first step in the decision-making process is to recognize the need for a decision.

Question 17

Which of the following is an assumption made by the classical model?
A)There is no optimum decision.
B)There is more than one alternative.
C)There is only one alternative.
D)Managers have access to all the information they need.
E)Managers cannot apply their own preferences to make a decision.

Accepted Answer

The classical model assumes managers have access to all the information they need to make the optimum decision.

Question 18

Which of the following is a reason why managers fail to generate creative solutions?
A)They find it difficult to view problems from a fresh perspective.
B)They often fail to specify the criteria that are important in reaching a decision.
C)They violate domestic or international laws or government regulations.
D)They fail to perform a cost-benefit analysis of the various alternatives.
E)They do not have complete information in most cases.

Accepted Answer

Many managers find it difficult to view problems from a fresh perspective.Generating creative alternatives to solve problems and take advantage of opportunities may require that we abandon our existing mind-sets and develop new ones-something that usually is difficult to do.

Question 19

________ decisions are nonroutine decisions made in response to novel situations in business.
A)Rule-based
B)Automatic
C)Guideline-based
D)Predetermined
E)Nonprogrammed

Accepted Answer

Nonprogrammed decisions are made in response to unusual or novel opportunities and threats.

Question 20

When the probabilities of alternative outcomes cannot be determined and future outcomes are unknown, there exists
A)satisficing ambiguity.
B)systematic error.
C)prior-hypothesis bias.
D)uncertainty.
E)blocking.

Accepted Answer

When uncertainty exists, the probabilities of alternative outcomes cannot be determined and future outcomes are unknown.

Quiz 7: Decision Making, Learning, Creativity, and Entrepreneurship

Programmed decision making is a(n) ______ process.

Steven, a marketing manager, wants to budget the advertising for a new product launch.He is trying to determine the amount of money that the company can afford to spend on advertising.Which criterion of decision making is he focusing on?

Eileen, a college professor, has to pick a textbook for an upcoming course.She has just enough time to review a few books from the many choices available.She settles for one of the books, even though the best book might be a book that she hasn't yet reviewed.What is this process called?

Which of the following is an accurate description of satisficing?

According to the administrative model of decision making, why wouldn't managers be able to arrive at the optimum decision even if they had unlimited ability to evaluate information?

According to March and Simon, humans are limited in their ability to interpret, process, and act on information.When the number of suitable alternatives are greater than what a manager can evaluate, Marc and Simon refer to this as

In the classical model of decision making, the most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is known as the ____________ decision.

The classical model specifies how decisions should be made.In other words it is

Wash Ur Car, which operates five car washes, has to decide whether or not it should invest in the latest drying equipment.What type of decision does this represent for the organization?

During the last several months at FSE Inc., workers' overtime hours have increased by more than 15%.Based on managers' decisions in the past, James Calloway, a top manager at FSE Inc.decided to hire additional staff.This is an example of

_____ is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them.

Based on guidelines established by the accounting manager, Jaime, the accounts payable clerk, makes payments to vendors in order to maximize discounts.What type of decision does this represent?

Jordan, the manager of JT's Tasty Treats, has to decide whether to introduce a new frozen dessert that has never been sold previously.What type of decision would this represent?

Managers must rely on their ______ to make the best decision when faced with uncertainty and ambiguity.

Which of the following is a reason for incomplete information?

The first step in the managerial decision-making process is to

Which of the following is an assumption made by the classical model?

Which of the following is a reason why managers fail to generate creative solutions?

________ decisions are nonroutine decisions made in response to novel situations in business.

When the probabilities of alternative outcomes cannot be determined and future outcomes are unknown, there exists