GMGT 2070 Ch12
6) Explain and give an example of the following three judgment shortcuts as they impact decision making; overconfidence bias, anchoring bias, confirmation bias.
Answer: 1. Overconfidence bias — tendency to be overly optimistic about one's own performance; in choosing a stock to buy, an individual might decide they can "pick winners." 2. Anchoring bias — tendency to fix on initial information and fail to adequately integrate subsequent information. A home-buyer may walk in to a house and notice it has great windows and great light and decide this is the house to buy; when the house inspection identifies problems with mold and mildew, the home buyer ignores or downplays the information and makes the house purchase. 3. Confirmation bias — seeking out and paying attention to information that confirms our view and past choices and discounting information that would contradict. After purchasing a new car, the owner reads articles and blogs that list that car's good features and ignores information that discusses the weaknesses of that vehicle. Diff: 3 Type: ES Page Ref: 419 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
5) Explain the group decision types of brainstorming and nominal group. Identify the strengths and weaknesses of each.
Answer: Brainstorming—an idea-generation process that specifically encourages any and all alternatives, while withholding any criticism of those alternatives; strengths are moderate number of ideas, high focus on the task, low potential for interpersonal conflict, develops high cohesiveness; weaknesses are somewhat time-consuming, doesn't develop commitment to outcomes. Nominal group—a group decision-making method in which individual members meet face to face to pool their judgements in a systematic but independent fashion; strengths are a high number of ideas, low cost, high task focus, creates some commitment to the decision and helps to develop group cohesiveness; weaknesses are moderate social pressure, and potential for interpersonal conflict. Diff: 3 Type: ES Page Ref: 428 Skill: Applied Topic: Group Decision Making Objective: 4
1) A choice made from alternatives is defined as A) a decision. B) a criterion. C) an attribution. D) a problem. E) a judgment.
Answer: A Diff: 1 Type: MC Page Ref: 414 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
5) The first phase of the rational decision-making model is A) problem definition. B) solution. C) conflict. D) perceptual distortion. E) managers only.
Answer: A Diff: 1 Type: MC Page Ref: 414 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
16) Bounded rationality is criticized because it is based on A) simplified models that lack complexity. B) institutional memory. C) too tight a structure. D) the outcome of highest utility. E) a knowledge model that is too complex.
Answer: A Diff: 1 Type: MC Page Ref: 416 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
9) Of the following, which best characterizes the satisficing decision-making process? A) seeking an acceptable solution B) following bounded rationality C) using the decision confirmation process D) searching for consistency E) one which seeks optimization
Answer: A Diff: 1 Type: MC Page Ref: 417 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
13) Which of the following describes the tendency for people to be too optimistic about their abilities? A) overconfidence bias B) availability bias C) escalation of commitment D) heuristical fallacy E) bounded discretion
Answer: A Diff: 1 Type: MC Page Ref: 419 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
58) The ability to produce novel and useful ideas is called A) creativity. B) talent. C) decision making. D) lateral thinking. E) problem structuring.
Answer: A Diff: 1 Type: MC Page Ref: 428 Skill: Recall Topic: Creativity in Organizational Decision Making Objective: 5
82) The proposition that individual creativity requires expertise, creative thinking skills, and intrinsic task motivation is called the A) three component model of creativity. B) utilitarian approach. C) leader-participation model. D) heuristic model. E) he groupshift approach.
Answer: A Diff: 1 Type: MC Page Ref: 428 Skill: Recall Topic: Creativity in Organizational Decision Making Objective: 5
47) The most recent approach to group decision making blends the nominal group technique with computer technology. It is known as A) the electronic meeting. B) electronic mail. C) computerized decision making. D) electronic participation. E) electronic database handling.
Answer: A Diff: 1 Type: MC Page Ref: 428 Skill: Recall Topic: Group Decision Making Objective: 4
49) Which of the following is likely to generate the lowest number of ideas? A) interacting groups B) brainstorming C) computer-assisted group D) nominal group technique E) electronic meetings
Answer: A Diff: 1 Type: MC Page Ref: 428 Skill: Recall Topic: Group Decision Making Objective: 4
50) Which type of decision-making group is most committed to the group solution? A) interacting B) brainstorming C) nominal D) electronic E) computer-assisted
Answer: A Diff: 1 Type: MC Page Ref: 428 Skill: Recall Topic: Group Decision Making Objective: 4
51) Which technique has the greatest potential for interpersonal conflict? A) interacting B) nominal group C) brainstorming D) meeting E) computer-assisted
Answer: A Diff: 1 Type: MC Page Ref: 428 Skill: Recall Topic: Group Decision Making Objective: 4
63) Which of the following are criteria for making ethical choices? A) utilitarianism, justice, rights, care B) utilitarianism, care, justice, satisficing C) heuristics, utilitarianism, justice, rights D) satisficing, justice, rights, heuristics E) care, utilitarianism, heuristics, rights
Answer: A Diff: 1 Type: MC Page Ref: 432 Skill: Recall Topic: What About Ethics in Decision Making? Objective: 6
74) People who lack a ________ sense are much less likely to make unethical decisions if the organizational environment ignores ethical behaviours. A) strong moral B) strong intuitive C) weak behaviour D) strong judgmental E) moderate extroverted
Answer: A Diff: 1 Type: MC Page Ref: 433 Skill: Applied Topic: What About Ethics in Decision Making? Objective: 6
40) Compared to group decision-making, individual decision-making outperforms on the criteria of A) speed. B) diversity of perspectives. C) acceptance of solution. D) higher quality decision. E) more complete information.
Answer: A Diff: 2 Type: MC Page Ref: 423 Skill: Recall Topic: Group Decision Making Objective: 3
SCENARIO 12-7 Microchip technology is at the heart of everything electronic. The stakes for manufacturers are high and market fluctuation makes for an uncertain future. Jim Forrest is CEO of BigChip Inc., a medium-sized company that manufactures specialty microchips used in a variety of computers to facilitate efficient graphics processing. Jim recognizes the need to diversify his manufacturing operations and is considering starting up a new division, which would design, develop and produce security chips. These would be used in situations ranging from data transmission to securing financial transactions.Other companies are also considering involvement since the security market is potentially a large one. Jim knows that the rapid advancements in the field of computer hardware and software necessitates an innovative approach to development of any new technology. Jim realizes that responding to market conditions and world economic influence will have to be carefully dealt with. 69) Jim knows that expansion into new technology will have to be carefully managed. Managers, in many instances, are content with reasonable rather than best-possible solutions. A weakness of rational decision-making in Jim's situation is the assumption that A) there are no time or cost constraints. B) decisions will never be made that produce the highest perceived value. C) decision criteria vary over time. D) all possible consequences of each alternative are unknown. E) criteria weights remain constant at all times.
Answer: A Diff: 3 Type: MC Page Ref: 414 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 1
25) Todd has a tendency to rely too much on the initial information at his disposal about any given issue; he fails to integrate and give weight to new information being given to him. This is known as A) anchoring bias. B) confirmation bias. C) performance bias. D) overconfidence bias. E) availability bias.
Answer: A Diff: 3 Type: MC Page Ref: 419 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
SCENARIO 12-1 You are making a decision whether to discontinue research on a new drug. This new drug would save lives, but it is uncertain whether it can be developed within a reasonable time frame and at a reasonable cost. Your firm has already spent a small fortune on this drug. You have gathered so much information in preparation for making the decision that you are unable to sort the good information from the superfluous. 18) You state to the committee helping you that all information and research on this drug and the disease it is to treat has been sorted and processed into the 36 binder that are on the table in front of them. In making this statement and assuming you have complete information you are committing A) confirmation bias. B) optimal solution. C) lateral approach. D) fundamental attribution error. E) risk aversion.
Answer: A Diff: 3 Type: MC Page Ref: 420 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
85) Tom is critical of the decisions made on his work team, and the team supports his behaviour by calling him 'the team cynic'; some managers outside the team have suggested Tom should be replaced by someone who is more cooperative with the team. Tom's behaviour contributes ________ to the group's decision-making. A) positively B) morality C) corporate social responsibility D) groupthink E) groupshift
Answer: A Diff: 3 Type: MC Page Ref: 425 Skill: Applied Topic: Group Decisions Objective: 3
SCENARIO 12-5 Helen is involved in making an important decision for her company and has read that creativity facilitates rational decision making. 60) Creativity is probably most important in A) helping identify all viable alternatives. B) selecting the best alternative. C) allocating weights to criteria. D) evaluating the alternatives. E) using alternatives to develop task structures.
Answer: A Diff: 3 Type: MC Page Ref: 428 Skill: Applied Topic: Creativity in Organizational Decision Making Objective: 5
56) Interpersonal conflict would be a big problem if it should develop in the work group. Which type of group would have the greatest potential for interpersonal conflict? A) interacting B) brainstorming C) nominal D) electronic E) heterogeneous
Answer: A Diff: 3 Type: MC Page Ref: 428 Skill: Applied Topic: Group Decision Making Objective: 4
SCENARIO 12-4 You are having trouble assessing the effectiveness of your work group. Your manager informs you that there are many different effectiveness criteria and suggests that you determine clear criteria for analysis. You also learn that the type of group used will impact group effectiveness. 55) If commitment to the solution is your effectiveness criteria, which type of group should be the most effective? A) interacting B) brainstorming C) nominal D) electronic E) electronic meeting
Answer: A Diff: 3 Type: MC Page Ref: 428 Skill: Applied Topic: Group Decision Making Objective: 4
71) Some managers at BigChip Inc. are cautioning Jim that creativity can be stifled because of the social environment within which the employees are functioning. This means that the potential they have for doing creative work may not be fully realized. Which factors act as blocks to the creativity process? A) expected evaluation B) conventional obligation C) physical constraints D) focusing on purpose E) emphasizing extrinsic rewards
Answer: A Diff: 3 Type: MC Page Ref: 431 Skill: Applied Topic: Creativity in Organizational Decision Making Objective: 5
31) As a practice, we should assume our most of our decisions are ________, and evaluate them with a critical process. A) values B) judgments C) behaviours D) perceptions E) thoughts
Answer: B Diff: 1 Type: MC Page Ref: 415 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
6) Allocating weights to the decision criteria is unnecessary if A) all criteria are relevant. B) all criteria are equally relevant. C) there are only two. D) there are three or more criteria. E) a team is not making the decision.
Answer: B Diff: 1 Type: MC Page Ref: 415 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
3) Rationality assumes A) high intelligence. B) consistency C) maturity. D) unlimited choices. E) unlimited power and influence.
Answer: B Diff: 1 Type: MC Page Ref: 415 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
12) The tendency for people to base their judgments on information that is readily available but may NOT be accurate is called A) representative bias. B) availability bias. C) escalation of commitment. D) heuristical fallacy. E) bounded discretion.
Answer: B Diff: 1 Type: MC Page Ref: 420 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
39) A group decision-making method in which each individual team member preplans their ideas and solutions for the problem and brings these ideas to the group, is known as A) groupshift. B) nominal group technique. C) groupthink. D) brainstorming. E) consistency bias.
Answer: B Diff: 1 Type: MC Page Ref: 427 Skill: Recall Topic: Group Decision Making Objective: 4
61) Utilitarianism is used in decisions that provide the A) least good for the least number. B) greatest good for the greatest number. C) greatest good for the decision makers. D) greatest good for the least privileged. E) greatest good for the best performers.
Answer: B Diff: 1 Type: MC Page Ref: 433 Skill: Recall Topic: What Ab Ethics in Decision Making? Objective: 6
81) When ethical behaviour and consequences vary depending on national culture, this presents A) solutions for changing individual behaviour. B) problems for those doing business in other countries. C) opportunities for domestic decision making. D) challenges to overcome conflict. E) some concern over group behaviours conflicting.
Answer: B Diff: 1 Type: MC Page Ref: 438 Skill: Recall Topic: Corporate Social Responsibility Objective: 7
44) Groupshift most often means decisions A) are made by groups rather than individuals. B) contain greater risk. C) are made more quickly. D) prove less effective. E) are more conservative.
Answer: B Diff: 1 Type: MC Page Ref: 444 Skill: Recall Topic: Group Decision Making Objective: 3
8) When a manager immediately hires the person he/she feels is "good enough," they are employing what decision-making process? A) intuitive decision making B) satisficing C) heuristics D) bounded-rationals E) reflexivity decision-making
Answer: B Diff: 2 Type: MC Page Ref: 417 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 1
76) Which of the following questions helps determine whether a decision is ethical? A) Does this decision cost more than the benefits received? B) Is the decision fair and equitable? C) How long will the solution take to complete? D) When can the results be expected? E) What minimum outcome is expected?
Answer: B Diff: 2 Type: MC Page Ref: 432 Skill: Recall Topic: What About Ethics in Decision Making? Objective: 6
21) After reflecting on his staff's decision-making abilities, James reaches the conclusion there are limitations on a person's ability to interpret, process and act on information. His opinion reflects A) groupthink. B) bounded rationality. C) satisficing. D) anchoring. E) confirming.
Answer: B Diff: 3 Type: MC Page Ref: 416 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
70) Jim has been identified as a risk-taker, which in the past has proven to be successful for him and BigChip Inc. Risk-takers generally make decisions intuitively, based on experience and other characteristics which are relevant to their views and perceptions. In which situation will intuitive decision making likely to be used? A) when there is much precedent and past history to draw on B) when analytical data and information appear to be of little or no use C) when variables are logically and scientifically predictable D) when facts clearly point the way to a logical conclusion E) when an obvious and plausible alternative solution exists
Answer: B Diff: 3 Type: MC Page Ref: 417 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 1
27) Ted decided to discontinue a product line a year ago; since then, it is clear this was the wrong decision. Nevertheless, Ted insists that he will be proven correct in time and he has no plans to change his mind. This is an example of A) delusional behaviour. B) escalation of commitment. C) randomness error. D) winner's curse. E) hindsight bias.
Answer: B Diff: 3 Type: MC Page Ref: 420 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
33) A weakness of group decision-making is A) less complete knowledge and information will be forthcoming. B) making the decision will be more time consuming. C) employees will be less accepting of the decision. D) the decision will probably be of a lower quality. E) there will be less diversity of views and opinions.
Answer: B Diff: 3 Type: MC Page Ref: 423 Skill: Applied Topic: Group Decision Making Objective: 3
54) Which of the following is TRUE about electronic meetings? A) This method is good for building group cohesiveness. B) This method is good for number and quality of ideas. C) This method tends to raise social pressures to a maximum. D) This method is an expensive means for generating a large number of ideas. E) Potential for interpersonal conflict is high.
Answer: B Diff: 3 Type: MC Page Ref: 428 Skill: Applied Topic: Group Decision Making Objective: 4
59) Jerry has fostered a spirit of competition among his staff members that produces winners and losers. This approach is very likely to stifle A) groupthink. B) creativity. C) consensus decision making. D) perceptual bias. E) randomness error.
Answer: B Diff: 3 Type: MC Page Ref: 431 Skill: Applied Topic: Creativity in Organizational Decision Making Objective: 5
77) Norma always tries to make decisions that will result in the greatest good for the greatest number of people. This approach is known as A) ethical decision making. B) utilitarianism. C) groupthink. D) morality. E) whistle blowing.
Answer: B Diff: 3 Type: MC Page Ref: 432 Skill: Applied Topic: What About Ethics in Decision Making? Objective: 6
72) Another issue for Jim is ethical practices. Ethical practices are a major focus that other companies, suppliers and competitors are emphasizing when they represent themselves to the larger community. Which of the following will NOT foster high ethical business practices in Jim's organization? A) high moral behaviour by senior management B) adherence to job tasks and job descriptions C) visible promotion and recognition of employees who display moral behaviour D) visible punishment for those who act unethically E) performance appraisals that evaluate means and results
Answer: B Diff: 3 Type: MC Page Ref: 435 Skill: Applied Topic: What About Ethics in Decision Making? Objective: 6
17) A decision made from unconscious processing of a person's many experiences is called A) satisficing. B) decision making. C) intuitive. D) randomness. E) escalated commitment.
Answer: C Diff: 1 Type: MC Page Ref: 417 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
29) If someone settles on an alternative that is "good enough" because it meets the minimum requirements of the situation, this is known as A) rational decision making. B) framing. C) satisficing. D) heuristics. E) intuition.
Answer: C Diff: 1 Type: MC Page Ref: 417 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
14) When managers predict that sales for next year will be the same as last year, despite a weakening economy, they are A) using framing. B) using regression to the mean. C) using confirmation bias. D) ignoring the base rate. E) escalating commitment.
Answer: C Diff: 1 Type: MC Page Ref: 420 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
48) Which of the following is a disadvantage of electronic meetings? A) honesty B) speed C) cost D) anonymity E) task orientation
Answer: C Diff: 1 Type: MC Page Ref: 428 Skill: Recall Topic: Group Decision Making Objective: 4
78) The study of moral values or principles that guide our behaviour and inform us whether actions are right or wrong is known as A) morality. B) values. C) ethics. D) rational decision making. E) heuristics.
Answer: C Diff: 1 Type: MC Page Ref: 432 Skill: Recall Topic: What About Ethics in Decision Making? Objective: 6
79) The question, "Is the decision fair and equitable?" helps determine which of the following? A) whether to go ahead with the cost investment B) whether an idea has merit or not C) whether the decision is ethical D) whether a product should be introduced or not E) how to go about investing in your people
Answer: C Diff: 1 Type: MC Page Ref: 432 Skill: Recall Topic: What About Ethics in Decision Making? Objective: 6
75) What can happen to righteous individuals when the organizational environment permits or encourages unethical practices? A) change their values B) see a new perspective C) become corrupted D) allow others to influence them E) have less productivity
Answer: C Diff: 1 Type: MC Page Ref: 433 Skill: Applied Topic: What About Ethics in Decision Making? Objective: 6
62) In which of the following examples is utilitarianism absent? A) laying off a small number of employees so that the larger number of workers can continue to work full-time jobs B) moving production operations to other countries, so that the company remains competitive C) using impartial means to equitably distribute benefits and costs D) discontinuing products with questionable effects on health E) raising prices to increase profitability
Answer: C Diff: 1 Type: MC Page Ref: 433 Skill: Recall Topic: What About Ethics in Decision Making? Objective: 6
46) Brainstorming is A) used to build group cohesiveness. B) a technique that tends to restrict independent thinking. C) a process for generating ideas. D) used mainly when group members cannot agree on a solution. E) used when no other method is available.
Answer: C Diff: 1 Type: MC Page Ref: 445 Skill: Recall Topic: Group Decision Making Objective: 4
10) Which of the following conditions would probably NOT lead to intuitive decision making? A) when time is limited B) when facts don't clearly point the way to go C) when a high level of certainty exists D) when facts are limited E) when there is pressure to come up with the right decision
Answer: C Diff: 2 Type: MC Page Ref: 417 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
2) Tom consistently chooses the ultimate alternative after identifying criteria and allocating weights to every alternative. This is known as ________ decision making. A) pensive B) cautious C) rational D) impulsive E) erratic
Answer: C Diff: 3 Type: MC Page Ref: 415 Skill: Applied Topic: How Should Decisions Be Made? Objective: 1
22) Liam makes a lot of decisions simply by "gut feel," and more often than not he makes the right one. This is known as ________ decision making. A) pensive B) rational C) intuitive D) impulsive E) cautious
Answer: C Diff: 3 Type: MC Page Ref: 417 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
19) You decide to spend more money on the project, even though you believe it to be improbable that you will succeed. You are guilty of A) availability heuristic. B) representative heuristic. C) escalation of commitment. D) satisficing. E) ignoring the base rate.
Answer: C Diff: 3 Type: MC Page Ref: 420 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
20) You feel that you are personally responsible for the lack of success with this drug. One course of action that you may be expected to take is A) availability heuristic. B) representative heuristic. C) escalation of commitment. D) satisficing. E) ignoring the base rate.
Answer: C Diff: 3 Type: MC Page Ref: 420 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
26) Gill has been criticized for making decisions superficially without digging for the information that he really needs. This is known as A) anchoring bias. B) confirmation bias. C) availability bias. D) overconfidence bias. E) performance bias.
Answer: C Diff: 3 Type: MC Page Ref: 420 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
28) Fred is a great decision maker, but he is superstitious, so he steadfastly maintains that he will not make any big decisions on Friday the 13th. This is known as A) perceptual bias. B) availability bias. C) randomness error. D) winner's curse. E) escalation of commitment.
Answer: C Diff: 3 Type: MC Page Ref: 421 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
SCENARIO 12-2 Your organization is considering the use of group decision-making. You have read extensively in the literature and are trying to inform your manager about the advantages and disadvantages of group decision-making. 32) A strength of group decision-making is that A) group decision-making will be faster. B) group discussions will be shared equally. C) there will be increased acceptance of the decision. D) group decision making will not be viewed as legitimate. E) group decision making will be more efficient.
Answer: C Diff: 3 Type: MC Page Ref: 422 Skill: Applied Topic: Group Decision Making Objective: 3
38) Freda's best skill as a group leader is to be able to get the group to generate a large number of alternatives while encouraging everyone to withhold criticism of any of the proposed alternatives. This technique is known as A) groupthink. B) groupshift. C) brainstorming. D) nominal grouping. E) consensus decision making.
Answer: C Diff: 3 Type: MC Page Ref: 426 Skill: Applied Topic: Group Decision Making Objective: 4
66) You decide to teach the group about the importance of making decisions consistent with fundamental liberties and privileges. You are planning to focus on which criterion? A) utilitarian B) justice C) rights D) privilege E) conformity
Answer: C Diff: 3 Type: MC Page Ref: 433 Skill: Applied Topic: What About Ethics in Decision Making? Objective: 6
83) Dick is very environmentally conscious, so he was pleased to discover his employer held a similar view and acted accordingly. His company is therefore exhibiting A) utilitarianism. B) morality. C) corporate social responsibility. D) groupthink. E) groupshift.
Answer: C Diff: 3 Type: MC Page Ref: 436 Skill: Applied Topic: Corporate Social Responsibility Objective: 7
42) What Don doesn't like about working in groups is that it takes much more time than it would take him to do things on his own. Thus, in terms of usage of time, his view is that groups are A) less effective than individuals. B) more effective than individuals. C) less efficient than individuals. D) more efficient than individuals. E) as efficient as individuals.
Answer: C Diff: 3 Type: MC Page Ref: 441 Skill: Applied Topic: Group Decision Making Objective: 3
43) Sammy has noticed a tendency of his staff to become overconfident when working in a group, leading them to take more risks than they normally would on their own. This is a symptom of A) bounded rationality. B) groupshift. C) groupthink. D) perceptual bias. E) randomness error.
Answer: C Diff: 3 Type: MC Page Ref: 442 Skill: Applied Topic: Group Decision Making Objective: 3
67) If you explain that decisions should respect and protect the special relationships that individuals have with each other, you will include A) project management principles. B) escalation of commitment. C) the criterion of care. D) paradigm shift. E) management principles.
Answer: C Diff: 3 Type: MC Page Ref: 452 Skill: Applied Topic: What About Ethics in Decision Making? Objective: 6
4) The rational decision-making model would best be described as an exercise in A) establishing goals. B) evaluating people. C) evaluating alternatives. D) choosing the option of highest utility. E) focusing on corporate culture.
Answer: D Diff: 1 Type: MC Page Ref: 415 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
7) Looking for a solution that is satisfactory and sufficient is called A) suboptimizing. B) seeking an implicit favourite. C) simplifying. D) satisficing. E) optimizing.
Answer: D Diff: 1 Type: MC Page Ref: 417 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
30) The tendency for people to base their judgments on information that is readily available to them rather than complete data is known as A) framing. B) bounded rationality. C) intuition. D) availability bias. E) regression.
Answer: D Diff: 1 Type: MC Page Ref: 420 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
11) One shortcut in judgment that may weaken the decision-making process is in a specific situation is A) optimalities. B) escalations. C) hindsight bias. D) randomness error. E) synectics.
Answer: D Diff: 1 Type: MC Page Ref: 421 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
15) Trying to cover up a wrongdoing and risking public trial and expensive court costs, instead of admitting a mistake, is an example of A) representative heuristic. B) availability heuristic. C) escalation of commitment. D) risk aversion. E) risk hindsight.
Answer: D Diff: 1 Type: MC Page Ref: 421 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
64) Individuals who have progressed to higher levels of moral development will place increased value on the rights of others. These individuals are A) strongly influenced by their peers to conform. B) likely to follow an organization's rules and procedures. C) likely to value the majority opinion. D) likely to challenge organizational practices that they feel or believe are wrong. E) predisposed to use their influence to disregard the organization's value system.
Answer: D Diff: 1 Type: MC Page Ref: 432 Skill: Recall Topic: What About Ethics in Decision Making? Objective: 6
68) Many companies are developing corporate ethics through a variety of methods and procedures. Which of the following would NOT foster corporate ethics? A) Provide specific examples of situations where there is no right or wrong answer. B) Rely on people to be guided by their conscience. C) Structure a favourable culture where people will recognize the role of ethics. D) Have management issue specific regulations to be followed by employees. E) Substitute understood and acceptable values for rules and regulations.
Answer: D Diff: 1 Type: MC Page Ref: 435 Skill: Recall Topic: What About Ethics in Decision Making? Objective: 6
80) It is important to note that what is considered unethical in one country may not be viewed similarly in another country. This is because A) cultural differences are extreme in Asia. B) North Americans have homogeneous values. C) Western culture encourages individuality while Eastern culture supports group behaviour. D) there are no global ethical standards. E) perspective is subjective.
Answer: D Diff: 1 Type: MC Page Ref: 438 Skill: Recall Topic: Corporate Social Responsibility Objective: 6
45) When group members become more exaggerated in their opinions and positions as group discussions go on, the group has experienced A) group process. B) groupthink. C) group demography. D) groupshift. E) group rationalization.
Answer: D Diff: 1 Type: MC Page Ref: 444 Skill: Recall Topic: Group Decision Making Objective: 3
23) Hari has a long history of success, but more recently his judgment has come into question in some decisions that he has made. Some believe that he is too optimistic about his own performance, and that affects his judgment. Hari may be committing A) performance bias. B) perceptual bias. C) semantic bias. D) overconfidence bias. E) anchoring bias.
Answer: D Diff: 3 Type: MC Page Ref: 419 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
34) You have observed that the group tends to arrive at consensus very quickly and you know that the group is very cohesive. You conclude that they may be suffering from A) inefficiency syndrome. B) groupshift. C) disintegrating norms. D) groupthink. E) rationalization.
Answer: D Diff: 3 Type: MC Page Ref: 423 Skill: Applied Topic: Group Decision Making Objective: 3
84) Like other members of her team, Jana seeks consensus when working in her team, she values her status on the team and enjoys working with all the team members. These characteristics create the potential for Jana to contribute to A) groupshift. B) satisficing. C) bounded-rationality. D) groupthink. E) morality.
Answer: D Diff: 3 Type: MC Page Ref: 423 Skill: Applied Topic: Group Decisions Objective: 3
36) Ben has noticed that after his team discusses any issue, the conservative people become even more cautious and the aggressive people get even bolder. This phenomenon is known as A) groupthink. B) perceptual bias. C) randomness error. D) groupshift. E) consistency bias.
Answer: D Diff: 3 Type: MC Page Ref: 426 Skill: Applied Topic: Group Decision Making Objective: 3
53) You have decided to use the electronic meeting technique. Which of the following is NOT true about this type of meeting? A) Participants type their responses onto a computer screen. B) You can expect participants to be honest. C) Participants will be anonymous. D) Group cohesiveness will be high. E) Quality of ideas will be high.
Answer: D Diff: 3 Type: MC Page Ref: 428 Skill: Applied Topic: Group Decision Making Objective: 4
57) Developing group cohesiveness is an important effectiveness criteria for your group. Which type of group would you want to avoid? A) interacting B) brainstorming C) nominal D) electronic E) consensus mapping
Answer: D Diff: 3 Type: MC Page Ref: 428 Skill: Applied Topic: Group Decision Making Objective: 4
SCENARIO 12-3 You know that the decision as to which new product to produce must have widespread acceptance and be of the highest quality. Having reviewed the literature, you decide this decision needs to be made by a group of your best managers. 52) Your managers are located in Taiwan, India, Brazil, and the United States. Which group decision-making technique might be the easiest to arrange in terms of speed and task orientation? A) interacting B) brainstorming C) nominal group D) electronic meeting E) group rationalization
Answer: D Diff: 3 Type: MC Page Ref: 428 Skill: Applied Topic: Group Decision Making Objective: 4
73) A corporate ethics policy or guideline must be based on core values. Although Jim has practiced many of these values, he has never been faced with developing them and instilling them in his managers and employees. Which of the following is the most basic of core values to work with? A) dominance B) persuasiveness C) articulateness D) responsibility E) power
Answer: D Diff: 3 Type: MC Page Ref: 437 Skill: Applied Topic: What About Ethics in Decision Making? Objective: 7
41) Corry has always believed that in order to generate new and creative ideas, a group setting is the best. Thus, in terms of creativity, he considers groups to be A) more efficient than individuals. B) less effective than individuals. C) less efficient than individuals. D) more effective than individuals. E) as effective as individuals.
Answer: D Diff: 3 Type: MC Page Ref: 441 Skill: Applied Topic: Group Decision Making Objective: 4
35) Omar has noticed that a chronic problem facing the work team he is on is the is pressure to conform; when the team is discussing a situation, it seems there is pressure to move quickly to agreeing on a decision, which means that the group does not usually adequately consider other alternatives that are less popular and less well known. This phenomenon is known as A) groupshift. B) perceptual bias. C) randomness error. D) availability bias. E) groupthink.
Answer: E Diff: 1 Type: MC Page Ref: 423 Skill: Applied Topic: Group Decision Making Objective: 3
24) Terry has been accused of being quite selective when researching an issue by only taking into consideration information that confirms his initial point of view and ignoring information to the contrary. This is known as A) availability bias. B) performance bias. C) anchoring bias. D) overconfidence bias. E) confirmation bias.
Answer: E Diff: 3 Type: MC Page Ref: 420 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
37) Carol has designated Kevin to be the group's "Devil's Advocate." His job is to challenge the majority opinion on each issue and to offer divergent perspectives. Which group decision-making problem is Carol attempting to avoid? A) perceptual bias B) consistency bias C) randomness error D) groupshift E) groupthink
Answer: E Diff: 3 Type: MC Page Ref: 425 Skill: Applied Topic: Group Decision Making Objective: 3
9) The bounded rationality model ignores rationality.
Answer: FALSE Diff: 1 Type: TF Page Ref: 416 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
13) Intuitive decision making is a conscious process created out of experience.
Answer: FALSE Diff: 1 Type: TF Page Ref: 417 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
15) Intuitive decision analysis operates independently of rational analysis.
Answer: FALSE Diff: 1 Type: TF Page Ref: 418 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
17) Managers who predict the performance of a new product by relating it to a previous product's success are demonstrating availability bias.
Answer: FALSE Diff: 1 Type: TF Page Ref: 422 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
27) Group decisions are almost always superior to individual decisions.
Answer: FALSE Diff: 1 Type: TF Page Ref: 423 Skill: Recall Topic: Group Decision Making Objective: 3
20) Appointing a devil's advocate will stop groupthink.
Answer: FALSE Diff: 1 Type: TF Page Ref: 425 Skill: Recall Topic: Group Decisions Objective: 3
32) An advantage of the brainstorming technique is that it permits the group to meet formally but does not restrict independent thinking in the way an interacting group does.
Answer: FALSE Diff: 1 Type: TF Page Ref: 426 Skill: Recall Topic: Group Decision Making Objective: 3
21) Groupthink causes poor decision outcomes.
Answer: FALSE Diff: 1 Type: TF Page Ref: 426 Skill: Recall Topic: Group Decisions Objective: 3
33) One of the advantages of electronic meetings is that it costs very little to set up and run the meeting.
Answer: FALSE Diff: 1 Type: TF Page Ref: 428 Skill: Recall Topic: Group Decision Making Objective: 3
25) Xavier could sense that the more the issue was discussed, the more people were reverting back to their initial positions. This is known as groupthink.
Answer: FALSE Diff: 2 Type: TF Page Ref: 426 Skill: Applied Topic: Group Decision Making Objective: 3
4) Identify and discuss four organizational factors that affect creativity. Use examples to illustrate your discussion.
Answer: Suggested answer (any four of the following): - Motivation—When people are matched up with the right assignments, their expertise and skills can be brought to the task of creative thinking. Individuals should be stretched, but not overwhelmed. - Reward Creativity—To be creative, once a person is given a project, he or she needs the rewards to match the process. In other words, let the person decide how to tackle the problem. This heightens intrinsic motivation. - Resources—Time and money are the two main resources that affect creativity. Thus, managers need to allot these resources carefully. - Work group features—Heterogeneous groups are likely to come up with more creative solutions. In addition to ensuring a diverse group of people, team members need to share excitement over the goal, must be willing to support each other through difficult periods, and must recognize each other's unique knowledge and perspective. - Supervisory encouragement—To sustain passion, most people need to feel that what they are doing matters to others. Managers can reward, collaborate, and communicate to nurture the creativity of individuals and teams. - Organizational support—Creativity-supporting organizations reward creativity, and also make sure that there is information sharing and collaboration. They make sure that negative political problems do not get out of control. Diff: 3 Type: ES Page Ref: 431 Skill: Applied Topic: Creativity in Organizational Decision Making Objective: 5
1) List and explain the six steps of the rational decision-making model.
Answer: Suggested answer: - Define the problem—the desired state of affairs versus the present existing conditions. - Identify the criteria—what is relevant when making the decision. - Allocate weights to criteria—helps to prioritize what is important. - Develop alternatives—do not appraise, just list the options available. - Evaluate the alternatives—rate them on the basis of advantages and disadvantages. - Select the best alternative—the alternative that has the most strengths/advantages is selected. Diff: 3 Type: ES Page Ref: 414 Skill: Applied Topic: How Should Decisions Be Made? Objective: 1
3) Identify and explain each of the six symptoms of the groupthink phenomena.
Answer: Suggested answer: - Illusion of invulnerability—Group members become overconfident among themselves, allowing them to take extraordinary risks. - Assumption of morality—Group members believe highly in the moral rightness of the group's objectives and do not feel the need to debate the ethics of their actions. - Rationalized resistance—Group members rationalize any resistance to the assumptions they have made. No matter how strongly the evidence may contradict their basic assumptions, members behave so as to reinforce those assumptions continually. - Peer pressure—Members apply direct pressures on those who momentarily express doubts about any of the group's shared views or who question the validity of arguments supporting the alternative favoured by the majority. - Minimized doubts—Those members who have doubts or who hold different points of view seek to avoid deviating from what appears to be the group consensus by keeping silent about misgivings and even minimizing to themselves the importance of their doubts. - Illusion of unanimity—If someone doesn't speak, it's assumed that he or she is in full accord. Diff: 3 Type: ES Page Ref: 424 Skill: Applied Topic: Group Decision Making Objective: 3
2) The rational decision-making model contains a number of assumptions. List and explain three assumptions of the model and give an example to illustrate each.
Answer: Suggested answer: - Problem clarity—The problem is clear and unambiguous. - Known options—It is assumed the decision maker can identify all the relevant criteria and can list all the viable alternatives. - Clear preferences—Rationality assumes that the criteria and alternatives can be ranked and weighted to reflect their importance. Diff: 3 Type: ES Page Ref: 433 Skill: Applied Topic: How Should Decisions Be Made? Objective: 1
1) Decision making happens at all levels of an organization.
Answer: TRUE Diff: 1 Type: TF Page Ref: 414 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
2) A decision is the choice made from two or more alternatives.
Answer: TRUE Diff: 1 Type: TF Page Ref: 414 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
3) A poor decision is often made because the individual does not define the problem clearly enough.
Answer: TRUE Diff: 1 Type: TF Page Ref: 414 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
5) The rational decision-making model assumes the decision maker can objectively list all the relevant criteria in the decision.
Answer: TRUE Diff: 1 Type: TF Page Ref: 414 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
6) The rational decision-making model assumes rationality; the alternative that yields the highest perceived value will be chosen.
Answer: TRUE Diff: 1 Type: TF Page Ref: 415 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
7) Problems that are visible tend to have a higher probability of being selected (for solving and decision-making) than ones that are important but not visible.
Answer: TRUE Diff: 1 Type: TF Page Ref: 415 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
8) The bounded rationality model assumes that the decision maker will not process all the alternatives available.
Answer: TRUE Diff: 1 Type: TF Page Ref: 416 Skill: Recall Topic: How Should Decisions Be Made? Objective: 1
10) A satisficing solution is both satisfactory and sufficient.
Answer: TRUE Diff: 1 Type: TF Page Ref: 417 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
12) Intuitive decision making is today perceived as more valid than it previously was.
Answer: TRUE Diff: 1 Type: TF Page Ref: 417 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
14) Rational decision-making is considered more socially desirable than intuitive decision-making.
Answer: TRUE Diff: 1 Type: TF Page Ref: 418 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 1
18) It has been well documented that individuals escalate commitment to a failing course of action when they view themselves as responsible for the failure.
Answer: TRUE Diff: 1 Type: TF Page Ref: 420 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
19) The phenomenon of "throwing good money after bad" is also called escalation of commitment.
Answer: TRUE Diff: 1 Type: TF Page Ref: 420 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
23) Group decisions are more likely to be accepted than individual decisions.
Answer: TRUE Diff: 1 Type: TF Page Ref: 422 Skill: Recall Topic: Group Decision Making Objective: 3
30) Groups usually make more risky decisions than do individuals.
Answer: TRUE Diff: 1 Type: TF Page Ref: 422 Skill: Recall Topic: Group Decision Making Objective: 3
16) Two common categories of judgment shortcuts are availability and hindsight bias.
Answer: TRUE Diff: 1 Type: TF Page Ref: 422 Skill: Recall Topic: How Do Individuals Actually Make Decisions? Objective: 2
24) If a low-to-medium ability person dominates a group, the group's overall effectiveness will suffer.
Answer: TRUE Diff: 1 Type: TF Page Ref: 423 Skill: Recall Topic: Group Decision Making Objective: 3
29) Illusion of unanimity and rationalized resistance are symptoms of the groupthink phenomenon.
Answer: TRUE Diff: 1 Type: TF Page Ref: 423 Skill: Recall Topic: Group Decision Making Objective: 3
22) Requiring group members to discuss negative outcomes before discussing positive outcomes helps to limit groupthink.
Answer: TRUE Diff: 1 Type: TF Page Ref: 425 Skill: Applied Topic: Group Decisions Objective: 3
28) Groupthink always hinders group performance.
Answer: TRUE Diff: 1 Type: TF Page Ref: 426 Skill: Recall Topic: Group Decision Making Objective: 3
26) One of the key advantages of electronic meetings is they generate large numbers of quality ideas.
Answer: TRUE Diff: 1 Type: TF Page Ref: 428 Skill: Recall Topic: Group Decision Making Objective: 3
31) Brainstorming is likely to generate more creative alternatives than are face-to-face interacting groups.
Answer: TRUE Diff: 1 Type: TF Page Ref: 428 Skill: Recall Topic: Group Decision Making Objective: 3
34) Research on creativity suggests idea generators should be different people than the idea evaluators.
Answer: TRUE Diff: 1 Type: TF Page Ref: 429 Skill: Recall Topic: Creativity in Organizational Decision Making Objective: 5
4) What all of the alternatives facing Peter have in common is they are consistent and high utility within specific constraints. In other words, the choices before him are rational.
Answer: TRUE Diff: 2 Type: TF Page Ref: 415 Skill: Applied Topic: How Should Decisions Be Made? Objective: 1
11) Since Edwin is very pressed for time, he is going to make a decision as to which piece of equipment to buy based on the information that he has available now. This is known as the availability bias.
Answer: TRUE Diff: 2 Type: TF Page Ref: 420 Skill: Applied Topic: How Do Individuals Actually Make Decisions? Objective: 2
SCENARIO 12-6 You are the manager of a development group in a large computer software company. You have decided that it is important for your group to understand the many ways that ethical decisions can be made and are designing a training program on the subject of ethics. 65) You decide to emphasize the ethical criterion that currently dominates business decision making. Which criterion is this? A) utilitarian B) justice C) rights D) synectics
E) moral development Answer: A Diff: 3 Type: MC Page Ref: 432 Skill: Applied Topic: What About Ethics in Decision Making? Objective: 6