MGMT 309 CH 9

The key to making effective decisions under conditions of risk is to

determine the probabilities associated with each alternative as accurately as possible

One advantage of group decision making is

diversity of members' backgrounds

The best alternative is the most ____ alternative

effective

It is important to follow up and evaluate the effectiveness of a decision to

ensure that the decision achieves the desired result

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?

escalation of commitment

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

escalation of commitment

The rational model of decision making assumes all of the following EXCEPT

the decision maker will select the least expensive acceptable alternative.

Most of the significant decisions in contemporary organizations are made under which decision-making condition?

uncertainty

Sy.Med Development, Inc. is the only company that has credentialing application software for physicians and managed care organizations. Credentialing applications must be submitted to each insurance provider annually and can be a very labor-intensive process. Sy.Med is the only company that has developed such software, and it provides complete support for the software. A physician's office in Montana that wants to buy or use the software would be making the purchase decision

under certainty

The Priest at Holy Trinity needs to select a youth ministry coordinator. This is an example of decision making

under uncertainty

The decision by executives at CBS to air Three Rivers to see if it could find a show to improve its primetime viewership was an example of a decision made

under uncertainty

The decision to hire a janitorial service, buy a fleet of sales vehicles, or hire a public relations expert are all examples of decisions made

under uncertainty

A manager who has a low-risk propensity would

use the rational decision-making model

When a manager makes a decision in spite of having imperfect information, this is known as

using the behavioral model of decision making.

A(n) ____ is an informal group allied together for a common purpose.

coalition

Ryan Tool Company just purchased Coney Tools. The purchase came about because both the research and development people and the production people at Ryan joined forces to lobby for the purchase of Coney rather than another company. Both groups wanted Coney because of its up-to-date research and production facilities. The behavioral force that influenced their decision making is referred to as

coalition

The CEO is retiring. There are two candidates remaining. Three division heads support Alex. The other four division heads support Pat. These alliances can be called

coalitions

Decisions that are unethical may pass one or two decision criteria, but they fail the ____ test

consequences

Before the space shuttle Columbia launched, its crew knew there was great risk in venturing into space and returning. The crew even talked about their desire for the shuttle program to continue should something happen to them. This is an example of

decision making under certainty

The U.S. government has never faltered on its debt payments. Investing in treasury bills is an example of

decision making under certainty

When the manager knows what the alternatives are and the probabilities associated with each alternative are guaranteed, the manager is experiencing

decision making under certainty

When the manager understands the available options but the probabilities associated with each option are uncertain, the manager is experiencing

decision making under risk

The manager who has difficulty identifying alternatives and assessing their probabilities is experiencing

decision making under uncertainty

Caving into peer pressure is a disadvantage of ____.

Groupthink

Hailey finds that her company is over billing the government for services. She tells her boss, who says he will take care of it, but he does nothing. Hailey tells her government contact. What model of decision making does Hailey's behavior represent?

Administrative

Herbert Simon noted that managers generally fail to make rational decisions because they are limited by their own values, skills, habits, and unconscious reflexes as well as by incomplete information. What name did Simon give this phenomenon?

Bounded rationality

LaTannia, manager of the accounting department, has to decide which computer system to purchase for her department. She has looked at all of the possible alternatives and is leaning toward an IBM system because she had positive experiences with an IBM system in her old job. This is an example of

Bounded rationality

____ may explain why publishers are more likely to publish a children's book by a recognizable celebrity like Katie Couric than to consider a beautifully illustrated and written book by an unknown author.

Bounded rationality

____ occurs when the decision maker is constrained by his or her own values, experiences, skills, and reflexes. He or she also has less than complete knowledge and information.

Bounded rationality

In which of the following decision-making conditions is the decision maker aware of all of the alternatives and able to assign probabilities to the costs and payoffs of each alternative?

Certainty

Karen has limited financing. She has three alternatives and knows the outcomes associated with each of them. She will choose under conditions of

Certainty

A disadvantage of the ____ decision making model is that it does not use ethics.

Classical

Managers at LEO Corporation scrutinize problems until they have all of the information they feel they need to make a decision and discuss every alternative while focusing on facts and eliminating assumptions. Which decision-making model does this most closely resemble?

Classical

Which of the following decision-making models involves recognizing and defining the situation, developing alternatives, selecting an alternative, implementing the chosen alternative, and following up?

Classical

Which of the following decision-making models is a prescriptive model?

Classical

Which of the following decision-making models is based on the belief that human behavior is unerringly rational?

Classical

The last step of the rational decision-making process is most closely related to which function of management?

Controlling

Which of the following statements BEST describes bounded rationality?

Decision makers are limited by having incomplete information as well as by their values, unconscious reflexes, skills, and habits

Which of the following statements about the classical model of decision making is FALSE?

Decision makers will be affected by personal preferences

When Kelly chooses to stay at work instead of going to the department team building event, she is engaged in

Decision making

When a college student says no to an alcoholic drink, he is engaged in

Decision making

____ is the act of choosing one alternative from many

Decision making

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.

Delphi

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?

Delphi

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

Delphi group

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?

Ethics

Imagine that you are an ABC network executive. Your task is to find a successful game show. You have three possible formats. One is a game show that is designed like a treasure hunt and staged on a secluded island. One uses a team approach to solving brainteasers and offers a $5 million prize. Another suggested game show pairs teenagers and their parents and has them answer music trivia questions. The prizes include full college tuition, a new house, automobiles for both, and so on. In which step of the rational decision-making process are you?

Evaluating alternatives

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

Expert cooperation

When evaluating decision alternatives, the first question to be asked is whether an alternative is within the realm of probability and practicality for the organization. This refers to which of the following alternative evaluation criteria?

Feasibility

When the space shuttle Columbia needed to reenter the atmosphere the crew knew there was damage on the outside of the aircraft. If there had been room and supplies the crew could have gone to the space station. Which criterion for evaluating a decision alternative did the space station fail to meet?

Feasibility

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

Groups often represent diversity of education and experience

Circuit City went bankrupt because of a series of poor managerial decisions and a down turn in the economy. In retrospect, it would seem that there was too much emphasis on the group reaching a consensus decision. As a result, many decisions were made to avoid conflict. What disadvantage of group decision making does this represent?

Groupthink

Which of the following disadvantages of group decisions typically results from the group being very cohesive?

Groupthink

In which stage of the decision-making/problem-solving process is resistance to change most likely to be a problem?

Implementing the chosen alternative

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?

Intuition

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

Members verbally vote for their first choice

Which of the following is NOT a behavioral force that influences decision making?

Optimization

Tino has a stack of resumes. He throws out all the ones without a bachelors degree. Which criterion for evaluating a decision alternative do these candidates fail to meet?

Satisfactoriness

When evaluating decision alternatives, which of the following criteria refers to the extent to which the alternative meets the conditions of the situation?

Satisfactoriness

Charles struggled through a year of Mandarin. The graduation requirement is two years of one world language. Charles could start with a different language, but he would have to give up an elective. Charles chose to take the second year of Mandarin. He engaged in

Satisficing

Donald Davis has to decide what make and model of pickup trucks to buy for his extermination company employees to drive. There are eight different manufacturers and countless models from which to choose. He also plans to buy a pickup for himself later on. He checks out the Dodge models and selects the Dodge full-sized model because he does not have much time to spend on the problem and because it will do the job. What would Herbert Simon call what Davis has just done?

Satisficing

When a manager evaluates alternatives until she comes to one that meets some minimum standard of sufficiency, selects it, and then goes on to other problems without considering the remaining rational alternatives, she has engaged in

Satisficing

____ is the selection of the first minimally acceptable alternative

Satisficing

What is the fourth step in rational decision making?

Select which alternative to implement

Joyce wants to decrease turnover. She can change hiring practices, improve benefits, improve wages, or provide an annual bonus. She chooses a year-end bonus because it keeps payroll lower and should quickly affect turnover. This example suggests that Joyce is at which step in the decision-making process?

Selecting which alternative to implement

Which of the following statements about programmed decisions is FALSE?

The use of programmed decisions should be limited to noncritical situations

Under which decision-making condition is the decision maker unaware of all the alternatives and the risks and consequences associated with each alternative?

Uncertainty

Your assistant comes to you with the feasibility evaluation of a decision alternative. What should he be describing to you?

Whether the alternative is within the realm of probability and practicality for the organization

The decision that the manager makes using the behavioral model of decision making

a. is made with imperfect information. b. has an incomplete set of alternatives. c. uses bounded rationality. d. requires the manager to engage in satisfying. e. All of these choices

Decision making is a part of which management function?

a.Planning b.Organizing c.Controlling d.Leading e.All of these choices

A(n) ____ decision-making model describes how decisions are made rather than prescribing how they should be made.

administrative

Imagine that you are a CBS network executive selecting a program. You have three possible formats. One is a game show that is designed like a treasure hunt and staged on a secluded island. One uses a team approach to solving brainteasers and offers a $5 million prize. Another suggested game show pairs teenagers and their parents and has them answer music trivia questions. The prizes include full college tuition, a new house, automobiles for both, and so on. The ____ model can be used to explain why you chose the treasure hunt game without even evaluating the other two

administrative

As it relates to selecting the alternative in a decision-making situation, optimization means choosing the

alternative that will do the most for the overall organization, even though it does not maximize outcomes for particular parts of the organization.

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

escalation of commitment

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

escalation of commitment

A disadvantage of using interacting groups to make decisions is

group politics

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

interacting

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.

intuition

Decisions by managers of AOL Time Warner to sell off Warner Music Group's DVD and CD manufacturing, printing, packaging, physical distribution, and merchandising business was an example of a ____ decision.

nonprogrammed

Dr Elkin is an orthodontist. Each patient's mouth is different. When he decides on a course of treatment he makes a(n) ____ decision.

nonprogrammed

The U.S. Postal Service started stamps.com so customers can print and send items from home. They also offered a promotion for a scale and free postage. This is an example of a(n) ____ decision.

nonprogrammed

To better compete with the Internet as a communications tool, Hallmark created a line of 99-cent cards called "Warm Wishes." This introduction of a line of cards that is priced much lower than its other product lines was more than likely the result of a(n) ____ management decision.

nonprogrammed

The first step in using the Delphi procedure is to

obtain the cooperation of a panel of experts

Computers scan items when they are purchased. Most inventory decisions are now

programmed

Decisions that are routine and deal with situations in which the factors are familiar and have occurred in the past are called ____ decisions.

programmed

Zaheer is a nurse. When his alarm goes off at 6:00 a.m. each morning. He puts on his uniform and drives to work on the same route each day. This is an example of a(n) ____ decision.

programmed

Based on the rational decision-making model, you would expect the first thing that happened at the other major networks as a result of the success of the American Idol television series was to

realize that they needed to create a viewer participation talent search TV program like American Idol

The first step in the decision-making process is

recognizing and defining the situation

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

risk propensity

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

risk propensity

Mikko needed to replace his air conditioner. He left messages with four companies. The first one to call back got the job. He used

satisficing.

Olga is house hunting in a "hot" market. Some homes sell within hours of listing. Olga finds one that meets her minimum criteria and immediately makes an offer. This is an example of

satisficing.

Bounded rationality is assumed in

the behavioral model