MGMT Smartbook 15

What are three practical things to consider in the decision-making process?

1. routine and frequency 2. information and communication 3. time constraints

In order to be successful decision makers, what should managers do?

Identify decision-making styles and build on strengths. Train employees to conduct effective brainstorming. Spark creativity among employees.

inherent morality

Ignores ethical implications

Different approaches to a problem

Individual members with various experiences and backgrounds offer different perspectives to problem solving.

Escalation of commitment bias

Persisting when an undesirable outcome is likely

What type of thinking is described by Daniel Kahneman as analytical and conscious thought?

System 2

Characteristics of the rational decision-making model include the assumption that managers:

are objective possess all information needed to make the best decision

What is a form of computing that allows machines to perform cognitive functions similar to the way humans do?

artificial intelligence (AI)

The decision-making model that assumes managers are fully objective and have all information they need to make a decision is the _______ decision model

rational

Deciding to choose a solution that meets enough minimum qualifications is:

satisficing

Deciding to select a solution that meets some minimum, adequate qualifications is ______________.

satisficing

Deciding to select a solution that meets some minimum, adequate qualifications is ________________.

satisficing

The least effective way to use evidence-based decision making is to:

support a decision made intuitively

What is one thing managers can do to improve their decision making?

Avoid decision-making biases by becoming aware of them.

invulnerability

Breeds excessive optimism and risk taking

Confirmation bias

Information is sought out to support previous decisions or positions

The tendency to base decisions on information that is recent and easily recalled from memory is:

availability bias

How do the news media influence availability bias?

by emphasizing unusual events

How can an individual or group avoid making mistakes in the decision-making process?

by reviewing past biases and influences by examining past decisions by understanding judgmental heuristics

The first two steps in the rational decision making model are:

determining the issue at hand generating alternative solutions

The tendency to stick to an ineffective course of action when it is unlikely that a bad situation can be reversed is:

escalation of commitment bias

The process of conscientiously using the best available data when making managerial decisions is:

evidence-based decision making

Daniel Kahneman describes two types of thinking in his book Thinking, Fast and Slow. Why is System 1 "fast"?

it is automatic. it is instinctive. it relies on mental shortcuts.

Daniel Kahneman describes two types of thinking in his book Thinking, Fast and Slow. Why is System 2 "slow"?

it is deliberate it is logical it helps override wrong intuition

Which of the symptoms of groupthink stifles critical debate?

self-censorship

The group process that anonymously generates ideas or judgments from physically dispersed experts is:

the delphi technique

Decisions that come to mind on their own and are not evaluated for validity are known as _______________.

intuition

The decision-making model that assumes managers are fully objective and have all the data needed is the:

rational decision model

Availability Bias

readily accessible information

What practical consideration might result in an individual rather than the whole group making a decision?

when there is limited time to make the decision

List the four steps in the rational decision making model with the first step in the process at the top and the last step on the bottom.

1. Identify the issue 2. Come up with potential solutions 3. evaluate the possibilities and select a solution 4. Put the solution into practice and evaluate

The group process that anonymously generates ideas or judgments from physically dispersed experts is called the ____________ ___________.

Delphi technique

What can an individual do to make better decisions?

Examine past decisions for the influence of biases. Assess decision-making styles. Develop critical thinking skills.

True or false: An assumption of the nonrational decision making models is that managers possess all of the information needed to make optimal decisions.

False

Representativeness bias

Generalizations are made based on one or limited number of experiences

More visible role modeling

Group members learn about group dynamics and problem solving skills.

Bagley's ethical decision tree shows a series of questions with appropriate actions based on the user's response. Which of the following is the first question to be asked?

Is the proposed action legal?

Hindsight bias

Knowledge of an outcome influences your perceived probability of it occurring

Groupthink can result in decisions that:

Lack moral judgment fail to realistically evaluate alternative options maintain the cohesiveness of the group

Peer Pressure

Loyalty of dissenters is questioned

Greater commitment to a decision

Participation in decision making usually results in commitment to a decision and responsibility for its implementation.

Better understanding of decision rationale

Participation in the decision-making process increases understanding about why the decision was made and what must happen to implement it.

Framing bias

Presenting information or questions in a particular way influences judgment

Mindguards

Protect themselves against adverse information

Rationalization

Protects "pet" ideas and assumptions

Self-censorship

Stifles critical debate

What type of thinking is described by Daniel Kahneman as intuitive and unconscious thought?

System 1

Overconfidence bias

Tendency to be overly optimistic in one's estimates

Greater pool of knowledge

The group has more knowledge and information than an individual acting alone.

Picking a solution is which step in the rational decision making process?

Third

True or false: Consensus does not require unanimous agreement.

True

Stereotyped views of the opposition

Underestimates opponents

Which of the following are components of confirmation bias? (Check all that apply.)

a decision is made before investigating why it is the right decision information is sought that confirms the already made decision and discounts information that does not

When decision-makers are influenced by the first information they receive even if it is irrelevant, it is ______.

anchoring bias

Evidence-based decision making holds the promise of:

avoiding decision making bias improving performance

Advantages of group decision-making include:

better understanding of the reasons for a decision more varied perspectives a greater pool of knowledge

The idea that decision makers are limited by various constraints during the decision-making process is the nonrational model known as ___________ ____________.

bounded rationality

The nonrational model in which decision makers are limited by various constraints when making decisions is known as:

bounded rationality

A technique used for solving problems, generating creative ideas for new products, and removing performance roadblocks is:

brainstorming

The sense of "we-ness" that overrides individual differences and motives in a group is

cohesiveness

What is it called when a decision maker recognizes information that supports a decision, while ignoring contracting information?

confirmation bias

Which of the following are disadvantages of big data? (Check all that apply.)

cybersecurity breaches leaked private information

The assumptions behind nonrational models of decision making are that:

decision makers lack complete information decision making lacks certainty managers struggle to make the best decisions

When you pinpoint and pick a solution that best solves a problem, this is:

decision making

What graphical representation of the process underlying decisions shows the consequences of making various choices?

decision tree

Anchoring bias

ealy information influences subsequent decisions or views

How can artificial intelligence (AI) help managers enhance business operations?

gaining insight through data analysis managing customer communications automating processes

When winning an argument with a rival overshadows the primary goal of trying to solve the problem, it is known as ____________ _____________.

goal displacement

The disadvantages of group decision making include:

goal displacement a few people dominate social pressure reduces creativity

The phenomenon that occurs when people who are members of a cohesive in-group so strive for unanimity that they fail to realistically appraise alternative courses of action is called __________.

groupthink

The limitations under which managers make decisions result in acquiring manageable rather than optimal amounts of ____________.

information

The limitations under which managers make decisions result in acquiring manageable rather than optimal amounts of _______________.

information

Decisions that come to mind on their own and are not evaluated for validity are known as

intuition

When you make a decision that comes to mind without clear awareness or evaluation of the evoking cues, this is:

intuition

What are the cognitive shortcuts used to simplify the decision making process called?

judgemental heuristics

Cognitive shortcuts or biases that are used to simplify the process of making decisions are known as ______________ _______________.

judgmental heuristics

Satisficing means that managers:

make a decision that is good enough make a decision that is satisfactory, but not optimal

Managers can reduce the likelihood of escalation of commitment bias if they:

make decision makers aware of the costs of persistence set minimum targets for performance and compare results to targets

Big data, the vast quantity of data available to decision makers, can

make information more transparent and usable be used to develop new products and services enhance productivity

Advantages of group decision-making include

more varied perspectives. better understanding of the reasons for a decision. a greater pool of knowledge.

The constraints in Herbert Simon's __________ model of decision-making include the limited capacity of the human mind.

nonrational

The constraints in Herbert Simon's ___________ model of decision making include the limited capacity of the human mind.

nonrational

The constraints in Herbert Simon's ___________ model of decision-making include the limited capacity of the human mind

nonrational

A ________________ is a situation in which it is possible to do something that eclipses expectations.

opportunity

When you can possibly produce results that surpass goals, it is a(n):

opportunity

A _______ is the divide between an actual and a desired situation.

problem

When there is a difference between what is desired and the actual situation, it is a(n):

problem

When all members of a group either agree with a decision or are able to support it, they have:

reached consensus

What is it called when decisions are based on past or similar information or situations?

representative bias

The decision-making heuristic used when people estimate the probability of an event occurring based on impressions about similar occurrences is:

representativeness bias

A decision tree can be described as:

showing the process underlying decisions showing the consequences of making decisions

Brainstorming is a technique used to help groups generate multiple ___________ and alternatives for solving ____________.

solutions; problems

Which of the following elements influence decision makers falling into the trap of anchoring bias?

stereotypes feedback impressions

What are the three ways managers use evidence or data in the decision-making process?

to make a decision to support a decision to inform a decision