MGT 3200 Exam 2
What is the problem with synectics?
as soon as a group member generates an idea, the technical expert evaluates the idea so the generation of ideas and the evaluation of ideas occur together, stifling creativity.
What kind of decision making is certainty?
programmed
What type of decision making would be hardest for uncertainty?
programmed
What is the prospect theme?
the pain of losing 20 bucks is greater than the excitement of winning 20 bucks. WE HATE TO LOSE
what does the representative heuristic involve?
the use of stereotypes in making judgements
Why is the availability fallible in decision making?
this heuristic is fallible because the availability of information in memory is affected by other factors that are not related to the objective frequency of the judged event.
What is the behavioral model?
this model assumes the managers try to be rational in making decisions, but there rationality is bounded. This is a descriptive model (it is what they should do)
What does the traditional economic model assume about decision makers? (2)
1. the decision maker is completely rational 2. the decision maker maximizes benefits (minimize cost)
What is decision making under conditions of risk?
1. the managers know the alternatives but their outcomes are in doubt 2. the probabilities associated with the different outcomes are between 0 and 100% 3. The key in risk is to make sure your probabilities are correct 4. you know something, but not everything 5. 1/10 or 1/1000 or 1/100000~ you know at least one thing
what are the two advantages of heuristics?
1. they save us time and effort in making decisions. As a result, they make us efficient. 2. they also lead to more good decisions than bad ones. Thus, they make us more effective, in general
what is the irrational model of decision making? (3)
1. this model assumes that early on in the decision making process that the decision-maker picks a favorite 2. then as the process continues, the decision-maker selects decision rules and distorts information to make the "favorite" alternative decision look better 3. this is irrational decision-making because it's based on emotion more than anything else.
What are the three models of decision making?
1. traditional/economic model 2. behavioral model 3. irrational model
What is decision making under conditions of uncertainty?
1. worst case uncertainty: the manager knows nothing 2. best case uncertainty: the manager knows the available alternatives but has no idea of what their outcomes could be.
define bounded rationality?
Managers are unable to grasp the full complexity of managerial decisions due to both their limited mental capacity and emotions, and the uncertainty of future events.
Why do we make decisions as managers?
Managers make decisions to accomplish organizational goals more efficiently As such, decisions are a means to an end rather an end in themselves
define satisfice
Managers select the first alternative that meets a minimally acceptable standard rather than going through and evaluating all the alternatives and selecting the best one. (it'll do, it is just good enough)( pretty good solution with less cost so it is efficient)
Is decision-making a function of management? Closely related to?
NO, but it is part of every function and closely associated with planning most closely related to planning
What are the defining characteristics of the Delphi technique?
similar to NGT but with a couple twists (it is fancy NGT) 1. the members never meet 2. the members remain anonymous 3. the technique has the same steps as NGT, but the information is gathered via questionnaires and surveys 4. think about hiding behind a computer screen. 5. the group process is eliminated even more 6. same five steps as NGT
Behavioral model is what type of reality?
simplified
What do managers need to think critically about when they use these OR techniques?
the data, the numbers that go in. Trash in than trash out
What in NGT does one try to eliminate to improve the decision-making process?
the inhibiting effects of group work
What is the key to making good decisions under risk?
the key in risk is to make sure your probabilities are correct.
What kind of data do they usually require?
quantitative, numerical data
What is the availability characteristic?
used when managers assess the frequency of an event by the extent to which instances of that event are easily recalled in memory. (if something is easily remembered it has to be frequent) An availability heuristic is a mental shortcut that relies on immediate examples that come to mind. When you are trying to make a decision, a number of related events or situations might immediately spring to the forefront of your thoughts. As a result, you might judge that those events are more frequent and possible than others. You give greater credence to this information and tend to overestimate the probability and likelihood of similar things happening in the future.
Can satisfice ever lead to a maximize solution?
yes it could be if you get extremely lucky, but you never know it is the best one because you have to consider all of them to do that. It is rare. You won't know it
an example of the behavioral model?
you go look at a house in east baton rouge parish, you have to consider all of them, rank the outcomes and decide the best one. By the time you finish the house would be gone so you satisfice, you go from house to house to house until you find one and then you pick it.
examples of programmed decisions would be
1. 90-100 would be an A in a class 2. High school degree 8/10 (successful) Without high school degree 4/10 (successful) So your rule is that people must have a high school degree 3. Once you hit start on your computer it does it own its own, you don't have to think about it
What are the 5 steps in the nominal group technique?
1. Group members are familiarized with the problem by facilitator 2. Group members, working silently and alone, generate solutions to the problem 3. Group members share their solutions in a round-robin manner 4. Group members evaluate the solutions in a round-robin manner 5. Group members vote privately ranking solutions from best (1) to worst (10). The one that is ranked highest in the second vote is the one that is implemented people are acting alone in 2 and 5 (generate and vote alone) nominal group- group in name only the question on the test will be which one of these steps are incorrect and he will probably change 2 or 5
what three things bound one's rationality
1. Limited mental capacity (cramming) 2. Emotions 3. Un-foreseeability of future events if the future is unforseeable than you dont know your risks
what is synectics
1. the connection together of diverse parts 2. involves a group whose job is to generate as well as evaluate solutions to a problem.
What are the two problems with heurisitics
1. a problem with heuristics is that they implicitly guide our judgement. As such, we often don't realize when we're using them. 2. When we over rely on them or misshapen on them they can lead to errors, sometimes severe errors which may effect the conclucsions
What are the two types of heuristics used in managerial decision making?
1. availability 2. representativeness
What are the four things that can be done in generating better alternatives?
1. brainstorming 2. synetics 3. nominal group technique 4. delphi technique
The traditional economic model of decision making assumes that managers make decisions under 1. Certainty 2. Risk 3. Uncertainty 4. 1 and 2 5. 2 and 3
1. certainty
What are the three decision making conditions?
1. certainty 2. risk 3. uncertainty exist on continuum on ambiguity and certainty *
Which decision-making condition is least frequent and easiest? Most common? Most difficult?
1. certainty is the easiest and least frequent 2. risk is the most common condition 3. uncertainty is the most difficult
What are the 4 rules of brainstorming?
1. criticism/ evaluation is strictly prohibited (most important) 2. freewheeling is welcomed (the most outrageous idea is best, task a risk and put yourself out there) 3. quantity of ideas is sought (quality will take care of itself) 4. combination and improvement of ideas is sought there are no bad ideas, just say it
Who does synectics employ? (2)
1. facilitator 2. technical expert
What two creativity techniques does synectics use in helping the group to generate better ideas?
1. fantasy (use your imagination) 2. analogy (personal examples, or examples in nature to help you solve a problem) (what analogy helped Pringles to pile, wet leaves, so stake when wet) ( what fantasy helped NASSA, flannel pajamas)
What are the problems that can be encountered when using the Delphi Technique (3)
1. if the questionnaires used to gather information are poorly designed, then you will get poor results 2. can be expensive and time consuming 3. if you wait too long between each step, then interest and motivation are significantly reduced
What is the basic purpose of a brainstorming session? (3)
1. involves a group whose sole purpose is to generate as many solutions to the problem as possible. 2. the belief behind brainstorming is that when people interact in an unrestrained setting, creativity will result 3. this is your subconscious to generate solutions to a problem
What are the two problems with representativeness? What may it result in?
1. it can cause the manager to miss important opportunities 2. the use of stereotypes don't allow us to see the real person. May result in unethical, discriminatory and illegal decisions
What are the two ways in which NGT is different from brainstorming and synectics?
1. it does not rely upon the free association of ideas (round robin manner) 2. it purposely restricts verbal interaction
What is the stepladder technique? (5)
1. it is a technique that is designed to create social globally 2. making a group reconsider decisions 3. 5 people in the step ladder 4. It is a technique used during teleconferences when the group cannot be face to face 5. group has to reconsider the decision multiple times A decision-making approach intended to facilitate group effectiveness by structuring the entry of members into a group.
What is decision making under conditions of certainty (3)
1. managers knows all the availability alternatives and the outcomes associated with each 2. there is no element of chance that intervenes between an alternative and its outcome. 3. the outcomes of alternatives are known with 100% certainty (a probability of 10)
why do managers use heuristics? (2)
1. managers use heuristics because of their limited information processing capabilities. 2. they help to simplify complex environments for us
What are the five functions of management?
1. planning 2. organizing 3. staffing 4. leading 5. controlling
What are the two assumptions of the behavioral model?
1. possess bounded rationality 2. they satisfice you try to be rational but there are limits
What is the traditional economic model? (6)
1. pre-scripted 2. this is how we should do it 3. this model assumes that decisions are made under the conditions of certainty 4. pick the best decision 5. consider all the alternatives 6. you are a computer (spot on)
Henry Ford had a rule when hiring executives: "If they salted their food before they tasted it, they would be poor decision makers." This is an example of 1. A decision made under certainty 2. A programmed decision 3. A non-programmed decision 4. A decision made under uncertainty 5. 1 and 2
2. a programmed decision
For the fifth step of the NGT how many votes are conducted?
2. preliminary and final
A retail store uses a cognitive ability test to hire candidates for a managerial position. They have found when they use a cut-score of 115 (an above average IQ score) to hire candidates 9 times out of 10 they become successful managers. This is a decision made under 1. Certainty 2. Risk 3. Uncertainty 4. None of the above, you cant tell what decision making condition it is from the facts presented
2. risk
how many times might you have to reconsider your decision to make sure it is done right the first time?
3
All of the following could cause one to overestimate the frequency of an even except 1. An event that is emotional 2. An event that is vivid 3. An event that is hard to imagine 4. An event that is recent 5. An event that is specific
3. an event that is hard to imagine
When a decision is framed negatively, the decision-maker 1. Is likely to take less risk 2. Is likely to take more risk 3. Is unaffected by the framing 4. None of the above
3. is likely to take more risk
All of the following are true concerning satisficing except 1. Satisficing saves time and effort 2. Satisficing entails selecting the first alternative that's just good enough 3. Satisficing can never lead to a maximizing solution. 4. Satisficing is quite rational given our limits as human beings
3. satisficing can never lead to a maximizing solution
With the irrational/implicit favorite model, this type of decision-making is most likely to occur under conditions of 1. Certainty 2. risk 3. Uncertainty 4. All of the above 5. Only 1 and 2
3. uncertainty
Which of the following factors would bound ones rationality? 1. Limited mental capacity 2. Emotional state 3. Unforeseeability of future events 4. All of the above bound one's rationality 5. Only 1 and 2 bound ones rationality
4. all of the above bound one's rationality
In the gambler's fallacy, the person believes after a number of unfortunate events that the likelihood of a good fortune is 1. Fifty-fifty 2. Twenty-five percent 3. Zero percent 4. Nearly a sure thing
4. nearly a sure thing
The behavioral model assumes that managers make decisions under 1. Certainty 2. Risk 3. Uncertainty 4. All of the above 5. 2 and 3
5. 2 and 3
Uncertainty as a decision making condition 1. Occurs when alternatives are known but the outcomes are unknown 2. Has probabilities that are unknown 3. Is the most difficult of the decision-making conditions 4. Occurs when alternatives and outcomes are both unknown 5. all of the above
5. all of the above
Which of the following are true concerning heuristics 1. They make us more efficient 2. They simplify complex environments 3. They produce more good than bad decisions 4. When they lead to errors, they are called biases 5. All of the above
5. all of the above
Which of the following is true concerning decision-making under risk? 1. It's the most common decision-making condition 2. It involves probabilities between 0 and 1 3. Even when you play the odds well, your decision can still have a negative result 4. The key to good decision-making under risk is accurate probabilities 5. all of the above
5. all of the above
Non-programmed decisions are associated with decisions made under conditions of 1. Certainty 2. Risk 3. Uncertainty 4. All of the above 5. Both uncertainty and risk
5. both uncertainty and risk
How do programmed/non-programmed decisions and the different decision-making conditions relate?
Certainty & risk = programmed uncertainty & risk = non-programmed
What is the superhero technique?
It is a way to stimulate creativity by getting rid of barriers. As a superhero there are no rules therefore nothing can hold you back from solving the problem.
What is the stepladder technique designed to prevent? Promote?
It is designed to promote the decision-making and interaction of group decision making by compensating for the obstacles of non-visual communication.
What is the reasoning behind the Delphi technique? Got its name from
Keep experts initial judgment ideas from being influenced by social pressure or other psychological aspects of group behavior. Eliminate the negativeness of group process. delphi got its name from technological forecasting
What's the difference between programmed (3) and non programmed decisions (4)
Programmed decisions are specific procedures that have been developed for routine, repetitive problems. it comes from experience. RULE, PROCEDURE, POLICY (the manager does not have to think they just follow the rules) we program decisions to be efficient vs. Non-Programmed decisions are specific solutions that to problems are novel, unique, complex, and unstructured.
how is the five person group set up?
Step 1: 2 person group Step 2: 3 person group which is made up of the two people from group 1 Step 3: 4 person group which is made up of the three people from group 2 Step 4: 5 person group which made up of the four people from group 3 enter the shy people in the first step and the dominant member the last step
What does the irrational/implicit favorite model of decision-making say about decision-making?
The decision maker selects a favorite early on in the evaluation of alternatives and keep it to ourselves. Once the favorite is chosen, all other alternatives are evaluated against it never giving the other alternatives a fair shot. Can lead the decision maker to distort information. Made under uncertainty
What is the job of the facilitator?
The facilitator's job is to structure the problem and help lead the discussion away from traditional ways of thinking, and generate ideas. Help you understand the problem and become more creative
What is the job of the technical expert?
The technical expert helps the group evaluate the feasibility of ideas.
What are operations research techniques? What are they designed to do?
These techniques improve the evaluation of alternatives by making the evaluation more systematic by using statistics
why is availability useful in decision making
This can be a very useful aid in decision-making since instances of events of greater frequency are generally recalled more easily than events of less frequency. Therefore, this heuristic will often lead to accurate judgments, helps you solve everyday problems
what research is Nominal Group Technique based on
This technique is based on the research that has found that 5 individuals working alone generate more creative ideas than these same five individuals would generate working together as a group. So the group process hurts it, in NGT we want to minimize it
What is meant by the term "confirmatory bias" in decision-making?
We look for information that confirms we made a good decision, we look for the positives but the best test of a decision is a chance is disprove it because if you still come up with positives than you made the right decisions. We don't normally do this because we don't want to be wrong.
What factors cause you to overestimate the frequency of an event? (5)
You would overestimate if the memory is specific, easily imagined, recent, vivid, or emotional. if something is emotional than they remember it than it is more frequent because it is always on their mind and they blow these problems out of proportion overestimating frequency
What factors cause you to underestimate the frequency of an event? (5)
You would underestimate if the event is distant in the past, bland, unemotional, difficult to imagine, vague
Are they an aid or substitute for managerial decision-making?
an aid
how is satisficing different from maximizing?
because satisficing uses the first alternative available instead of looking at ALL alternatives before decision-making.
When heuristics lead to errors in judgment, they are called______
biases (mental short cut misapplied)
Under what decision-making condition do decisions get made in the traditional economic model?
certainty
define unique for non-programmed decisions
different
define complex for non-programmed decisions
hard to understand
An example of the traditional decision model
if you are trying to figure out where to go for college you would be rational and pick the best one for you, so you would have to look at all of them. Then rank each college on every outcome that was important to you. Then with your preferences you select the best one.
what is an example of non-programmed decisions
introduction of technology
Under what decision-making condition do decisions get made in the behavioral model?
risk and uncertainty
What is a heuristic?
mental shortcuts (labor-saving devices) humans use in making decisions. also a rule of thumb example: the best predicted of future performance is past performance, that's why we ask for a resume (shortcut). more times than it is right (it will be more effective) you can make mistakes so it can make you more efficient but not effective
define novel for non programmed decisions
new
is satisficing irrational?
no it is not irrational. it is quite sensible considering the limits of human information processing, the costs of searching for and identifying alternatives, and the uncertainty of future events it is rational, select one that is good enough
define unstructured for non-programmed decisions
no set way to deal with it
Are they applicable to all decisions that managers make? When are they greatest
no, they are in greatest use when making decisions under risk
Can inhibitions be totally eliminated in brainstorming sessions?
no, which is the problem with brainstorming. this is because a number of factors such as non-verbal communication and power differences among members. If the manager is in there, you can't be weird
every programmed decision started as a
non-programmed decision
As you move up the management pyramid do you make more programmed or non-programmed decisions? Why?
non-programmed decisions will increase in frequency because you are planning for the future and the future is unknown (so first line makes more programmed decisions)
What types of decisions are made irrationally? his first irrational decision?
non-programmed, decisions made under uncertainty (1971 black cutlass supreme was his first irrational decision)
What kind of decision making is risk?
program or non-program
In general in total organizations do you have more of programmed or non-programmed decisions?
programmed decisions
What is the representative heuristic?
reflect the tendency of managers to assess the likelihood of an occurrence by matching it with a preexisting category.
