Chapter 7 MGT300

_____ is a decision maker's ability to discover original and novel ideas that lead to feasible alternative courses of action.

Creativity

Steven, a marketing manager, wants to budget the advertising for a new product launch. He is trying to determine the amount of money that the company can afford to spend on advertising. Which criterion of decision-making is he focusing on? Corey has been looking at several alternative locations for his new facility and performs a cost-benefit analysis in order to determine the net financial payoff of each location. Which criterion of decision-making is Corey focusing on?

Economic feasibility

Which of the following is a source of bias that can adversely affect the way managers make decisions?

Escalating commitment

Allowing individuals to develop a sense of personal mastery is detrimental to organizational learning

FALSE

Developing a learning organization is a quick and easy process.

FALSE

Identifying all relevant information for a decision means the manager has complete information.

FALSE

The classical decision-making model assumes that managers require very little or no information in order to make an optimum decision.

FALSE

The likelihood of a manager making an error in judgment is much greater in programmed decision-making than in nonprogrammed decision-making.

FALSE

The tendency of managers to ignore critical information is not as serious as the existence of incomplete information.

FALSE

When a group of managers makes a decision, the probability that the decision will be implemented successfully decreases.

FALSE

Which of the following would be considered a programmed decision by James Calloway, CEO of FSE Inc.?

Hiring additional staff

Which of the following is true of choosing among alternative solutions?

Identifying all relevant information doesn't mean that a manager has complete information.

____ is the tendency of decision makers to overestimate their ability to control activities and events.

Illusion of control

Which of the following is a guideline for managers to avoid the negative effects of cognitive biases?

List the criteria that are being used to assess and evaluate alternatives.

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

Managers have access to all the information they need.

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

Managers would not have complete information.

_____ is the process through which managers seek to improve employees' desire and ability to understand and manage the organization.

Organizational learning

Dan, the president of Bank Missouri, is attempting to determine whether the bank has both the capability and the resources to open a branch facility in a new location. Which criterion of decision-making is Dan focusing on? Dale, a manager, is assessing possible alternative solutions of a problem. Dale attempts to determine if a possible alternative will threaten other company projects. Which criterion of decision-making is Dale focusing on?

Practicality

_____ refers to the loss of productivity in brainstorming sessions due to the unstructured nature of brainstorming.

Production blocking

Peggy, a foreman at a petrochemical plant, asks the plant superintendent to hire an additional worker whenever overtime hours for the previous month increase by more than 15 percent over the headcount. What type of decision is this? Based on guidelines established by the accounting manager, Jaime, the accounts payable clerk, makes payments to vendors in order to maximize discounts. What type of decision does this represent? Barbara, a school superintendent, hires an additional teacher whenever the student enrollment in a grade goes beyond 35. This can be classified as a(n) _____ decision.

Programmed

_____ results from the tendency to generalize inappropriately from a small sample or from a single vivid event or episode.

Representativeness bias

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

Risk

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

Satisficing

Decision making in response to OPPORTUNITIES occurs when managers search for ways to improve organizational performance to benefit customers, employees, and other stakeholder groups.

TRUE

Prior-hypothesis bias implies that managers tend to seek and use information that is consistent with their prior beliefs.

TRUE

The higher the level of entrepreneurship in a firm, the higher the level of learning and innovation.

TRUE

Which of the following group decision-making processes is a written approach to creative problem solving?

The Delphi technique

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

They find it difficult to view problems from a fresh perspective.

A group of managers meets face-to-face and generates and debates a wide variety of alternatives from which to make a decision. This is called:

brainstorming

To deal with opportunities and threats, managers must select one solution from a set of alternatives. This process is known as _____.

decision making

Intrapreneurial managers who leave their current organizations because of a lack of opportunity and start their own companies are known as _____.

entrapreneurs

An organization in which managers enable subordinates to think creatively in order to maximize the potential for organizational learning is called a(n):

learning organization.

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

prescriptive.

Mistakes in decision-making that some managers make repeatedly are known as:

systematic errors.