MGMT Quiz 6 (Chapter 7)

Decision making is at the core of every leader's job. This activity is important because it focuses on the four key steps that a decision maker should strive to implement, to the greatest extent possible, when making a decision. The goal of this activity is to challenge your knowledge of the four steps in rational decision making.

1. In this stage, the problem or opportunity is identified. Stage 1 2. Decide whether a solution you've generated is the right thing to do. In other words, is this an ethical solution to a problem? Stage 3 3. Take time to carefully plan out your chosen solution. Stage 4 4. Thinking of alternative solutions takes place in this stage. Stage 2 5. Search for possibilities to exceed existing goals. This requires looking past the barrage of daily problems and figuring out what you can do better than expected. Stage 1 6. In this stage, alternatives are evaluated and a solution is selected. Stage 3 7. Think creatively about what you can do to solve problems you've identified. Stage 2 8. Consider how those affected by your solution will feel about any changes, and give them the necessary latitude. Stage 4

Decision making is often a biased and flawed process. This activity is important because a person who can identify and be aware of their biases may be able to make better decisions for themselves and may be able to diagnose flawed decisions that affect their workplace. The goal of this activity is to test your knowledge of the nine fundamental decision-making biases. Match each scenario to the decision-making bias that it best represents

Availability Bias When she traveled to Australia on business recently, Cori assumed the weather would be the same as her home in New York. She soon found out it was winter in Australia. Anchoring and Adjustment Bias Nishka was looking at buying a new car. After seeing the sticker prices on really expensive models, the lower cost models looked even more attractive! Representativeness Bias Trinity tried a new sales technique with a new client. It worked! She now assumes that this technique will also work with all of her current clients. Confirmation Bias After finally deciding on what new car to buy, Declan told his friends and colleagues about it, but disregarded the things said by friends who didn't like the model he chose. Escalation of Commitment Bias Much to the dismay of her friends and colleagues, Amara decided to change cellphone carriers. She wasn't happy with the new service, but continued to use them rather than switch back to the carrier all of her friends wanted her to use. Framing Bias When she was looking at leasing a new car, Rosa noticed that the car salesman focused more on the monthly payment than on the overall cost of the lease versus buying it outright. Sunk-Cost Bias Zion took his older car to a mechanic and had his transmission rebuilt (a somewhat costly repair). The next week, his brakes quit working. Instead of trading the car in, he put in new brakes as well, since he had already fixed the transmission. Overconfidence Bias After a couple of weeks in his class in corporate finance, Milo decided he should be able to do just as good of a job at making investment decisions as his broker. Hindsight Bias A new company offering office supplies opened up and Sai decided to try the new vendor, not knowing if their service would be any good. After a few months of good service, Sai looked back and felt he knew he had picked a winner all along.

An individual's decision-making style reflects the combination of how that person perceives and responds to information. Decision-making style reflects both one's value orientation and one's tolerance for ambiguity. This activity is important because having knowledge of decision-making styles helps you to better understand yourself, influence others, and deal with interpersonal conflicts. The goal of this activity is to challenge your knowledge of the four general decision-making styles. Match the appropriate style of decision making that best represents each person.

Directive Ellis has a low tolerance for ambiguity. He is efficient, logical, practical, and systematic in his approach to solving problems. Behavioral Pei is very people-oriented. When making decisions, he enjoys social interactions in which opinions are openly exchanged. He is receptive to suggestions and tends to avoid conflict. Conceptual Grace has a high tolerance for ambiguity and tends to focus on the social aspects of a situation. She is willing to take risks and is good at finding creative solutions to problems. Analytical Ursula has a high tolerance for ambiguity but focuses on technical aspects more than social aspects. She is a careful decision maker, taking longer to make decisions but acting well in new situations.

A local university is facing some tough decisions, so they are using the decision tree, which contains individuals, websites, and organizations that specialize in handling sensitive and difficult decisions

False

Why should you encourage David to use groups to make decisions?

Groups have a greater pool of knowledge.

Decision making can be a difficult process if managers are not well-versed in recognizing and addressing various hindrances they face when attempting to make rational decisions. This activity is important because leadership and decision-making go hand-in-hand; decision making is one of the critical KSAOs you will need in order to be career-ready. The goal of this activity is to test your knowledge of the hindrances to rational decision making.

Information overload Broderick, as head of company benefits, is choosing a new healthcare plan for all of the company's employees. He has stacks of thick policy manuals on his desk reaching up to the ceiling. There is no way he can get through all of it alone. But he decides to do the best he can because he'd rather not take other benefits workers off of their already busy workloads. Different cognitive capacity, values, skills, habits, and unconscious reflexes Jarrod wants to hire a female assistant, even though several males have applied who are objectively more qualified. Jarrod just thinks women do a better job at this type of work than men. Imperfect information Annice, as CIO, is taking her company's training fully digital. She is being courted by four different learning technology companies and has to choose a platform from one of them. She has never used any of the platforms and knows that she couldn't possibly foresee all of the things that will annoy her employees about each platform until she chooses one and they start using it. Time and money constraints Tony needs to decide on a new copy machine for his office. This is a several thousand dollar decision and he wants to be sure he buys a machine that has the best features for all of the employees. But he limits himself to 8 hours for his search, because time spent finding a copier is time lost on important work. Complexity Phoebe's department at work has gotten out of control. Everyone is fighting for resources, factions are forming, and no one is getting any real work done because of all of the interpersonal problems. She decides it's time to hire some new blood, even though the issues are so complicated that no one really has a good idea of what the department needs. Conflicting goals Nickole is ready to fire one of her employees. He is a terrible manager, unkind to his subordinates, and performs fairly poorly year after year. Nickole brings the issue to her supervisor who asks her to hold off on firing the worker because he has connections that the company wants to continue to use. Different priorities Lavonna is a finance professor who is choosing a new PhD student as her mentee. She has GMAT scores and three recommendation letters for each person. Lavonna pays more attention to the letters mentioning work ethic than she does to formal scores - she believes hard work can make up for a lack of sheer cognitive prowess.

Ming-Na, a marketing data analyst with Robust Brews Coffee, was tasked with determining if customers liked the new blond roast blend. According to Robust Brews' sales data, over 4,000 customers purchased the new coffee last month. If Ming-Na surveys 25 of those customers to determine if they like the coffee or not, she will most likely suffer from confirmation bias.

True

The University of Calabasas senior leadership team had to quickly make a decision on whether to hold classes in-person or online due to COVID-19. Its president is known to be very people-oriented and avoids conflict as much as possible. Based on what you know about decision-making styles, the university president's style will be effective in this ambiguous situation.

True

When brainstorming, you should go for quantity over quality.

True

With satisficing, managers look for alternatives until they find one that is satisfactory, not optimal.

True

Kameko, the CEO of an oil drilling company, and her top management team recently discovered that their facilities are damaging a beach in Asia and the local wildlife. Apply Bagley's ethical decision tree to help Kameko decide if temporarily closing or not closing the facilities is the right thing to do. Assuming it is legal to close the facilities, which of the following would you advise Kameko when she asks you, "Should we close the facilities?"

Yes, close the facilities because not taking action would be unethical.

________ is a technique used to help groups generate multiple ideas and alternatives for solving problems.

brainstorming

To decide how much an insurance policy should cost a customer, underwriters use ________, such as historical industry trends and loan characteristics, to predict risk levels.

data anylytics

Carson Contractors specialize in ecofriendly construction of large, industrial buildings such as schools, hospitals, and factories. In response to the recent Coronavirus pandemic, Carson Contractors began to focus on construction techniques that minimize the spread of germs, such as improved ventilation, handwashing stations, and spaces with moveable furniture. The germ minimization goal now outweighs the ecofriendly goal, which is an example of

goal displacement

Terrence's team is very close and tends to agree on most decisions with little discussion. Terrence should be concerned about-------------.

groupthink

Upon graduating from college, Annie needed to decide which city she wanted to live in, what kind of job to look for, whether to apply to graduate school now or later, what to do about her lease that was going to expire in three months, and whether to trade-in her car. What would you advise Annie to do first in her decision-making process?

list the decisions she needs to make

Which models of decision making describe how managers actually make decisions?

nonrational

Haya operates a car dealership, and she has been working to come up with ways to overcome the incredibly high competition her business faces. There are six other dealerships within a one-mile radius. So far, Haya has thought of doing a car giveaway event, adding extended warranties on every new car that is sold, or running advertisements through the mail. Haya is at which stage of the decision-making process?

thinking up alternative solutions