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