Chapter 10: Decision Making by Individuals and Groups

Risk shift phenomenon of group decision making implies that group members collectively make a _______ than most or all of the individuals would have made working alone. A. More risky choice B. Less risky choice C. More rational choice D. Less rational choice

A. More risky choice

In choosing between less and more risky options, an individual's ______ often plays a role. A. Risk taking propensity B. Background C. Physical features D. Cognitive ability E. Both physical features and cognitive ability.

A. Risk taking propensity

An example of strategic decision would be adding or deleting products and services. A. True B. False

A. True

Brain-writing can be an effective technique for overcoming the problems of standard group brainstorming. A. True B. False

A. True

Decisions made at all levels of the organization can impact organizational performance. A. True B. False

A. True

Individuals in positive moods seem to neglect the details of decision situations. A. True B. False

A. True

The opportunity for personal growth provided by participation in group decision making is a benefit that is often overlooked. A. True B. False

A. True

Moods

Affective states corresponding to general positive or negative feelings disconnected from an event or stimulus.

Emotions

Affective states corresponding to specific feelings, such as anger, that tend to be associated with events, people, or other stimuli.

All of the following are pitfalls in group decision-making EXCEPT: A. Groupthink B. Brainstorming C. Diversity-based infighting D. Common information bias

B. Brainstorming

Mental shortcuts involving simplified ways of thinking are known as: A. Confirmation biases B. Cognitive biases C. Anchoring biases D. Ease of recall biases

B. Cognitive biases

One type of cognitive bias, anchoring bias, involved relying too much on information that is east to recall when making a decision. A. True B. False

B. False

Group decision making is usually better than individual decision making because: A. It is less costly B. It is faster C. It can handle complex problems better D. It does not require commitment

C. It can handle complex problems better

Decisions

Choices of actions from among multiple feasible alternatives

All of the following are decision-making styles EXCEPT: A. Sensing B. Intuition C. Thinking D. Absorbing

D. Absorbing

All of the following are symptoms of Groupthink EXCEPT: A. Self-censorship B. Unanimity C. Invulnerability D. Irrationality E. Morality

D. Irrationality

In the _____ technique for group decision making, discussion is structured and the final solution is decided by silent vote. A. Brain-writing B. Electronic brainstorming C. Group thinking D. Nominal group E. Rational group

D. Nominal group

Cognitive Biases

Mental shortcuts involving simplified ways of thinking.

Satisficing Decisions

Satisfactory rather than optimal decisions

Risk-taking propensity

Willingness to take chances

Eight Specific Symptoms associated with Groupthink:

1. Self-censorship 2. Pressure 3. Unanimity 4. Rationalization 5. Invulnerability 6. Mindguards 7. Morality 8. Stereotypes

Common information bias

A bias in which group members overemphasize information held by a majority or the entire group while failing to be mindful of information held by one group member or a few members.

Confirmation Bias

A cognitive bias in which information early beliefs and ideas is sought while potentially disconfirming information is not sought.

Ease-of-recall bias

A cognitive bias in which information that is easy to recall from memory is relied on too much in making decision.

Sunk-cost bias

A cognitive bias in which past investments of time,effort, and/or money are heavily weighted in deciding on continued investment.

Anchoring Bias

A cognitive bias in which the first piece of information that is encountered about a situation is emphasized too much in making a decision.

Intuition

A decision style focused on developing abstractions and figurative examples for use in decision making, with an emphasis on imagination and possibilities.

Sensing

A decision style focused on gathering concrete information directly through the senses, with an emphasis on practical and realistic ideas.

Feeling

A decision style focused on subjective evaluation and the emotional reactions of others.

Thinking

A decision style focuses on objective evaluation and systematic analysis

Devil's advocacy

A group decision-making technique that relies on a critique of a recommended action and its underlying assumptions.

Dialectical Inquiry

A group decision-making technique that relies on debate between two subgroups that have developed different recommendations based on different assumptions.

Delphi technique

A highly structured decision-making process in which participants are surveyed regarding their opinions or best judgements.

Reference Point

A possible level of performance used to evaluate one's current standing.

Risky shift

A process by which group members collectively make a more risky choice than most or all of the individuals would have made working alone.

Nominal group technique

A process for group decision making in which discussion is structured and the final solution is decided by silvent vote.

Brainstorming

A process in which a large number of ideas are generated while evaluation of the ideas is suspended

Diversity-based infighting

A situation in which group members engage in unproductive, negative conflict over differing views.

Groupthink

A situation in which group members maintain or seek consensus at the expense of identifying and debating honest disagreements.

__________ results from a situation in which group members engage in unproductive negative conflict over differing views. A. Diversity-based fighting B. Common information bias C. Risky shift D. Groupthink E. Group polarization

A. Diversity-based fighting

You have unfortunately started a new business. You took a loan of $75,000 from a bank. Unfortunately, your business venture has turned out to be a failure. You believe that you can recover the $75,000 you invested in this business if you could invest another $50,000 into it. Your logic is influenced by the A. Ease of recall bias B. Confirmation bias C. Anchoring bias D. Sunk-cost bias E. Common information bias

D. Sunk-cost bias

People tend to make satisfactory decisions rather than optimal (i.e. maximizing decisions) because: A. They have the capability to collect and process only 75% the information relevant for a particular decision B. Very smart people make only optimal decisions C. They often display a tendency to choose the last satisfactory alternative discovered D. They do not have the capability to collect and process all the information relevant for a particular decision and they often display a tendency to choose the first satisfactory alternative discovered.

D. They do not have the capability to collect and process all the information relevant for a particular decision and they often display a tendency to choose the first satisfactory alternative discovered

All of the following are symptoms associated with groupthink EXCEPT: A. Morality B. Pressure C. Unanimity D. Vulnerability

D. Vulnerability

Which of the following questions should a manager ask in deciding whether and when to involve associates in making a decision? A. Is there a quality requirement such that one solution is likely to be more rational than another? B. Do I have sufficient information to make a high-quality decision? C. Is problem structured (do I know the questions to ask and where to look for relevant information)? D. Is acceptance of the decision by associates critical to effective implementation? E. All of the above

E. All of the above