Chapter 7

Which of the following is a reason for incomplete information? A. Ambiguity B. Complexity C. Specificity D. Heuristic ability E. Satisficing ability

A. Ambiguity

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? A. Economic feasibility B. Practicality C. Ethicalness D. Legality E. Functionality

A. Economic feasibility

_____ occurs when individuals in a team strive for agreement among themselves rather than assessing information accurately. A. Groupthink B. Intuition C. Bounded rationality D. Escalating commitment E. Representativeness bias

A. Groupthink

Which of the following is an advantage of group decision making? A. Managers can draw on the combined skills, competencies, and accumulated knowledge of group members. B. Managers can embark on a course of action without wasting time in evaluating its merits. C. Groups can rally around a central manager and the course of action that he supports. D. Groupthink can lead to better productivity. E. Group members commit to a decision without understanding its consequences.

A. Managers can draw on the combined skills, competencies, and accumulated knowledge of group members.

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? A. Managers would not have complete information. B. Managers would not have bounded rationality. C. Managers would have no decision-making ability. D. Managers would have varying perspectives. E. Managers would have too many alternatives.

A. Managers would not have complete information.

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? A. Practicality B. Ethicalness C. Legality D. Economic feasibility E. Functionality

A. Practicality

_____ results from the tendency to make decisions based on preexisting beliefs even though evidence suggest that those beliefs are wrong. A. Prior hypothesis bias B. Dialectical inquiry C. Escalating commitment D. Representativeness bias E. The illusion of control

A. Prior hypothesis bias

_____ refers to the loss of productivity in brainstorming sessions due to the unstructured nature of brainstorming. A. Production blocking B. Satisficing C. Nonprogrammed decision making D. Systematic error E. Illusion of control

A. Production blocking

sed 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? A. Programmed B. Bounded C. Intuitive D. Groupthink E. Creative

A. Programmed

_____ are individuals who pursue causes such as reducing poverty, increasing literacy, protecting the natural environment, or reducing substance abuse. A. Social entrepreneurs B. Intrapreneurs C. Product champions D. Skunkwork specialists E. Devil's advocates

A. Social entrepreneurs

Which of the following group decision-making processes is a written approach to creative problem solving? A. The Delphi technique B. Dialectical inquiry C. Brainstorming D. Nominal group technique E. Devil's advocacy

A. The Delphi technique

To deal with opportunities and threats, managers must select one solution from a set of alternatives. This process is known as _____. A. groupthink B. intuition C. decision making D. bounded rationality E. heuristics

C. decision making

Which of the following is a reason why managers fail to generate creative solutions? A. They find it difficult to view problems from a fresh perspective. B. They often fail to specify the criteria that are important in reaching a decision. C. They violate domestic or international laws or government regulations. D. They fail to perform a cost-benefit analysis of the various alternatives. E. They do not have complete information in most cases.

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

dividuals who notice opportunities and decide how to mobilize the resources necessary to produce new and improved goods and services are called _____. A. entrepreneurs B. managers C. supervisors D. product champions E. intuitors

A. entrepreneurs

Managers must rely on their ______ to make the best decision when faced with uncertainty and ambiguity. A. intuition and judgement B. cognitive biases C. bounded rationality D. escalating commitment E. illusion of control

A. intuition and judgement

An organization in which managers enable subordinates to think creatively in order to maximize the potential for organizational learning is called a(n): A. learning organization. B. dialectical organization. C. skunksworks. D. intuitive organization. E. heuristic organization.

A. learning organization.

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. A. programmed B. heuristic C. brainstormed D. intuitive E. creative

A. programmed

_____ is a critical analysis of a preferred alternative, defending unpopular or opposing alternatives for the sake of argument. A. Dialectical inquiry B. Devil's advocacy C. Groupthink D. Prior-hypothesis bias E. Organizational learning

B. Devil's advocacy

Which of the following would be considered a programmed decision by James Calloway, CEO of FSE Inc.? A. Launching a new promotional campaign B. Hiring additional staff C. Entering a new market D. Expanding operations internationally E. Developing a new product line

B. Hiring additional staff

Which of the following is true of choosing among alternative solutions? A. The alternative solutions are ranked in the order that they were developed or created. B. Identifying all relevant information doesn't mean that a manager has complete information. C. Existence of incomplete information is more serious than ignoring critical information. D. Once alternatives are chosen and ranked, they must be evaluated. E. The final step in the decision-making process is choosing among alternative solutions.

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

_____ results from overestimating one's own ability to influence actions and events. A. Escalating commitment B. Illusion of control C. Prior hypothesis bias D. Representativeness bias E. Dialectical inquiry

B. Illusion of control

_____ is the term given to employees who engage in entrepreneurial activity and who are an important source of organizational creativity. A. Entrepreneurs B. Intrapreneurs C. Social entrepreneurs D. Devil's advocates E. Middle managers

B. Intrapreneurs

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? A. Economic feasibility B. Practicality C. Legality D. Ethicalness E. Functionality

B. Practicality

A situation in which the number of suitable alternatives are greater than what a manager can evaluate is called _____. A. prior-hypothesis B. bounded rationality C. productive blocking D. illusion of control E. satisficing ambiguity

B. bounded rationality

The last step in the managerial decision-making process is: A. generating alternatives. B. learning from feedback. C. recognizing the need for a decision. D. implementing the chosen alternative. E. choosing between alternatives.

B. learning from feedback.

The classical model specifies how decisions should be made. In other words it is: A. heuristic. B. prescriptive. C. optimizing. D. intuitive. E. satisficing.

B. prescriptive.

Programmed decision making is a(n) ______ process. A. novel B. routine C. intuitive D. unusual E. creative

B. routine

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? A. Legality B. Ethicality C. Economic feasibility D. Practicality E. Product sustainability

C. Economic feasibility

Which of the following is true of decision making? A. Making a decision and not acting on it is better than not making a decision at all. B. Identifying relevant information means that the manager has complete information. C. In order to implement the chosen alternative many subsequent and related decisions must be made. D. Effective managers prefer planning for the future rather than conducting a retrospective analysis. E. If the advantages of an alternative are significantly high, its disadvantages need not be evaluated.

C. In order to implement the chosen alternative many subsequent and related decisions must be made.

When paper supplies reaches a minimum level, Ethan makes a call to the supplier to order more paper. What type of decision does this represent? A. Brainstormed decision B. Heuristic decision C. Programmed decision D. Intuitive decision E. Creative decision

C. Programmed decision

_____ is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them. A. Uncertainty B. Incomplete information C. Risk D. Ambiguity E. Cognitive limitation

C. Risk

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: A. the Delphi technique. B. dialectical inquiry. C. brainstorming. D. a nominal group technique. E. programmed decision making.

C. brainstorming.

Intrapreneurial managers who leave their current organizations because of a lack of opportunity and start their own companies are known as _____. A. skunkworks B. social entrapreneurs C. entrapreneurs D. product champions E. devil's advocates

C. entrapreneurs

Decisions that are based on rules and guidelines are known as: A. brainstormed decisions. B. heuristic decisions. C. programmed decisions. D. intuitive decisions. E. creative decisions.

C. programmed decisions.

_____ is a decision maker's ability to discover original and novel ideas that lead to feasible alternative courses of action. A. Groupthink B. Dialectical inquiry C. Intuition D. Creativity E. The illusion of control

D. Creativity

Which of the following is a characteristic of an entrapreneur? A. Not open to new experiences B. Have an external locus of control C. Have a low level of self esteem D. Have a high need for achievement E. Have a low need for power

D. Have a high need for achievement

Which of the following is a guideline for managers to avoid the negative effects of cognitive biases? A. Concentrate on planning for the future instead of conducting a retrospective analysis. B. Reward middle managers irrespective of whether they fail or succeed to implement a decision. C. Rank various alternatives even when all relevant information is not available. D. List the criteria that are being used to assess and evaluate alternatives. E. Persist with economically superior alternatives despite the threat of cannibalization.

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

Which of the following is an assumption made by the classical model? A. There is no optimum decision. B. There is more than one alternative. C. There is only one alternative. D. Managers have access to all the information they need. E. Managers are not capable of making the right decisions.

D. Managers have access to all the information they need.

___ is the decision-making method in which group members write down ideas and solutions, read their suggestions to the whole group, and discuss and then rank the alternatives. A. Delphi technique B. Dialectical inquiry C. Brainstorming D. Nominal group technique E. Devil's advocacy

D. Nominal group technique

Jordan, the manager of JT's Tasty Treats, has to decide whether to introduce a new frozen dessert that has never been sold previously. What type of decision would this represent? A. Automatic B. Rule-based C. Predetermined D. Nonprogrammed E. Inconsequential

D. Nonprogrammed

WashUrCar, which operates five car washes, has to decide whether or not it should invest in the latest drying equipment. What type of decision does this represent for the organization? A. Automatic B. Intuitive C. Bounded D. Nonprogrammed E. Rule-based

D. Nonprogrammed

_____ is the process through which managers seek to improve employees' desire and ability to understand and manage the organization. A. Dialectical inquiry B. Devil's advocacy C. Groupthink D. Organizational learning E. Skunkworks

D. Organizational learning

John, an operations manager, has chosen an alternative way to solve a problem he is faced with. Now John must decide whether the company has the capabilities and resources required to implement the alternative. Which criterion of decision-making is he focusing on? A. Legality B. Ethicality C. Economic feasibility D. Practicality E. Product sustainability

D. Practicality

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? A. Intuitive B. Groupthink C. Satisficing D. Programmed E. Bounded

D. Programmed

___ results from the tendency to generalize inappropriately from a small sample or from a single vivid event or episode. A. Prior hypothesis B. Dialectical inquiry C. Escalating commitment D. Representativeness bias E. The illusion of control

D. Representativeness bias

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? A. Optimizing B. Brainstorming C. Rationality binding D. Satisficing E. Cognitive biasing

D. Satisficing

Which of the following is an accurate description of satisficing? A. Viewing problems from a fresh perspective to come up with creative alternative solutions to specific problems B. Generating creative alternatives to solve problems and taking advantage of opportunities by abandoning existing mind-sets C. Conducting a retrospective analysis to see what can be learnt from past successes or failures D. Searching for and choosing acceptable or satisfactory ways to respond to problems and opportunities rather than trying to make the optimal decision E. Seeking and using information that is consistent with prior beliefs and ignoring information that contradicts those beliefs

D. Searching for and choosing acceptable or satisfactory ways to respond to problems and opportunities rather than trying to make the optimal decision

The first step in the managerial decision-making process is to: A. choose between alternatives. B. assess alternatives. C. implement the chosen alternative. D. recognize the need for a decision. E. conduct a retrospective analysis.

D. recognize the need for a decision.

When the probabilities of alternative outcomes cannot be determined and future outcomes are unknown, there exists: A. satisficing ambiguity. B. systematic error. C. prior-hypothesis bias. D. uncertainty. E. blocking.

D. uncertainty.

Nonroutine decisions made in response to novel situations in business are known as: A. rule-based decisions. B. automatic decisions. C. guideline-based decisions. D. predetermined decisions. E. nonprogrammed decisions.

E. nonprogrammed decisions.

n the classical model of decision-making, the most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is known as the ____________ decision. A. intuitive B. creative C. heuristic D. subjective E. optimum

E. optimum

Mistakes in decision-making that some managers make repeatedly are known as: A. dialectical errors. B. programmed decisions. C. nonprogrammed decisions. D. intuitive judgements. E. systematic errors.

E. systematic errors.