MGT 3301 Chapter 05 Study Guide
Sometimes in a brainstorming session, group members cannot simultaneously make sense of all the alternatives being generated, think up additional alternatives, or remember what they were thinking. This problem is known as A) production blocking. B) groupthink. C) nominal group problem. D) bounded rationality.
A) production blocking.
The pattern of faulty and biased decision making that occurs in groups whose members strive for agreement at the expense of good decision making is called A) brainstorming. B) groupthink. C) devil's advocacy. D) bounded rationality.
B) groupthink.
Go-Getter, Co., is attempting to decide whether or not to launch a new $10 million advertising campaign for a product whose sales have been lagging well below its projected sales. This represents which type of decision for the organization? A) optimum B) intuitive C) nonprogrammed D) satisficing
C) nonprogrammed
The first step in decision making that a manager needs to take is generate a set of feasible alternative courses of action in response to the opportunity or threat. True or False
false
The nominal group technique is especially useful when an issue is not controversial and when different managers are expected to champion a similar course of action. True or False
false
When a manager chooses an acceptable alternative instead of the optimum alternative, we say that a satisficing decision has occurred. True or False,
true
The ability of a decision maker to discover novel ideas that lead to feasible alternatives in decision making is known as creativity. True or False
true
The classical decision-making model assumes that managers have all of the information they need in order to make the optimum decision. True or False
true
77) Which of the following is a way to bring distant managers together to brainstorm and is a written approach to creative problem solving? A) brainstorming B) dialectical inquiry C) Delphi technique D) nominal group technique
C) Delphi technique
Which of the following is a part of the Delphi technique of group decision making? A) Group members write down, read their suggestions, discuss, and then rank the alternatives. B) Group members engage in videoconferencing and present their ideas. C) Group members respond in writing to questions posed by the group leader. D) Five to fifteen managers meet in a closed-door session and decide for the group.
C) Group members respond in writing to questions posed by the group leader.
Decisions that have been made many times in the past and for which managers have rules and guidelines about how to make similar decisions in the future are known as ________ decisions. A) nonprogrammed B) judgment C) programmed D) optimum
C) programmed
A sales manager wants to promote a shared vision among his staff. Considering this, which of the following would he do? A) emphasize how using creativity can enhance the development of a learning organization B) have some of the sales staff try one sales method and have others try another approach C) encourage his sales staff to think of different methods to sell a product D) talk with his sales staff about the way they should all treat customers
D) talk with his sales staff about the way they should all treat customers
You are a manager who wants to give some of your programmed decisions to your assistant to leave you more time to devote to nonprogrammed decisions. Considering this, which of the following actions would you delegate to your assistant? A) how much to invest in a new product B) whether to expand into a new market C) when to time a new advertising campaign D) when to bill customers
D) when to bill customers
When an organization's accounting department decides to send out a bill to a new customer, this represents a(n) _____ decision. A) programmed B) nonprogrammed C) intuitive D) groupthink
A) programmed
What do managers do to regulate routine activities? A) They create a mission statement. B) They establish rules and guidelines. C) They create cross-functional teams. D) They facilitate a strong organizational culture.
B) They establish rules and guidelines.
Which of the following explains the reasons for the inherently uncertain and risky nature of decision making and the making of satisfactory rather than optimum decisions by managers? A) logical model B) administrative model C) perspective model D) rational model
B) administrative model
When the meaning of the information available to a manager is unclear and can be interpreted in several ways, the information is A) certain. B) ambiguous. C) bounded. D) irrational.
B) ambiguous.
In the administrative model of decision making, when the number of possible alternatives to a decision is so large that the manager cannot possibly evaluate all of them before making a decision, which of the following has occurred? A) satisficing B) bounded rationality C) brainstorming D) devil's advocacy
B) bounded rationality
Which of the following is most likely to be a disadvantage of brainstorming in an organization? A) Group members are allowed to criticize an alternative when it is described and it leads to confusion. B) Brainstorming in an organization means that support can only be given to a limited number of ideas. C) It discourages group members from building on each other's suggestions for fear of seeing "unoriginal." D) Group members cannot always simultaneously understand the alternatives and think up additional alternatives.
D) Group members cannot always simultaneously understand the alternatives and think up additional alternatives.
64) At the heart of organizational learning is A) devil's advocacy. B) risk-taking. C) satisficing. D) creativity.
D) creativity.
In managerial decision making, the ability of a manager to discover novel ideas that lead to alternative courses of action for the organization to use for solving a particular problem is known as A) groupthink. B) satisficing. C) innovation., D) creativity.
D) creativity.
When fire chiefs manage firefighters battling hazardous, out-of-control fires, they frequently have to depend on their professional instincts to make on-the-spot decisions that will protect the lives of the firefighters, save the lives of others control the fires and preserve property—decisions made in emergency situations involving high ambiguity and rapidly changing conditions. This is an example of which of the following types of decision making? A) programmed B) routine C) groupthink D) intuition
D) intuition
When an issue is controversial and when different managers might be expected to champion different courses of action, which of the following is the preferred technique for encouraging creativity? A) production blocking technique B) brainstorming technique C) team learning technique D) nominal group technique
D) nominal group technique
Fyodor, a manager of the research and development team of an organization, challenges his subordinates to "think outside the box" to improve the way the unit does its work. Fyodor is focusing on ________. A) personal mastery B) mental models C) team learning D) shared vision,
B) mental models
An organization that has been focusing on a target market located in the eastern part of the United States is attempting to decide whether to expand its sales to the West Coast of the United States. Which of the following types of decisions is being made by the organization? A) intuition B) nonprogrammed C) groupthink D) satisficing
B) nonprogrammed
The classical model of decision making assumes that A) the number of alternatives is so great that a manager could never come close to evaluating them all. B) managers have little information to use in making a decision. C) managers have access to all the information they need to make the optimum decision. D) managers have neither the time nor the money to search for all possible alternative solutions.
C) managers have access to all the information they need to make the optimum decision.
Which step of the decision-making process requires managers to be sure all the information available is brought to bear on the problem or issue at hand while ranking the alternatives? A) assess alternatives B) choose among alternatives C) recognize the need for a decision D) generate alternatives
C) recognize the need for a decision
Li, a production manager, was engaged in the development of a core component of a machine. Li realized that the component would not be ready for QC testing as per the fixed deadline and suggested allotting two more weeks for its complete development or sending only a part of it for testing in the first cycle. Which two decision-making steps does this represent? A) choose among alternatives and assess alternatives B) generate alternatives and choose among alternatives C) recognize the need for a decision and generate alternatives D) recognize the need for a decision and choose among alternatives
C) recognize the need for a decision and generate alternatives
When managers know the possible outcomes of a decision and can assign probabilities to each of these outcomes in terms of their likelihood of occurrence in the future, this is known as A) uncertainty. B) certainty. C) risk. D) bounded rationality.
C) risk.
Instead of calling a hundred possible windshield suppliers, the purchasing manager for Telsa Motor Co. decides to call three suppliers of automobile windshields for a bid on an order for 1,000 windshields for a new car. What type of decision does this represent? A) nonprogrammed B) illusion of control C) satisficing D) programmed
C) satisficing
Jack, a manager, wants to promote creativity in his company. To do this, which of the following actions would he take? A) allow a subordinate to proceed on a work project even though he does not agree with how the subordinate wants to do the work B) keep a close eye on a subordinate to make sure he or she is working steadily and efficiently to find a solution to a problem C) set a strict deadline on a subordinate, thereby using this pressure to motivate the subordinate to think of novel solutions to a problem D) inform a subordinate not to think of outlandish ideas to solve a problem, but rather think of ideas that seem practical
A) allow a subordinate to proceed on a work project even though he does not agree with how the subordinate wants to do the work
The explosion of the space shuttle Challenger is an example of poor managerial decision making by the managers at NASA and Morton Thiokol, who considered and then downplayed the criterion of A) ethicalness. B) practicality. C) legality. D) economic feasibility.
A) ethicalness.
To counteract groupthink on a merchandising team, a manager decides to brings in two A) female co-workers because five of the nine current members are women. B) co-workers of Mexican descent because none of the current members have a Latino background. C) co-workers who agree with the ideas of most of the current members. D) male co-workers who agree with the ideas of four current female members in order to create a majority.
B) co-workers of Mexican descent because none of the current members have a Latino background.
A group of managers meets face-to-face and generates and debates a wide variety of alternatives from which to make a decision. What is this process of decision making called? A) Delphi technique B) dialectical inquiry C) brainstorming D) nominal group technique
C) brainstorming
A manager who takes "ownership" of a project and provides the leadership and vision that takes a commodity from the idea stage to the final customer is a product A) innovator. B) advocate. C) champion. D) satisficer.
C) champion.
To use a programmed decision in dealing with occasional company overspending, a manager would A) have a brainstorming session to gather possible solutions to the overspending. B) listen to the opinions of various employees about why the company overspends. C) conduct an analysis to determine the possible causes for overspending. D) devise procedures to take depending on the amount of overspending in a month.
C) conduct an analysis to determine the possible causes for overspending.
The marketing managers of Compliant, Ltd., strive so hard to agree on an important decision to launch a product that they ignore information that a similar product already exists in the market and that the barriers to entry into the market are high. This refers to which of the following decision-making processes? A) dialectical inquiry B) devil's advocacy C) groupthink D) intuition
C) groupthink
The main reason for the loss of productivity in brainstorming is A) complex mental models. B) groupthink. C) production blocking. D) bounded rationality.
C) production blocking.
Discuss the assumptions that underlie the classical model of decision-making.
The assumptions that underlie the classical model of decision making are that managers can generate a complete list of all alternatives and their consequences. They have access to all the information they need to make the optimum decision and they can easily list their own preferences for each alternative and rank them from least to most preferred to make the optimum decision.
When a member of a group challenges the decision that is being made by the group in an attempt to make the group carefully consider the pros and cons of a particular alternative, this member is playing the role of the devil's advocate. True or False
true
While assessing the practicality of alternatives, managers must decide whether they have the capabilities and resources required to implement the alternative, and they must be sure that the alternative will not threaten the attainment of other organizational goals. True or False
true
Why is group decision making considered beneficial? A) It takes less time than individual decision-making. B) It is easy to get two or more managers to agree to the same solution. C) It allows more information processing and correction of errors. D) It cannot be undermined by biases.
C) It allows more information processing and correction of errors.
What can managers do to promote individual creativity?
Managers can promote individual creativity in the following ways: Give employees the opportunity to experiment and take risks. Not penalize employees for giving ideas. Give employees the freedom to ask questions and seek answers. Give constructive feedback and motivation to employees. Give recognition and rewards to employees.
Bountiful, Ltd., is trying to decide whether or not to launch a new product nationally. This represents a(n) ________________ decision. A) programmed B) intuitive C) groupthink D) nonprogrammed
D) nonprogrammed
Define groupthink. Explain a technique that counteracts groupthink.
Groupthink is a pattern of faulty and biased decision making that occurs in groups whose members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision. The existence of groupthink raises the question of how to improve the quality of group and individual decision making so managers make decisions that are realistic and are based on thorough evaluation of alternatives. One technique known to counteract groupthink is devil's advocacy. Devil's advocacy is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented. The devil's advocate critiques and challenges the way the group evaluated alternatives and chose one over the others. The purpose of devil's advocacy is to identify all the reasons that might make the preferred alternative unacceptable. In this way, decision makers can be made aware of the possible perils of recommended courses of action. Devil's advocacy can thus help counter the effects of groupthink.
Describe why the stage of learning from feedback is considered very important for managers in an organization. List the benefits of this step in the decision-making process.
Learning from feedback is the final step in the decision-making process of an organization. Effective managers always conduct a retrospective analysis to see what they can learn from past successes or failures. Managers who do not evaluate the results of their decisions do not learn from experience. Instead, they stagnate and are likely to make the same mistakes again and again. To avoid this problem, managers must establish a formal procedure with which they can learn from the results of past decisions. Managers who always strive to learn from past mistakes and successes are likely to continuously improve the decisions they make. A significant amount of learning can take place when the outcomes of decisions are evaluated, and this assessment can produce enormous benefits. Learning from feedback is particularly important for entrepreneurs who start their own businesses.
You are a manager who works with managers employed in different cities. All of you are working on developing the same new product. These managers encounter problems to the ones you face. Even so, you are unable to meet face-to-face with them for any discussion. Explain two ways you can solve this problem.
Videoconferencing is one way to bring distant managers together to brainstorm. I could set up a meeting in which the managers and I would interact via video, thereby allowing for the sharing of ideas, problems, and possible solutions. Also, I could use the Delphi technique, which is a written approach to creative problem solving. As the group leader, I would write a statement of the problem and a series of questions to which participating managers are to respond. After this, I would send the questionnaire to the managers, asking them to generate solutions and mail the questionnaire back to me. Once I receive the questionnaires, I would record and summarize the responses. I would then send the results back to the participants, with additional questions to be answered before a decision can be made. The process would be repeated until a consensus was reached and the most suitable course of action was apparent.
A group of intrapreneurs who are separated from the normal operation of an organization in order to develop new products with a relatively brief development time is known as a(n) A) product champion. B) innovator. C) skunkworks. D) satisficer.
C) skunkworks.
In the decision-making process, to compare what actually happened to what was expected to happen as a result of the decision is a procedure of choosing among alternatives. True or False
false
Rationalization is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented. True or False
false
You are a manager assessing possible alternatives for the solution of a problem. To do this, you have to determine the net financial payoff of each alternative. Which of the following criteria of decision making do you have to implement to accomplish this? A) economic feasibility B) practicality C) ethicalness D) legality,
A) economic feasibility
Managers can increase their ability to make nonprogrammed decisions that will allow them to adapt to, modify, and even drastically alter their task environments so that they can continually increase organizational performance through organizational A) learning. B) satisficing. C) group thinking. D) diversity.
A) learning.
To create a learning organization, managers must empower employees and allow them to experiment, create, and explore what they want through developing a sense of A) personal mastery. B) mental models. C) team learning. D) shared vision.
A) personal mastery.
Anja is taking part in a brainstorming group that is supposed to think of new storylines for films for a major studio. The studio wants creative stories that are different from previously produced films, but also marketable. However, Anja soon notices that members in the group tend to rely on old storylines, especially about superheroes, that seem like "safe" bets at the box office. Additionally, when one of them proposes an idea, the others almost invariably go along with it. What should Anja do in order to effectively counteract this dynamic? A) point out that many superhero films have recently failed at the box office and that audiences are looking for alternative stories that are not similar to video games B) suggest that the group include more woman and more people from different ethnic backgrounds to get different perspectives on storylines C) agree that superhero films are a great idea and suggesting superheroes that have not been portrayed in mainstream media for at least several years D) get two of the members to agree with her idea of developing a movie that combines the musical genre with the superhero genre
A) point out that many superhero films have recently failed at the box office and that audiences are looking for alternative stories that are not similar to video games
Briana, a manager, is attempting to determine whether she has both the capability and the resources to produce one of several possible new products. In the context of decision making, on which of the following criteria of alternative courses of action is Briana focusing? A) practicality B) ethicalness C) legality D) economic feasibility,
A) practicality
The manager of a charity asks the board of directors for permission to hire temporary help when the regular secretary goes on vacation. This is an example of which type of decision? A) programmed B) groupthink C) nonprogrammed D) intuition
A) programmed
Cecilia is the manager for a fragrance company that is considering starting a line of organic perfumes. Her employees have mixed feelings about this idea. Some criticize it as being impractical,but others are enthusiastic about it, despite the costs involved in producing perfumes with organic ingredients.Which of the following actions should Cecilia take to efficiently and effectively ensure that the company's organic perfume line reaches the end consumer? A) recognize that one employee is the staunchest advocate for organic perfume and encourage her to take charge of the project B) form a group of employees to come up with ideas to implement the product and constantly check in with them to monitor their progress C) cut bonuses for employees who think of good ideas for implementing organic perfume and spend the money on advertising their ideas D) tell employees who support the idea of organic perfume that they should start their own company if the idea is rejected
A) recognize that one employee is the staunchest advocate for organic perfume and encourage her to take charge of the project
Managers in the field of biotechnology know that new drugs have a 10 percent chance of passing advanced clinical trials and always assign probabilities to the results of clinical trials. This is an example of A) risk. B) uncertainty. C) bounded rationality. D) incomplete information.
A) risk.
If you want to develop a skunkworks, which of the following actions would you take? A) separate a group from the normal operations of an organization B) combine people from various departments to form a group C) take "ownership" of a project and form a group that supports your ownership D) have people who have similar ideas about an organization into a group,
A) separate a group from the normal operations of an organization
69) The idea that one level of learning affects other levels is part of the _________ principle of creating a learning organization. A) systems thinking B) mental models C) team learning D) shared vision
A) systems thinking
Mila is a manager involved in group decision making with other managers. She wants to make sure that the group avoids groupthink. Which of the following actions should she take to ensure that the group makes the best possible decision? A) encourage the group to agree with one of the alternatives to support esprit de corps and to facilitate a quick resolution B) challenge the way the group evaluates alternatives and points out some reasons why the alternative preferred by the group is not acceptable C) make sure the group has a healthy mix of women and men and that various ethnic backgrounds are represented D) staunchly support one of the alternatives, providing detailed data to back her position
B) challenge the way the group evaluates alternatives and points out some reasons why the alternative preferred by the group is not acceptable
Francisco is considering opening a theater in a mid-size city. However, before he does this, he wants to lower the risk of such an endeavor. Many theaters have opened before but have failed because of financial difficulties. Francisco has some experience as an actor and as a stage manager, but this will be his first real foray into the business side of things. To best increase his chances of achieving his goal, Francisco should A) plan the slate of theater productions for the first year based on his gut feeling of what will be successful in this particular community. B) conduct a survey to determine local cultural tastes, evaluate other cities as options, and search for a central location with a reasonable rent. C) contact well-known actors who he feels certain will be a big draw in his city's theater-going community. D) talk to a friend who works for successful theater in another state and take his advice on what shows to choose and how much to charge.,
B) conduct a survey to determine local cultural tastes, evaluate other cities as options, and search for a central location with a reasonable rent.
Kareem is the new owner of a major league baseball team. Over the last several years, the team has consistently had a losing record and, as a result, attendance is slumping. Kareem is currently evaluating potential solutions, including revamping the affiliated minor league team, moving the team to a new city, and hiring all new coaching staff. Kareem's next step is to A) evaluate the effect that revamping the minor league team has on the major league team. B) decide that revamping the minor league team is better than moving the team to a new city or hiring new coaches. C) revamp the affiliated minor league team by firing most of the managers, coaches, and scouts. D) determine whether there is anything he can do to positively impact the team's losing record.
B) decide that revamping the minor league team is better than moving the team to a new city or hiring new coaches.
A critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented, with the purpose of identifying all the reasons that might make the preferred alternative unacceptable, is A) dialectical inquiry. B) devil's advocacy. C) groupthink. D) the Delphi technique.
B) devil's advocacy.
To enhance the interaction between members of a brainstorming group, a manager should A) allow members to present ideas without being criticized. B) encourage members to "piggyback." C) refuse to let members debate the ideas presented. D) present to members an outline about the problem being faced.
B) encourage members to "piggyback."
LMN, Inc., has received a poor rating for one of its newly launched products from the customers. Joseph, a top manager at LMN, Inc., wants to find out why this product performed poorly. To accomplish this, which of the following decision-making steps does Joseph have to implement? A) generate alternatives B) learn from feedback C) recognize the need for a decision D) implement the chosen alternative
B) learn from feedback
With reference to the steps of decision-making process, which of the following is the last step in the managerial decision-making process? A) generate alternatives B) learn from feedback C) recognize the need for a decision D) implement the chosen alternative
B) learn from feedback
Star, Inc., is attempting to decide whether or not it should change its manufacturing process to a new type of technology. This represents a(n) ________ decision. A) programmed B) nonprogrammed C) groupthink D) intuitive
B) nonprogrammed
The most appropriate decision in light of what managers believe to be the most desirable consequences for the organization is called the ______ decision. A) tactical B) optimum C) rational D) operational
B) optimum
Stojan, a plant manager, wants to initiate a diversity training program in his plant. He is considering whether his department has enough extra people to cover for the time his employees will be engaged in the classes. Which of the following criteria of decision making is Stojan implementing? A) legality B) practicality C) devil's advocacy D) economic feasibility
B) practicality
You are a manager assessing possible alternatives for the solution of a quality problem in his department. As part of this process, you want to determine if a possible alternative will threaten other company projects. To accomplish this, which of the following criteria of decision-making will you implement? A) economic feasibility B) practicality C) legality D) ethicalness
B) practicality
The classical model of decision making specifies how decisions should be made by managers this is a way of saying that this model of decision making is A) heuristic. B) prescriptive. C) incomplete. D) intuitive.
B) prescriptive.
Nikola, the accountant for a small firm, always pays the real estate taxes seven days before they are due. This represents which type of decision? A) satisficing B) programmed C) intuition D) nonprogrammed
B) programmed
After one person shares an idea, the next thing that should happen in a brainstorming session is A) criticism of the idea. B) sharing of other ideas. C) acceptance and implementation of the idea. D) ranking of the idea.
B) sharing of other ideas.
A software firm is considering introducing a new product on the market. However, managers cannot estimate the probability of success for the new product. Which of the following best describes the situation? A) risk B) uncertainty C) bounded rationality D) incomplete information
B) uncertainty
An organization's finance department decides to go to the company's usual bank and take out a loan whenever the company's revenues for the month are projected to be less than its expenses. What type of decision does this represent? A) optimum B) satisficing C) programmed D) risk
C) programmed
To access the ethicalness of an alternative for a restaurant, the manager would A) decide if the cost of advertising on both TV and radio is affordable. B) decide if serving alcoholic beverages would be legal in a city. C) determine if the lower-priced beef source used inhumane methods to slaughter the livestock. D) determine if profits are high enough to open an additional restaurant location in another city.
C) determine if the lower-priced beef source used inhumane methods to slaughter the livestock.
Ayaru, a marketing manager, wants to budget the advertising for a new product launch. She is trying to determine the amount of money that her company can afford to spend on advertising this new product. In the context of decision-making, which of the following criteria of alternative courses of action is Ayaru implementing? A) legality B) ethicalness C) economic feasibility D) practicality
C) economic feasibility
Esteban, a manager, performs a financial analysis of several investment alternatives in order to determine which alternative is most likely to impact the organization's profitability. Esteban is focusing on A) bounded rationality. B) ethicalness. C) economic feasibility. D) dialectical inquiry.
C) economic feasibility.
You are a manager in an organization that needs to advertise a product. To do this, you decide to use satisficing. Considering this, which of the following actions would you take? A) review all the advertising media available in the area B) consider every advertising technique that can be used for your product C) select three advertising agencies to pitch a proposal D) ask all the advertising agencies in the area to make a pitch
C) select three advertising agencies to pitch a proposal
A human resource manager for a large company wants to hire people who show strong potential to become intrapreneurs. Considering this, the manager would most likely hire the applicant who A) achieved success with a project in his previous job, but downplays his contribution to the project. B) achieved success with a safe project in her previous job and opposed riskier projects. C) took responsibility for the failure of a project in his previous job and is confident he will correct his mistakes. D) took responsibility for the successes in her previous job, but blamed others for the failures.,
C) took responsibility for the failure of a project in his previous job and is confident he will correct his mistakes.
When managers decide that they have the capabilities and resources required to implement an alternative, and they are sure that the alternative will not threaten the attainment of other organizational goals, they are focusing on which of the following criteria of alternative courses of action? A) legality B) ethicalness C) economic feasibility D) practicality
D) practicality
In a meeting, after hearing a member describe a problem to be addressed, all other members of the group first wrote down ideas and solutions. After this, everyone shared those suggestions without criticism. The group, one by one, clarified, critiqued, and then discussed the alternatives in the sequence in which they were first proposed. Finally, each member ranked all the alternatives, and the highest-ranking alternative was chosen. Which of the following decision-making techniques did the group implement? A) Delphi technique B) dialectical inquiry C) brainstorming D) nominal group technique
D) nominal group technique
Nonroutine decisions made in response to novel situations in business are known as ________ decisions. A) devil's advocacy B) ambiguous C) groupthink D) nonprogrammed
D) nonprogrammed
Fatima is the manager of the tennis division of a large sporting goods company. An employee named Anika shows great promise but seems to lack the confidence to share her creative ideas. Based on what you know about promoting creativity, which of the following actions should Fatima take? A) share Anika's idea for a square-shaped tennis racquet with the company's CEO, even though the idea might not be practical B) share Anika's idea for a square-shaped tennis racquet in a group session, in which members are encouraged to criticize the idea C) point out to Anika the drawbacks of her idea for a square-shaped tennis racquet and supervise her more closely as she thinks of other ideas D) praise Anika for her square-shaped tennis racquet idea and allow her to think of more ideas without any hands-on supervision
D) praise Anika for her square-shaped tennis racquet idea and allow her to think of more ideas without any hands-on supervision
Manuel, a plant foreman, hires an additional worker whenever overtime hours for the previous month increase by more than 25 percent. This is an example of which type of decision? A) intuition B) groupthink C) satisficing D) programmed
D) programmed
Regina, a manager, orders raw materials when the raw materials inventory reaches a certain point. This is an example of which type of decision? A) intuition B) satisficing C) nonprogrammed D) programmed
D) programmed
Based on the work of March and Simon's administrative model of decision making, the first step in the managerial decision-making process is to A) choose among alternatives. B) assess alternatives. C) implement the chosen alternative. D) recognize the need for a decision.
D) recognize the need for a decision.
A manager considers a limited sample of the potential alternative solutions for a problem and selects one that is acceptable instead of attempting to select the optimum solution. This type of decision is called A) programmed. B) intuition. C) certainty. D) satisficing.
D) satisficing.
When managers cannot assign probabilities of future occurrence to possible alternatives with a decision, this is known as A) certainty. B) risk. C) bounded rationality. D) uncertainty.
D) uncertainty.
What is intuition? Give an example to support your definition. Should managers use intuition in decision making? Why or why not?
Intuition is the set of feelings, beliefs, and hunches that come readily to mind, require little effort and information gathering, and result in on-the-spot decisions. Sometimes managers have to make rapid decisions and do not have time to carefully consider the issues involved. They must rely on their intuition to quickly respond to a pressing concern. For example, when fire chiefs, captains, and lieutenants manage firefighters battling dangerous, out-of-control fires, they often need to rely on their expert intuition to make on-the-spot decisions that will protect the lives of the firefighters, save the lives of others, contain the fires, and preserve property—decisions made in emergency situations entailing high uncertainty, high risk, and rapidly changing conditions. In other cases, managers do have time to make reasoned judgments, but there are no established rules to guide their decisions. Regardless of the circumstances, making nonprogrammed decisions can result in effective or ineffective decision making.
In assessing alternatives, explain the four criteria to evaluate the pros and cons of alternative courses of action.
Once managers have generated a set of alternatives, they must evaluate the advantages and disadvantages of each one. The key to a good assessment of the alternatives is to define the opportunity or threat exactly and then specify the criteria that should influence the selection of alternatives for responding to the problem or opportunity. One reason for bad decisions is that managers often fail to specify the criteria that are important in reaching a decision. Successful managers use four criteria to evaluate the pros and cons of alternative courses of action: Legality: Managers must ensure that a possible course of action will not violate any domestic or international laws or government regulations. For example, if a credit card company wants to implement new debt-collection practices and late-fee charges, it must make sure that in doing so it does not violate any laws or government regulations. Ethicalness: Managers must ensure that a possible course of action is ethical and will not unnecessarily harm any stakeholder group. Many decisions managers make may help some organizational stakeholders and harm others. When examining alternative courses of action, managers need to be clear about the potential effects of their decisions. For example, before staring the production of a new product, a company should examine the environmental footprint it would leave behind if this product were produced. The company must make sure it does not cause permanent ecological damage and threaten the health and safety of people living in an area. Economic feasibility: Managers must decide whether the alternatives are economically feasible, that is, whether they can be accomplished, given the organization's performance goals. Typically managers perform a cost-benefit analysis of the various alternatives to determine which one will have the best net financial payoff. For example, if a company wants to expand by opening 100 new restaurants, it must make sure that the cost of opening these restaurants does not exceed the money obtained from them. Practicality: Managers must decide whether they have the capabilities and resources required to implement the alternative, and they must be sure the alternative will not threaten the attainment of other organizational goals. At first glance, an alternative might seem economically superior to other alternatives, but if managers realize it is likely to threaten other important projects, they might decide it is not practical after all. For example, if a company is considering opening an online store, it must make sure that doing this will threaten its brick-and-mortar stores.
Peter Senge has identified five principles that can be used by an organization to create "a learning organization." Discuss any three of these principles.
Peter Senge's five principles for creating a learning organization are personal mastery, complex mental models, team learning, building a shared vision, and systems thinking. Students can discuss any three of the following principles. For organizational learning to occur, top managers must allow every person in the organization to develop a sense of personal mastery. Managers must empower employees and allow them to experiment and create and explore what they want. As part of attaining personal mastery, organizations need to encourage employees to develop and use complex mental models that are sophisticated ways of thinking that challenge them to find new or better ways of performing a task to deepen their understanding of what is involved in a particular activity. Managers must do everything they can to promote group creativity. Team learning (learning that takes place in a group or team) is more important than individual learning in increasing organizational learning. Managers must emphasize the importance of building a shared vision: a common mental model that all organizational members use to frame problems or opportunities. Managers must encourage systems thinking—the effects of one level of learning on another.
Compare and contrast programmed and nonprogrammed decision-making in organizations. Give an example of each.
Programmed decision-making is routine and automatic. It arises in situations that an organization has faced many times before and for which it can develop rules and guidelines to be applied. For example, setting up procedures on how to order office supplies is a programmed decision. Nonprogrammed decision making is nonroutine. It arises in situations that are new ambiguous, and/or complex. No ready-made decision rules have been set down. The likelihood of error is much greater in nonprogrammed decision making than in programmed decision making. For example, deciding which areas of the United States are best for opening a new chain-restaurant is a non-programmed decision.
Identify the advantages and disadvantages of group decision making.
The advantages of group decision making include It is less likely to be biased and make judgment errors. It can draw on the combined knowledge and skills of all group members. It can process more information. It allows members to correct one another's errors. It increases the probability of successful implementation. The disadvantages of group decision making include It generally takes longer. In group decision making, gaining agreement may be difficult. It can be undermined by biases. A major source of group bias is groupthink.
Explain the different ways by which organizations can promote intrapreneurship.
The intensity of competition today, particularly from agile, small companies, has made it increasingly important for large, established organizations to promote and encourage intrapreneurship to raise their level of creativity and organizational learning. The higher the level of intrapreneurship, the higher will be the level of learning and innovation. Organizations can promote intrapreneurship in many ways. Product champions: One way to promote intrapreneurship is to encourage individuals to assume the role of product champion, a manager who takes "ownership" of a project and provides the leadership and vision that take a product from the idea stage to the final customer. For instance, a breakfast cereal company could encourage a manager to take ownership of a new organic cereal and thereby guide the development of this product from the idea stage to the final customer. Skunkworks: A skunkworks is a group of intrapreneurs who are deliberately separated from the normal operation of an organization. The idea is that if these people are isolated, they will become so intensely involved in a project that development time will be relatively brief and the quality of the final product will be enhanced. For example, a telecommunications company that focuses on producing cell phones could develop a skunkworks group to come up with ideas for a wide variety of products. The skunkworks might think of creating a portable GPS device, a product that the company does not currently produce. Because the skunkworks devotes a lot of time on this product, its development will probably be carefully and fully considered, thereby enhancing its quality and easing its implementation by the company. Rewards for creativity: To encourage managers to bear the uncertainty and risk associated with the hard work of entrepreneurship, it is necessary to link performance to rewards. Organizations must reward intrapreneurs equitably if they wish to prevent them from leaving and becoming outside entrepreneurs who might form a competitive new venture. For example, a company could provide bonuses to intrapreneurs based on their contributions to the organization.
March and Simon developed three important concepts in their administrative model of decision making. Discuss these three concepts.
The three important concepts in this model are bounded rationality, incomplete information, and satisficing decisions. March and Simon believed that managers do not have the mental ability to absorb and evaluate all of the possible relevant information for a complex decision. March and Simon coined the term "bounded rationality" to describe the situation in which the number of alternatives a manager must identify is so great and the amount of information so vast that it is difficult for the manager to even come close to evaluating it all before making a decision. For example, to determine whether to start a new product line, a manager could be swamped with data from various surveys and research reports, opinions of experts and fellow co-workers, and economic indicators from the stock market. As a result, the manager would have difficulty evaluating all this information to make a decision. Information is incomplete because the full range of decision-making alternatives is unknowable in most situations, and the consequences associated with known alternatives are uncertain. Information is incomplete because of risk and uncertainty, ambiguity, and time constraints. For example, a manager might want to find out why a certain product sold below expectations. The data the manager receives could indicate some of the reasons. However, other reasons might not show up in the data. As a result, the action needed to improve the product's performance is uncertain. Satisficing is exploring a limited sample of all potential alternatives. When managers satisfice, they search for and choose acceptable, or satisfactory, ways to respond to problems and opportunities rather than trying to make the optimal decision. For example, the managers of the clothing company might realize that an overhaul of their product is required to significantly increase profits. However, such action is expensive and risky because there is a chance that the overhaul will not have the desired outcome. As a result, the managers choose a safer option, namely changing one type of clothing, such as shirts, which helps with profitability but does not have the significant outcome needed.
There are three important techniques that managers can use to promote creativity in group decision-making situations. Discuss any two of these techniques.
To encourage creativity at the group level, organizations can use group problem-solving techniques that promote creative ideas and innovative solutions. These techniques can also prevent groupthink and help managers uncover biases. The two techniques discussed here are brainstorming and nominal group technique. Brainstorming is a group problem-solving technique in which managers meet face-to-face to generate and debate a wide variety of alternatives from which to make a decision. Generally, from 5 to 15 managers meet in a closed-door session and proceed like this: One manager describes in broad outline the problem the group is to address. Group members share their ideas and generate alternative courses of action. As each alternative is described, group members are not allowed to criticize it. Everyone withholds judgment until all alternatives have been heard. One member of the group records the alternatives on a flip chart. Group members are encouraged to be as innovative and radical as possible. Anything goes and the greater the number of ideas put forth, the better. Moreover, group members are encouraged to build on each other's suggestions. When all alternatives have been generated, group members debate the pros and cons of each and develop a short list of the best alternatives. Nominal group technique is a structured way of generating alternatives in writing and gives each manager more time and opportunity to come up with potential solutions. It is especially useful when an issue is controversial and when different managers might be expected to champion different courses of action. Generally, a small group of managers meets in a closed-door session and adopts the following procedures: One manager outlines the problem to be addressed, and 30 or 40 minutes are allocated for group members, working individually, to write down their ideas and solutions. Group members are encouraged to be innovative. Managers take turns reading their suggestions to the group. One manager writes all the alternatives on a flip chart. No criticism or evaluation of alternatives is allowed until all alternatives have been read. The alternatives are then discussed, one by one, in the sequence in which they were proposed. Group members can ask for clarifying information and critique each alternative to identify its pros and cons. When all alternatives have been discussed, each group member ranks all the alternatives from most preferred to least preferred, and the alternative that receives the highest ranking is chosen.
Managers can use a variety of techniques in group decision-making situations to counteract situations in which the group is suffering from groupthink or cognitive biases.
Two such techniques have been shown to be especially useful in such situations. Discuss these two techniques and give an example of each. The two techniques that have been found to be most useful in groups suffering from groupthink or cognitive biases are devil's advocacy and diversity. Devil's advocacy is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented. Typically one member of the decision-making group plays the role of devil's advocate. The devil's advocate critiques and challenges the way the group evaluated alternatives and chose one over the others. The purpose of devil's advocacy is to identify all the reasons that might make the preferred alternative unacceptable. In this way, decision makers can be made aware of the possible perils of recommended courses of action. For example, a group might come to an easy conclusion that a certain resource should be used to produce a product because it is inexpensive to obtain. However, a devil's advocate in the group could point out that the country producing most of this resource is having political problems that might hamper production. Also, this country uses sweatshop labor that is unethical. Another way to improve group decision making is to promote diversity in decision-making groups. Bringing together managers of both genders from various ethnic, national, and functional backgrounds broadens the range of life experiences and opinions that group members can draw on as they generate, assess, and choose among alternatives. Moreover, diverse groups are sometimes less prone to groupthink because group members already differ from each other and thus are less subject to pressures for uniformity. For example, if a company wants to sell more products to female consumers, they should make sure their decision-making groups have a significant number of women, who can provide insight in choosing various alternatives.
Researchers have identified a six-step model that can be used by managers who are faced with an important decision. Discuss any two of these steps.
Using the work of March and Simon as a basis, researchers have developed a step-by-step model of the decision-making process and the issues and problems that managers confront at each step. (1) recognize the need for a decision (2) generate alternatives (3) assess alternatives (4) choose among alternatives (5) implement the chosen alternative (6) learn from feedback Recognize the need for a decision: Some stimuli usually spark the realization that a decision must be made. These stimuli often become apparent because changes in the organizational environment result in new kinds of opportunities and threats. Generate alternatives: Having recognized the need to make a decision, a manager must generate a set of feasible alternative courses of action to take in response to the opportunity or threat. Management experts cite failure to properly generate and consider different alternatives as one reason why managers sometimes make bad decisions. Assess alternatives: The key to a good assessment of the alternatives is to define the opportunity or threat exactly and then specify the criteria that should influence the selection of alternatives for responding to the problem or opportunity. In general, successful managers use four criteria to evaluate the pros and cons of alternative courses of action: legality, ethicalness, economic feasibility, and practicality. Choose among the alternatives: Once the set of alternative solutions has been carefully evaluated, the next task is to rank the various alternatives and make a decision. Implement the chosen alternative: Once a decision has been made and an alternative has been selected, it must be implemented, and many subsequent and related decisions must be made. Learning from feedback: Effective managers always conduct a retrospective analysis to see what they can learn from past successes or failures. The procedure should include these steps: Compare what actually happened to what was expected to happen as a result of the decision. Explore why any expectations for the decision were not met. Derive guidelines that will help in future decision making.
