ch 7 ob test

The rational choice paradigm assumes that decision makers have limited information-processing capabilities and engage in a limited search for alternatives.

false According to the bounded rationality view, people process limited and imperfect information and rarely select the best choice. This is inconsistent with the rational choice paradigm view. According to the rational choice paradigm of decision making, people rely on logic to evaluate and choose alternatives. This paradigm assumes that decision makers have well-articulated and agreed-on organizational goals, efficiently and simultaneously process facts about all alternatives and the consequences of those alternatives, and choose the alternative with the highest payoff.

Decision makers typically look at alternatives sequentially and compare each alternative with an implicit favorite.

true

Employee involvement potentially improves both the decision-making quality and the commitment of employees.

true

Employees are more committed to implementing a solution when they are involved in making the decision.

true

Escalation of commitment is likely to occur when the perceived costs of terminating the project are high or unknown.

true

Intuition allows us to draw on our tacit knowledge to guide our decision preferences.

true

Nonprogrammed decisions require all steps in the decision model because the problems they present are new, complex, or ill-defined.

true

The prospect theory effect motivates us to avoid losses.

true

What is meant by "divine discontent"? A. Decision makers are never satisfied with current conditions, so they more actively search for problems and opportunities. B. It is much easier to discover blind spots in problem identification when listening to how others perceive the situation. C. Employees can minimize problem identification errors by discussing the situation with colleagues and clients. D. Decision makers are more motivated to consider other perspectives of reality. E. Leaders require considerable willpower to resist the temptation of looking decisive.

A. Decision makers are never satisfied with current conditions, so they more actively search for problems and opportunities.

_____ is a conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs. A. Decision making B. Bounded rationality C. Divergent thinking D. Prospect theory E. Scenario planning

A. Decision making

What effect do mental models have on the decision-making process? A. They perpetuate assumptions that make it difficult to see new opportunities. B. They allow decision makers to obtain accurate information from the surroundings. C. They reduce the importance of developing alternative solutions to the problem. D. They allow decision makers to maximize the potential of their decision making. E. They help people to be more creative in decision making.

A. They perpetuate assumptions that make it difficult to see new opportunities.

Dora is an example of a(n) _______________ thinker. A. divergent B. innovative C. procedural D. convergent E. illumination

A. divergent

The Dot Com business boom can be used as an example of A. escalation of commitment. B. rational maximization. C. rational choice thinking. D. confirmation bias. E. impulsive buying.

A. escalation of commitment.

People tend to be more creative when they A. have a reasonable level of job security. B. are secluded from others in the organization. C. are under extreme time pressure. D. have relatively low experience. E. have low openness to experience.

A. have a reasonable level of job security.

Often management is "under the gun" to solve problems and meet deliverables. This can lead to A. solution-focused problem-solving. B. stakeholder framing. C. misguided leadership. D. perceptual defense. E. identifying opportunities.

A. solution-focused problem-solving.

Incubation and verification are two A. stages of the creative process. B. elements of bounded rationality. C. elements of the MARS model. D. stages of team decision making. E. steps in perceptual modeling.

A. stages of the creative process.

After Braided Bread evaluates the selected choice, the next problem will start with A. choosing the best decision process. B. identifying the problem. C. developing possible choices. D. selecting the highest value choice. E. implementing the selected choice.

B. identifying the problem.

The first stage of the creative process is A. divergent thinking. B. preparation. C. experimentation. D. illumination. E. intuition.

B. preparation.

The gap between "what is" and "what ought to be" is also called a A. deviation. B. problem. C. opportunity. D. choice. E. decision.

B. problem.

What do impromptu storytelling, morphological analysis, and artwork have in common? A. They are forms of cross-pollination. B. They increase the risk of bounded rationality. C. They are forms of associative play. D. They significantly weaken the creative process. E. They are used mainly to improve the rational choice process.

C. They are forms of associative play.

Braided Bread has selected a choice and now needs to A. choose the best decision process. B. develop additional possible choices. C. implement the selected choice. D. discover alternative choices. E. evaluate the selected choice.

C. implement the selected choice.

According to the rational choice decision-making process, the first step in solving this problem would be A. choosing the best decision process. B. evaluating the decision inputs. C. researching the problem. D. identifying the problem or opportunity. E. researching and evaluating the decision inputs.

D. identifying the problem or opportunity.

_______ occurs when decision makers choose to continue an existing course of action because it is the less painful option at the time. A. The prospect theory effect B. The sunk costs effect C. The self-justification effect D. The self-enhancement effect E. Satisficing

A. The prospect theory effect

Intuition relies on programmed decision routines that speed up our response to pattern matches or mismatches. These programmed decision routines are referred to as A. action scripts. B. illuminations. C. rational formulae. D. solution-focused problems. E. implicit favorites.

A. action scripts.

Since Braided Bread has identified the problem, their next step is to A. choose the best decision process. B. develop possible choices. C. select the choice with the highest value. D. implement the selected choice. E. evaluate the selected choice.

A. choose the best decision process.

Sue Kim is trying to decide which shoes to order for the next season. She has examined the sales reports and walked the sales floor. She thinks she has a good idea, but she still asks her staff at the next meeting though, just to be sure. She is using which contingency for employee involvement in decision making? A. decision structure B. source of decision knowledge C. decision commitment D. risk of conflict E. cross-pollination

A. decision structure

Which of these is also referred to as participative management? A. employee involvement B. escalation of commitment C. creativity D. implicit favorite E. divergent thinking

A. employee involvement

Prospect theory and closing costs are two reasons why people A. engage in escalation of commitment. B. define problems in terms of preferred solutions. C. make nonprogrammed decisions rather than programmed decisions. D. demonstrate satisficing behaviors. E. encourage employee involvement.

A. engage in escalation of commitment.

Leading business writers emphasize that _____ is one of the most important and challenging tasks in the decision-making process. A. escalation of commitment B. rational maximization C. translating decisions into action D. confirmation bias E. bounded rationality

A. escalation of commitment

Decision makers might succumb to the solution-based problem trap because A. it provides a comforting solution. B. they prefer ambiguity rather than decisiveness. C. it avoids the escalation of commitment problem. D. it avoids problems of bounded rationality. E. it helps in minimizing the biases caused by mental models.

A. it provides a comforting solution.

The rational choice decision-making process selects the choice with the highest utility through the A. rational choice calculator. B. selective expected utility. C. solution-focused calcuator. D. rational expected utility. E. rational selective calculator.

A. rational choice calculator.

With funding from her family, Sarine is currently developing a new line of dolls for her business, which she hopes will take her company to the next level. At first, she encountered some minor problems with the construction of the dolls and spent a fair amount of money engineering a way to enable them to be as she envisioned them to be. Unfortunately, she then found out that there was a patent protecting the way the dolls arms were connected, so she spent more money redesigning the dolls. After an unexpectedly uninterested response from the public in the dolls, she decided that they needed to be marketed differently in order to sell. With this in mind, Sarine allocated more resources to marketing, had the packaging of the dolls redesigned, and created a new set of advertising materials. The cost of manufacturing these dolls has now exceeded the initial proposed cost by four times, but she is determined to make it work. She is embarrassed by how this has gone but continues to put on a brave front. 74. Sarine is most likely making decisions to continue with these dolls at this point because of A. self-justification. B. self-enhancement. C. a decline of commitment. D. prospect theory. E. closing costs.

A. self-justification.

Satisficing refers to A. the tendency to choose an alternative that is good enough rather than the best. B. the feeling employees experience when they are not involved in a decision in which they would have made a valuable contribution. C. a desirable outcome of decision making when several employees participate in the decision process. D. the feeling employees experience when they make the right decision. E. the tendency for decision makers to evaluate alternatives sequentially rather than comparing them all at once.

A. the tendency to choose an alternative that is good enough rather than the best.

Employees should not make the decision alone (without the manager's involvement) when A. their goals and norms conflict with the organization's objectives. B. they lack commitment to decisions made by the boss alone. C. they possess more knowledge than the manager. D. the employees are likely to disagree with each other regarding the preferred solution. E. the problem calls for a nonprogrammed decision.

A. their goals and norms conflict with the organization's objectives.

Which of the following is the lowest level of employee involvement? A. Consult with individuals. B. Ask employees for specific information. C. Describe the problem to employees and ask for information. D. Create a team to make the decision. E. Create a team to make recommendations.

B. Ask employees for specific information.

_____ is valuable throughout the decision-making process. A. Incubation B. Creativity C. Verification D. Preparation E. Illumination

B. Creativity

________ shape(s) how we evaluate information, not just which choice we select. A. Decisions B. Emotions C. Values D. Cognitive dissonance E. Design thinking

B. Emotions

Which of the following is true at the highest level of employee involvement? A. Participation involves asking employees for information. B. The entire decision-making process is handed over to employees. C. Specific employees provide information to the management, and management makes the recommendations. D. Employees tend to disagree with each other regarding the preferred solution. E. Employees are told about the problem and they provide recommendations to the decision maker.

B. The entire decision-making process is handed over to employees.

________ can be defined as the view that people should and typically do use logic and all available information to choose the alternative with the highest value. A. Subjective expected utility maximization B. The rational choice decision-making process C. Bounded rationality D. Decision making E. Intuition

B. The rational choice decision-making process

The workplace supports _____ when reasonable mistakes are tolerated and expected as part of the discovery process. A. a creative process B. a learning orientation C. associative play D. cross-pollination E. design thinking

B. a learning orientation

The main reason why decision makers compare alternatives against an implicit favorite is the hard-wired human need to minimize A. confirmation bias. B. cognitive dissonance. C. implicit favorite. D. decision heuristics. E. anchoring.

B. cognitive dissonance.

Which of the following refers to calculating the conventionally accepted "right answer" to a logical problem? A. divergent thinking B. convergent thinking C. logical validity D. escalation of commitment E. confirmation bias

B. convergent thinking

The concept of bounded rationality holds that A. our perception of a rational reality is bounded by nonrationality. B. decision makers process limited and imperfect information and therefore rarely select the best choice. C. decision makers have limited alternatives to make decisions. D. decision makers are bound to project images of themselves as rational thinkers. E. our realities are bounded by our own perceptions so that everyone's reality is different.

B. decision makers process limited and imperfect information and therefore rarely select the best choice.

Which of the following ultimately energizes us to select the preferred choice? A. logic B. emotions C. rational logic D. creativity E. intuition

B. emotions

George is a manager for InnoBLAST Inc., a web-based applications company. In an attempt to promote new ideas, George decides to allow his engineering team to devote 15 percent of their work time to whatever projects they would like to work on and reduces their assigned workload. He then institutes a 30-minute period each morning where the team members are asked to look over their current project list for the day and develop more knowledge about a task before they move on to work on their assigned tasks. 80. George is attempting to promote A. employee relations. B. employee creativity. C. employee work/life balance. D. a learning-oriented culture. E. task orientation.

B. employee creativity.

Decision makers tend to rely on their implicit favorite when they A. select an appropriate decision style. B. evaluate decision alternatives sequentially. C. want to avoid escalation of commitment. D. want to make more creative decisions. E. have to make a selection from very limited alternatives.

B. evaluate decision alternatives sequentially.

Once Alvin makes the choice and contracts with the vendor, he will still need to A. implement the best decision process. B. evaluate the selected choice. C. develop possible choices. D. research the problem. E. seek out additional vendors.

B. evaluate the selected choice.

The representativeness heuristic refers to the tendency A. to choose an alternative that is good enough rather than the best. B. for people to influence an initial anchor point. C. to evaluate probabilities of an event or an object by how closely it resembles another event or object. D. to estimate the probability of something occurring by how easily we can recall those events. E. for decision makers to evaluate alternatives sequentially rather than comparing them all at once.

C. to evaluate probabilities of an event or an object by how closely it resembles another event or object.

You have just received seed money for a new e-commerce business and you want to hire a dozen people with a high level of creative potential. To hire the most creative people, you would select applicants who have A. no experience in this industry, high analytic intelligence, and relatively low need for achievement. B. high degree of nonconformity, high value for self-direction, and relatively low need for affiliation. C. strong mental models regarding their field of knowledge, high synthetic intelligence, and relatively high need for social approval. D. high need for affiliation, high need for achievement, and high need for social approval. E. low openness to experience, high need for social approval, and relatively low need for affiliation.

B. high degree of nonconformity, high value for self-direction, and relatively low need for affiliation.

In the creative process, which of the following refers to a "fringe" awareness? A. incubation B. illumination C. preparation D. verification E. convergent thinking

B. illumination

When someone says, "The lightbulb just went on," they are in the _____ stage. A. incubation B. illumination C. preparation D. verification E. convergent thinking

B. illumination

The Director of Nursing is looking throughout the hospital for a new format of a work schedule for nurses. She evaluates each schedule system as soon as she learns about it. Eventually, she finds a schedule that is "good enough" for her needs and ends her search even though there may be better schedules available that she hasn't yet learned about. The Director of Nursing is engaging in A. escalation of commitment. B. satisficing. C. perceptual defense. D. post-decisional justification. E. open rationalization.

B. satisficing.

Numerous studies on participative decision making, task conflict, and team dynamics have found that involvement A. brings out less diverse perspectives. B. tests ideas. C. provides worst alternatives. D. provides less valuable knowledge. E. brings out weakened employee commitment.

B. tests ideas.

Escalation of commitment can be minimized by ensuring that A. there are ready-made alternatives to resolve the problem. B. those who make the decision are different from those who implement and evaluate it. C. the team leader has strong opinions about the preferred options for a problem. D. organizational goals are relatively ambiguous. E. negative information is screened out to protect the self-esteem of the decision makers.

B. those who make the decision are different from those who implement and evaluate it.

Which of the following is one of the assumptions of the rational decision-making process? A. Decision makers evaluate alternatives against an implicit favorite. B. Decision makers choose the alternative that is good enough. C. Decision makers have well-articulated goals. D. Decision makers evaluate alternatives sequentially. E. Decision makers process perceptually distorted information.

C. Decision makers have well-articulated goals.

Who constructed the four-stage creative process model? A. Abraham Maslow B. Hermann von Helmholtz C. Graham Wallas D. Frederick Taylor E. Adam Smith

C. Graham Wallas

Which of the following statements is true about scenario planning? A. It is unwittingly selective in the acquisition and use of evidence. B. It is the process of planning a solution based on employee preferences. C. It is a disciplined method for imagining possible futures. D. It is an act of reframing the problem in a unique way and generating different approaches to the issue. E. It is the act of calculating the conventionally accepted right answer to a logical problem.

C. It is a disciplined method for imagining possible futures.

George decides to do a _____ before encouraging the team to develop their own ideas. A. task orientation B. groupthink C. learning orientation D. cross-pollination E. human rule test

C. learning orientation

A nonprogrammed decision is applicable in any A. routine situation where the company has a ready-made solution. B. decision that does not relate directly to the employee's job description. C. nonroutine situation in which employees must search for alternative solutions. D. decision that is clearly within the employee's job description. E. decision that affects the employee's performance.

C. nonroutine situation in which employees must search for alternative solutions.

Alvin, the production manager at the Paragon Company, wants to select the best supplier of raw materials from among several vendors. He has several choices and has done research into which company provides the best services and products. One company is known to be extremely timely, another is much lower in price but often late in deliveries, and the third is well-known to provide the highest quality products available. 77. According to the rational decision-making process, Alvin should select the vendor that offers the most A. discounts. B. deliveries. C. satisfaction. D. expectancy. E. quality.

C. satisfaction.

After a problem has been identified and possible choices have been identified, the next step is to A. choose the best decision process. B. discover possible choices. C. select the choice with the highest value. D. implement the selected choice. E. evaluate the selected choice.

C. select the choice with the highest value.

When a business must decide between completing a project that is over budget and past due versus starting over, they are evaluating the A. bounded rationality. B. intuition. C. sunk costs effect. D. self-justification effect. E. prospect theory effect.

C. sunk costs effect.

A marketing specialist needed to find a new way of marketing the company's main product to its potential clients. While watching a movie one evening, the marketing specialist saw a scene that gave her inspiration for a new marketing plan. According to the creative process model, which of the following is the next stage in the creative process after such inspiration? A. preparation B. incubation C. verification D. illumination E. morphological analysis

C. verification

What could Sarine have done differently in order to avoid this escalation of commitment with her decisions? A. Ensure that the people who evaluate the decisions are the people who originally made them. B. Privately establish a preset level at which the decision is abandoned or reevaluated. C. Find a source of systematic and clear marketing. D. Involve several people in the evaluation of the decision. E.Obtain funding from other sources instead of her family.

D. Involve several people in the evaluation of the decision.

Perceptual defense causes us to A. defend the solutions we propose. B. defend those who agree with us when we identify a problem. C. defend the perception we have after making a decision. D. block out bad news or information that threatens our self-concept. E. justify our actions to defend our position.

D. block out bad news or information that threatens our self-concept.

After choosing among several computer server systems, the Director of Information Systems feels very positive about the final choice. However, some of this optimism is due to the fact that the Director forgot about few of the limitations of the chosen system and unconsciously downplayed the importance of the positive features of the rejected systems. The Director of Information Systems is engaging in A. escalation of commitment. B. rational maximization. C. rational choice thinking. D. confirmation bias. E. impulsive buying.

D. confirmation bias.

Dora and Keith are managers at ABC Corporation. Keith is having problems in his department with a lack of innovation. In response, he consults the corporate procedures manual and speaks with his boss about the right way to solve the problem. Dora is also having a similar problem in her own department but decides to confront it by hosting team luncheons where she can learn new perspectives and discuss new "outside the box" ways to deal with the problem. 83. Keith is an example of a(n) ________________ thinker. A. divergent B. innovative C. procedural D. convergent E. illumination

D. convergent

Which of the following is assisted by incubation in the creative process? A. escalation of commitment B. prospect theory effect C. convergent thinking D. divergent thinking E. decision choice

D. divergent thinking

Which of these is the final step in the rational choice decision making process? A. developing a list of solutions B. implementing the selected alternative C. choosing the best alternative D. evaluating decision outcomes E. recognizing the opportunities

D. evaluating decision outcomes

Selene and Rita are both engineers at a highly innovative technology company. They are both very creative people. Selene has 15 years of engineering background, a high need for achievement, and strong task motivation, whereas Rita prides herself on her high openness to experience, strong self-direction, and ability to evaluate the potential usefulness of ideas. 85. According to the characteristics of creative people, which areas are Selene's strongest? A. independent imagination and experience B. persistence and practical intelligence C. cognitive and practical intelligence D. experience and persistence E. experience only

D. experience and persistence

If Sarine had built several low-cost prototypes to test, she would have been able to test which rule of design thinking? A. human rule B. ambiguity rule C. re-design rule D. tangible rule E. creative process rule

D. tangible rule

The most accurate view of intuition is that it is A. a trait that people acquire mainly through heredity. B. more likely to be found in men than women. C. acquired more quickly by people whose careers extend to several unrelated industries. D. the ability to know when an opportunity exists and select the best course of action without conscious reasoning. E. an unacceptable way of making decisions in an organizational setting.

D. the ability to know when an opportunity exists and select the best course of action without conscious reasoning.

The availability heuristic refers to the tendency A. to choose an alternative that is good enough rather than the best. B. for people to influence an initial anchor point. C. to evaluate probabilities of events or objects by how closely the event or object resembles another event. D. to estimate the probability of something occurring by how easily we can recall those events. E. for decision makers to evaluate alternatives sequentially rather than comparing them all at once.

D. to estimate the probability of something occurring by how easily we can recall those events.

_____ is the tendency to experience stronger negative emotions when losing something of value than the positive emotions experienced when gaining something of equal value. A. Implicit favoritism B. Bounded rationality C. Intuition D. Nonprogrammed decision making E. Prospect theory effect

E. Prospect theory effect

One school of management thought states that organizational decisions and actions are influenced mainly by what attracts management's attention, rather than by the objective reality of the external or internal environment. Which of the following practices is closely associated with this argument? A. rational decision-making process B. programmed decision making C. perceptual defense D. decisive leadership E. stakeholder framing

E. stakeholder framing

Which of the following is not a reason people engage in satisficing rather than maximization? A. They lack the capacity and motivation to process a huge volume of information. B. They rely on sequential evaluation of new alternatives. C. Decisions with many alternatives can be cognitively and emotionally draining. D. Alternatives present themselves over time, not all at once. E.It allows them to choose the alternative with the highest payoff.

E.It allows them to choose the alternative with the highest payoff.

Middle managers of a marketing firm were addressing the problem of creating eye-catching ads that were able to be easily reproduced in both color and black and white. One manager said, "The main problem here is we design using color to lure the consumer instead of relying on the benefits of the product itself." Which of the following best describes the decision-making problem that this manager is exhibiting? A. The manager is engaging in escalation of commitment. B. The manager is being too creative. C. The manager is involved in participative decision making. D. The manager is engaging in groupthink. E.The manager is defining the problem in terms of a solution.

E.The manager is defining the problem in terms of a solution.

The 30-minute time period set aside each morning by George should help promote which stage of the creative process? A. preparation B. incubation C. illumination D. verification E.both preparation and incubation

E.both preparation and incubation

The illumination stage in the creative process A. provides a tested solution to complex problems. B. occurs after the verification stage in the process. C. generates long-lasting thoughts in the memory. D. is characterized by convergent thinking. E.can be quickly lost if not documented.

E.can be quickly lost if not documented.

An organization asks its employees to reframe the problems in a unique way and generate different approaches to the problems. Which of the following stages in the creative process would assist this? A. verification B. preparation C. experimentation D. illumination E.incubation

E.incubation

According to the characteristics of creative people, which areas are Rita's strongest? A. independent imagination and experience B. persistence and practical intelligence C. cognitive and practical intelligence D. experience and persistence E.intelligence and independent imagination

E.intelligence and independent imagination

The benefits of employee involvement increase with A. the routineness and similarity of the problem or opportunity. B. management's knowledge of the situation. C. the standardization and repetitiveness of the problem or opportunity. D. the number and similarity of employees involved in the decision. E.the novelty and complexity of the problem or opportunity.

E.the novelty and complexity of the problem or opportunity.

According to bounded rationality theory, people make the best decisions when their perceptions are "bounded" or framed by past experience.

false Bounded rationality refers to the view that people are bounded in their decision-making capabilities, including access to limited information, limited information processing, and a tendency toward satisficing rather than maximizing when making choices. This makes them choose a satisfactory solution rather than the best solution.

Creative people have practical intelligence but not cognitive intelligence.

false Creative people have above-average cognitive intelligence to synthesize information, analyze ideas, and apply their ideas. They recognize the significance of small bits of information and are able to connect them in ways that few others can imagine. They also have practical intelligence—the capacity to evaluate the potential usefulness of their ideas.

Decision making is a nonconscious process of moving toward a desirable state of affairs.

false Decision making is the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs.

Divergent thinking refers to calculating the conventionally accepted "right answer" to a logical problem.

false Divergent thinking refers to reframing the problem in a unique way and generating different approaches to the issue. This contrasts with convergent thinking, calculating the conventionally accepted "right answer" to a logical problem.

Employee involvement tends to weaken the decision-making process.

false Employee involvement can potentially improve the number and quality of solutions generated. In a well-managed meeting, team members create synergy by pooling their knowledge to form new alternatives.

The incubation stage of creativity is more effective when the decision maker sets aside all other activities and focuses attention on the issue or problem.

false Incubation refers to the period of reflective thought. We put the problem aside, but our mind is still working on it in the background. Incubation does not mean you forget about the problem or issue.

The rational choice decision-making process recommends choosing the alternative with a moderate subjective expected utility.

false The fourth step in the rational decision-making model is to select the choice with the highest subjective expected utility. This calls for all possible information about all possible alternatives and their outcomes, but the rational choice paradigm assumes it can be accomplished with ease.