Chapter 7: Individual and Group Decision Making How Managers Make Things Happen

True or false: A decision tree is an analytical tool that can help managers to understand the possible consequences of their decisions and to create a plan to reach a goal.

True

True or false: The availability bias means that your manager may give more weight to your most recent work rather than everything you have done over the course of a year.

True

Minority _____ occurs when a minority in a group publicly opposes the beliefs, attitudes, ideas, procedures, or policies assumed by the majority of the group.

dissent

When decision makers increase their commitment to a project despite negative information about it, they are experiencing which type of bias? escalation of commitment availability anchoring and adjustment confirmation representativeness

escalation of commitment

In System _____ of Kahneman's decision making model, reasoned choices are determined.

two

Which two of the following are examples of the Delphi technique? A group of employees have an emergency meeting at work about incoming technology upgrades A group of managers discuss company issues through a web based video conference A group of specialists submit anonymous reports about a subject The expert opinion is compiled and consensus is reached.

A group of specialists submit anonymous reports about a subject The expert opinion is compiled and consensus is reached.

According tot he psychologist Daniel Kahneman, which of the following characteristics would describe System 2 thinking? Deliberate Analytical Conscious Intuitive Unconscious

Analytical Conscious Deliberate

Indicate the assumptions prevalent in the rational decision-making model. Complete information, no uncertainty Choice of best decision for the organization Logical, unemotional analysis Imperfect, fragmentary information Time and money constraints

Complete information, no uncertainty Logical, unemotional analysis Choice of best decision for the organization

The manager cannot find a satisfactory solution so procrastinates, passes the back or denies the risk of negative consequences

Defensive avoidance

True or false: "There is no point in doing anything because nothing bad is going to happen" is a good example of relaxed change.

False

Which of the following are appropriate actions for a manager to take if a decision is not working as intended? Change it slightly Blame others Deny there is anything wrong Give it more time Try another alternative Start over

Give it more time Change it slightly Try another alternative Start over

Which of the following are characteristics that affect decision making by a group? The fact that groups tend to make bad decisions Groups take longer to make decisions The knowledge of the group members The size of the group

Groups take longer to make decisions The knowledge of the group members The size of the group

During which of the following is positive team spirit and striving for unanimity most likely to lead to poor decision making? a. goal displacement b. satisficing c. brainstorming d. groupthink

Groupthink

List the steps of the rational model of decision making in the correct order, with the first step listed at the top and the last step listed at the bottom Think of alternative solutions Identify the problem or opportunity Evaluate alternatives and select a solution Implement and evaluate the solution chosen

Identify the problem or opportunity Think of alternative solutions Evaluate alternatives and select a solution Implement and evaluate the solution chosen

Indicate three ways that can help managers in "deciding whether to decide" Importance Credibility Personal gain Costs Urgency

Importance Credibility Urgency

Identify the benefits of using intuition in the decision-making process. It can be helpful to managers when resources are limited. It can speed up decision making It is always more reliable than rational decision making It is not subject to the biases that affect rational decision making

It can be helpful to managers when resources are limited. It can speed up decision making

The manager has become frantic to dispose of the problem and therefore cannot deal with the situation realistically

Panic

Which of the following are examples of business analytics? Time-series forecast Advertising campaigns Portfolio analysis Group think marketing plans

Portfolio analysis Time-series forecast

Kelly works in the customer service department and at the end of the day she reported to her manager that all of the calls she received that day were customers complaining about the new wheel sprocket the company had just started using. Which aspect of the rational decision making process is Kelly providing to her manager? a. Objectives b. Problems c. Assignments d. Opportunities

Problems

The manager opts for the first available alternative that involves low risk

Relaxed Change

A manager decides to take no action in the belief that there will be no great negative consequences.

Relaxed avoidance

Successful implementation of major decisions requires which two of the following to occur? Reliance on the easy way out of the problem Sensitivity to those affected by the decision Careful planning Ignoring ethical dilemmas

Sensitivity to those affected by the decision Careful planning

Which of the following data would be included in Big Data? Unrecorded customer interactions Social network communications Data in corporate databases Surveillance data Web browsing data trails

Social network communications Data in corporate databases Surveillance data Web browsing data trails

Which of the following are part of the seven implementation principles of evidence-based decision making? If all else fails, slow the spread of bad practice Treat your organization as an unfinished prototype Like everything else, you still have to sell it. Don't worry about what outsiders think.

Treat your organization as an unfinished prototype Like everything else, you still have to sell it. If all else fails, slow the spread of bad practice

In a study done at Babson college's working knowledge research center, researchers identified three key attributes among organizations committed to quantitative, fact-based analysis. What are those three attributes? Having multiple applications Leading among competition Support from top executives Employee agreement Use of modeling

Use of modeling Having multiple applications Support from top executives

A consensus is when all members are able to express their opinions _____. a. and reach agreement to support the final decision b. and decide on a date to make a final decision c. and vote in making a final decision d. but unable to reach a final decision

a. and reach agreement to support the final decision

The tendency of people to view events as being more predictable than they really are is referred to as ____ bias. a. hindsight b. reality c. parity d. cognitive

a. hindsight

A manager who picks the first reasonable option suggested to fix a problem, rather than taking the time to explore other alternatives, is responding to a decision situation with which ineffective response? a. relaxed change b. defensive avoidance c. panic d. relaxed avoidance

a. relaxed change

The ___ bias is based on an individual's tendency to make decisions based on an initial figure. a. anchoring and adjustment b. sunk cost c. representativeness d. availability

anchoring and adjustment

Jacinda bought stock in AZY Company at $70 per share and the price has tumbled since then. The stock is now trading at $7 per share and financial experts keep saying that the stock is likely to continue to decline because of a lawsuit pending against the company. She keeps the stock and hopes it will turn around, even though she knows thats not likely. This is an example of _____. a. availability bias b. escalation of commitment bias c. the representativeness bias d. the anchoring and adjustment bias

b. escalation of commitment bias

"Going with your gut," or ______, is making a choice without the use of conscious thought or logical inference. a. satisficing b. intuition c. analytics d. risk propensity

b. intuition

"Close enough is good enough" would BEST characterize which model of decision making? a. predictive mode b. satisficing model c. intuition d. rational model

b. satisficing model

Heuristics are strategies that ____ the process of making decisions. a. originate b. simplify c. complicate d. categorize

b. simplify

All of the following are advantages to group decision making EXCEPT _____. a. different perspectives b. superior can dominate or intimidate the group c. greater pool of knowledge d. deeper commitment to the decision

b. superior can dominate or intimidate the group

The concept that suggests that the ability of decision makers to be rational is limited by constraints such as complexity, skills, time, and money is known as ______ rationality.

bounded

What is the name of a technique used to help groups generate multiple ideas for solving problems in which potential ideas or solutions from group members in a meeting are collected and written on a board for flip chart? a. benchmarking b. brainstorming c. the Delphi technique d. a decision supported system

brainstorming

What is the name of a technique used to help groups generate multiple ideas for solving problems in which potential ideas or solutions from group members in a meeting are collection and written on a board or flip chart? a. The delphi technique b. benchmarking c. brainstorming d. a decision support system

brainstorming

The ____ bias occurs when people seek data to support their point of view and disregard information that does not support it.

confirmation

The process of examining large amounts of data in a variety of types to uncover hidden patterns, unknown correlations, and other useful information is known as ____. a. prescriptive modeling b. database normalization c. cloud computing d. Big Data analytics

d. Big Data analytics

Brainwriting is the process of brainstorming by using _____. a. anonymity b. SWOT analysis c. benchmarking d. a computer network

d. a computer network

When using the ethical decision tree, management should consider whether a proposed action is both legal and _____. a. illegal b. ecological c. illogical d. ethical

d. ethical

The information collected from a decision support system is known as business ____. a. processing b. opportunity c. cooperative d. intelligence

d. intelligence

A manager that hires all applicants that have graduated from a certain college because a particularly good employee came from that same college is an example of: a. escalation of commitment bias b. confirmation bias c. anchoring and adjustment bias d. representativeness bias

d. representativeness bias

When Kendra's manager asked the team to come up with some new ideas for drawing people to their trade show booth, Kendra decided to be creative and suggested installing a video game in the booth to attract people. Which part of the decision making process does Kendra's idea exemplify? a. evaluate alternatives b. implement the solution c. identify the problem d. think up alternative solutions

d. think up alternative solutions

A ____ is a choice made from available alternatives. a. feasibility b. rationale c. decision d. consensus

decision

When a manager can't find a good solution to a serious problem and either procrastinates, passes the buck, or denies that there will be any negative consequences, she or he is adopting which ineffective response to a decision situation? a. relaxed change b. panic c. defensive avoidance d. relaxed avoidance

defensive avoidance

Conducting a(n) ____ involves analyzing the underlying causes of a problem or opportunity. a. value orientation b. predictive model c. diagnosis d. benchmark

diagnosis

Goal ____ occurs when the primary goal is subsumed by a secondary goal.

displacement

Someone who is trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas is called a(n) ______. a. bias representative b. ethics officer c. consensus agent d. business analytic

ethics officer

The tendency of decision makers to be influenced by the way a situation or problem is presented to them is referred to as the _____ bias.

framing

As a manager, Collin realizes that there is no single formula for making easy decisions. In reality, business decisions he has to make involve uncertainty and risk. This describes the ____ model of decision making. a. nonrational b. rational c. prescriptive d. complacent

nonrational

Situations that present possibilities for exceeding existing goals are known as _________.

opportunities

When you ___ your knowledge or expertise in a decision situation, you fall prey to the overconfidence bias. a. underestimate b. accurately estimate c. overestimate d. frequently estimate

overestimate

When Krystal lost a big sale that meant she would not make her sales quota for the month, she burst into tears. "I can't deal with this!" she walled to a coworker. "I'm a complete failure at this job, and I'm just going to quit!" Which response to a decision situation does this best reflect? a. relaxed avoidance b. panic c. relaxed change d. defensive avoidance

panic

A data-mining technique used to predict future behavior and anticipate the consequences of change is known as ___ modeling.

predictive

Apex enterprises spent a large amount of money to customize a pumping system that it bought many years ago. Its supplier has begun to offer a new pumping system with even better features than its customized system. Although the new system is competitively prices, Apex decides to keep its older system. This would be an example of the ____ bias. a. sunk-cost b. confirmation c. representative d. availability

sunk cost

All of the following are ineffective reactions to challenges EXCEPT: a. urgency b. relaxed avoidance c. relaxed change d. panic

urgency