chapter 7 management
Which of these is another term for hindsight bias?
The "I-knew-it-all-along" effect
Turbine Manufacturing uses artificial intelligence in its factories to automate basic tasks, freeing human employees to perform more high-level finishing and quality assurance tasks. Which area of artificial intelligence does this illustrate?
assisted intelligence
Tonya decided to purchase a piece of equipment from a domestic company instead of an overseas company despite the domestic company's higher cost and lower quality. Her decision was based on uncertainty that the foreign shipment would meet her production deadline. According to Herbert Simon, Tonya was feeling the effects of _____.
bounded rationality During the 1950s, economist Herbert Simon—who later received the Nobel Prize—began to study how managers actually make decisions. From his research he proposed that managers could not act truly logically because their rationality was bounded by so many restrictions. Bounded rationality, the concept suggests that the ability of decision makers to be rational is limited by numerous constraints, such as complexity, time and money, and their cognitive capacity, values, skills, habits, and unconscious reflexes
Michelle met with her five employees around a table and asked each of them to take five minutes to write down what they personally thought their new facility should include. She then collected the information and wrote it on the white board for all of them to view and decide upon. Michelle is using the _____ technique
brainstorming
During meetings, Stacy likes to challenge new ideas, even those that she agrees with, in order to make sure that her team has considered every angle. What role is Stacy playing?
devils advocate
People with a(n) _______ decision-making style have a low tolerance for ambiguity and are task oriented. They are efficient, logical, and practical in their approach to solving problems and making decision. Which style do they use?
directive
People with the ______ style of decision making are action-oriented and like to focus on facts. They also tend to be autocratic-type managers.
directive
Consulting firm Accenture predicts that by 2035 artificial intelligence will have which economic effect?
economic growth will double
What is the most valuable competitive resource for a manager who needs alternative solutions to a problem?
employees with ideas
Ramona is bidding on an auction item against several other people. She knows the bid is already too high, but she doesn't want to give up, so she continues bidding. This is an example of the _____ bias.
escalation of commitment
When decision makers increase their commitment to a project despite negative information about it, they are experiencing which type of bias?
escalation of commitment
What is the third stage of the rational model of decision making?
evaluate alternative and select a solution
True or false: Overconfidence bias is the tendency of decision makers to be influenced by the way a situation or problem is presented to them
false
True or false: Overconfidence bias is the tendency of decision makers to be influenced by the way a situation or problem is presented to them.
false
True or false: Predictive modeling is a groupthink technique
false
True or false: Value orientation reflects the extent to which a person is unethical
false
Bob was unsure how his boss was going to react to his proposal, so he was careful to put an upbeat "spin" on the situation to emphasize the positive aspects rather than the negative aspects. Bob's method of presenting the situation demonstrates the ___ bias.
framing
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
When rivals are focused on winning an argument rather than the goal of a meeting and the topics of the meeting are not discussed, it is an example of _____.
goal displacement
Jai is a member of a tight-knit team at work that avoids any kind of disagreement.Team members, therefore, avoid considering new ideas. What behavior is Jai's team exhibiting?
groupthink
______ are strategies such as "rules of thumb" that simplify decision making.
heuristics
The tendency of people to view events as being more predictable than they really are is referred to as _____ bias.
hindsight
The first stage in the rational decision-making process involves _____.
identifying the problem
In the fourth stage of rational decision making, managers will _____.
implement and evaluate the chosen solution
Which of the following is an advantage of group decision making?
intellectual stimulation
"Going with your gut," or _____, is making a choice without the use of conscious thought or logical inference.
intuition
Sam is an experienced firefighter who must act quickly and decisively to do his job. He frequently relies on his ______ to make decisions when there isn't time for rational analysis
intuition
Sam is an experienced firefighter who must act quickly and decisively to do his job. He frequently relies on his ______ to make decisions when there isn't time for rational analysis.
intuition
According to psychologist Daniel Kahneman, System 1 thinking is _____
intuitive and largely unconscious
Making a choice without the use of conscious thought or logical inference is known as using . (Use only one word.
intution
In order to develop the best customer base it can, Harrison's Gourmet Foods sends out different types of promotional items to see which one garners the best response in terms of customers who will buy once and come back to order again. The information Harrison's receives provides the basis for _____ modeling
predictive
In order to develop the best customer base it can, Harrison's Gourmet Foods sends out different types of promotional items to see which one garners the best response in terms of customers who will buy once and come back to order again. The information Harrison's receives provides the basis for _____ modeling.
predictive
A data-mining technique used to predict future behavior and anticipate the consequences of change is known as modeling
predictive modeling
The rational model of decision-making is considered _____ in that it describes how managers should make decisions, rather than how they actually make them.
prescriptive
What are symptoms of groupthink?
rationalization, an illusion of unanimity and a sense of invulnerability
The _______ bias reflects our tendency to generalize from a small sample or single event.
representativeness
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 _____.
representativeness bias
Which model of decision making emphasizes choosing the first solution that meets the criteria, rather than the optimal choice?
satisficing
"Close enough is good enough" best characterizes which model of decision making?
satisficing model—that is, managers seek alternatives until they find one that is satisfactory, not optimal.
Heuristics are strategies that ______ the process of making decisions
simplify
What are three characteristics that affect decision making by a group?
the efficiency of the group The knowledge of the group members The size of the group
Which of the following is an accurate description of decision making?
the process of identifying and choosing alternative course of action
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 year.
true
Kendall is frustrated with her co-worker Jill. She feels that Jill doesn't care that their manager seems to be showing favoritism toward the two other members of their team. Jill just focuses on the work she is supposed to do, which demonstrates her _____.
value orientation
Decision-making styles vary along which two dimensions?
value orientation tolerance for ambiguity
In the devil's advocacy technique, the group assigns one person to do which of the following?
Uncover all possible objections to a plan or idea.
An AI application that learns from human inputs in order to assist humans in making better decisions is known as----- intelligence
augmented
In the ______ bias, managers use information readily available from memory to make judgments.
availability
What is the name of a technique used to help groups generate multiple ideas for solving problems in which potential ideas or solutions are collected (sometimes anonymously) and written on a board or flip chart?
brainstorming
Artificial intelligence lacks which key feature of human intelligence?
common sense
Goal _____ occurs when the primary goal is subsumed by a secondary goal.
displacement
A person's decision-making style is a combination of how a person perceives something as well as _____.
how they respond to it
Which model of decision making explains how managers should use logic to determine the optimal means of furthering the organization's best interests?
the rational model
Which steps are recommended for establishing a process or method for making decisions?
Analyze the situation. Consider whether the decision is consistent with your values. Conduct a cost-benefit analysis.
What type of bias refers to the tendency to make decisions based on an initial figure that may or may not be in line with market realities?
Anchoring and adjustment
Artificial intelligence aids human decision making by exhibiting superior performance in which of the following activities?
Building and analyzing models and simulations to make predictions
In what way is artificial intelligence expected to make business and personal data safer?
By monitoring and deflecting the activities of hackers
What is the main difference between critical thinking and the moment-to-moment thinking that we use in our everyday lives?
Critical thinking requires deliberate mental processes, whereas moment-to-moment thinking is automatic and prone to bias.
Which of the following are ways in which artificial intelligence is expected to improve the interactions between businesses and employees or consumers?
Eliminating human bias from human resources decisions, Reducing work demands and freeing up more time for family or leisure and Tailoring products to the personal needs and preferences of individual consumers
Which of these are reasons for the increase in ethical violations among business leaders in the 21st century?
Globalization allows businesses to operate in regions where ethical risks are greater. The 24/7 news cycle places more scrutiny on unethical behavior. Digital communications are more susceptible to hackers and whistleblowers.
What is the best way to develop a ready-made solution?
Identify best practices and turn them into standard operating procedure.
Which of these describe how knowledge of decision-making styles affects managers' work?
It gives managers an understanding of how different people reach different conclusions. It allows managers to better identify personal strengths and weaknesses
Knowledge of decision-making styles can assist managers in many ways except for which one of the following?
It increases the biases of the manager toward their favorite style.
By 2035, artificial intelligence is expected to have what effect on labor productivity?
It will increase labor productivity by as much as 40%.
What are common results of groupthink?
Loss of new ideas and Failure to consider new information
Which of these assumptions are made in the rational model of decision making?
Managers will always select the course of action that they know will most benefit the organization. Managers have complete, error-free information about alternative courses of action and their consequences. Managers are able to make logical decisions without prejudice or emotional blind spots.
Which of the following are examples of Big Data?
Surveillance data Social network communications Web-browsing data trails Data in corporate databases
What is the goal of conducting a project post-mortem?
To determine what could be done better and incorporate those insights into future decisions
Which of the following are aspects of critical thinking?
Using qualitative and quantitative information to solve problems creatively Using reason to analyze situations, make decisions, and solve problems
Which questions should you ask when developing ready-made solutions based on past experiences?
What was the solution? what was the problem What lessons can you derive from this experience?
Brainwriting is the process of brainstorming by using _____.
a computer network
When making decisions for her department, Ellie tends to take a long time because she takes into consideration a large amount of information. What type of decision-making style does Ellie demonstrate?
analytical
An online retailer uses complex data-mining software to evaluate the preferences and buying habits of its customers and makes decisions based on these findings. This is an example of the use of ______ in the decision-making process.
analytics
Sam gave employees a 5% raise last year and expects to give the same percentage raise this year, even though it will push his company's salaries above what is normally paid in the industry. This is an example of the _____ bias.
anchoring and adjustment
A consensus is reached when all members are able to express their opinions ______
and reach agreement to support the final decision
Rather than holding formal meetings in the board room, Kevin prefers meeting with his group over lunch at a restaurant. He feels that his group opens up more during these lunches and opinions are openly exchanged. Which style of decision making does Kevin use?
behavioral
Which decision-making style is the most people-oriented of the four styles?
behavioral
Andi has recently joined her company's new product development team. She has a number of innovative ideas, but because the group is so unified in its support for more traditional ideas, Andi decides to keep her ideas to herself and go along the group. Which symptom of groupthink does this situation illustrate?
belief in " the wisdom of crowds"
Stores of data that are so large or complex that it is difficult to process them using traditional data base management applications are known as ______.
big data
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
Electronic brainstorming, also called _____, is a technique used to help members of a group come together over a computer network to generate ideas and alternatives for solving problems.
brain writing
Successful implementation of major decisions requires which of the following?
careful planning sensitivity to those affected by the decision Stage 4: Implement and Evaluate the Solution ChosenWith some decisions, implementation is usually straightforward (though not necessarily easy—firing employees who steal may be an obvious decision, but it can still be emotionally draining). With other decisions, implementation can be quite difficult; when one company acquires another, for instance, it may take months to consolidate the departments, accounting systems, inventories, and so on
Which one of the following best describes the decisions made by a person with an analytical style?
carefully considers lots information and alternatives
Which decision-making style is characterized by a high tolerance for ambiguity and the consideration of many options together with a willingness to take risks?
conceptual
The _____ bias occurs when people seek data to support their point of view and disregard information that does not support it.
confirmation
Tyler has never gotten along with his employee Marcus. Although Marcus has been a top performer during his three years with the company, Tyler tends to fixate on the one quarter when Marcus performed poorly. Tyler uses that quarter as an example of Marcus being a "poor fit" with the company. What type of bias is this an example of?
confirmation
Which of the following are examples of what can function as the first stage in rational decision making by managers?
customer complaints sales shortfalls poor product quality
A _____ is a choice made from available alternatives.
decision
A graph of decisions and their possible consequences used to create a plan is known as a(n) ______
decision tree
According to psychologist Daniel Kahneman, which of the following characteristics describe System 2 thinking?
deliberate conscious analytics
In the ______ method, groups engage in a structured debate between opposing positions (thesis and antithesis) with the aim of reaching a consensus
diabetic
All the following are characteristics of group decision-making EXCEPT _____.
group make decisions quickly
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
identify the problem or opportunity thinking of alternative solutions evaluate alternative and select a solution implement and evaluate the solution chosen
Which of the following questions would you use to evaluate alternatives in the third stage of the rational model of decision making
is it feasible? is it ultimately effective? is it ethical ?
Knowledge of decision-making styles can assist managers in many ways except for which one of the following?
it increases the biases of the manger toward their favorite style
Which models are characteristic nonrational models of decision making?
models that describe how managers actually make decisions
As a manager, Colin 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.
non rational
Evidence-based decision relies on ______.
observation about what actually works
What is the recommended step you should take after making a decision?
observer the results the conduct a post-mortem
You fall prey to the overconfidence bias when you ______ your knowledge or expertise in a decision situation
overestimate
You fall prey to the overconfidence bias when you ______ your knowledge or expertise in a decision situation.
overestimate
Which of these are examples of business analytics?
portfolio analysis time series forecast
After a major product launch, managers at McLaughlin Industries meet to evaluate outcomes and how those outcomes differ from what the group expected. This approach is part of which group problem-solving technique?
project post-mortem
Evidence-based management attempts to introduce which factor into the decision-making process?
rationality
Even though not everyone in the meeting agreed with the final decision, the group decided to proceed and replace all existing machine parts in the warehouse. In this situation, the group had _____
reached a consensus
People with a conceptual decision-making style are likely to do which of the following?
rely on intuition take risks find creative solutions
The ______ bias is demonstrated when managers add up all the money already spent on a project and conclude it is too costly to simply abandon it.
sunk cost
You go to the movie theater to see the latest release by your favorite actor. You quickly realize the movie is not very good, but instead of walking out, you stay to watch the rest of the movie, figuring that you've already spent $9.50 for a movie ticket and $6 for popcorn. This is an example of the _______ bias.
sunk-cost
All of the following are advantages to group decision making EXCEPT _____.
superiors can dominate or intimidate the group
Value orientation reflects the extent to which an individual focuses on which of the following dimensions?
technical concerns or social concerns
The managers of Coastal Imports are having a meeting to decide whether the company should raise prices on its best-selling products. During the meeting, the team engages in a debate in which one side argues that the company should lower its prices while the other side argues in favor of raising them. Which problem-solving technique is the group using?
the dialectic method
When Kendra's manager asked the team to come up with new ideas for attracting people to their trade show booth, Kendra suggested installing a video game in the booth. Which part of the rational decision making process does Kendra's idea exemplify?
think up alternative solutions
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: CEOs are at a higher risk of being fired for ethical violations than ever before because the public has become less forgiving of unethical behavior.
true