Lesson 8

True or false: Efficiency occurs when a decision results in the best possible outcome.

False

True or false: Good decision makers eliminate all risk.

False

True or false: Satisficing is less likely in groups.

False

The formal decision making process has six steps. Which step involves implementing the decision?

Fifth

When using groups to make decisions, what is one of the potential disadvantages?

Goal displacement

Which of the following statements about using a group to make a decision is true?

Groups generally make higher-quality decisions than individuals.

______ occurs when you achieve the best possible balance among several goals.

Optimizing

In the fourth step in decision making, the decision will differ according to the criteria and method used. What are the important methods managers should recognize when choosing among the alternatives evaluated? (Check all that apply.)

Optimizing Maximizing Satisficing

The three requirements for effectively managing group decisions include which of the following? (Check all that apply.)

The constructive use of disagreement and conflict An appropriate leadership style Enhancement of creativity

Which stage in the formal decision-making process involves determining the value or adequacy of the alternatives that were generated?

Third

A common technique used for eliciting creative ideas from group members that requires group members to generate as many ideas about a problem as they can is called:

brainstorming

In , group members generate as many ideas about a problem as they can in order to elicit creative ideas.

brainstorming

The state that exists when decision makers have accurate and comprehensive information is called _____.

certainty

A decision bias influenced by the way a problem or decision alternative is phrased or presented is known as a(n) ______ effect in decision-making terminology.

framing

Using decision-making terminology, a decision bias influenced by the way in which a problem or decision alternative is phrased or presented is known as a(n) effect.

framing

A phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus is known as ______.

groupthink

Frank needs to make a decision but does not know the probabilities of alternative outcomes. Future outcomes are also unknown. This exemplifies ______.

uncertainty

The condition in which managers have insufficient information and thus cannot know what the outcome of actions will be is _____.

uncertainty

Which of the following is true of the design thinking process?

It starts by developing an understanding of current and potential customers.

The representative bias promotes the use of ______.

stereotypes

The belief that one can influence events even when one has no control over what will happen is known as ______.

the illusion of control

Which of the following are common consequences of a manager making the wrong decision? (Choose all that apply.)

A company could lose money. A company could ruin its reputation.

Lottery organizers heavily promote the jackpot winners so that people are continually hearing about those who've won big. In contrast, players hear almost nothing about the vast majority of people who haven't won a single dollar. This tactic draws upon which type of bias?

Availability bias

Which stage in the formal decision making process involves making the choice among the alternatives?

Fourth

True or false: As a manager, you will constantly be making decisions.

True

When applying for jobs, job seekers often focus on a desired salary while ignoring other aspects of the job offer such as benefits, fit with the job, and working environment. In many cases, the salary may be good, but there are other, negative features of the job not being considered. This is an example of

anchoring bias.

The state that exists when decision makers have accurate and comprehensive information is known as .

certainty

A method for encouraging different views involves a process called ______, a structured debate between two conflicting courses of actions.

dialectic

A structured debate between two conflicting courses of action is called a ______.

dialectic

The state that exists when the probability of an action succeeding is less than 100% and losses may occur is called .

risk

Choosing the first option that is minimally acceptable or adequate when making a decision is known as

satisficing

Most people do not like having to attend meetings and may display negative behaviors, such as criticizing members who want to explore new options, as a way to end a meeting. This occurs more frequently in group decision making and may result in _______, rather than working to arrive at the best decision.

satisficing

In the first stage of decision making, the sources of discrepancies that exist in organizational or unit performance may be detected when comparing current performance against:

current performance of other organizations or units future expected performance past performance

The second stage of decision making involves:

developing alternative solutions

A person who has the role of criticizing ideas to ensure that their downsides are fully explored is referred to as:

devil's advocate

Along with dialectic, another method managers can implement for encouraging different views is ______.

devil's advocate

One method for encouraging different views involves assigning the role of ______ to criticize ideas to ensure the downsides are exploited.

devil's advocate

The fourth step in decision making, after all the possible consequences of the options have been evaluated, is called _______.

making the choice

A decision resulting in the best possible outcome is called ______.

maximizing

Josephine decided to go with option three because it resulted in the lowest cost and provided the greatest benefits with the largest expected total return. Josephine is using the decision strategy called ______.

maximizing

The decision strategy that results in the greatest benefit, at the lowest cost, with the largest expected total return is called:

maximizing

Achieving the best possible balance among several goals when making decisions is known as ______.

optimizing

Personal biases that interfere with objective rationality in decision making are called _______ biases.

psychological

How do social realities affect decision making? (Check all that apply.)

A manager must consider the preferences and reactions of many people. Many decisions are the result of intensive social interactions, bargaining, and politicking. Important managerial decisions are marked by conflict among interested parties.

Which of the following are actions to take during the sixth and final stage of the decision-making process? (Check all that apply.)

Collect information on how well the decision is working. Use feedback to either continue the decision or go back to the first stage. Compare collected information with specified goals.

Managers are faced with tough decisions daily, and most complex managerial decisions lack structure. Which of the following characteristics add to the difficulty and pressure managers experience when making tough decisions? (Choose all that apply)

Degree of risk Level of uncertainty Potential for conflict

In the decision-making process, which one of the following actions comes directly AFTER the act of generating alternative solutions?

Determining the respective suitability of each of the alternatives that were generated

Which of the following are methods managers can implement for encouraging different views? (Check all that apply)

Dialectic Devil's advocate

A decision maker decides to allow clear cutting of timber in a pristine state forest. This allowance will infuse much-needed funds into state government, so the decision maker chooses not to consider the environmental impact reports. In decision-making terminology, what is this decision maker doing?

Discounting the future

Management at Dungaree Denim acquired a factory at an incredibly low price. The factory came outfitted with necessary equipment, and it could discard the water involved in producing its high-end jeans into the neighboring river. Dungaree was aware that the river was undergoing an environmental survey due to talks of endangered fish, but Dungaree believed everything would work out fine. Which type of psychological bias did Dungaree's decision demonstrate?

Discounting the future

Which stage of the decision-making process involves the fundamental process of predicting the possible consequences that will occur if the various options are put into effect?

Evaluating the alternatives

Which of the following are NOT requirements for effectively managing group decisions? (Check all that apply)

Facilitating satisficing Encouraging goal displacement

Which of the following is not a barrier to effective decision making?

Full execution of the six stages of decision making

Which of the following statements concerning managerial decision making and risk are true?

Good decision makers do everything to anticipate, minimize, and control risk. Good decision makers prefer to manage risk. Risk and uncertainty are a fact of life in managerial decision making.

Mason has considered all possible consequences of his options. Which of the following describes the behavior Mason would use to maximize his decision?

He would choose the option with the greatest positive consequences and fewest negative consequences.

_______ bias occurs when someone uses information from the outcome of a decision, often a negative outcome, and retrospectively realizes what they should have done.

Hindsight

Which of the following are psychological biases that act as barriers to effective decision making?

Illusion of control Discounting the future Framing effects

______ feedback suggests that the implementation will require more time, resources, effort, or thought; alternatively, the decision was a bad one.

Negative

What are the potential advantages of using a group to make a decision? (Check all that apply.)

Participants in the group discussions are more likely to understand why the decision was made. More information is available. Group discussion provides intellectual stimulation. A greater number of perspectives on the issues or different approaches to solving the problem are available.

When assessing alternatives in decision making, which of the following actions is fundamental to the process?

Predict the possible consequences that will occur if the various options are put into effect.

Which of the following are tactics employed by fast-acting firms to meet time pressures without sacrificing quality? (Check all that apply)

Rely on heavily trusted experts Focus on real-time information Take a realistic view of conflict

Which of the following are NOT tactics employed by fast-acting firms to meet time pressures without sacrificing quality? (Check all that apply)

Rely on long-range planning Focus on futuristic forecasts Take a futuristic view of conflict

What exists when the probability of an action succeeding is less than 100 percent, and losses may occur?

Risk

_________ occurs when you choose the first option that is acceptable, although it may not be the best or perfect option.

Satisficing

Which of the following are common potential problems associated with group decision making?

Satisficing Goal displacement Groupthink

Which stage of the formal decision making process involves generating alternative solutions?

Second

When considering the social realities of a decision, it is important that managers take into account which of the following?

Social interactions, bargaining, and politicking

Which of the following are barriers to effective decision making? (Check all that apply.)

Social realities Time pressures Psychological biases

A human-centered approach to innovation that integrates customer needs, the potential of technology, and the requirements for business success is known as ______.

design thinking

Goal ______ is a condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges.

displacement

Goal is a condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges.

displacement

The stage of decision making where information is collected and compared to goals and plans to determine success or failure is called ______.

evaluating the decision

Suhindra is in a work group that has a goal of coming up with a proposal for workplace childcare. The group strives to work cohesively as a team, and as a result Suhindra does not want to question members' ideas. In fact, nobody in the group voices any disagreement. Suhindra's group is guilty of ______.

groupthink

Which of the following is the first step in the ideal decision-making process?

identifying and diagnosing the problem

Gambling is an example of the ______ in that some people believe they have the skill to beat the odds, even though most of the time they cannot.

illusion of control

Negative feedback regarding the implementation of the decision suggests: (check all that apply)

implementation will require more time the decision was a bad decision implementation will require more effort

Once a choice is made in the decision-making process, managers must take action to operationalize their choice. This step of decision making is called ______ the decision.

implementing