MGMT 3140-H01: Chapter 3. Managerial Decision Making
Which are ways that time pressures influence effective decision making?
- Business decisions made too slowly become irrelevant. - Meeting the deadline becomes more important than content. - Decision quality may be reduced when the decision is made too quickly.
Which are consistent with the use of a devil's advocate to create constructive conflict?
- Criticize ideas and point out problems. - Make conflict less personal and emotional. - Lessen people's inhibitions about disagreeing with each other.
Which are procedures for leaders to manage decision making in groups?
- Encourage people's input. - Avoid groupthink and satisficing. - Stay focused on the group's goals. - Encourage constructive conflict.
How do social realities affect decision making?
- Important managerial decisions can be marked by conflict among interested parties. - Many decisions are the result of intensive social interactions, bargaining, and politicking. - A manager must consider the preferences and reactions of many people.
When evaluating alternatives, which questions should a manager ask to aid in decision making?
- Is the information we have about the alternative complete and current? - What problems could we encounter if we implement the alternative? - Does the alternative meet our primary objectives?
What are the potential advantages of using a group to make a decision?
- 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. - Participants in the group discussions are more likely to understand why the decision was made.
What are ways that managers can encourage more creativity in their employees?
- Strive to be creative yourself. - Don't punish creative failures. - Stimulate and challenge people intellectually. - Recognize creativity.
Which actions should be taken during the sixth and final stage of the decision-making process?
- Use feedback to either continue the decision or go back to the first stage. - Compare collected information with specified goals. - Collect information on how well the decision is working.
During brainstorming, when group members are not engaged due to inhibition or anxiety, what could help increase effectiveness?
- Utilize electronic communication to reduce face-to-face communication. - Take time for members to silently write down ideas.
When evaluating alternatives in decision making, what goal-related questions should managers consider when deciding among alternatives?
- Which alternatives can be implemented at the lowest cost or highest profit? - Which alternatives are most acceptable? - How does the solution relate to the defined goal?
Select the characteristics that describe System 2 information processing.
- analytical - reflective - deliberative
Why did Herbert Simon claim decision makers cannot be truly rational?
- because people within an organization have conflicting goals - because they are unable to process all the information to which they are exposed - because they have incomplete information about alternatives and consequences
The difficulty and pressure faced by managers in making decisions is driven by which three factors?
- complexity of the problem - degree of risk - level of uncertainty
To encourage ideas when brainstorming, groups should ______.
- encourage people to say anything that comes to mind - post ideas for everyone to read - withhold criticism of people and ideas
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 ______.
- future expected performance as determined by plans and forecasts - past performance - current performance of other organizations or units
In which situations are people likely to be more creative in the workplace?
- if they know that coworkers expect creativity - if they believe they are capable of being creative - if they think their employer values creativity
Which are constraints on decision makers?
- market - human - organizational - financial - legal
"Illusion of control" refers to pitfalls in decision making; this illusion may include ______.
- overconfidence - general optimism - previous successes
Which are barriers to effective decision making?
- psychological biases - social realities - time pressures
Select the characteristics that describe System 1 information processing.
- reflexive - emotional - automatic
Managers can encourage creativity in their employees by ______.
- stimulating and challenging people intellectually - giving creative efforts the rewards they are due - listening to employee's ideas
What are the three requirements for effectively managing group decisions?
- the constructive use of disagreement and conflict - an appropriate leadership style - enhancement of creativity
Rank the stages of decision making in order. NOTE the first step should be the top item in your list.
1. Identify and diagnose the problem 2. Generate alternative solutions 3. Evaluate alternatives 4. Make the choice 5. Implement the decision 6. Evaluate the decision
Which statement about decision making is true?
Better decisions are made when managers use rational processes.
______ conflict is defined as differences in perspectives or judgments about issues.
Cognitive
If a decision appears inappropriate, which stage should be re-examined first?
Defining the problem
Which statement about using a group to make a decision is true?
Groups generally make higher-quality decisions than individuals.
Why do managers want to minimize risk in decision making?
Making a wrong decision could lose the company money.
Which statement about managerial decisions is TRUE?
Managers often avoid taking action on making decisions.
______ decisions are decisions that have been encountered and made before, have objectively correct answers, and are solvable by using simple rules, policies, or numerical computations.
Programmed
______ is an acceptable decision-making behavior when there is no other known option because information is unavailable, time is limited, or other constraints make maximizing impossible.
Satisficing
Which statement about decision makers is TRUE?
They face constraints that can inhibit certain actions.
A decision is more likely to be influenced by a framing effect when ______.
a current problem is viewed as similar to an issue experienced in the past
Pressuring others to make decisions quickly, creating a false sense of urgency to spur action, and focusing on meeting deadlines versus following a rational process are all examples of managers falling into what's known as ______.
a speed trap
A less-than-perfect form of rationality in which decision makers cannot be perfectly rational because decisions are complex, and complete information is unavailable or cannot be processed, is referred to as ______.
bounded rationality
Match the component of effective group decision making with its appropriate characteristics: What is creativity?
brainstorm, avoid criticizing
How can a "problem" be turned into an opportunity?
by understanding what the organization is doing now and what it can do to create a more positive future
Alternative courses of action that can be implemented based on how the future unfolds are called ______ plans.
contingency
Plans that generate alternative courses of actions during times of uncertainty are called ______.
contingency plans
Some say that today we are in the midst of the next great business revolution where new ideas and innovation will be fundamental to our survival. Therefore, managers' most important and challenging responsibilities will be to foster _____ in their employees.
creativity
When an organization's leaders have a plan in place for dealing with unforeseen events that could damage the organization, they have developed a(n) ______ plan.
crisis management
A person whose role is to criticize ideas to fully explore potential downsides of ideas is known as a ______.
devil's advocate
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
When decision makers focus more attention on short-term costs and benefits than long-term costs and benefits they are demonstrating a psychological bias of ______.
discounting the future
To be an effective leader of a decision-making group, you should ______.
encourage input
What stage of decision making is information collected and compared to goals and plans to determine success or failure?
evaluating the decision
When dealing with time pressures in decision making, what should managers avoid doing?
falling into the speed trap
A phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus is known as ______.
groupthink
When group members don't want to break up a positive team spirit and wish to remain friendly by avoiding dissension, ______ may occur.
groupthink
Ensuring that decisions turn into or translate into actions and changes is part of the ______ step in the decision-making process.
implementing
Once a choice is made in the decision-making process, managers must take action to actualize the choice. This step of decision making is called ______ the decision.
implementing
The framing effect can have a disastrous effect on decision making when ______.
managers believe a current problem is similar to one they already experienced, so they don't look for alternatives
Match the component of effective group decision making with its appropriate characteristics: What is constructive conflict?
play devil's advocate, stay on task
The decision made from a set formula, such as when a manager needs to decide the amounts for an employee's paycheck, is an example of which type of decision?
programmed
Biases that interfere with objective rationality are called ______ biases.
psychological
Individual decision makers experience ______ conflict when several options are attractive or when none of the options are attractive.
psychological
The levels of conflict commonly experienced by managers when making decisions are ______ conflict and conflict between people.
psychological
When decision makers are biased in the way they gather, evaluate, and apply information in making their decisions, they are being influenced by ______ biases.
psychological
Ideas that have been seen or tried before are called ______ solutions.
ready-made
When managers follow the suggestions of others who have faced similar problems, they are applying ______ solutions.
ready-made
Match the component of effective group decision making with its appropriate characteristics: What is leadership?
remember the goals, avoid domination
In decision-making terminology, _____ exists when the probability of a successful action is less than 100 percent, and losses are possible.
risk
Choosing the first option that is minimally acceptable or adequate when making a decision is known as ________.
satisficing
Often, managers do not expend the time or energy to gather more information when needing to make a decision. Rather, in decision-making terminology, they opt for ______, making an expedient decision based on readily available information.
satisficing
When considering the effect of social realities on the decision-making process, it is important that managers take into account ______.
social interactions, bargaining, and politicking
The belief that one can influence events even when one has no control over what will happen is referred to as ______.
the illusion of control
Cognitive conflict is ______.
the most constructive type of conflict
