Practice Exercise 3-1

Describe conceptual style. In what type of profession might someone with this type of decision-making style excel? Explain your answer.

A person with conceptual style has a high tolerance for ambiguity and an intuitive way of thinking. He has a very broad perspective and considers many alternatives. Conceptual decision-makers are very good at finding creative solutions to problems. They excel in making long-term visionary decisions. One possible profession for a conceptual style decision-maker might be president.

What is the difference between a person's way of thinking and a person's tolerance for ambiguity?

A person's way of thinking refers to how he processes information. A person's tolerance for ambiguity refers to how much structure or control that person needs.

Define alternatives.

Alternatives are the different possible actions that can solve your problem or achieve the goal presented by your opportunity.

What is bounded rationality?

Bounded rationality is a concept that says managers' ability to make decisions is limited by many constraints. These constraints include: the complexity of a decision; limitations on time and money; the manager's personal values and characteristics; incomplete information or too much information; conflicting priorities.

Compare and contrast rational and nonrational decision-making.

Rational decision-making is the process of logically examining a problem or situation to make the best choice for a company. Nonrational decision-making is the process of making a decision in a risky environment when information isn't available or when a manager doesn't have time to work through the situation using a step-by-step, logical approach.

__________ usually involves complex, important situations. a. nonprogrammed decisions b. programmed decisions c. daily crisis points

a. nonprogrammed decisions

Finding a solution that is satisfactory, but not necessarily the best solution is called ___________. a. satisficing b. hedging c. nonrational decision-making d. choosing the lesser of two evils

a. satisficing

If you have a high tolerance for ambiguity and a rational way of thinking, you have a(n) __________ style of decision-making. a. conceptual b. analytical c. irrational d. rational

b. analytical

_________ is the process of finding and choosing among the available alternatives. a. leadership b. decision-making c. management

b. decision-making

__________ is the process of making a decision in a risky environment. a. nonbounded rationality b. rational decision-making c. nonrational decision-making

c. nonrational decision-making