Ch. 7 Pre-Reading/LearnSmart
Which steps are recommended for establishing a process or method for making decisions?
- Analyze the situation. - Conduct a cost-benefit analysis. - Consider whether the decision is consistent with your values.
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 - Tailoring products to the personal needs and preferences of individual consumers - Reducing work demands and freeing up more time for family or leisure
Which of the following are potential threats associated with artificial intelligence?
- Generating false but convincing images and sounds - Expanding surveillance in authoritarian ways - Producing automated weapons that could end up in the wrong hands
Evidence-based decision relies on ______.
observations about what actually works
Situations that present possibilities for exceeding existing goals are known as _____.
opportunities
Ryan learns that distribution problems caused a competitor's sales to fall in his region. He decides to take advantage of the situation by adding a salesperson to capture some of the competitor's lost business. Ryan is demonstrating how a(n) ______ affects decision making.
opportunity
Constance Bagley's decision tree is specifically designed for use when _____.
making ethical choices
When a few members of a group publicly oppose the beliefs, ideas, policies or procedures assumed by the majority of the group, it is referred to as _____.
minority dissent
Analytics are best used to help companies track _____ applications.
multiple
Satisficing and intuition are two ____________ models of decision making.
nonrational
The _____ bias occurs when people's positive feelings about their own decision-making ability is greater than their objective accuracy.
overconfidence
You fall prey to the overconfidence bias when you ______ your knowledge or expertise in a decision situation.
overestimate
Predictive modeling is a groupthink technique.
False
Big Data analytics allows us to uncover:
hidden patterns unknown correlations
The _______ is characterized by the tendency to view events as more predictable than they really are.
hindsight
The tendency of people to view events as being more predictable than they really are is referred to as _______________ bias.
hindsight
Intuition based on expertise is called ____________; while intuition based on feelings is called ____________.
holistic hunch; automated experience
A person's decision-making style is a combination of how a person perceives something as well as _____.
how they respond to it
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
Making a choice without the use of conscious thought or logical inference is known as using . (Use only one word.)
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 Kahneman, System 1 thinking is _____.
intuitive and largely unconscious
One thing groupthink teaches us is that cohesiveness:
isn't always a good thing.
As expertise grows, experts can be less able to see their products from an outsider's view and may make decisions that are no longer intuitive to users. This process has been called the curse of _____.
knowledge
In a recent team meeting, Terry agreed to vote in favor of rearranging the office so long as his desk would be near a window. Which negative method of achieving consensus does this illustrate?
log rolling
Which of the following are disadvantages associated with group-aided decision making?
- Group members may engage in satisficing to avoid prolonged debate. - The group may fall into groupthink. - A few people may influence or intimidate the rest of the group.
Which strategies are recommended for conducting a successful project post-mortem?
- Have an agenda. - Prepare and circulate a written report at the end of the meeting. - Encourage honest feedback from all participants.
Which of these describe how knowledge of decision-making styles affects managers' work?
- It allows managers to better identify personal strengths and weaknesses. - It gives managers an understanding of how different people reach different conclusions.
Which of these characteristics are associated with someone with a high tolerance for ambiguity?
- Lacking a strong need for control - Thriving in uncertain situations
What are common results of groupthink?
- Loss of new ideas - Failure to consider new information
Which techniques are effective ways to reduce the escalation of commitment?
- Make decision makers aware of the costs of persistence. - Set minimum performance targets and compare performance results. - Rotate managers in key positions during a project.
Which of these assumptions are made in the rational model of decision making?
- Managers have complete, error-free information about alternative courses of action and their consequences. - Managers will always select the course of action that they know will most benefit the organization. - Managers are able to make logical decisions without prejudice or emotional blind spots.
Which examples illustrate prosocial lying?
- Martin inflates the sales figures on a quarterly report to make his boss look better. - Jody approves a loan for a couple even though they are unlikely to be able to afford their payments.
Which of the following are true regarding the second stage in the rational model of decision making?
- Once you have identified a problem or an opportunity and diagnosed its causes, you need to come up with both obvious and creative alternative solutions. - Creativity precedes innovation and has been described as the source of all intellectual property.
An ______________ intelligence system learns from human inputs in order to assist humans in making better decisions.
- Producing automated weapons that could end up in the wrong hands - Expanding surveillance in authoritarian ways - Generating false but convincing images and sounds
Which of these are examples of the "curse of knowledge"?
- Professional bankers taking excessive risks - Engineers designing remotes with too many buttons
Successful implementation of major decisions requires which of the following?
- Sensitivity to those affected by the decision - Careful planning
Which of the following are examples of Big Data?
- Social network communications - Data in corporate databases - Web-browsing data trails - Surveillance data
Which are examples of the application of Big Data analytics?
- Studying nationwide medical information to inform health policy decisions - Reviewing social media posts to predict the revenue a new movie will generate - Using information about current employees to sort through large volumes of job applications
Which of these are reasons for chief executive officers (CEOs) getting increasingly ousted for ethical violations in the 21st century?
- The 24/7 news cycle places more scrutiny on unethical behavior. - Globalization allows businesses to operate in regions where ethical risks are greater. - Digital communications are more susceptible to hackers and whistleblowers.
Select the reasons it can be difficult to make evidence based decisions.
- There is not enough good evidence. - People are trying to mislead you. - There is too much evidence.
Which of the following are aspects of critical thinking?
- Using reason to analyze situations, make decisions, and solve problems - Using qualitative and quantitative information to solve problems creatively
Which two of these options are important in combating groupthink?
- allowing criticism - allowing other perspectives
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 - think of alternative solutions - evaluate alternatives and select a solution - implement and evaluate the solution chosen
Analytical decision makers:
- may overanalyze a situation - take time to make decisions
What are symptoms of groupthink?
- rationalization - a sense of invulnerability - an illusion of unanimity
What are three characteristics that affect decision making by a group?
- the knowledge of group members - the size of the group - the efficiency of the group
People with a conceptual decision-making style are likely to do which of the following?
-rely on intuition-find creative solutions-take risks
For who of the following would Big Data analytics be the most useful?
A market researcher who is studying consumer behavior
Which of the following is not true about group decision-making?
An added benefit of group decision-making is groupthink.
An individual with a high tolerance for ambiguity would most likely be attracted to which style of decision making?
Analytical
According to Kahneman, which of the following characteristics describe System 2 thinking?
Analytical Deliberate Conscious
What is the fundamental concern shared among all critics of artificial intelligence?
Artificial intelligence has the capacity to exceed human capabilities, leaving us under its control.
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
Why should you encourage Dionne to use groups to make decisions?
Because groups have a greater pool of knowledge
Which decision-making style is the most people-oriented of the four styles?
Behavioral
What are the four general styles of decision making associated with a person's value orientation and tolerance for ambiguity?
Behavioral Directive Conceptual Analytical
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 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 _____.
Big Data analytics
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 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
Which one of the following best describes the decisions made by a person with an analytical style?
Carefully considers lots of information and alternatives
Artificial intelligence lacks which key feature of human intelligence?
Common sense
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
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
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.
During meetings, Stacy challenges 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?
Devil's advocate
As businesses continue to incorporate artificial intelligence into the decision-making process, what will become even more important for humans to do?
Display good judgment
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
What are appropriate actions for a manager to take if a decision is not working as intended?
Give it more time. Start over. Change it slightly. Try another alternative.
______ are strategies such as "rules of thumb" that simplify decision making.
Heuristics
In general, managers are most likely to tolerate unethical behavior among which of the following groups of employees?
High-performing salespeople
What is the name for an intuitive decision based on a person's years of experience with similar situations?
Holistic hunch
What is the best way to develop a ready-made solution?
Identify best practices and turn them into standard operating procedure.
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 ethical? Is it ultimately effective?
Which of the following questions is NOT one of the questions used in Constance Bagley's ethical decision tree?
Is the proposed action a benefit to our competitors?
Identify the benefits of using intuition in the decision-making process. Check all that apply.
It can be helpful to managers when resources are limited. It can speed up decision making.
Knowledge of decision-making styles can assist managers in many ways except for which one of the following?
It increases the biases of the managers toward their favorite style.
Choose a key benefit of using intuition in decision making.
It speeds up the process when deadlines are tight.
By 2035, artificial intelligence is expected to have what effect on labor productivity?
It will increase labor productivity by as much as 40%.
Which of these are part of the seven implementation principles of evidence-based decision making?
Like everything else, you still have to sell it. Treat your organization as an unfinished prototype. If all else fails, slow the spread of bad practice.
One method of reducing the escalation of commitment is to measure performance against which metric?
Minimum performance targets
Which models are characteristic nonrational models of decision making?
Models that describe how managers actually make decisions
What is the recommended step you should take after making a decision?
Observe the results then conduct a post-mortem.
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
_____ is a form of unethical behavior that helps others rather than yourself.
Prosocial lying
Evidence-based management attempts to introduce which factor into the decision-making process?
Rationality
Which of the following function as the first stage in rational decision making by managers? (Select all that apply.)
Sales shortfalls Poor product quality Customer complaints
"Close enough is good enough" best characterizes which model of decision making?
Satisficing
Match each symptom of groupthink with its explanation.
Sense of invulnerability - Group members have the illusion that nothing can go wrong, breeding excessive optimism and risk taking Rationalization - Pet assumptions underlying the group's decisions are protected from critical questions Illusion of unanimity - A group member's silence is interpreted as consent The wisdom of crowds - Groupthink's pressure to conform can lead members with different ideas to censor themselves
Apex Enterprises spent a large amount of money to customize a pumping system it bought many years ago. A supplier is now offering a new pumping system that will save the company money in the long term. However, Apex decides to keep the older system because it has already spent so much money on the older system. What type of bias is this an example of?
Sunk-cost
Value orientation reflects the extent to which an individual focuses on which of the following dimensions?
Technical concerns or social concerns
Kenneth, the plant manager, was talking with another manager about Brendan, the lead engineer in the corporate R & D department. Kenneth remarked, "Brendan is so bright, and he is an expert in designing products. But like so many experts, he can't imagine what it's like to be as ignorant as the rest of us. I think at times, he cannot see things from an outsider's perspective." Brendan is suffering from
The curse of knowledge
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
Which of the following is an accurate description of decision making?
The process of identifying and choosing alternative courses of action
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
According to Constance Bagley, what should businesspeople use as a guide for making good ethical decisions?
Their own sense of right and wrong
What is the goal of conducting a project post-mortem?
To determine what could be done better and incorporate those insights into future decisions
__________ reflects the extent to which a person has a high need for structure or control in their life.
Tolerance for ambiguity
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
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
Brainwriting is the process of brainstorming by using _____.
a computer network
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.
The results of rational decision making should be evaluated because things may occur that were not foreseen, a "law" in economics known as the Law of _____ Consequences.
Unintended
What strategies are effective for achieving consensus in a group?
Use active listening. Involve as many group members as possible.
In a study done at Babson College's Working Knowledge Research Center, researchers identified what three key attributes of organizations committed to quantitative, fact-based analysis?
Use of modeling Multiple applications Support from top management
Which of the following approaches to using analytics is most likely to create a competitive advantage?
Using multiple applications to support multiple parts of the business
_____________ reflects the extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions.
Value orientation
Decision-making styles vary along which two dimensions?
Value orientation Tolerance for ambiguity
Which of the following is the best diagnostic question for an organization practicing evidence-based decision according to Jeffrey Pfeffer and Robert Sutton?
What happens when people fail?
Which questions should you ask when developing ready-made solutions based on past experiences?
What was the problem? What lessons can you derive from this experience? What was the solution?
When are directors, managers, and employees most likely to engage in unethical behavior?
When they feel compelled to put company interests ahead of their own sense of right and wrong
Satisficing
Which model of decision making emphasizes choosing the first solution that meets the criteria, rather than the optimal choice?
According to Ed Catmull of Pixar and Disney Animation, what is the absolute minimum that should be accomplished in a project post-mortem?
Write down five things you would do again and five things you wouldn't.
In order to prevent groupthink, it is important to do which of the following?
allow criticism
Sophisticated forms of business data analysis are known as business _________.
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
Samantha had never traveled to New York City before, but she had been on a recent business trip to Houston. When she learned that the hotel room she wanted in New York City cost $300 per night, she was shocked, because she thought the hotel rooms would be priced similarly to those in Houston. 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
Stores of data that are so vast that conventional database management systems cannot handle them, and very sophisticated analysis software and supercomputing-level hardware are required, are known as ____. These data include not only data in corporate databases but also web-browsing data trails, social network communications, sensor data, and surveillance data.
big data
The concept that 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, is known as ______________ rationality.
bounded
Simon believed that managers can never act truly logically because of their __________.
bounded rationality
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
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.
brainwriting
"Don't tell me the truth; just tell me what I want to hear" is an example of the _______ bias.
confirmation
A _____ is a choice made from available alternatives.
decision
Conducting a(n) _____ involves analyzing the underlying causes of a problem or opportunity.
diagnosis
When deciding how to make improvements or change conditions from the present to the desirable, you are performing a(n) __________.
diagnosis
In the ______ method, groups engage in a structured debate between opposing positions (thesis and antithesis) with the aim of reaching a consensus.
dialectic
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
Goal _____ occurs when the primary goal is subsumed by a secondary goal.
displacement
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
The rise of artificial intelligence in the 21st century is expected to ______ the need for human decision makers.
enhance
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
When using the ethical decision tree, management should consider whether a proposed action is both legal and _____.
ethical
Cynthia, the human resources manager, has significant experience handling ethical issues in the workplace. Over the years she has received extensive training in matters of workplace ethics. Due to Cynthia's legal background (she is a member of the local bar association), the management of her company rely on Cynthia to assist them with legal issues, especially with ethical dilemmas. The ideal role for Cynthia within the organization is
ethics officer
Someone who is trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas, is called a(n) _____.
ethics officer
What is the third stage of the rational model of decision making?
evaluate alternatives and select a solution.
A logic manager is someone trained about matters of ethics in the workplace.
false
Evidence-based management includes treating your organization as a finished prototype.
false
To reduce the escalation of commitment, Shannon, the CEO, allows herself to be very influenced by the way a problem with her team is presented to her.
false
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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
All the following are characteristics of group decision-making EXCEPT _____.
groups make decisions quickly
One disadvantage of group decision making is _____________, which occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation.
groupthink
People with a behavioral decision making style are more likely to:
have a hard time saying no avoid conflict
Omar, who works as a waiter in a top restaurant in Manhattan, likes the fast pace of his work and the fact that things are always changing there. Omar can be said to
have a high tolerance for ambiguity.
One obstacle to making evidence-based decisions is that stories are often more ______ than evidence.
persuasive
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
_____________ are difficulties that inhibit the achievement of goals.
problems
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
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
Heuristics are strategies that ______ the process of making decisions.
simplify
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
All of the following are advantages to group decision making EXCEPT _____.
superiors can dominate or intimidate the group
Eileen had provided the weekly inventory report to the management team every Friday for the past four months, but she wasn't able to generate the report last week because she was attending a seminar learning how to use the new inventory software. Her boss sent her an e-mail reminding her of the importance of the report and asking her to be sure and submit it every Friday. This is an example of _____.
the availability bias
Research shows that one of the key characteristics of companies that have successfully implemented analytics into the decision-making process, is support from ______.
top management
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
Evidence-based management includes making decisions based on what actually works versus what ought to work.
true
The increased focus on business ethics that followed the business scandals of the early 2000s, including the Enron collapse and civilian contractor abuses in Iraq, also lead to the growing use of ethics officers.
true
