Chapter 09: Managerial Decision Making

Suppose that a manager had a very low risk propensity — she would do whatever she could to avoid taking risks. This might be a problem in which of the following steps of the decision making process?

Step 4. Selection of desired alternative.

Intuition is associated with which of the following decision making models?

Administrative model

People who use this style like to gather a lot of objective, rational data to make complex decisions.

Analytical

If you make a decision about what new product to produce in the upcoming year, but you don't have information about new technology that would lead to you making a better choice, you are operating under conditions of

bounded rationality

Four distinct _____________ ______________ have been identified that characterize how managers evaluate problems, generate alternatives, and make choices.

decision styles

The administrative model of decision making is ___________ , and its fundamental underlying assumption is that:

descriptive, People make decisions based on unconscious mental habits and models

The political model of decision making is _____________, and its fundamental underlying assumption is that:

descriptive; Decisions are made by groups with diverse interests, goals, and values

The classical model of decision making is _____________ , and its fundamental underlying assumption is that:

normative; People make decisions rationally and logically

Suppose that you are buying a new car. You know that you want a hatchback. You go to the Honda dealer and test drive a Fit. Since it has the hatchback you want, you buy it without going to any other dealerships or looking at any other hatchback models. You are operating under conditions of

satisficing

A manager who is perpetuating the status quo would be likely to do which of the following?

Base this year's budget on last year's budget.

What is the second step in the decision making process?

Determining the reason for the decision.

Which of the following statements is consistent with evidence-based decision making?

Evidence-based decision making encourages questioning assumptions. Knowing what you don't know is as important as knowing what you do know.

Which model of decision making comes the closest to describing how decisions are made in real life?

Political model

Which model of decision making tells managers how they would make decisions in an ideal world?

Rational model