Chapter 7: Individual and Group Decision Making: How Managers Make Things Happen (SmartBook)

A _____ is a choice made from available alternatives.

decision

A graph of decisions and their possible consequences used to create a plan is known as a(n) ______.

decision tree

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

Analytical decision makers:

may overanalyze a situation take time to make decisions

Making a choice without the use of conscious thought or logical inference is known as using ______________. (Use only one word)

intuition

According to Kahneman, System 1 thinking is _____.

intuitive and largely unconscious

One thing groupthink teaches is us that cohesiveness:

isn't always a good thing

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.

1. identift the problem or opportunity 2. think of alternative solutions 3. evaluate alternatives and select a solution 4. implement and evaluate the solution chosen

According to Kahneman, which of the following characteristics describe System 2 thinking?

Analytical Deliberate Conscious

What type of bias refers to the tendency to make decisions based on an initial figure that may or may not be in line with market realities?

Anchoring and adjustment

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

Which decision-making style is the most people-oriented of the four styles?

Behavioral

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

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

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

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

Which of the following are true regarding the second stage in the rational model of decision making?

Creativity precedes innovation and has been described as the source of all intellectual property. 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.

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

Which of these are reasons for chief executive officers (CEOs) getting increasingly ousted for ethical violations in the 21st century?

Digital communications are more susceptible to hackers and whistleblowers. The 24/7 news cycle places more scrutiny on unethical behavior. Globalization allows businesses to operate in regions where ethical risks are greater.

Consulting firm Accenture predicts that by 2035 artificial intelligence will have which economic effect?

Economic growth will double.

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 Reducing work demands and freeing up more time for family or leisure Tailoring products to the personal needs and preferences of individual consumers

What is the most valuable competitive resource for a manager who needs alternative solutions to a problem?

Employees with ideas

What is the third stage of the rational model of decision making?

Evaluate alternatives and select a solution.

What are common results of groupthink?

Failure to consider new information Loss of new ideas

True or false: Predictive modeling is a groupthink technique.

False

People with a conceptual decision-making style are likely to do which of the following?

Find creative solutions Take risks Rely on intuition

Sense of invulnerability Rationalization Illusion of unanimity The wisdom of crowds

Group members have the illusion that nothing can go wrong, breeding excessive optimism and risk taking Pet assumptions underlying the group's decisions are protected from critical questions A group member's silence is interpreted as consent Groupthink's pressure to conform can lead members with different ideas to censor themselves

______ are strategies such as "rules of thumb" that simplify decision making.

Heuristics

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 ultimately effective? Is it ethical?

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.

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.

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 assumptions are made in the rational model of decision making?

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. Managers have complete, error-free information about alternative courses of action and their consequences.

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

_____________ are difficulties that inhibit the achievement of goals.

Problems

Evidence-based management attempts to introduce which factor into the decision-making process?

Rationality

"Close enough is good enough" best characterizes which model of decision making?

Satisficing

Which model of decision making emphasizes choosing the first solution that meets the criteria, rather than the optimal choice?

Satisficing

Successful implementation of major decisions requires which of the following?

Sensitivity to those affected by the decision Careful planning

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

Which of the following are examples of Big Data?

Surveillance data Data in corporate databases Web-browsing data trails Social network communications

Value orientation reflects the extent to which an individual focuses on which of the following dimensions?

Technical concerns or social concerns

Which of these is another term for hindsight bias?

The "I-knew-it-all-along" effect

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

What is the goal of conducting a project post-mortem?

To determine what could be done better and incorporate those insights into future decisions

Decision-making styles vary along which two dimensions?

Tolerance for ambiguity Value orientation

True or false: 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

True or false: 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

True or false: 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 Reason: The availability bias means a manager may look at information that is the most recent or most readily available information.

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.

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

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

_____________ reflects the extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions.

Value orientation

Which questions should you ask when developing ready-made solutions based on past experiences?

What lessons can you derive from this experience? What was the problem? What was the solution?

Brainwriting is the process of brainstorming by using _____.

a computer network

What are symptoms of groupthink?

an illusion of unanimity a sense of invulnerability rationalization

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

Which of these are areas in which experts believe AI can be applied to decision making?

assisted intelligence augmented intelligence autonomous intelligence

An __________ intelligence system learns from human inputs in order to assist humans in making better decisions.

augmented

In the ______ bias, managers use information readily available from memory to make judgments.

availability

People with a behavioral decision making style are more likely to:

avoid conflict have a hard time saying no

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

The _____ bias occurs when people seek data to support their point of view and disregard information that does not support it.

confirmation

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

The _______ is characterized by the tendency to view events as more predictable than they really are.

hindsight

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

"Going with your gut," or _____, is making a choice without the use of conscious thought or logical inference.

intuition

Satisficing and intuition are two ____________ models of decision making.

nonrational

Evidence-based decision relies on ______.

observations about what actually works

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

A data-mining technique used to predict future behavior and anticipate the consequences of change is known as _____ modeling.

predictive

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

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

You go to the movie theater to see the latest release by your favorite actor. You quickly realize the movie is not very good, but instead of walking out, you stay to watch the rest of the movie, figuring that you've already spent $9.50 for a movie ticket and $6 for popcorn. This is an example of the _______ bias.

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

What are three characteristics that affect decision making by a group?

the size of the group the efficiency of the group the knowledge of group members