MAN3025

When the president of Smithson Corp. proposed a new product for launch, his board of directors readily accepted his proposition without considering the risks. This is an example of

groupthink

Under a state of _____, the availability of each alternative and its potential payoffs and costs are all associated with probability estimates.

risk

occurs when a group or team's desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision.

Groupthink

GraviTea Inc. is examining potential for a new tea product. It has engaged a panel of experts to individually and anonymously state their opinions. It is now in the process of averaging them and may ask the experts for another prediction or justification. The average prediction will be taken to represent the decision of the group of experts. GraviTea is using a(n) _____ for decision making.

Delphi group

Which of the following best describes satisficing?

Decision makers search only until they find an alternative that meets some minimum standard of sufficiency.

In the following table, identify the order in which these steps are usually taken.

Define the decision situation. Identify the alternatives. Evaluate the alternatives. Select the best alternative. Implement the chosen alternative. Evaluate the results.

After you reviewed the six steps with Eric, he asked for an example of how to identify alternatives as he decides on a college major. Which of the following is the correct example to give to Eric?

Eric would make a list of majors he might want to study

Although Paula likes the structure provided by the rational decision-making process, you caution her that it has some shortcomings. Given the assumptions of the rational decision-making model, why is this process difficult to apply completely in many situations? Check all that apply.

Managers do not always evaluate situations rationally. Managers cannot always obtain complete and accurate information. Managers are limited by their values and unconscious beliefs.

Pauline, a manager of a popular chain of supermarkets, is making a decision using the rational decision-making process. She has completed evaluating all alternatives. What should she do next?

She should select the best alternative.

Which of the following is true of a state of uncertainty?

The decision maker does not know all the alternatives.

Roger is described as a manager with low risk propensity. He is most likely to:

be cautious when making decisions.

Which of the following is the final step in the rational decision-making process?

Evaluating the results

Which of the following decisions of an experienced chef of a restaurant is a nonprogrammed decision?

To hire a new sous chef

You recently attended a retreat in which you learned about evidence-based management (EBM), and you think this approach might be helpful to your organization. Your manager asks you to share your thoughts at the next staff meeting. What do you tell your colleagues about this concept? Check all that apply.

Using EBM, managers base decisions on data, even if the information challenges long-held beliefs. EBM is a contemporary formulation of rational decision making. To use EBM, an organization needs to develop a culture of truth telling, in which people face unpleasant facts head on.

Mark is a logical and rational manager. When making decisions, he first acquires complete and perfect information and then eliminates uncertainty to arrive at a decision that best serves the interests of his company. Mark follows

the classical decision model

is a major factor in nonprogrammed decisions.

Intuition

Which of the following statements is true of a coalition?

It is formed to achieve a common goal.

In the rational decision-making process, which of the following should one do after identifying the alternatives?

Evaluate the alternatives.

Which of the following is a disadvantage of team decision making?

It is more time consuming than individual decision making.

Lana, owner of a high-end boutique, claims she selects items for her boutique purely on a hunch. Based on Lana's claim, which of the following is true of Lana's decision making?

Lana uses intuition.

A company has hired you as a consultant, and you have recommended using evidence-based management (EBM). The CEO is skeptical, however, and asks you for some examples of EBM results. What examples do you give? Check all that apply.

Health care providers have stopped prescribing the treatments they were taught in school or are most skilled in applying in favor of those shown by studies to most benefit patients. Terminating employees who are satisfactory but perform less well than their peers has been shown to reduce productivity and lead to errors. Managers have learned that the widely accepted pay-for-performance model works poorly for collaborative teams.

Although Eric likes the structure provided by the rational decision-making process, you caution him that it has some shortcomings. Given the assumptions of the rational decision-making model, why is this process difficult to apply completely in many situations? Check all that apply.

Managers do not always make decisions based on the company's best interest. Managers cannot always assess all relevant information before making a decision. Managers may lack time to consider new and previously untested alternatives.

After you reviewed the six steps with Paula, she asked for an example of how to define the decision situation as she decides whether Gingerforge should start manufacturing patio furniture. Which of the following is the correct example to give to Paula?

Paula would articulate the specific environmental stimulus the company needs to respond to: the entry of a competitor into the patio furniture market.