Organizational Behavior - Chapter 7

66. The workplace supports _____ when reasonable mistakes are tolerated and expected as part of the discovery process. A. a creative process B. a learning orientation C. associative play D. cross-pollination E. design thinking

B. a learning orientation Feedback: The workplace supports a learning orientation when reasonable mistakes are tolerated and expected as part of the discovery process.

22. The gap between "what is" and "what ought to be" is also called a A. deviation. B. problem. C. opportunity. D. choice. E. decision.

B. problem. Feedback: A problem is a deviation between the current and the desired situation—the gap between "what is" and "what ought to be."

84. Dora is an example of a(n) _______________ thinker. A. divergent B. innovative C. procedural D. convergent E. illumination

A. divergent Feedback: Incubation assists divergent thinking—reframing the problem in a unique way and generating different approaches to the issue.

29. Decision makers tend to rely on their implicit favorite when they A. select an appropriate decision style. B. evaluate decision alternatives sequentially. C. want to avoid escalation of commitment. D. want to make more creative decisions. E. have to make a selection from very limited alternatives.

B. evaluate decision alternatives sequentially. Feedback: Decision makers have a natural tendency to evaluate alternatives sequentially, not all at the same time. They evaluate each alternative against the implicit favorite when evaluating decision alternatives.

62. _____ is valuable throughout the decision-making process. A. Incubation B. Creativity C. Verification D. Preparation E. Illumination

B. Creativity Feedback: Creativity is valuable throughout the decision-making process.

48. ________ shape(s) how we evaluate information, not just which choice we select. A. Decisions B. Emotions C. Values D. Cognitive dissonance E. Design thinking

B. Emotions Feedback: Emotions shape how we evaluate information, not just which choice we select.

55. Which of the following refers to calculating the conventionally accepted "right answer" to a logical problem? A. divergent thinking B. convergent thinking C. logical validity D. escalation of commitment E. confirmation bias

B. convergent thinking Feedback: Incubation assists divergent thinking—reframing the problem in a unique way and generating different approaches to the issue. This contrasts with convergent thinking—calculating the conventionally accepted "right answer" to a logical problem.

4. According to bounded rationality theory, people make the best decisions when their perceptions are "bounded" or framed by past experience.

FASLE Feedback: Bounded rationality refers to the view that people are bounded in their decision-making capabilities, including access to limited information, limited information processing, and a tendency toward satisficing rather than maximizing when making choices. This makes them choose a satisfactory solution rather than the best solution.

6. Decision makers typically look at alternatives sequentially and compare each alternative with an implicit favorite.

TRUE Feedback: Decision makers have a natural tendency to evaluate alternatives sequentially, rather than at the same time. This sequential evaluation occurs partly because all alternatives are not usually available to the decision maker at the same time. Consequently, as a new alternative comes along, it is immediately compared with an implicit favorite—an alternative that the decision maker prefers and that is used as a comparison with other choices.

13. Employee involvement potentially improves both the decision-making quality and the commitment of employees.

TRUE Feedback: Employee involvement can potentially improve the number and quality of solutions generated. Employee involvement also tends to strengthen employee commitment to the decision. Rather than viewing themselves as agents of someone else's decision, staff members feel personally responsible for its success.

56. Which of the following is assisted by incubation in the creative process? A. escalation of commitment B. prospect theory effect C. convergent thinking D. divergent thinking E. decision choice

D. divergent thinking Feedback: Incubation assists divergent thinking—reframing the problem in a unique way and generating different approaches to the issue.

As director of new projects, you have just learned that cash flow problems have forced your organization to cut back product development activities. This means that two of the eight projects currently being developed must be terminated, along with the employees working on those projects (about 25 percent of employees in your unit). You have a good knowledge of these projects, as well as the performance and seniority of employees who work in your unit. While some projects clearly have a high chance of success, the long-term potential of a couple of them is unknown. Identify the best level of employee involvement in this situation, and describe three factors (contingencies) that support this level of involvement.

1. Decision structure: This problem is unique, so it lacks structure. As a nonprogrammed decision, this problem has the potential need for employee involvement. 2. Source of decision knowledge: It seems that you have sufficient information about most aspects of this situation. You don't know the feasibility of some projects, but neither do employees. Thus, a low level of involvement is possible. The brief description suggests that employees have no more information than you do. Thus, a low level of involvement is possible. 3. Decision commitment: There is a high probability that if you make the decision yourself, employees will follow the decision because you would have legitimate power to lay off redundant employees. Thus, a low level of involvement is possible. 4. Risk of conflict: (a) Given that some employees will be laid off, it is unlikely that employee goals are compatible with organizational goals here. Thus, a low level of involvement is preferred. (b) Given the threat of layoff, subordinate conflict among the alternatives is high. Thus, a low level of involvement is preferred.

96. Creative Finance Ltd. wants to introduce practices that would enhance creativity, among employees in solving some of the financial institution's ongoing work process problems. Identify and describe three types of activities that encourage creativity including a specific example of things that might be done in each activity.

1. Redefining the problem: Creativity experts have suggested various ways to help people to redefine problems. Employees might be encouraged to revisit old projects that have been set aside. After a few months of neglect, these projects might be seen in new ways. Another strategy involves asking people unfamiliar with the issue (preferably with different expertise) to explore the problem with you. You would state the objectives and give some facts and then let the other person ask questions to further understand the situation. 2. Associative play: Associative play activities include object-oriented chain stories, taking art classes, viewing problems through metaphors, and morphological analysis. 3. Cross-pollination: This is accomplished by having employees from different work areas work together on the problem. Cross-pollination also occurs through formal information sessions, where people from different parts of the organization share their knowledge.

37. What is meant by "divine discontent"? A. Decision makers are never satisfied with current conditions, so they more actively search for problems and opportunities. B. It is much easier to discover blind spots in problem identification when listening to how others perceive the situation. C. Employees can minimize problem identification errors by discussing the situation with colleagues and clients. D. Decision makers are more motivated to consider other perspectives of reality. E. Leaders require considerable willpower to resist the temptation of looking decisive.

A. Decision makers are never satisfied with current conditions, so they more actively search for problems and opportunities. Feedback: A third way to improve problem identification is to create a norm of "divine discontent." Decision makers with this mindset are never satisfied with current conditions, so they more actively search for problems and opportunities.

16. _____ is a conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs. A. Decision making B. Bounded rationality C. Divergent thinking D. Prospect theory E. Scenario planning

A. Decision making Feedback: Decision making is a conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs.

46. ________ occurs when decision makers choose to continue an existing course of action because it is the less painful option at the time. A. The prospect theory effect B. The sunk costs effect C. The self-justification effect D. The self-enhancement effect E. Satisficing

A. The prospect theory effect Feedback: Prospect theory effect is the tendency to experience stronger negative emotions when losing something of value than the positive emotions when gaining something of equal value.

26. What effect do mental models have on the decision-making process? A. They perpetuate assumptions that make it difficult to see new opportunities. B. They allow decision makers to obtain accurate information from the surroundings. C. They reduce the importance of developing alternative solutions to the problem. D. They allow decision makers to maximize the potential of their decision making. E. They help people to be more creative in decision making.

A. They perpetuate assumptions that make it difficult to see new opportunities. Feedback: Mental models are visual or relational images of the external world; they fill in information that we don't immediately see, which helps us understand and navigate in our surrounding environment. Many mental images are also prototypes—they represent models of how things should be. These mental models also blind us from seeing unique problems or opportunities because they produce a negative evaluation of things that are dissimilar to the mental model.

41. Intuition relies on programmed decision routines that speed up our response to pattern matches or mismatches. These programmed decision routines are referred to as A. action scripts. B. illuminations. C. rational formulae. D. solution-focused problems. E. implicit favorites.

A. action scripts. Feedback: Intuition relies on action scripts—programmed decision routines that speed up our responses to pattern matches or mismatches. Action scripts effectively shorten the decision-making process by jumping from problem identification to selection of a solution. In other words, action scripting is a form of programmed decision making. Action scripts are generic, so we need to consciously adapt them to the specific situation.

Scenario F The Braided Bread company is struggling with how to break into the bagel market. They see this as an opportunity for growth, as it would not require any new machinery. The downside is that there is already a bagel shop in town. 87. Since Braided Bread has identified the problem, their next step is to A. choose the best decision process. B. develop possible choices. C. select the choice with the highest value. D. implement the selected choice. E. evaluate the selected choice

A. choose the best decision process. Feedback: The second step involves choosing the best decision process. This step is really a meta-decision—deciding how to decide—because it refers to choosing among the different approaches and processes to make the decision.

73. Sue Kim is trying to decide which shoes to order for the next season. She has examined the sales reports and walked the sales floor. She thinks she has a good idea, but she still asks her staff at the next meeting though, just to be sure. She is using which contingency for employee involvement in decision making? A. decision structure B. source of decision knowledge C. decision commitment D. risk of conflict E. cross-pollination

A. decision structure Feedback: Subordinates should be involved in some level of decision making when the leader lacks sufficient knowledge and subordinates have additional information to improve decision quality. In many cases, employees are closer to customers and production activities, so they often know where the company can save money, improve product or service quality, and realize opportunities. This is particularly true for complex decisions where employees are more likely to possess relevant information.

67. Which of these is also referred to as participative management? A. employee involvement B. escalation of commitment C. creativity D. implicit favorite E. divergent thinking

A. employee involvement Feedback: Employee involvement, also called participative management, refers to the degree to which employees influence how their work is organized and carried out.

45. Prospect theory and closing costs are two reasons why people A. engage in escalation of commitment. B. define problems in terms of preferred solutions. C. make nonprogrammed decisions rather than programmed decisions. D. demonstrate satisficing behaviors. E. encourage employee involvement.

A. engage in escalation of commitment. Feedback: Four of the main influences that lead to escalation of commitment include self-justification, prospect theory effect, self enhancement, and sunk costs.

50. The Dot Com business boom can be used as an example of A. escalation of commitment. B. rational maximization. C. rational choice thinking. D. confirmation bias. E. impulsive buying.

A. escalation of commitment. Feedback: Another reason why decision makers don't evaluate their decisions very well is due to escalation of commitment—the tendency to repeat an apparently bad decision or allocate more resources to a failing course of action.

60. People tend to be more creative when they A. have a reasonable level of job security. B. are secluded from others in the organization. C. are under extreme time pressure. D. have relatively low experience. E. have low openness to experience.

A. have a reasonable level of job security. Feedback: Companies foster creativity by providing a comfortable degree of job security, which explains why creativity suffers during times of downsizing and corporate restructuring.

24. Decision makers might succumb to the solution-based problem trap because A. it provides a comforting solution. B. they prefer ambiguity rather than decisiveness. C. it avoids the escalation of commitment problem. D. it avoids problems of bounded rationality. E. it helps in minimizing the biases caused by mental models.

A. it provides a comforting solution. Feedback: Decision makers tend to define problems as veiled solutions. Decision makers engage in solution-focused problem identification because it provides comforting closure to the otherwise ambiguous and uncertain nature of problems.

18. The rational choice decision-making process selects the choice with the highest utility through the A. rational choice calculator. B. selective expected utility. C. solution-focused calcuator. D. rational expected utility. E. rational selective calculator.

A. rational choice calculator. Feedback: Rational choice decision making selects the best alternative by calculating the probability that various outcomes will occur from the choices and the expected satisfaction from each of those outcomes

Scenario A With funding from her family, Sarine is currently developing a new line of dolls for her business, which she hopes will take her company to the next level. At first, she encountered some minor problems with the construction of the dolls and spent a fair amount of money engineering a way to enable them to be as she envisioned them to be. Unfortunately, she then found out that there was a patent protecting the way the dolls arms were connected, so she spent more money redesigning the dolls. After an unexpectedly uninterested response from the public in the dolls, she decided that they needed to be marketed differently in order to sell. With this in mind, Sarine allocated more resources to marketing, had the packaging of the dolls redesigned, and created a new set of advertising materials. The cost of manufacturing these dolls has now exceeded the initial proposed cost by four times, but she is determined to make it work. She is embarrassed by how this has gone but continues to put on a brave front. 74. Sarine is most likely making decisions to continue with these dolls at this point because of A. self-justification. B. self-enhancement. C. a decline of commitment. D. prospect theory. E. closing costs.

A. self-justification. Feedback: Decision makers typically want to appear rational and effective. One such impression-management tactic is to demonstrate the importance of a decision by continuing to invest in it, whereas pulling the plug symbolizes the project's failure and the decision maker's incompetence. This self-justification effect is particularly evident when decision makers are personally identified with the project, have staked their reputations to some extent on the project's success, and have low self-esteem.

36. Often management is "under the gun" to solve problems and meet deliverables. This can lead to A. solution-focused problem-solving. B. stakeholder framing. C. misguided leadership. D. perceptual defense. E. identifying opportunities.

A. solution-focused problem-solving. Feedback: Many leaders announce problems or opportunities before having a chance to logically assess the situation. The result is often a misguided effort to solve an ill-defined problem or resources wasted on a poorly identified opportunity.

52. Incubation and verification are two A. stages of the creative process. B. elements of bounded rationality. C. elements of the MARS model. D. stages of team decision making. E. steps in perceptual modeling.

A. stages of the creative process. Feedback: Preparation, incubation, illumination, and verification are the four stages of the creative process.

32. Satisficing refers to A. the tendency to choose an alternative that is good enough rather than the best. B. the feeling employees experience when they are not involved in a decision in which they would have made a valuable contribution. C. a desirable outcome of decision making when several employees participate in the decision process. D. the feeling employees experience when they make the right decision. E. the tendency for decision makers to evaluate alternatives sequentially rather than comparing them all at once.

A. the tendency to choose an alternative that is good enough rather than the best. Feedback: Satisficing is the act of choosing an alternative that is satisfactory or "good enough."

71. Employees should not make the decision alone (without the manager's involvement) when A. their goals and norms conflict with the organization's objectives. B. they lack commitment to decisions made by the boss alone. C. they possess more knowledge than the manager. D. the employees are likely to disagree with each other regarding the preferred solution. E. the problem calls for a nonprogrammed decision.

A. their goals and norms conflict with the organization's objectives. Feedback: If employee goals and norms conflict with the organization's goals, only a low level of employee involvement is advisable.

90. Describe the rational choice paradigm of decision making.

According to the rational choice paradigm of decision making, people rely on logic to evaluate and choose alternatives. This paradigm assumes that decision makers have well-articulated and agreed-on organizational goals, efficiently and simultaneously process facts about all alternatives and the consequences of those alternatives, and choose the alternative with the highest payoff. The first step is to identify the problem or recognize an opportunity. A problem is a deviation between the current and the desired situation—the gap between "what is" and "what ought to be." An opportunity is a deviation between current expectations and a potentially better situation that was not previously expected. Next, the decision maker chooses the best decision style for this problem or opportunity, such as whether to involve others or make the decision alone, whether to treat the issue as routine or unique, and so on. Third, the decision maker develops alternative solutions. This involves searching for existing solutions to the problem and possibly designing a custom-made solution. Fourth, the decision maker chooses the best solution from the available alternatives. This is followed by the process of implementing the solution. The final stage involves evaluating the implemented decision.

68. Which of the following is the lowest level of employee involvement? A. Consult with individuals. B. Ask employees for specific information. C. Describe the problem to employees and ask for information. D. Create a team to make the decision. E. Create a team to make recommendations.

B. Ask employees for specific information. Feedback: A low level of involvement occurs where employees are individually asked for specific information, but the problem is not described to them.

69. Which of the following is true at the highest level of employee involvement? A. Participation involves asking employees for information. B. The entire decision-making process is handed over to employees. C. Specific employees provide information to the management, and management makes the recommendations. D. Employees tend to disagree with each other regarding the preferred solution. E. Employees are told about the problem and they provide recommendations to the decision maker.

B. The entire decision-making process is handed over to employees. Feedback: At the highest level of employee involvement process, the entire decision-making process is handed over to employees, where the original decision maker serves only as a facilitator to guide the team's decision process and keep everyone on track.

17. ________ can be defined as the view that people should and typically do use logic and all available information to choose the alternative with the highest value. A. Subjective expected utility maximization B. The rational choice decision-making process C. Bounded rationality D. Decision making E. Intuition

B. The rational choice decision-making process Feedback: The view that people should and typically do use logic and all available information to choose the alternative with the highest value is known as the rational choice decision-making process.

38. The main reason why decision makers compare alternatives against an implicit favorite is the hard-wired human need to minimize A. confirmation bias. B. cognitive dissonance. C. implicit favorite. D. decision heuristics. E. anchoring.

B. cognitive dissonance. Feedback: The main reason why decision makers compare alternatives against an implicit favorite is the hard-wired human need to minimize cognitive dissonance.

27. The concept of bounded rationality holds that A. our perception of a rational reality is bounded by nonrationality. B. decision makers process limited and imperfect information and therefore rarely select the best choice. C. decision makers have limited alternatives to make decisions. D. decision makers are bound to project images of themselves as rational thinkers. E. our realities are bounded by our own perceptions so that everyone's reality is different.

B. decision makers process limited and imperfect information and therefore rarely select the best choice. Feedback: Nobel Prize-winning organizational scholar Herbert Simon argued that people engage in bounded rationality because they process limited and imperfect information and rarely select the best choice.

39. Which of the following ultimately energizes us to select the preferred choice? A. logic B. emotions C. rational logic D. creativity E. intuition

B. emotions Feedback: Neuroscientific evidence says that information produced from logical analysis is tagged with emotional markers that then motivate us to choose or avoid a particular alternative. Ultimately emotions, not rational logic, energize us to make the preferred choice.

Scenario C George is a manager for InnoBLAST Inc., a web-based applications company. In an attempt to promote new ideas, George decides to allow his engineering team to devote 15 percent of their work time to whatever projects they would like to work on and reduces their assigned workload. He then institutes a 30-minute period each morning where the team members are asked to look over their current project list for the day and develop more knowledge about a task before they move on to work on their assigned tasks. 80. George is attempting to promote A. employee relations. B. employee creativity. C. employee work/life balance. D. a learning-oriented culture. E. task orientation.

B. employee creativity. Feedback: Creativity is the development of original ideas that make a socially recognized contribution. Creativity is at work when imagining opportunities, such as how a company's expertise might be redirected to untapped markets. Creativity is present when developing alternatives, such as figuring out new places to look for existing solutions or working out the design of a custom-made solution. The value of creativity in decision making is evident at Google, the Internet search engine company. Google's creative culture includes a natural practice of experimenting with ideas and seeking out different uses of technology. Perhaps most famous is the company's policy of giving engineers 20 percent of their time to develop projects of their choosing.

79. Once Alvin makes the choice and contracts with the vendor, he will still need to A. implement the best decision process. B. evaluate the selected choice. C. develop possible choices. D. research the problem. E. seek out additional vendors.

B. evaluate the selected choice. Feedback: The final step is to evaluate whether the gap has narrowed between "what is" and "what ought to be." Ideally, this information should come from systematic benchmarks so that relevant feedback is objective and easily observed.

59. You have just received seed money for a new e-commerce business and you want to hire a dozen people with a high level of creative potential. To hire the most creative people, you would select applicants who have A. no experience in this industry, high analytic intelligence, and relatively low need for achievement. B. high degree of nonconformity, high value for self-direction, and relatively low need for affiliation. C. strong mental models regarding their field of knowledge, high synthetic intelligence, and relatively high need for social approval. D. high need for affiliation, high need for achievement, and high need for social approval. E. low openness to experience, high need for social approval, and relatively low need for affiliation.

B. high degree of nonconformity, high value for self-direction, and relatively low need for affiliation Feedback: Creative people possess a cluster of personality traits and values that support an independent imagination: high openness to experience, moderately low need for affiliation, and strong values around self-direction and stimulation.

65. When someone says, "The lightbulb just went on," they are in the _____ stage. A. incubation B. illumination C. preparation D. verification E. convergent thinking

B. illumination Feedback: Illumination is often visually depicted as a lightbulb, but a better image would be a flash of light or perhaps a briefly flickering candle—these bits of inspiration are fleeting and can be quickly lost if not documented.

64. In the creative process, which of the following refers to a "fringe" awareness? A. incubation B. illumination C. preparation D. verification E. convergent thinking

B. illumination Feedback: Illumination (also called insight), the third stage of creativity, refers to the experience of suddenly becoming aware of a unique idea. Wallas and others suggest that this stage begins with a "fringe" awareness before the idea fully enters our consciousness.

53. The first stage of the creative process is A. divergent thinking. B. preparation. C. experimentation. D. illumination. E. intuition.

B. preparation. Feedback: The first stage of the creative process is preparation—the process of investigating the problem or opportunity in many ways. Preparation involves developing a clear understanding of what you are trying to achieve through a novel solution and then actively studying information seemingly related to the topic.

31. The Director of Nursing is looking throughout the hospital for a new format of a work schedule for nurses. She evaluates each schedule system as soon as she learns about it. Eventually, she finds a schedule that is "good enough" for her needs and ends her search even though there may be better schedules available that she hasn't yet learned about. The Director of Nursing is engaging in A. escalation of commitment. B. satisficing. C. perceptual defense. D. post-decisional justification. E. open rationalization.

B. satisficing. Feedback: Typically, people are bounded in their decision-making capabilities, including access to limited information, limited information processing, and tendency toward satisficing rather than maximizing when making choices. Satisficing is the act of choosing an alternative that is satisfactory or "good enough."

72. Numerous studies on participative decision making, task conflict, and team dynamics have found that involvement A. brings out less diverse perspectives. B. tests ideas. C. provides worst alternatives. D. provides less valuable knowledge. E. brings out weakened employee commitment.

B. tests ideas. Feedback: Numerous studies on participative decision making, task conflict, and team dynamics have found that involvement brings out more diverse perspectives, tests ideas, and provides more valuable knowledge, all of which help the decision maker select the best alternative.

47. Escalation of commitment can be minimized by ensuring that A. there are ready-made alternatives to resolve the problem. B. those who make the decision are different from those who implement and evaluate it. C. the team leader has strong opinions about the preferred options for a problem. D. organizational goals are relatively ambiguous. E. negative information is screened out to protect the self-esteem of the decision makers.

B. those who make the decision are different from those who implement and evaluate it. Feedback: One of the most effective ways to minimize escalation of commitment and confirmation bias is to ensure that the people who made the original decision are not the same people who later evaluate that decision.

28. Which of the following is one of the assumptions of the rational decision-making process? A. Decision makers evaluate alternatives against an implicit favorite. B. Decision makers choose the alternative that is good enough. C. Decision makers have well-articulated goals. D. Decision makers evaluate alternatives sequentially. E. Decision makers process perceptually distorted information.

C. Decision makers have well-articulated goals. Feedback: The rational decision-making process assumes that organizational goals are clear and agreed-on. Unfortunately, organizational goals are often ambiguous or in conflict with each other.

63. Who constructed the four-stage creative process model? A. Abraham Maslow B. Hermann von Helmholtz C. Graham Wallas D. Frederick Taylor E. Adam Smith

C. Graham Wallas Feedback: London School of Economics professor Graham Wallas built on Helmholtz's ideas to construct the four-stage model shown in Exhibit 7.4. Nearly a century later, this model is still considered the most elegant representation of the creative process.

42. Which of the following statements is true about scenario planning? A. It is unwittingly selective in the acquisition and use of evidence. B. It is the process of planning a solution based on employee preferences. C. It is a disciplined method for imagining possible futures. D. It is an act of reframing the problem in a unique way and generating different approaches to the issue. E. It is the act of calculating the conventionally accepted right answer to a logical problem.

C. It is a disciplined method for imagining possible futures. Feedback: Scenario planning is a disciplined method for imagining possible futures. It typically involves thinking about what would happen if a significant environmental condition changed and what the organization should do to anticipate and react to such an outcome.

61. What do impromptu storytelling, morphological analysis, and artwork have in common? A. They are forms of cross-pollination. B. They increase the risk of bounded rationality. C. They are forms of associative play. D. They significantly weaken the creative process. E. They are used mainly to improve the rational choice process.

C. They are forms of associative play. Feedback: A set of creativity activities, known as associative play, ranges from art classes to impromptu storytelling and acting.

88. Braided Bread has selected a choice and now needs to A. choose the best decision process. B. develop additional possible choices. C. implement the selected choice. D. discover alternative choices. E. evaluate the selected choice.

C. implement the selected choice. Feedback: The fifth step is to implement the selected alternative. Rational choice decision making assumes that implementation occurs without any problems.

82. George decides to do a _____ before encouraging the team to develop their own ideas. A. task orientation B. groupthink C. learning orientation D. cross-pollination E. human rule test

C. learning orientation Feedback: One of the most important conditions for creativity is a learning orientation. The workplace supports a learning orientation when reasonable mistakes are tolerated and expected as part of the discovery process. A second condition for creativity is motivation from the job itself. Employees tend to be more creative when they believe their work benefits the organization and/or larger society (i.e., task significance) and when they have the freedom to pursue novel ideas without bureaucratic delays (i.e., autonomy). Creativity is about changing things, and change is possible only when employees have the authority to experiment. More generally, jobs encourage creativity when they are challenging and aligned with the employee's knowledge and skills.

19. A nonprogrammed decision is applicable in any A. routine situation where the company has a ready-made solution. B. decision that does not relate directly to the employee's job description. C. nonroutine situation in which employees must search for alternative solutions. D. decision that is clearly within the employee's job description. E. decision that affects the employee's performance.

C. nonroutine situation in which employees must search for alternative solutions. Feedback: Nonprogrammed decisions require all steps in the decision model because the problems are new, complex, or ill-defined. Such decisions do not follow standard operating procedures.

Scenario B Alvin, the production manager at the Paragon Company, wants to select the best supplier of raw materials from among several vendors. He has several choices and has done research into which company provides the best services and products. One company is known to be extremely timely, another is much lower in price but often late in deliveries, and the third is well-known to provide the highest quality products available. 77. According to the rational decision-making process, Alvin should select the vendor that offers the most A. discounts. B. deliveries. C. satisfaction. D. expectancy. E. quality.

C. satisfaction Feedback: A rational-choice decision maker would choose the supplier that will give the company the greatest satisfaction. This is calculated by multiplying the valence of each outcome with the probability of that outcome occurring, then adding those results across all three outcomes. The supplier with the higher score is the better choice, given available information. The key point from this example is that all rational decisions rely primarily on two pieces of information: (a) the probability that each outcome will occur and (b) the valence or expected satisfaction of each outcome.

21. After a problem has been identified and possible choices have been identified, the next step is to A. choose the best decision process. B. discover possible choices. C. select the choice with the highest value. D. implement the selected choice. E. evaluate the selected choice.

C. select the choice with the highest value. Feedback: The fourth step is to select the best choice by applying the rational choice calculation we described in Exhibit 7.1. Choosing the alternative that offers the greatest satisfaction or value requires the decision maker to have information about all possible alternatives and their outcomes. That condition is usually impossible, but the rational choice view of decision making assumes this can be accomplished with ease.

34. The representativeness heuristic refers to the tendency A. to choose an alternative that is good enough rather than the best. B. for people to influence an initial anchor point. C. to evaluate probabilities of an event or an object by how closely it resembles another event or object. D. to estimate the probability of something occurring by how easily we can recall those events. E. for decision makers to evaluate alternatives sequentially rather than comparing them all at once.

C. to evaluate probabilities of an event or an object by how closely it resembles another event or object. Feedback: The representativeness heuristic states that we pay more attention to whether something resembles (is representative of) something else than to more precise statistics about its probability.

58. A marketing specialist needed to find a new way of marketing the company's main product to its potential clients. While watching a movie one evening, the marketing specialist saw a scene that gave her inspiration for a new marketing plan. According to the creative process model, which of the following is the next stage in the creative process after such inspiration? A. preparation B. incubation C. verification D. illumination E. morphological analysis

C. verification Feedback: Illumination is the third stage of creativity. It refers to the experience of suddenly becoming aware of a unique idea. The marketing specialist suddenly became aware of a new marketing plan while watching a movie. The given situation is an example of an illumination. Illuminations are merely rough ideas. Their usefulness requires verification through detailed logical evaluation, experimentation, and further creative insight. That is, for this marketing specialist, verification is the next stage in the creative process.

75. What could Sarine have done differently in order to avoid this escalation of commitment with her decisions? A. Ensure that the people who evaluate the decisions are the people who originally made them. B. Privately establish a preset level at which the decision is abandoned or reevaluated. C. Find a source of systematic and clear marketing. D. Involve several people in the evaluation of the decision. E.Obtain funding from other sources instead of her family.

D. Involve several people in the evaluation of the decision. Feedback: One of the most effective ways to minimize escalation of commitment and confirmation bias is to ensure that the people who made the original decision are not the same people who later evaluate that decision. A second strategy is to publicly establish a preset level at which the decision is abandoned or reevaluated. A third strategy is to find a source of systematic and clear feedback. A fourth strategy to improve the decision evaluation process is to involve several people in the evaluation.

25. Perceptual defense causes us to A. defend the solutions we propose. B. defend those who agree with us when we identify a problem. C. defend the perception we have after making a decision. D. block out bad news or information that threatens our self-concept. E. justify our actions to defend our position.

D. block out bad news or information that threatens our self-concept. Feedback: People sometimes block out bad news as a coping mechanism. Their brain refuses to see information that threatens their self-concept. This phenomenon is known as perceptual defense.

43. After choosing among several computer server systems, the Director of Information Systems feels very positive about the final choice. However, some of this optimism is due to the fact that the Director forgot about few of the limitations of the chosen system and unconsciously downplayed the importance of the positive features of the rejected systems. The Director of Information Systems is engaging in A. escalation of commitment. B. rational maximization. C. rational choice thinking. D. confirmation bias. E. impulsive buying.

D. confirmation bias. Feedback: The Director is engaging in confirmation bias. Confirmation bias is the "unwitting selectivity in the acquisition and use of evidence." When evaluating decisions, people with confirmation bias ignore or downplay the negative features of the selected alternative and overemphasize its positive features.

Scenario D Dora and Keith are managers at ABC Corporation. Keith is having problems in his department with a lack of innovation. In response, he consults the corporate procedures manual and speaks with his boss about the right way to solve the problem. Dora is also having a similar problem in her own department but decides to confront it by hosting team luncheons where she can learn new perspectives and discuss new "outside the box" ways to deal with the problem. 83. Keith is an example of a(n) ________________ thinker. A. divergent B. innovative C. procedural D. convergent E. illumination

D. convergent Feedback: Convergent thinking is calculating the conventionally accepted "right answer" to a logical problem.

20. Which of these is the final step in the rational choice decision making process? A. developing a list of solutions B. implementing the selected alternative C. choosing the best alternative D. evaluating decision outcomes E. recognizing the opportunities

D. evaluating decision outcomes Feedback: The final step in rational choice decision making is evaluating the decision outcomes. It includes evaluating whether the gap has narrowed between "what is" and "what ought to be." Ideally, this information should come from systematic benchmarks so that relevant feedback is objective and easily observed.

Scenario E Selene and Rita are both engineers at a highly innovative technology company. They are both very creative people. Selene has 15 years of engineering background, a high need for achievement, and strong task motivation, whereas Rita prides herself on her high openness to experience, strong self-direction, and ability to evaluate the potential usefulness of ideas. 85. According to the characteristics of creative people, which areas are Selene's strongest? A. independent imagination and experience B. persistence and practical intelligence C. cognitive and practical intelligence D. experience and persistence E. experience only

D. experience and persistence Feedback: Creative people have persistence, which includes a higher need for achievement, a strong motivation from the task itself, and a moderate or high degree of self-esteem. Creative people also benefit from a foundation of knowledge and experience to discover or acquire new knowledge.

78. According to the rational choice decision-making process, the first step in solving this problem would be A. choosing the best decision process. B. evaluating the decision inputs. C. researching the problem. D. identifying the problem or opportunity. E. researching and evaluating the decision inputs.

D. identifying the problem or opportunity. Feedback: The first step in the rational choice decision-making process is to identify the problem or recognize an opportunity. A problem is a deviation between the current and the desired situation—the gap between "what is" and "what ought to be."

76. If Sarine had built several low-cost prototypes to test, she would have been able to test which rule of design thinking? A. human rule B. ambiguity rule C. re-design rule D. tangible rule E. creative process rule

D. tangible rule Feedback: Design thinking spends less time planning and more time doing. Designers build several low-cost prototypes of their ideas rather than analyze those ideas at a purely conceptual level. Prototypes represent a rich form of communication that does not exist in conceptual planning. One design-thinking mantra is "fail fast, fail often," meaning that prototypes are made quickly and frequently along the journey to the final result. This statement also recognizes that design thinking tolerates failure and embraces a learning orientation.

40. The most accurate view of intuition is that it is A. a trait that people acquire mainly through heredity. B. more likely to be found in men than women. C. acquired more quickly by people whose careers extend to several unrelated industries. D. the ability to know when an opportunity exists and select the best course of action without conscious reasoning. E. an unacceptable way of making decisions in an organizational setting.

D. the ability to know when an opportunity exists and select the best course of action without conscious reasoning. Feedback: Intuition refers to the ability to know when a problem or opportunity exists and to select the best course of action without conscious reasoning.

30. The availability heuristic refers to the tendency A. to choose an alternative that is good enough rather than the best. B. for people to influence an initial anchor point. C. to evaluate probabilities of events or objects by how closely the event or object resembles another event. D. to estimate the probability of something occurring by how easily we can recall those events. E. for decision makers to evaluate alternatives sequentially rather than comparing them all at once.

D. to estimate the probability of something occurring by how easily we can recall those events. Feedback: The availability heuristic is the tendency to estimate the probability of something occurring by how easily we can recall those events.

33. Which of the following is not a reason people engage in satisficing rather than maximization? A. They lack the capacity and motivation to process a huge volume of information. B. They rely on sequential evaluation of new alternatives. C. Decisions with many alternatives can be cognitively and emotionally draining. D. Alternatives present themselves over time, not all at once. E.It allows them to choose the alternative with the highest payoff.

E. It allows them to choose the alternative with the highest payoff. Feedback: Satisficing is selecting an alternative that is satisfactory or "good enough" rather than the alternative with the highest value (maximization).

44. _____ is the tendency to experience stronger negative emotions when losing something of value than the positive emotions experienced when gaining something of equal value. A. Implicit favoritism B. Bounded rationality C. Intuition D. Nonprogrammed decision making E.Prospect theory effect

E. Prospect theory effect Feedback: Escalation of commitment is partly fueled by the prospect theory effect. This is the tendency to experience stronger negative emotions when losing something of value than the positive emotions experienced when gaining something of equal value.

35. Middle managers of a marketing firm were addressing the problem of creating eye-catching ads that were able to be easily reproduced in both color and black and white. One manager said, "The main problem here is we design using color to lure the consumer instead of relying on the benefits of the product itself." Which of the following best describes the decision-making problem that this manager is exhibiting? A. The manager is engaging in escalation of commitment. B. The manager is being too creative. C. The manager is involved in participative decision making. D. The manager is engaging in groupthink. E.The manager is defining the problem in terms of a solution.

E. The manager is defining the problem in terms of a solution. Feedback: Decision makers describe the problem as a veiled solution. Solution-focused problem identification also occurs because decision makers are comforted by closure to problems, so they seek out solutions while still defining the problem

57. The illumination stage in the creative process A. provides a tested solution to complex problems. B. occurs after the verification stage in the process. C. generates long-lasting thoughts in the memory. D. is characterized by convergent thinking. E.can be quickly lost if not documented.

E. can be quickly lost if not documented. Feedback: Illumination refers to bits of inspiration and can be quickly lost if not documented.

54. An organization asks its employees to reframe the problems in a unique way and generate different approaches to the problems. Which of the following stages in the creative process would assist this? A. verification B. preparation C. experimentation D. illumination E.incubation

E. incubation Feedback: Here, the organization is promoting divergent thinking. Incubation assists the process of divergent thinking.

86. According to the characteristics of creative people, which areas are Rita's strongest? A. independent imagination and experience B. persistence and practical intelligence C. cognitive and practical intelligence D. experience and persistence E.intelligence and independent imagination

E. intelligence and independent imagination Feedback: Creative people have above-average intelligence to synthesize information, analyze ideas, and apply their ideas. Creative people also possess a cluster of personality traits and values that support an independent imagination: high openness to experience, moderately low need for affiliation, and strong values around self-direction and stimulation.

81. The 30-minute time period set aside each morning by George should help promote which stage of the creative process? A. preparation B. incubation C. illumination D. verification E.both preparation and incubation

E.both preparation and incubation Feedback: The first stage is preparation—the process of investigating the problem or opportunity in many ways. Preparation involves developing a clear understanding of what you are trying to achieve through a novel solution and then actively studying information seemingly related to the topic. It is a process of developing knowledge and possibly skills about the issue or object of attention. The second stage, called incubation, is the period of reflective thought. We put the problem aside, but our mind is still working on it in the background.

70. The benefits of employee involvement increase with A. the routineness and similarity of the problem or opportunity. B. management's knowledge of the situation. C. the standardization and repetitiveness of the problem or opportunity. D. the number and similarity of employees involved in the decision. E.the novelty and complexity of the problem or opportunity.

E.the novelty and complexity of the problem or opportunity. Feedback: Programmed decisions are less likely to need employee involvement because the solutions are already worked out from past incidents. In other words, the benefits of employee involvement increase with the novelty and complexity of the problem or opportunity.

11. Divergent thinking refers to calculating the conventionally accepted "right answer" to a logical problem.

FALSE Feedback: Divergent thinking refers to reframing the problem in a unique way and generating different approaches to the issue. This contrasts with convergent thinking, calculating the conventionally accepted "right answer" to a logical problem.

14. Employee involvement tends to weaken the decision-making process.

FALSE Feedback: Employee involvement can potentially improve the number and quality of solutions generated. In a well-managed meeting, team members create synergy by pooling their knowledge to form new alternatives.

3. The rational choice decision-making process recommends choosing the alternative with a moderate subjective expected utility.

FALSE Feedback: The fourth step in the rational decision-making model is to select the choice with the highest subjective expected utility. This calls for all possible information about all possible alternatives and their outcomes, but the rational choice paradigm assumes it can be accomplished with ease.

5. The rational choice paradigm assumes that decision makers have limited information-processing capabilities and engage in a limited search for alternatives.

FALSE Feedback: According to the bounded rationality view, people process limited and imperfect information and rarely select the best choice. This is inconsistent with the rational choice paradigm view. According to the rational choice paradigm of decision making, people rely on logic to evaluate and choose alternatives. This paradigm assumes that decision makers have well-articulated and agreed-on organizational goals, efficiently and simultaneously process facts about all alternatives and the consequences of those alternatives, and choose the alternative with the highest payoff.

12. Creative people have practical intelligence but not cognitive intelligence.

FALSE Feedback: Creative people have above-average cognitive intelligence to synthesize information, analyze ideas, and apply their ideas. They recognize the significance of small bits of information and are able to connect them in ways that few others can imagine. They also have practical intelligence—the capacity to evaluate the potential usefulness of their ideas.

10. The incubation stage of creativity is more effective when the decision maker sets aside all other activities and focuses attention on the issue or problem.

FALSE Feedback: Incubation refers to the period of reflective thought. We put the problem aside, but our mind is still working on it in the background. Incubation does not mean you forget about the problem or issue.

92. What is intuition? What are its major implications in decision making?

Intuition refers to the ability to know when a problem or opportunity exists and to select the best course of action without conscious reasoning. Intuition is both an emotional experience and a rapid nonconscious analytic process. It warns us of impending problems. All gut feelings are emotional signals, but not all emotional signals are intuition. The key distinction is that intuition involves rapidly comparing our observations with deeply held patterns learned through experience.

7. Intuition allows us to draw on our tacit knowledge to guide our decision preferences.

TRUE Feedback: Intuition involves rapidly comparing our observations with deeply held patterns learned through experience. These templates represent tacit knowledge that has been implicitly acquired over time.

2. Nonprogrammed decisions require all steps in the decision model because the problems they present are new, complex, or ill-defined.

TRUE Feedback: Nonprogrammed decisions require all steps in the decision model because the problems are new, complex, or ill-defined.

9. Escalation of commitment is likely to occur when the perceived costs of terminating the project are high or unknown.

TRUE Feedback: Some experts argue that throwing more money into a failing project is sometimes a logical attempt to further understand an ambiguous situation. This strategy is essentially a variation of testing unknown waters. By adding more resources, the decision maker gains new information about the effectiveness of these funds, which provides more feedback about the project's future success. This strategy is particularly common where the project has high closing costs.

8. The prospect theory effect motivates us to avoid losses.

TRUE Feedback: The prospect theory effect is the tendency to experience stronger negative emotions when losing something of value than the positive emotions experienced when gaining something of equal value. This prospect theory effect motivates us to avoid losses, which typically occurs by taking the risk of investing more in that losing project. Stopping a project is a certain loss, which is more painful to most people than the uncertainty of success associated with continuing to fund the project. Given the choice, decision makers choose the less painful option.

95. A consumer products company wants more creativity in its research and development operations. The company has spent large amounts of money on creativity training sessions that have helped somewhat, but the VP of research and development believes that the fundamental conditions must be altered to foster more creativity. Describe three conditions (other than training) that this organization should establish to increase the level of creativity in its research and development operations. Briefly explain how each condition might improve creativity.

· Learning orientation: One of the most important conditions is that the organization has a learning orientation; that is, leaders recognize that employees make reasonable mistakes as part of the creative process. · Intrinsically motivating work: This relates back to most of the job characteristics (Chapter 6), including task significance, autonomy, and feedback from the job as well as other sources. Other work conditions are self-set creativity goals, feedback, and other elements of self-leadership. The textbook also explains that creativity occurs during a state of "flow," where job challenges are aligned with the employee's competencies. · Organizational support: This includes free-flowing communication, · sufficient resources, maintaining a reasonable level of job security, receiving some pressure to perform, and having trust in colleagues.

94. WesTech Components wants to hire several people for jobs requiring a high degree of creativity. Identify three individual characteristics that WesTech should consider when selecting job applicants who have a high potential for creativity.

1. Cognitive and practical intelligence: Students might identify this general category, but they should discuss one or more of the three specific intellectual abilities characteristic of creative people. First, creative people have synthetic intelligence by recognizing the significance of small bits of information and are able to connect them in ways that no one else could imagine. Second, creative people use their analytic intelligence, their IQ, to evaluate the potential usefulness of their ideas. Third, creative people have practical ability. They can see how their ideas can be applied in the real world. 2. Knowledge and experience: Employees are more creative when they possess a good foundation of knowledge and experience on the subject. Some students might also note that lengthy experience isn't always an asset in creativity because it creates mental models that block alternative ways of seeing the environment. 3. Persistence: Creative people have a high need for achievement and at least a moderate degree of self-confidence. These characteristics make them persistent in their efforts. 4. Inventive thinking style: Although this is discussed as one characteristic, students might identify specific elements of this as different characteristics. Creative people think in novel ways rather than following set patterns. They take a broad view of problems, don't like to abide by rules or status, and are less concerned about social approval of their actions. Creative people are risk-takers. They are not bothered about working with ambiguous information or issues and are willing to take the chance of making mistakes. 5. Independent imagination: Creative people possess a cluster of personality traits and values that support an independent imagination: high openness to experience, moderately low need for affiliation, and strong values around self-direction and stimulation. 5.

93. Describe the four stages of the creative process.

1. Preparation: In this stage, you gather the necessary information and materials and learn about the elements of the problem or issue. 2. Incubation: This is the stage of reflective thought. You put the problem aside, but your mind is still working on it subconsciously. 3. Illumination: At some point during the incubation stage, you become aware of a unique idea. These flashes of inspiration are fleeting and can be lost quickly if not documented. 4. Verification: Illuminations are merely rough ideas, so you need to develop them through evaluation and experimentation.

49. Leading business writers emphasize that _____ is one of the most important and challenging tasks in the decision-making process. A. escalation of commitment B. rational maximization C. translating decisions into action D. confirmation bias E. bounded rationality

C Feedback: Leading business writers emphasize that execution—translating decisions into action—is one of the most important and challenging tasks in the decision-making process.

23. One school of management thought states that organizational decisions and actions are influenced mainly by what attracts management's attention, rather than by the objective reality of the external or internal environment. Which of the following practices is closely associated with this argument? A. rational decision-making process B. programmed decision making C. perceptual defense D. decisive leadership E. stakeholder framing

E. stakeholder framing Feedback: One school of management thought states that organizational decisions and actions are influenced mainly by what attracts management's attention, rather than by the objective reality of the external or internal environment. This would lead to stakeholder framing. Stakeholders present the information in such a way that it triggers the decision maker's emotional response that the information is a problem, an opportunity, or inconsequential.

91. A large financial institution is losing market share to savvy upstart companies, and it has asked its top marketing executive to identify the main reasons for their sliding performance. Describe three barriers that might cause the marketing executive to poorly identify the problem(s), and include an illustrative example for each barrier.

The students could discuss the following problems discussed in the text. Stakeholder framing: Several people interviewed by the marketing executive might try to frame their view of the problem to suit their particular interests. For example, the information technology manager might claim that the bank needs to spend more on IT infrastructure to satisfy customers' evolving needs. Perceptual defense: The marketing executive might ignore or overlook the possibility that some of his or her past decisions caused the sliding market share, such as a poorly designed advertising campaign. Mental models: The marketing executive might have a strong mindset regarding the cause of market share problems, which prevents him or her from thinking about completely different causes. For example, the executive might have a mental model that market share increases with advertising expenses. Decisive leadership: Managers try to be decisive in their decisions, which cause them to short-circuit the diagnostic stage of problem identification. The marketing manager might try to look executive savvy by quickly identifying the cause of sliding market share without actually spending much time investigating various possible causes. Defining problems in term of preferred solutions: The marketing manager might have a preferred solution (e.g., spending more on advertising), and consequently will define the problem as the need for more advertising rather than define the problem as a problem, of which more advertising might be a solution.

89. After Braided Bread evaluates the selected choice, the next problem will start with A. choosing the best decision process. B. identifying the problem. C. developing possible choices. D. selecting the highest value choice. E. implementing the selected choice.

B. identifying the problem. Feedback: The first step is to identify the problem or recognize an opportunity.

51. When a business must decide between completing a project that is over budget and past due versus starting over, they are evaluating the A. bounded rationality. B. intuition. C. sunk costs effect. D. self-justification effect. E. prospect theory effect.

C. sunk costs effect. Feedback: Another disincentive to axing a failing project is sunk costs—the value of resources already invested in the decision. The rational choice view states that investing resources should be determined by expected future gains and risk, not the size of earlier resources invested in the project. Yet people inherently feel motivated to invest more resources in projects that have high sunk costs. A variation of sunk costs is time investment.

1. Decision making is a nonconscious process of moving toward a desirable state of affairs.

FALSE Feedback: Decision making is the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs.

15. Employees are more committed to implementing a solution when they are involved in making the decision.

TRUE Feedback: Employee involvement tends to strengthen employee commitment to the decision. Rather than viewing themselves as agents of someone else's decision, staff members feel personally responsible for its success.