Decision Making Process Overview

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Questions and Answers

What is the best definition for the word satisfice?

requires a perfect solution

accepts a less than perfect solution (correct)

not sufficient

very satisfying

Herbert Simon found that most people satisficed because they had limited ability to ________.

think independently

deal with difficult situations

grasp present conditions and anticipate future conditions (correct)

be truthful and honest in situations that deal with other people

A person who satisfices fails to ________.

make any kind of decision

accept the truth of a situation

understand his or her position

maximize his or her decision (correct)

Sticking to a decision despite evidence that it is a mistake is called ________.

escalation of commitment Signup and view all the answers

Which model of decision making takes advantage of unconscious reasoning?

intuitive Signup and view all the answers

What is a major advantage of intuitive decision making compared to fully rational decision making?

speed Signup and view all the answers

Approximately what percentage of managers typically use intuitive decision making rather than formal analysis to make decisions?

75% Signup and view all the answers

Which option is LEAST likely to be a decision criterion for a high-tech bicycle buyer focused on performance?

warranty Signup and view all the answers

What defines a heuristic in decision making?

A simplistic and quick rule of thumb Signup and view all the answers

What can be a consequence of using heuristics instead of a systematic decision-making process?

Increased likelihood of errors and biases Signup and view all the answers

Why do managers often opt for heuristics in decision making?

They appear to reduce complexity and save time. Signup and view all the answers

Which factor is NOT typically included in a bicycle buyer's evaluation of different models?

the color of the bicycle Signup and view all the answers

What is the last step Sondra should take in the decision-making process?

Evaluate the decision's effectiveness Signup and view all the answers

Which of the following correctly defines the nature of a problem in decision making?

A problem is a discrepancy between current and desired states Signup and view all the answers

What does a decision criterion refer to in the decision-making process?

It outlines factors that are crucial for making a decision Signup and view all the answers

Emotions and feelings ________ decision making.

can improve Signup and view all the answers

How can heuristics impact the decision-making process?

They can simplify complex decisions but may lead to errors Signup and view all the answers

Which statement about confirmation bias is accurate?

It refers to disregarding new evidence that contradicts existing beliefs Signup and view all the answers

Is it realistic for today's managers to be completely rational?

No, that is an unrealistic goal Signup and view all the answers

An assumption of bounded rationality indicates that managers can analyze all relevant information about all alternatives for a situation.

False, it is not realistic Signup and view all the answers

What is the assumption made regarding a rational decision maker?

They strive for objectivity and logical reasoning Signup and view all the answers

Which of the following best describes structured problems?

clear and straightforward Signup and view all the answers

In decision-making, what does it mean for a decision maker to maximize value?

To select options that provide the highest possible benefits Signup and view all the answers

Unstructured problems are defined as ________.

situations in which all options are not known Signup and view all the answers

What does identifying the wrong problem entail for a manager in a decision-making scenario?

It is equally as harmful as failing to solve the right problem Signup and view all the answers

Which one of the following is an example of a structured problem?

deciding shipping options for a vacuum cleaner Signup and view all the answers

Structured problems typically have while unstructured problems typically have .

only one solution; many solutions Signup and view all the answers

Programmed decisions are best suited for solving ________.

routine and repetitive problems Signup and view all the answers

Which of the following is NOT a factor that can increase the probability of groupthink?

Group leaders solicit ideas from all group members without passing judgment on their ideas. Signup and view all the answers

Which option is NOT a way to minimize groupthink?

Foster open discussion. Signup and view all the answers

What technique is specifically designed to generate creative ideas in a group?

Brainstorming Signup and view all the answers

Which of the following is NOT allowed in a brainstorming session?

Criticism or dismissal of poor ideas Signup and view all the answers

Which group technique promotes both group interaction and independent decision-making?

Nominal group technique Signup and view all the answers

Which of the following describes a blend of the nominal group technique with computer technology?

Electronic meeting Signup and view all the answers

What is a key advantage of videoconferencing for group decision making?

Savings on travel and time Signup and view all the answers

What is a common drawback of group decision making?

Increase in decision legitimacy Signup and view all the answers

Groups tend to be more efficient and less effective than individual decision making.

False Signup and view all the answers

Which of the following is a major advantage of electronic meetings?

Anonymity Signup and view all the answers

Mid-level managers from high power distance countries are ________ than those from low power distance countries.

Less likely to take risks Signup and view all the answers

Mid-level managers in low uncertainty avoidance countries are ________ than those in high uncertainty avoidance countries.

Less risk-averse Signup and view all the answers

Individualistic countries like the United States tend to have ________ than group-oriented countries like Japan.

Less conformity and more cooperation Signup and view all the answers

The use of ringisei in Japanese organizations is indicative of which cultural value?

Consensus-seeking Signup and view all the answers

When tackling international management styles, managers must be ________.

Flexible Signup and view all the answers

What does individual creativity require according to one well-accepted model?

Expertise Signup and view all the answers

Study Notes

Decision Making

Decision making begins with identifying a problem.
A problem is a discrepancy between what exists and what the decision-maker desires.
The decision-making process consists of eight steps.
Identifying a problem involves comparing the current state to a standard or goal.
A manager can follow the decision-making process correctly but still fail to achieve value if they don't correctly identify the problem.
Identifying decision criteria is a step in the decision-making process.

Purchasing New Computers

A manager considering new computers is identifying the problem.
Identifying decision criteria is a step in the decision-making process.
A manager assesses the current computers (analyzing alternatives)

Decision Criteria

Decision criteria are the factors that are relevant to a decision.
Decision criteria must be fairly objective (e.g., weight)
Decision criteria should be important to the decision maker (e.g. personal preference).

Decision-Making Errors & Biases

Sunk costs, randomness, and overconfidence are decision errors/biases.
Confirmation bias is seeking information that confirms existing beliefs.
Escalation of commitment is persisting with a decision despite evidence of its mistakes.
Heuristics are mental shortcuts or rules of thumb used in decision-making.

Models of Decision Making

Rational model: The ideal decision maker is completely objective and logical
Bounded rationality: The decision maker has limitations on their processing power, but they strive for rational decisions despite having limitations
Intuitive decision making: Decision is based on experience, feelings, and intuition.

Problem Types and Decision Types

Structured problems have clear goals and known options. They use programmed decisions (rules, policies, or procedures).
Unstructured problems are fuzzy and lack clear goals or available options. They require nonprogrammed decisions (original solutions, intuition, etc.).

Decision-Making Conditions

Certainty: All outcomes are known.
Risk: Probabilities of outcomes are known.
Uncertainty: Probabilities of outcomes are unclear.

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Description

This quiz covers the essentials of the decision-making process, including how to identify a problem and the various decision criteria involved. You will explore the eight steps of decision making and see how they apply to real-world scenarios, such as purchasing new computers. Test your understanding of how effective decision-making can lead to better outcomes in management.