Decision Making Quiz: Test Your Decision Making Process

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Questions and Answers

What is confirmation bias and how does it affect decision making?

Confirmation bias is the tendency to seek out information that confirms one's existing beliefs or solutions to a problem. It affects decision making by influencing individuals to selectively gather or remember information that supports their position, even if evidence is ambiguous.

Explain the concept of escalation of commitment in decision making.

Escalation of commitment is when individuals continue to pursue a failing course of action due to sunk costs. They invest additional resources in a failing endeavor, letting past investments influence future decisions.

What is the framing effect in decision making and how does it influence choices?

The framing effect is how the presentation of equivalent alternatives influences decisions. Positively framed information encourages conservative decisions, while negatively framed information encourages risk-taking behavior.

Describe groupthink and provide strategies to prevent it in group decision making.

Groupthink occurs when group pressures harm the quality of decisions by favoring unanimity over quality. Strategies to prevent it include having a devil's advocate, objective leaders, encouraging dissent, involving outside experts, and using subgroups to work on the same problem. Signup and view all the answers

Explain the concept of group polarization and how it influences group decision making.

Group polarization refers to the tendency of group members to shift towards more extreme positions after discussion. It influences decision making by making individuals express more extreme views during group discussions. Signup and view all the answers

What is the significance of sunk costs in decision making, and how does it relate to escalation of commitment?

Sunk costs should not enter into future decisions, but individuals tend to invest more resources in a failing course of action due to escalation of commitment. Signup and view all the answers

How does the framing effect influence decision making, and what are the two frames discussed in the text?

The framing effect influences decisions based on how information is presented. The two frames are gain frame (positive framing) and loss frame (negative framing). Signup and view all the answers

Explain the concept of group polarization and its impact on group decision making.

Group polarization refers to the tendency of group members to adopt more extreme positions after discussion, influencing the overall decision-making process. Signup and view all the answers

What is the role of a devil's advocate in preventing groupthink, and why is it important in group decision making?

A devil's advocate challenges the group's consensus by presenting alternative viewpoints, helping to avoid groupthink by encouraging critical thinking and diverse perspectives. Signup and view all the answers

Define leadership in the context of organizational behavior and outline the key components of leadership as discussed in the text.

Leadership is the influence exerted by individuals to guide followers towards goal attainment within an organizational setting. The key components include influence, a two-way process, group interaction, and common goal achievement. Signup and view all the answers

What is the difference between perfect rationality and bounded rationality in decision making?

Perfect rationality is completely informed and logical, while bounded rationality relies on limited information and reflects time constraints and political considerations. Signup and view all the answers

Explain the concept of bounded rationality and how it affects decision making.

Bounded rationality is a decision strategy that relies on limited information and is influenced by time constraints and political considerations. Signup and view all the answers

What are some limitations of decision makers when relying on bounded rationality?

Some limitations include capacity to acquire and process information, time constraints, reliance on flawed memory, obtaining irrelevant information, and potential ignorance of values and probabilities. Signup and view all the answers

How do decision making biases impact the evaluation of solutions?

Decision making biases can lead to overlooking missing data, improperly assessing risks, and influencing the criteria for solution evaluation. Signup and view all the answers

What is the significance of automatic thinking in decision making?

Automatic thinking in decision making relies on quick, intuitive judgments that may be influenced by biases and heuristics. Signup and view all the answers

Study Notes

Decision Making

Decision making: developing a commitment to a course of action based on a choice among alternatives
Rational Decision Making: systematic, step-by-step process with a clearly defined problem, complete and accurate information, and a clear evaluation criterion
Perfect Rationality: a decision strategy that is completely informed, perfectly logical, and oriented toward economic gain
Bounded Rationality: a decision strategy that relies on limited information and reflects time constraints and political considerations

Biases in Decision Making

Decision Making Biases: tendency to overlook missing data and risks that were not properly assessed
Overconfidence: don't accurately perceive risk, willing to take risk
Confirmation bias: tendency to seek out information that confirms one's definition of, or solution to, the problem
Escalation of commitment: continuing to pursue a failing course of action because of sunk costs
Framing effect: the manner in which objectively equivalent alternatives are presented affects decision-making
Prescriptions for escalation of commitment:
- Actively seek disconfirming information about a chosen alternative
- Reframe losses as gains to prevent risk-seeking behavior
- Structure incentives so that decision makers are not punished for inconsistency
- Be careful not to consider expanded resources (sunk costs) when making decisions

Group Decision Making

Groupthink: when group pressures damage the quality of a group's decision
Group polarization: group discussion tends to polarize or exaggerate the initial position of the group
Prescriptions for avoiding Groupthink:
- Devils advocate
- Objective leaders (don't state preference first)
- Norms that encourage dissent and communication
- Outside experts who can challenge the view of core members
- Use subgroups to work on the same problem

Prospect Theory

Loss of x hurts twice as much as a gain of x pleases

Leadership

Leadership: the influence that particular individuals exert to direct the activities of followers toward goal achievement in an organizational context
Components of Leadership:
- Influence: using power to affect others
- Process: two-way, interactive process
- Group: operating in a group of people
- Common goal achievement: directing a group of people toward a common goal

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Description

Test your knowledge on decision making processes, including commitment development, choice among alternatives, rational decision making, and perfect rationality. Learn about the systematic steps, problem definition, information accuracy, and evaluation criteria.

Decision Making Process Quiz

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