Questions and Answers
The _____ approach describes how managers actually make decisions, whereas _____ approach defines how a decision-maker should make decisions.
Descriptive; normative
Which model of decision making is associated with satisficing, bounded rationality, and uncertainty?
The growth of quantitative decision techniques that use computers has expanded the use of which decision-making approach?
The _____ model of decision making describes how managers actually make decisions in situations characterized by nonprogrammed decisions, uncertainty, and ambiguity.
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The concept that people have the time and cognitive ability to process only a limited amount of information on which to base decisions is known as:
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Melissa is a manager at InStylez Clothing. Her job is very complex and she feels that she does not have enough time to identify and/or process all the information she needs to make decisions. Melissa's situation is most consistent with which of the following concepts?
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The essence of _____ is to choose the first solution available.
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Rodney doesn't always realize that within his role as an air traffic controller, he must continuously perceive and process information based on knowledge and experience that he is not consciously aware of. This describes what type of decision-making?
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Intuition is based on _____, but lacking in _____.
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Most managers settle for a _____ rather than a _____ solution.
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All of the following are characteristics of the administrative decision making model except:
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Which of the following is the process of forming alliances among managers during the decision making process?
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The _____ model of decision-making is useful for making nonprogrammed decisions when conditions are uncertain, information is limited, and there are managerial conflicts about what goals to pursue or what course of action to take.
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The _____ model closely resembles the real environment in which most managers and decision-makers operate.
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Jefferson Inc. is an information technology consulting firm located in Washington D.C. Decisions at Jefferson are complex and involve many people, with a significant amount of disagreement and conflict. Which decision-making model fits best for this organization?
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All of these are basic assumptions of the political model except:
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Making a choice is the most significant part of the decision-making process.
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A decision is a choice made from available alternatives.
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Programmed decisions are decisions that are made for situations that have occurred often in the past and allow decision rules to be developed to guide future decisions.
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Two employees in Stacey's department quit which is normal for her department. She is faced with the decision to fill these positions. This would be considered a nonprogrammed decision.
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Gerald's Groceries and Marty's Market decided to merge their operations, something neither company has tried before. This would be considered a nonprogrammed decision.
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In the real world, few decisions are certain.
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The main difference between risk and uncertainty is that with risk you know the probabilities of the outcomes.
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Uncertainty means that a decision has clear-cut goals, and that good information is available, but the future outcomes associated with each alternative are subject to chance.
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A situation where the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable refers to ambiguity.
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The classical decision-making model assumes that the decision-maker is rational, and makes the optimal decision each time.
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The approach that managers use to make decisions usually falls into one of three types - the classical model, the administrative model, and the political model.
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The growth of quantitative decision techniques that use computers has reduced the use of the classical approach.
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The administrative model of decision making describes how managers actually make decisions in difficult situations.
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Normative decision theory recognizes that managers have only limited time and cognitive ability and therefore their decisions are characterized by bounded rationality.
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The classical model of decision-making works best in organizations that are made up of groups with diverse interests, goals, and values.
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According to the classical model of decision making, managers' searches for alternatives are limited because of human, information, and resource constraints.
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According to the administrative model of decision making, managers' searches for alternatives are limited because of human, information, and resource constraints.
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Satisficing behavior occurs when we choose the first solution alternative that satisfies minimal decision criteria regardless of whether better solutions are expected to exist.
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Intuition is a quick apprehension of a decision situation based on past experience but without conscious thought.
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According to both research and managerial experience, intuitive decisions are best and always work out.
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The process of forming alliances among managers is called coalition building.
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The political model consists of vague problems and goals, limited information about alternatives and their outcomes, and a satisficing choice for resolving problems using intuition.
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Good intuitive decision making is based on an ability to recognize patterns at lightning speed.
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Administrative and political decision-making procedures and intuition have been associated with high performance in unstable environments in which decisions must be made rapidly and under more difficult conditions.
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Managers confront a decision requirement in the form of either a problem or an opportunity.
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Nonprogrammed decisions require six steps; however, programmed decisions, being structured and well understood, require only one step.
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Step one in the managerial decision-making process is recognition of decision requirement.
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For a non-programmed decision, feasible alternatives are hard to identify and in fact are already available within the organization's rules and procedures.
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The best alternative is the one in which the solution best fits the overall goals and values of the organization and achieves the desired results using the fewest resources.
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The formulation stage involves the use of managerial, administrative, and persuasive abilities to ensure that the chosen alternative is carried out.
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Risk propensity refers to the willingness to undertake risk with the opportunity of gaining an increased payoff.
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In the implementation stage, decision makers gather information that tells them how well the decision was implemented and whether it was effective in achieving its goals.
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Feedback is the part of monitoring that assesses whether a new decision needs to be made.
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People who prefer simple, clear-cut solutions to problems use the directive style.
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Managers with an analytical decision style like to consider complex solutions based on as much data as they can gather.
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The behavioral style is often adopted by managers who like to consider complex solutions based on as much data as they can gather.
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Individuals with a conceptual decision-making style are more socially oriented than those with an analytical style.
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The most effective managers are consistent in using their own decision style rather than shifting among styles.
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Justifying past decisions is a common bias of managers.
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Most bad decisions are errors in judgment that originate in the human mind's limited capacity and in the natural biases of the manager.
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Managers will frequently look for new information that contradicts their instincts or original point of view.
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Most people underestimate their ability to predict uncertain outcomes.
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Brainstorming uses a face-to-face interactive group to spontaneously suggest a wide range of alternatives for decision making.
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Brainwriting refers to the tendency of people in groups to suppress contrary opinions.
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Groupthink refers to the tendency of people in groups to suppress contrary opinions.
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Devil's advocate technique is similar to brainstorming in that both techniques prevent individuals from challenging other group members' assumptions.
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Point-counterpoint is a decision-making technique in which people are assigned to express competing points of view.
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Managers are often referred to as:
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_____ is a vital part of good management because decisions determine how the organization solves its problems, allocates resources, and accomplishes its goals.
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Which of the following is a choice made from available alternatives?
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Mark, a production manager at Kaylie's Kookware, recently chose to schedule his workers to work overtime. His alternative was to hire more workers. He is now monitoring the consequences of his choice. This is an example of _____
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_____ refers to the process of identifying problems and then resolving them.
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_____ decisions are associated with decision rules.
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Programmed decisions are made in response to _____ organizational problems.
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Bierderlack has a policy that states that more than three absences in a six-month period shall result in a suspension. Colleen, the manager, has just decided to suspend one of her shift employees for violating this policy. This is an example of:
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Nordstrom Department store's 'No questions asked - Return's Policy' is an example of a(n):
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If your instructor has an attendance policy, she/he is using a(n):
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Nonprogrammed decisions are made in response to situations that are:
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Examples of nonprogrammed decisions would include the decision to:
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Good examples of _____ decisions are strategic decisions.
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When a small community hospital decides to add a radiation therapy unit, it is considered a:
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Two area banks, Bank A and Bank B, decided to merge their operations. This is an example of a:
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At the start of every shift, Carl, a delivery truck driver, plans out his route based on the addresses that he will be visiting to drop off packages. This can best be described as what kind of decision?
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Associated with the condition of _____ is the lowest possibility of failure.
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Which of the following means that all the information the decision-maker needs is fully available?
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Bobby, a product manager, wants to increase the market share of his product. He is unsure about how to go about it, not knowing for sure how costs, price, the competition, and the quality of his product will interact to influence market share. Bobby is operating under a condition of _____.
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Under conditions of _____, statistical analyses are useful.
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Which of the following means that a decision has clear-cut goals and that good information is available, but the future outcomes associated with each alternative are subject to chance?
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_____ means that managers know which goals they wish to achieve, but information about alternatives and future events is incomplete.
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When managers know which goals they wish to achieve, but information about alternatives and future events is incomplete, the condition of _____ exists.
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Which of the following has the highest possibility of failure?
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The four positions on the possibility of failure scale include certainty, risk, ambiguity, and _____.
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_____ is by far the most difficult situation for a decision-maker.
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Which of the following means that the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable?
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The condition under which ambiguity occurs is when:
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_____ decisions are associated with conflicts over goals and decision alternatives, rapidly changing circumstances, fuzzy information, and unclear links among decision elements.
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During the fallout of the global financial crisis of the late 2000s, finance companies had to make important decisions in a highly ambiguous environment. The decision to buyout failed banks could best be described as what type of decision?
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The classical model of decision making is based on _____ assumptions.
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Riley is a manager at the Tinker Tools. She is expected to make decisions that are in the organization's best economic interests. Her decisions should be based on which of the following models?
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Which of these assumptions are included in the classical model of decision making?
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Which approach defines how a decision-maker should make decisions?
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_____ is the approach that defines how a decision maker should make decisions and provides guidelines for reaching an ideal outcome for the organization.
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All of the following are characteristics of the classical decision making model except:
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Study Notes
Decision-Making Process
- Making a choice constitutes a crucial part of decision-making but isn't the sole component.
- A decision involves selecting from available alternatives.
- Programmed decisions stem from familiar, recurring situations, allowing established rules to guide choices.
- Nonprogrammed decisions arise from unique scenarios, such as unexpected employee departures or mergers.
Types of Decisions
- Nonprogrammed decisions require extensive analysis due to their unique nature.
- Successful intuitive decision-making relies on recognizing patterns and drawing from past experiences.
Uncertainty and Risk
- Decisions in the real world are often marked by uncertainty, where outcomes are unpredictable.
- Risk involves understanding potential outcomes and their probabilities, differing from uncertainty where such probabilities may be unknown.
- Ambiguity occurs when goals are unclear, alternatives are complex, and information is insufficient for decision-making.
Decision-Making Models
- The classical decision-making model assumes rationality, aiming for optimal decisions.
- The administrative model better represents how managers tackle real-life situations with constraints on time and resources.
- Normative decision theory clarifies ideal decision-making processes, while descriptive approaches describe actual practices.
Cognitive Limitations and Biases
- Decision-making often reflects human biases and limited cognitive capacity, leading to potential judgment errors.
- Managers may show a tendency to ignore contradictory information to uphold their biases.
Group Decision-Making Techniques
- Brainstorming encourages spontaneous idea generation in groups.
- Groupthink happens when dissenting opinions are suppressed, stifling innovative solutions.
- The Devil’s Advocate technique challenges assumptions to consider alternative viewpoints, enabling more robust discussions.
Feedback and Monitoring
- Feedback mechanisms are essential for assessing decision effectiveness and informing future actions.
- The decision-making process includes recognizing the requirement, generating alternatives, choosing the best option, and implementing the decision.
Decision-Making Conditions
- Conditions of certainty offer complete information, while risk entails clear probabilities of outcomes.
- Ambiguity and uncertainty make decision-making complex, hindering effective problem-solving.
Key Concepts
- Satisficing refers to selecting the first acceptable solution rather than an optimal one.
- Bounded rationality highlights constraints in processing information, impacting the decision-making efficiency.
- Strategic decisions are typically considered nonprogrammed due to their complexity and significance.
Managerial Decision Styles
- Managers exhibit different decision-making styles, such as directive, analytical, or conceptual approaches, based on their preferences for handling problems.
Importance of Effective Decision-Making
- Strong decision-making is integral for solving organizational issues, allocating resources efficiently, and achieving overarching goals.### Classical Model of Decision Making
- A structured approach for making rational decisions based on complete information and logical analysis.
- Assumes decision-makers are fully informed and objective.
Rodney's Decision-Making
- Intuitive decision-making involves processing information unconsciously and relies heavily on prior knowledge and experience.
- Often occurs in high-pressure environments like air traffic control.
Intuition in Decision-Making
- Intuition is grounded in experience but lacks conscious thought.
- Represents a quick, often subconscious evaluation of situations.
Managerial Approaches to Decisions
- Most managers prefer "satisficing" solutions—adequate but not optimal—over pursuing "maximizing" solutions which aim for the best possible outcome.
Characteristics of Administrative Decision Making
- Involves dealing with vague problems and goals.
- Operates under conditions of uncertainty and limited information.
- Does not adhere strictly to rationality, focusing instead on satisfactory outcomes.
Coalition Building
- The process of forming alliances among managers to facilitate decision-making.
- Enhances cooperation and resource-sharing during complex decisions.
Political Model of Decision-Making
- Useful for complex, nonprogrammed decisions with conflicts and uncertainty.
- Recognizes the influence of various groups with different interests within organizations.
Environmental Realism in Decision-Making Models
- The political model accurately mirrors managerial environments filled with conflict and multiple perspectives.
- Stresses the dynamic and often contentious nature of decision-making in real-world scenarios.
Jefferson Inc. Case Study
- A complex decision-making environment characterized by significant disagreement.
- The political model best suits organizations like Jefferson Inc. where diverse interests collide.
Basic Assumptions of the Political Model
- Organizations consist of groups with varied interests, goals, and values.
- Managers lack the resources to fully identify all dimensions of a problem.
- Engages in negotiation and compromise to achieve decision-making outcomes.
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Description
Explore the intricacies of decision-making in this quiz, focusing on programmed and nonprogrammed decisions. Understand the role of uncertainty and risk in making choices and how past experiences influence intuitive decisions. Test your knowledge on these critical concepts essential for effective decision-making.
