Managerial Decision Making Quiz

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Questions and Answers

What characterizes nonprogrammed decision making?

It involves widely recognized solutions.

It follows established procedures.

It requires analysis of complex and uncertain situations. (correct)

It is routine and automatic.

Which step is NOT part of the six steps managers should take to make decisions?

Implement the decision.

Identify the problem.

Gather information.

Exit the discussion. (correct)

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

Potential for groupthink. (correct)

Increased variety of ideas.

Better information sharing.

Enhanced creativity.

Which of the following plays a critical role in improving managerial decisions?

Organizational learning. (A) Signup and view all the answers

What distinguishes an entrepreneur from an intrapreneur?

Entrepreneurs create new ventures, while intrapreneurs innovate within existing organizations. (B) Signup and view all the answers

What type of decision is characterized by following established rules?

Programmed decision. (B) Signup and view all the answers

In the context of decision making, cognitive biases primarily affect which aspect?

Evaluation of alternatives. (D) Signup and view all the answers

What is a primary goal of making decisions in response to threats?

To protect organizational performance. (A) Signup and view all the answers

What is a characteristic of nonprogrammed decisions?

They arise from unexpected opportunities or threats. (D) Signup and view all the answers

What distinguishes intuition from reasoned judgment in decision making?

Intuition relies on feelings and beliefs. (D) Signup and view all the answers

Which model of decision making assumes the decision maker can identify all consequences?

Classical model (D) Signup and view all the answers

What is meant by the term 'bounded rationality' in decision making?

The inability to gather all relevant information. (B) Signup and view all the answers

What does 'satisficing' imply about managerial decisions?

Managers settle for a solution that is good enough. (B) Signup and view all the answers

Which term describes a decision made spontaneously with little effort?

Intuitive decision (B) Signup and view all the answers

What is an 'optimum decision'?

The most suitable decision considering desirable outcomes. (D) Signup and view all the answers

What does the administrative model highlight about decision making?

It acknowledges the inherent uncertainty and risks in decisions. (A) Signup and view all the answers

What is confirmation bias?

The tendency to make decisions based on strong existing beliefs. (D) Signup and view all the answers

Which cognitive bias involves making assumptions based on insufficient data?

Representativeness (C) Signup and view all the answers

What is a key advantage of group decision making compared to individual decision making?

It is less prone to biases. (B) Signup and view all the answers

What is groupthink?

A decision-making pattern that prioritizes consensus over rational analysis. (B) Signup and view all the answers

What is the primary disadvantage of group decision making?

It can be time-consuming and complicate agreement. (B) Signup and view all the answers

What does the illusion of control refer to?

Believing that personal efforts influence random events. (C) Signup and view all the answers

What effect does escalating commitment have on decision-making?

It leads to putting more resources into failing projects. (C) Signup and view all the answers

What is meant by organizational learning?

Improving employees' ability to understand and manage the organization. (D) Signup and view all the answers

What is bounded rationality primarily concerned with?

The cognitive limitations that affect information interpretation. (A) Signup and view all the answers

Which situation best describes ambiguity in information?

Information that can be interpreted in multiple conflicting ways. (A) Signup and view all the answers

What does 'satisficing' imply in decision making?

Choosing an option that is merely satisfactory rather than optimal. (C) Signup and view all the answers

What does risk quantify in decision making?

The likelihood of certain outcomes occurring based on probability. (C) Signup and view all the answers

What is a primary cause of incomplete information?

Ambiguous interpretations of data. (D) Signup and view all the answers

Which of the following describes heuristics in decision making?

Rules of thumb simplifying the decision-making process. (C) Signup and view all the answers

What is one key step in the feedback procedure after a decision has been made?

Comparing actual results to expected results. (B) Signup and view all the answers

What is considered a primary characteristic of systematic errors in decision making?

Errors that lead to consistently poor decisions. (C) Signup and view all the answers

What is considered a characteristic of a learning organization?

Maximizing the creativity of individuals and groups (D) Signup and view all the answers

Which of the following describes creativity in decision-making?

The capacity to find novel and feasible alternatives (D) Signup and view all the answers

What can be a drawback of brainstorming sessions?

Potential loss of productivity due to production blocking (D) Signup and view all the answers

What is the nominal group technique used for?

Collecting ideas and ranking them in a structured way (A) Signup and view all the answers

Which technique involves group members responding in writing rather than meeting face-to-face?

Delphi technique (B) Signup and view all the answers

How do social entrepreneurs differ from traditional entrepreneurs?

They aim to address social problems through creative solutions (D) Signup and view all the answers

Which statement best defines the term 'entrepreneur'?

People who notice opportunities and mobilize resources for innovation (B) Signup and view all the answers

What is the primary focus of the Delphi technique?

Written responses to gather ideas from group members (A) Signup and view all the answers

What term is used to describe managers or researchers who identify opportunities for product development within an organization?

Intrapreneurs (A) Signup and view all the answers

Which characteristic is NOT typically associated with entrepreneurs?

Desire for security (D) Signup and view all the answers

What is a 'product champion' in the context of intrapreneurship?

A manager who leads a project from conception to market (A) Signup and view all the answers

Which of the following best describes skunkworks?

A specialized group focused on innovative projects away from main operations (D) Signup and view all the answers

What is one challenge often faced by founding entrepreneurs regarding management?

They may lack management skills and experience. (B) Signup and view all the answers

Xerox PARC is known for which of the following innovations?

Laser printers and personal workstations (D) Signup and view all the answers

What aspect differentiates entrepreneurship from management?

Entrepreneurship often involves creating new ventures, whereas management focuses on operational efficiency. (A) Signup and view all the answers

What is a common characteristic of intrapreneurs?

They seek opportunities for improvement within their organization. (A) Signup and view all the answers

Study Notes

Contemporary Management - Chapter 7

Decision Making: The process where managers respond to opportunities and threats by analyzing options and determining organizational goals and courses of action. This involves responding to opportunities to improve performance, or threats that adversely affect performance.
Programmed Decisions: Routine decisions based on established rules or guidelines. These decisions have been made repeatedly in the past and managers have rules/guidelines to follow.
Example of Programmed Decision: A manufacturing supervisor hiring new workers when existing workers work overtime more than 10%
Nonprogrammed Decisions: Non-routine decisions made in response to unusual or unpredictable opportunities and threats. No pre-existing rules or guidelines apply, as the situation is unexpected or uncertain.
Intuition: Feelings, beliefs, hunches, that lead to on-the-spot decisions, requiring only minimal information gathering.
Reasoned Judgment: Decisions requiring time and effort for information gathering, generating alternatives, and evaluating alternatives.
Classical Decision-Making Model: A prescriptive approach assuming the decision-maker can identify all possibilities and rationally choose the best possible course of action.
Optimum Decision: The most appropriate decision in light of what managers believe are the most desirable consequences for the organization.
Administrative Model: An approach that explains why decision-making is uncertain & risky and why managers often choose satisfactory instead of optimum decisions. It is based on bounded rationality, incomplete information, and satisficing.
Bounded Rationality: Cognitive limitations that constrain one's ability to interpret, process, and act on information.
Incomplete Information: A result of risk, uncertainty, ambiguity, and time constraints.
Risk: The degree of probability that the possible outcomes of a particular course of action will occur.
Uncertainty: The situation where the probabilities of alternative outcomes cannot be determined and future outcomes are unknown.
Ambiguous Information: Information that can be interpreted in multiple and often conflicting ways.
Satisficing: Choosing a satisfactory response rather than the best possible response to problems or opportunities.
Six Steps in Decision Making: Recognizing the need for a decision, generating alternatives, assessing alternatives, choosing among alternatives, implementing the chosen alternative, and learning from feedback.
Criteria for Evaluating Possible Courses of Action: Legal, ethical, economical, and practical considerations.
Feedback Procedures: Compare actual results to expected outcomes, explore why expectations were not met, and derive guidelines for future decision-making.
Cognitive Biases: Systematic errors that lead to poor decision making.
Heuristics: Rules of thumb used to simplify decision-making.

Group Decision Making

Superior to Individual Decisions: Groups offer diverse perspectives and skills, reducing the risk of falling victim to bias compared to single individuals.
Groupthink: A pattern of faulty and biased decision making where group members prioritize agreement over accurately assessing information about a decision.
Potential Disadvantages: Group decision-making can be time-consuming, difficult to reach consensus, and potentially swayed by group biases.
Devil's Advocacy: A decision-making technique where one member is assigned to critically evaluate the favored alternative. This process helps to find weaknesses and consider alternatives.
Dialectical Inquiry: A decision-making technique where opposing viewpoints about an issue are presented and debated.

Organizational Learning and Creativity

Organizational Learning: Managers improve an employee's desire and ability to understand and manage organizational and task environments, maximizing the potential for organizational learning to take place.
Learning Organization: An organization where managers maximize individuals' and groups' capacity for creative thinking and behavior. This promotes organizational learning.
Creativity: A decision-maker's ability to discover original and novel ideas.
Brainstorming: A group meeting to generate and debate many possible alternatives.
Production Blocking: Potential loss of productivity in brainstorming due to the unstructured nature of brainstorming.
Nominal Group Technique: A decision-making technique where group members write suggestions, the group collectively discusses, and then alternatives are ranked.
Delphi Technique: A decision-making process where members do not meet face-to-face, but rather respond in writing to questions posed by the group leader.

Entrepreneurship

Entrepreneurs: Individuals who identify opportunities and mobilize resources to produce new, improved goods and services.
Social Entrepreneurs: Individuals pursuing initiatives to address social problems and improve society.
Intrapreneurs: Managers, scientists, or researchers who identify opportunities to develop new or improved products/improve production methods within an organization.
Characteristics of Entrepreneurs: Open to experience, internal locus of control, high self-esteem, high need for achievement.
Entrepreneurship vs Management: Entrepreneurship is not the same as management; founding entrepreneurs may lack the necessary management skills and experience.
Product Champion: A manager who takes ownership of a project and guides it from idea to final customer.
Skunkworks: A group of intrapreneurs separated from the normal operations of an organization to focus on developing new products.
Xerox PARC: Research division of Xerox that led to innovations, such as the laser printer, personal workstation, WYSIWYG printing, and GUI.

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Description

Test your knowledge on the principles of decision making in management. This quiz covers various aspects such as nonprogrammed decisions, cognitive biases, and the roles of entrepreneurs and intrapreneurs. Challenge yourself with questions that delve into decision-making processes and models.