Fundamentals of Management Chapter 4 Making Decisions PDF

Fundamentals of Management, 11e (Robbins) Chapter 4 Making Decisions 1) Decision making begins with ________. A) selecting alternatives B) identifying decision criteria C) identifying a problem D) eliminating false alternatives 2) Which one of the following defines a problem in the decision-making...

Fundamentals of Management, 11e (Robbins) Chapter 4 Making Decisions 1) Decision making begins with ________. A) selecting alternatives B) identifying decision criteria C) identifying a problem D) eliminating false alternatives 2) Which one of the following defines a problem in the decision-making process? A) a discrepancy between what exists and what the decision maker desires to exist B) a discrepancy between the ideal and the practical C) something that causes irritation D) something that calls for attention 3) The decision-making process consists of a series of eight steps that identify a problem and work toward ultimately ________. A) determining if there is a solution to the problem B) solving the problem C) making a plan to solve the problem D) breaking down the problem into a series of steps 4) To identify a problem, a manager ________. A) compares one set of standards or goals to a second set of standards or goals B) looks for unhappy customers C) uses intuition to see that things don't look right D) compares the current state of affairs with some standard or goal 5) A manager can faithfully execute the decision-making process but still end up with nothing of value if ________. A) he fails to identify the correct problem B) he fails to assign number values to different criteria C) he solves the problem inefficiently D) he fails to correctly identify the steps of the process 6) A manager is considering purchasing new computers for her department. The manager spends time assessing the computers her department now has. Which stage of the decision-making process is she going through? A) identification of a problem B) identification of decision criteria C) development of alternatives D) implementation of an alternative 1 Copyright © 2020 Pearson Education, Inc. 7) A manager is determining what kind of new computers she should purchase for her department. She has made a list of five different computer models for consideration. Which stage of the decision-making process is this? A) selection of an alternative B) identification of decision criteria C) development of alternatives D) analysis of alternatives 8) After purchasing new computers for her department, a manager is now comparing the performance of the new computers to the computers they replaced. Which stage of the decision- making process is she carrying out? A) analysis of alternatives B) evaluation of decision effectiveness C) selection of an alternative D) implementation of an alternative 9) For a high-tech bicycle buyer, decision criteria would be determined by ________. A) whatever most bike buyers recommend B) expert ratings in bike magazines C) technical specifications D) personal preferences of the buyer 10) Which one of the following is LEAST likely to be a decision criterion for a high-tech bicycle buyer who cares primarily about performance? A) warranty B) gear mechanism C) frame composition D) brake assembly 11) Which one of the following would be a fairly objective criterion by which a bicycle buyer could assess different bike models? A) color B) weight C) quality of craftsmanship D) style 12) A manager chooses to ignore a rigorous decision-making process and selects TV monitor A over monitor B because he "trusts" company A more than company B. If the decision he made was rational, which one of the following is true? A) Monitor A is really the better choice. B) The manager should have included "trust" as a criterion. C) Monitor B is really the better choice. D) The manager must have made a mistake in calculating his weighted criteria. 2 Copyright © 2020 Pearson Education, Inc. 13) In allocating weights to the decision criteria, which one of the following is most helpful to remember? A) All weights must be the same. B) The total of the weights must equal 100. C) The high score should be a 10, and no two criteria should be assigned the same weight. D) Assign the most important criterion a score, and then assign weights against that standard. 14) What is a heuristic? A) a complicated and systematic method of decision making B) a purely intuitive method of decision making C) a totally unreliable method of decision making D) a shortcut or rule of thumb that is used for decision making 15) Because they are not systematic or comprehensive, using heuristics in place of an eight-step decision-making process can lead to ________. A) errors and biases B) consistently better decisions C) more imaginative decisions D) decisions that more directly solve problems 16) Which one of the following is NOT a reason why managers often resort to using heuristics? A) They seem to eliminate complexity. B) They seem to eliminate ambiguity. C) They save time. D) They thoroughly explore all alternatives. 17) A banker opts for short-term gain despite indications that his decision might not pay off in the long run. Which error or bias is the banker guilty of? A) overconfidence B) immediate gratification C) selective perception bias D) representation 18) A scientist cites two studies that show a positive effect for her drug and ignores five other studies that show a negative effect. Which error or bias is she committing? A) hindsight B) anchoring effect C) confirmation bias D) self-serving 19) One legislator sees decreased tax revenue as the key problem in the budget. A second legislator sees increased spending as the problem. Each of these legislators has a(n) ________. A) representation bias B) self-serving bias C) availability bias D) framing bias 3 Copyright © 2020 Pearson Education, Inc. 20) Which one of the following is NOT a common decision-making error or bias? A) sunk costs B) randomness C) forest for the trees D) overconfidence bias Decisions, Decisions (Scenario) Sondra needed help. Her insurance company's rapid growth was necessitating making some IT changes, but what changes? Should they modify the servers that they currently use or purchase an entirely new system? Sondra was confused and needed help in making the correct decision. 21) According to the decision-making process, the first step Sondra should take is to ________. A) analyze alternative solutions B) identify decision criteria C) evaluate her decision's effectiveness D) identify the problem 22) Sondra has decided to collect information about the features the company needs for its system. Which stage of the decision-making process is she carrying out? A) identify alternative solutions B) identify decision criteria C) evaluate her decision's effectiveness D) allocate weights to the criteria 23) Sondra has determined that the speed of the system she settles on is twice as important as the capacity of the system. Which stage of the decision-making process is she carrying out? A) allocation of weights to criteria B) selecting an alternative C) implementing the alternative D) identifying the problem 24) Sondra has decided to purchase a new system. After obtaining permission, she has ordered the system from a reputable company. Which stage of the decision-making process is she carrying out in making the order? A) analyzing alternative solutions B) selecting an alternative C) implementing the alternative D) identifying the problem 25) The very last step Sondra should take, according to the decision-making process, is to ________. A) analyze alternative solutions B) select alternatives C) implement the alternative D) evaluate the decision's effectiveness 4 Copyright © 2020 Pearson Education, Inc. 26) In decision making, a problem can be defined as a discrepancy between what exists and what the problem solver desires to exist. Answer: TRUE 27) A decision criterion defines factors that are relevant in a decision. Answer: TRUE 28) Managers identify a problem by comparing the current state of affairs to some standard. Answer: TRUE 29) All criteria are equally important in the decision-making process. Answer: FALSE 30) Identifying the wrong problem is just as much a failure for a manager as identifying the right problem and failing to solve it. Answer: TRUE 31) The final step of the decision-making process is to implement the alternative that has been selected. Answer: FALSE 32) A heuristic can simplify the decision-making process. Answer: TRUE 33) Because heuristics simplify the decision-making process, they are unlikely to lead to errors. Answer: FALSE 34) Decision makers who seek information that matches what they already know are guilty of confirmation bias. Answer: TRUE 35) A basketball coach who takes a very good shooter out of a game because she missed her last two shots has availability bias. Answer: TRUE 38) The three main models that managers use to make decisions are ________. A) rational, bounded rational, and intuitive B) rational, irrational, and bounded rational C) intuitive, unintuitive, and rational D) bounded rational, intuitive, and systematic 39) It is assumed that a rational decision maker ________. A) would never make a wrong choice B) would be subjective and impractical C) would face only difficult decisions D) would be objective and logical 5 Copyright © 2020 Pearson Education, Inc. 40) What does it mean for a decision maker to maximize value? A) to make the decision to be as clear and logical as possible B) to make the achievement of goals as likely as possible C) to waste as little time and energy as possible D) to make decision making as simple as possible 41) Maximizing value for an organization means making sure that ________. A) the organization makes money B) the best interests of the organization are addressed C) the decision made is as rational as possible D) the decision is as simple as possible 42) Which one of the following is NOT assumed in a rational decision? A) a clear and specific goal B) a clear and unambiguous problem C) most alternatives and consequences are known D) value is maximized 43) It is assumed that in most cases the decisions of all managers are limited by ________. A) greed and short-sightedness B) having too much information C) not being able to analyze all information for all alternatives D) not being able to act rationally or in the best interests of their organization 44) Which term best characterizes a decision that has bounded rationality? A) virtually perfect B) rigorous and comprehensive C) not good enough D) just good enough 45) Software programs that use a series of questions to aid humans in decision making are called ________. A) text reading software B) expert systems C) group systems D) support software 46) Expert systems are primarily used to help what kinds of decision makers? A) lower-level managers B) top managers C) senior managers D) experts 6 Copyright © 2020 Pearson Education, Inc. 47) Neural networks are able to outdo the performance of humans by ________. A) analyzing symbols B) handling up to three variables at once C) handling hundreds of variables at once D) reading facial expressions 48) Neural networks differ from expert systems in that they can ________. A) draw conclusions from data B) ask questions to the decision maker C) perform sophisticated calculations D) learn from experience 49) Neural networks outperform expert systems in uncovering ________. A) credit card fraud B) false positives for pregnancy C) potential credit card customers D) credit problems in bank mortgages 50) Herbert Simon won the Nobel Prize in economics for his work in describing ________. A) how people spend money B) how most people are perfectly rational C) how people make decisions D) how people avoid decisions 51) Which one of the following is the best definition for the word satisfice? A) very satisfying B) not sufficient C) accepts a less than perfect solution D) requires a perfect solution 52) Herbert Simon found that in making decisions, most people satisficed because they had limited ability to ________. A) be truthful and honest in situations that deal with other people B) think independently C) deal with difficult situations D) grasp present conditions and anticipate future conditions 53) A person who satisfices fails to ________. A) maximize his or her decision B) understand his or her position C) accept the truth of a situation D) make any kind of decision 7 Copyright © 2020 Pearson Education, Inc. 54) Sticking to a decision despite evidence that it is a mistake is called ________. A) escalation of commitment B) escalation of rationality C) satisficing commitment D) error enhancement 55) Escalation of commitment can occur when people don't ________. A) want to make a decision B) want to admit that an earlier decision was flawed C) accept current conditions D) understand that conditions have changed 56) Which model of decision making takes advantage of unconscious reasoning? A) rational B) nonrational C) intuitive D) factual 57) Compared to fully rational decision making, what is a major advantage of intuitive decision making? A) total reliability B) fully quantified C) thoroughness D) speed 58) Approximately what percentage of managers typically use intuitive decision making rather than formal analysis to make decisions? A) 95% B) 75% C) almost 50% D) less than 10% 59) Intuitive decision making ________. A) should be avoided by managers in making day to day decisions B) is often described as conscious decision making C) can complement other decision making approaches D) takes more time than other approaches as it requires managers to shift through feelings and emotions and place them in context with actual facts. 60) Which one of the following is NOT a way in which intuition guides people who are making decisions? A) Intuition provides ethics and values guidelines. B) Intuition provides a formal analysis method. C) Intuition provides experiences to draw from. D) Intuition draws on knowledge, skills, and training. 8 Copyright © 2020 Pearson Education, Inc. 61) Emotions and feelings ________ decision making. A) often have no effect on B) can improve C) always decrease performance in D) are more important than facts and logic in 62) A rational decision will never fail to provide the best and most successful solution to a problem. Answer: FALSE 63) Being completely rational is a realistic goal for today's managers. Answer: FALSE 64) One assumption of bounded rationality is that managers can analyze all relevant information about all alternatives for a situation. Answer: FALSE 65) A synonym for the word satisfice is maximize. Answer: FALSE 66) One assumption of bounded rationality is that managers usually attempt to make rational decisions. Answer: TRUE 67) Intuitive decision making is systematic, logical, and orderly. Answer: FALSE 68) Intuitive decision making should not be a part of a manager's decision-making process. Answer: FALSE 69) The expression "throwing good money after bad" is an example of an escalation of commitment. Answer: TRUE 70) Personal judgments and emotions should always be strictly ignored in a decision-making process. Answer: FALSE 73) Structured problems are ________. A) ambiguous B) undefined and vague C) clear and straightforward D) incomplete 9 Copyright © 2020 Pearson Education, Inc. 74) Unstructured problems are ________. A) perfectly rational B) clear and straightforward C) situations in which all options are known D) situations in which all options are not known 75) Which one of the following is an example of a structured problem? A) designing a new digital music player B) hiring a lawyer C) deciding shipping options for a vacuum cleaner D) drafting a quarterback for a pro football team 76) Which one of the following is an example of an unstructured problem? A) finding the list price of different copy machines B) choosing the best wardrobe for an executive C) comparing gas mileage for different car models D) measuring pollution levels in a power plant 77) Structured problems typically have ________ while unstructured problems typically have ________. A) only one solution; many solutions B) many solutions; one solution C) many solutions; fewer solutions D) two solutions; three solutions 78) Programmed decisions work well for solving ________. A) structured problems B) unstructured problems C) both structured and unstructured problems D) poorly defined problems 79) Programmed decisions draw heavily on which one of the following? A) mistakes made in the past B) past solutions that were successful C) past solutions that were unsuccessful D) innovative, new solutions 80) Which one of the following is NOT a type of programmed decision? A) systematic procedure B) policy C) brainstorm D) rule 10 Copyright © 2020 Pearson Education, Inc. 81) Following the directions to put together an elliptical exercise machine is an example of which way to solve a problem? A) procedure B) rule C) general practice D) policy 82) A football coach makes the decision to punt or not to punt on fourth down based on whether he is past his own 50-yard line. Which decision-making method does the coach use? A) a policy B) a hunch C) a procedure D) a rule 83) Which pair of terms is correctly matched up? A) structured problem, programmed decision B) structured problem, structured decision C) unstructured problem, programmed decision D) structured problem, nonprogrammed decision 84) A judge consults guidelines before handing down an award for damages in a legal case. What kind of decision making is she doing? A) following a policy B) following a rule C) programmed D) following a procedure 85) Top managers in an organization tend to ________. A) make programmed decisions B) solve structured problems C) make nonprogrammed decisions D) solve well-defined problems 86) Which three conditions do decision makers face? A) certainty, risk, uncertainty B) certainty, uncertainty, confidence C) risk, high risk, low risk D) certainty, risk, high risk 87) In a condition of certainty, ________. A) most outcomes are known B) the decision is already made C) all outcomes of all alternatives are known D) some alternatives are not known 11 Copyright © 2020 Pearson Education, Inc. 88) If a car buyer knows the inventory dealer price of the same car at different dealerships, he or she is operating under what type of decision-making condition? A) risk B) uncertainty C) certainty D) factual 89) A retail clothing store manager who estimates how much to order for the current spring season based on last spring's outcomes is operating under what kind of decision-making condition? A) seasonal B) risk C) uncertainty D) certainty 90) ________ is a situation in which a decision maker has incomplete information about outcomes and does not have the ability to reasonably estimate outcomes that are not known. A) Certainty B) Risk C) Uncertainty D) High certainty 91) A low-level manager is most likely to solve problems under which condition? A) certainty B) low risk C) uncertainty D) low certainty 92) A top-level manager is most likely to solve problems under which condition? A) certainty B) risk C) uncertainty D) high certainty 93) A manager has a choice of three investment funds. To assess them, he looks at their investment records over the previous five years. The manager is operating under which condition? A) certainty B) probability C) uncertainty D) risk 12 Copyright © 2020 Pearson Education, Inc. 94) A manager has a choice of three bank CDs that pay different amounts of fixed interest over different time periods. The manager is operating under which condition? A) jeopardy B) certainty C) uncertainty D) risk 95) A manager wants to invest in one of three start-up companies. All three of the companies seem to have a good business plan. None of the companies has a track record. The manager is operating under which condition? A) uncertainty B) certainty C) low certainty D) risk 96) A key to what is commonly used to assess risk is for a decision maker to examine the ________ an investment. A) promises made by a company for B) ads posted by a company for C) historical data for D) minor details of 97) Programmed decisions tend to be routine. Answer: TRUE 98) A rule is simpler than a policy or a procedure to implement. Answer: TRUE 99) Implementing a procedure requires more judgment and interpretation than implementing a policy. Answer: FALSE 100) A highway speed limit is an example of a policy. Answer: FALSE 101) Managerial decisions are likely to become more programmed as managers rise in an organizational hierarchy. Answer: FALSE 102) Most managerial decisions include an element of risk. Answer: TRUE 103) Uncertainty involves a situation in which the probability of a certain outcome is known to be small. Answer: FALSE 13 Copyright © 2020 Pearson Education, Inc. 104) A manager is more confident of his or her assessment of a situation if it involves risk rather than uncertainty. Answer: TRUE 106) Managers in organizations make group decisions ________. A) frequently B) never C) almost never D) rarely 107) The eight steps of decision making ________. A) can only be employed by individuals B) can only be employed in very small groups C) can be employed by individuals and groups D) can only be employed by groups 108) One advantage of group decision making is that it usually provides ________ than individual decision making. A) faster decisions B) more ethical decisions C) less confusion D) more information 109) Group decisions generally feature ________ acceptance than decisions made by an individual. A) greater B) less C) neither greater nor less D) more enthusiastic 110) Group decision making typically increases the legitimacy of a decision because the decision was made ________. A) over a long period of time B) democratically C) by experts D) primarily by the group leader 111) Decisions made by individuals typically suffer from suspicions that the decision maker ________. A) is dishonest B) is not rational C) did not try to analyze the situation D) did not consult all interested parties 14 Copyright © 2020 Pearson Education, Inc. 112) Seeking the views of a diverse group of people can provide a decision maker with ________ on issues. A) fresh perspectives B) conventional wisdom C) universal agreement D) a foolproof way to get the perfect answer 113) Which one of the following is a drawback to seeking diverse views in decision making? A) less reliable decision B) easier decision-making process C) more time consuming D) less time consuming 114) What tends to be the most successful group size? A) 10-25 B) 5-7 C) 12-25 D) 3-12 115) Group decisions are usually ________ individual decisions. A) more efficient than B) less efficient than C) equal in efficiency to D) more efficient but less effective than 116) Since all members of a group are rarely equal in status, most groups suffer from ________. A) minority domination B) majority domination C) too much diversity D) gridlock 117) ________ can cause people in a group to fail to express their true opinions. A) Ambiguous responsibility B) Group imbalance C) Pressure to conform D) Years of experience 118) Which one of the following is a primary characteristic of groupthink? A) conflict among group members B) failure to reach consensus within a group C) complete conformity among group members D) candidness and openness within a group 15 Copyright © 2020 Pearson Education, Inc. 119) Which one of the following is NOT a factor that can increase the probability of groupthink? A) Influential group members dominate the discussion and the decision-making process. B) Group leaders stress the importance of consensus above all other concerns. C) The group has more than 40 group members. D) Group leaders solicit ideas from all group members without passing judgment on their ideas. 120) Which one of the following is NOT a way to minimize groupthink? A) give the leader more power in making decisions B) encourage cohesion C) have an impartial leader D) foster open discussion 121) Which one of the following group techniques is relatively simple and is used exclusively to generate creative ideas in a group setting? A) brainstorming B) nominal group technique C) groupthink D) electronic meetings 122) Which one of the following is NOT allowed in a brainstorming session? A) clear definition of the problem B) criticism or dismissal of poor ideas C) large number of alternatives D) recording of all alternatives 123) Which one of the following group techniques allows group members to meet together, but at the same time facilitates independent decision making? A) brainstorming B) nominal group technique C) large meetings of over 50 individuals D) small meetings of less than 10 individuals 124) The ________ blends the nominal group technique with sophisticated computer technology. A) personal meeting B) electronic meeting C) virtual meeting D) preliminary meeting 125) What advantages does videoconferencing provide for group decision making? A) anonymous expression of opinions B) less groupthink C) less minority domination D) savings on travel and time 16 Copyright © 2020 Pearson Education, Inc. 126) The second step in the decision-making process is identifying a problem. Answer: FALSE 127) Group decisions tend to provide more complete information than individual decisions. Answer: TRUE 128) An advantage of group decisions is that they increase the perception of the legitimacy of the solution. Answer: TRUE 129) A drawback of group decision making is groupthink. Answer: TRUE 130) Groups tend to be more efficient and less effective than individual decision making. Answer: FALSE 131) Two major advantages of electronic meetings are anonymity and honesty. Answer: TRUE 136) Mid-level managers in a country with high power distance are ________ than managers from a low power distance country. A) more likely to make risky decisions B) less likely to make risky decisions C) less likely to make safe, conservative decisions D) more likely to disagree with their leaders' decisions 137) Mid-level managers in a country with low uncertainty avoidance are ________ than managers from a high uncertainty avoidance country. A) more likely to make risky decisions B) less likely to make risky decisions C) less likely to make foolish decisions D) more likely to avoid making decisions 138) Individualistic countries like the United States tend to have ________ than group-oriented countries like Japan. A) more conformity and more cooperation B) more conformity and less cooperation C) less conformity and more cooperation D) less conformity and less cooperation 139) The use of ringisei in Japanese organizations reflects which one of the following values in Japanese culture? A) tradition-following B) consensus-seeking C) risk taking D) go-it-alone 17 Copyright © 2020 Pearson Education, Inc. 140) French management style tends to be ________ in style. A) permissive B) group oriented C) rule following D) autocratic 141) When dealing with international organizations, managers must be ________ in order to accommodate the managing styles of different cultures. A) as flexible as possible B) as inflexible as possible C) as strict as possible D) as thorough as possible 142) ________ helps people find better solutions to problems using innovative problem-solving methods. A) Planning B) Creativity C) Organization D) Structure 143) According to one study, about ________ of men and women were somewhat creative. A) 1 percent B) 10 percent C) 30 percent D) 60 percent 144) One well-accepted model states that individual creativity requires ________, or a commanding understanding of a subject matter. A) expertise B) task motivation C) high interest D) intuition 145) Which one of the following is NOT a characteristic of a creative problem solver? A) self confidence B) tolerance for ambiguity C) frustrates easily D) accepts risks readily 146) Which one of the following traits do all creative people seem to share? A) They like to save time. B) They get along well with others. C) They love their work. D) They don't like to work hard. 18 Copyright © 2020 Pearson Education, Inc. 147) Which one of the following tends to impede a person's creativity? A) providing time and resources B) clearly defined goals C) being watched while you work D) internal motivation 148) A country with high uncertainty avoidance and high power distance is more likely to engage in groupthink than a country with low uncertainty avoidance and low power distance. Answer: TRUE 149) Creativity is valued because it helps identify new and viable alternatives that have not previously been considered. Answer: TRUE 19 Copyright © 2020 Pearson Education, Inc.