Chapter 9_ Decision making process PDF

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Chapter 9--Managerial Decision Making Student: ___________________________________________________________________________

1.

Making a choice is the most significant part of the decision-making process. True False

2.

A decision is a choice made from available alternatives. True False

3.

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. True False

4.

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. True False

5.

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. True False

6.

In the real world, few decisions are certain. True False

7.

The main difference between risk and uncertainty is that with risk you know the probabilities of the outcomes. True False

8.

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. True False

9.

.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. True False

10 The classical decision making model assumes that the decision-maker is rational, and makes the . optimal decision each time. True False 1

11 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. True False 12 The growth of quantitative decision techniques that use computers has reduced the use of the classical . approach. True False 13 The administrative model of decision making describes how managers actually make decisions in . difficult situations. True False 14 Normative decision theory recognizes that managers have only limited time and cognitive ability and . therefore their decisions are characterized by bounded rationality. True False 15 The classical model of decision-making works best in organizations that are made up of groups with . diverse interests, goals, and values. True False 16 According to the classical model of decision making, managers’ searches for alternatives are limited . because of human, information, and resource constraints. True False 17 According to the administrative model of decision making, managers' searches for alternatives are . limited because of human, information, and resource constraints. True False 18 Satisficing behavior occurs when we choose the first solution alternative that satisfies minimal . decision criteria regardless of whether better solutions are expected to exist. True False 19 Intuition is a quick apprehension of a decision situation based on past experience but without . conscious thought. True False 20 According to both research and managerial experience, intuitive decisions are best and always work . out. True False 21 The process of forming alliances among managers is called coalition building. . True False 2

22 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. True False 23 Good intuitive decision making is based on an ability to recognize patterns at lightning speed. . True False 24 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. True False 25 Managers confront a decision requirement in the form of either a problem or an opportunity. . True False 26 Nonprogrammed decisions require six steps, however, programmed decisions being structured and . well understood require only one step. True False 27 Step one in the managerial decision-making process is recognition of decision requirement. . True False For a non-programmed decision, feasible alternatives are hard to identify and in fact are already available within the organization's rules and procedures. True False 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. True False The formulation stage involves the use of managerial, administrative, and persuasive abilities to ensure that the chosen alternative is carried out. True False Risk propensity refers to the willingness to undertake risk with the opportunity of gaining an increased payoff. True False 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. True False 3

Feedback is the part of monitoring that assesses whether a new decision needs to made. True False People who prefer simple, clear-cut solutions to problems use the directive style. True False Managers with an analytical decision style like to consider complex solutions based on as much data as they can gather. True False The behavioral style is often adopted by managers who like to consider complex solutions based on as much data as they can gather. True False Individuals with a conceptual decision-making style are more socially oriented than those with an analytical style. True False The most effective managers are consistent in using their own decision style rather than shifting among styles. True False Most bad decisions are errors in judgment that originate in the human mind's limited capacity and in the natural biases of the manager. True False Justifying past decisions is a common bias of managers. True False Managers will frequently look for new information that contradicts thier instincts or original point of view.. True False Most people underestimate their ability to predict uncertain outcomes. True False Brainstorming uses a face-to-face interactive group to spontaneously suggest a wide range of alternatives for decision making. True False

4

Brainwriting refers to the tendency of people in groups to suppress contrary opinions. True False Groupthink refers to the tendency of people in groups to suppress contrary opinions. True False Devil's advocate technique is similar to brainstorming in that both techniques prevent individuals from challenging other group member's assumptions. True False Point-counterpoint is a decision-making technique in which people are assigned to express competing points of view. True False Managers are often referred to as: A. B peace makers. . C conflict . creators. Dan unnecessary layer of employees. E profit . suppressor. _____ is a vital part of good management because decisions determine how the organization solves its problems, allocates resources, and accomplishes its goals. A.

Orga nizin g B Competiti ve visioning C Proper . alignment

E Leadersh . ip 5

B. C. D . E .

De cisi on Plan Goal Tacti c Strate gy

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 A.

pla nni ng

C organ . izing D contr . olling E leadi . ng

6

_____ refers to the process of identifying problems and then resolving them. A.

Or gan izin g B Contro . lling

D . E .

Planni ng Leadi ng

_____ decisions are associated with decision rules. A.

N on pr og ra m m ed B Uni . que

D Illstruct ured E Nov . el

7

Programmed decisions are made in response to _____ organizational problems. A.

un us ual

C signif . icant D . E .

min or uniq ue

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:

Ba . nonprogramme d decision. C an insignificant . decision. D . E .

8

poor management. personal grudge.

A.

B . C. D . E .

nonprogrammed decision. novel decision. poor management. unstructured decision.

If your instructor has an attendance policy, she/he is using a(n): A.

B unique . approach. C condition of . ambiguity. D nonprogram med decision. E none of . these. Nonprogrammed decisions are made in response to situations that are: A. unique. B. unstructured. C. important to the organization. E unique and important to the . organization.

9

A.

reorde r suppli es.

perform routine maintenance on one of the machines in manufacturing . terminate an employee for violation of company rules. E fill a . position. Good examples of _____ decisions are strategic decisions. A.

B . C . D . E .

10

program med insignifi cant recurri ng structur ed

A.

program med decision . B structured . decision.

D poor . management decision. E certainty . decision.

A.

programme d decision.

C. decision rule. D structured decision. . E bad community . decision.

B Nonpro gramm ed C Wick . ed D Admini . strative E Intuiti . ve 11

Associated with the condition of _____ is the lowest possibility of failure. A.

ambi guity B uncertai . nty

D. risk E all of . these Which of the following means that all the information the decision-maker needs is fully available?

B. C . D . E .

Risk Uncertaint y Ambiguity None of these

Bobby, a product manager, 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 _____. A. risk B ambiguity . C. certainty

E brainstormi . ng

12

A.

cer tai nty B ambig . uity

D uncert . ainty E confli . ct 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? A.

Certai nty

C . D . E .

Uncertainty Ambiguity Brainstormi ng

_____ means that managers know which goals they wish to achieve, but information about alternatives and future events is incomplete. A.

B.

Cert aint y Risk

D . E .

Ambigu ity Advoca cy

13

When managers know which goals they wish to achieve, but information about alternatives and future events is incomplete, the condition of _____ exists. A.

C . D . E .

risk

ambiguit y certainty problemat ic

Which of the following has the highest possibility of failure? A.

The cond ition of certa inty

CThe condition of uncertainty D The condition of risk E All of . these

14

The four positions on the possibility of failure scale include certainty, risk, ambiguity, and _____.

B . C . D . E .

conflict necessit y indecisi on possibili ty

_____ is by far the most difficult situation for a decision-maker. A.

Certai nty B. Risk C Uncertainty .

E Brainstormi . ng 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? A.

Certai nty B. Risk C Uncertainty .

E Brainstormi . ng

15

The condition under which ambiguity occurs is when:

B objectives are well . defined. C information about outcomes is readily available. D all the alternatives are . known. E decisions are already . made. are associated with conflicts over goals and decision alternatives, rapidly changing circumstances, fuzzy information, and unclear links among decision elements. A.

Non pro gra mm ed B Progra . mmed

D Conven . tional E Irration . al

16

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? A.

Bounde d B. Programmed C Conventional .

E Irrational . decision The classical model of decision making is based on _____ assumptions.

B. C . D . E .

irrational economic uncertaint y technologic al

Riley is a manager at the Tinker Tools. She is expected to make decisions that are in the . Her decisions should be based on which of the following models? A.

B . C .

The administrative model of decision making The garbage can model of decision making The scientific management model of decision making

E The humanistic model of decision . making

17

Which of these assumptions are included in the classical model of decision making? A.

Problems are unstructured and ill defined.

C Criteria for evaluating . alternatives are unknown. DThe decision-maker selects the alternatives that will minimize the economic return to the organization. E The situation is always . uncertain. Which approach defines

B . C . D . E .

Scientifi c Descripti ve Reflectiv e Humanist ic

is the approach that defines how a decision maker should make decisions and for reaching an ideal outcome for the organization. A.

Admi nistrat ive B Descriptiv . e

D Bounded . rationality E None of . these 18

All of the following are characteristics of the classical decision making model except: A. clear-cut problems and goal B. conditions of certainty. C rational choice by individual for maximizing outcomes. .

E all of these are characteristics of classical decision making . model. The _____ model of decision making is most valuable when applied to _____. A.

administrative; programmed decisions B classical; nonprogrammed . decisions

D classical; ambiguous decisions . E administrative; structured . decisions _____ approach describes how managers actually make decisions, where as _____ approach defines how a decision-maker should make decisions. A.

Normative; descriptive B Normative; classical .

D . E .

19

Descriptive; administrative Normative; administrative

Which model of decision making is associated with satisficing, bounded rationality, and uncertainty? A.

Cla ssic al

C Quanti . tative D . E .

Ratio nal Politi cal

The growth of that use computers has expanded the use of which decision-making approach?

B . C. D. E .

Classical Intuitive Political Bureaucrat ic

The _____ model of decision making describes how managers actually makes decisions in situations characterized by nonprogrammed decisions, uncertainty, and ambiguity. A.

nor mat ive B classic . al

Dscientifi c manage ment E objecti . ve 20

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: A.

satisficin g.

C classical model of decision making. D normative . approach. E scientific . approach. 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? A. B The classical model of decision making C. Satisficing D. Brainstorming E Scientific . management The essence of _____ is to choose the first solution available. A.

bounded rationality

B. creativity C. decision maximization D. E the classical model of decision . making

21

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 decisionmaking?

B Right. brained C . D . E .

Satisfi cing Ratio nal Intuiti ve

Intuition is based on _____, but lacking in _____. A.

conscious thought; practicalit y

C a solid analysis; . applicability D experience; . conscious thought E thought-process; . guts

22

Most managers settle for a _____ rather than a _____ solution. A.

C . D . E .

minimizi ng; maximizi ng

top-level; bottomline maximizing; satisficing challenging; simple

All of the following are characteristics of the administrative decision making model except: A.

vague problem and goals

C limited information about alternatives and their outcomes. . D. satisfying choice. E all of these are characteristics of administrative decision ma . model. Which of the following is the process of forming alliances among managers during the decision making process? A.

Networ king B. Socializing

D. Satisficing E Passing the . buck

23

. A.

classic al functional

B . C bureaucrati . c

E administrati . ve The _____ model closely in which most managers and decisionmakers operate. A.

nor mat ive B admini . strative C descri . ptive D classi . cal

Jefferson Inc. is an information technology consulting firm located in Washington D.C. Decisions at Jefferson are complex and involve many people, . Which decision-making model fits best for this organization?

B . C . D . E . 24

Functiona l Classical Administra tive Bureaucrat ic

All of these are basic assumptions of the political model except: A.

organizations are made up of groups with diverse interests, goals, and values. B. information is clear and complete. C managers do not have the time, resources, or mental capacity to identify all dimensions of the problem. D managers engage in the push and pull of debate to . decide goals and discuss alternatives.

Shirley works in the human resource department at Turtle Shells, Inc. She believes she is an increase in drinking problems among the workforce. She thinks she needs to investigate further. She is at what stage of the managerial decision making process? A.

Diagnosis and analysis of causes B Development of alternatives .

D Evaluation and feedback . E Selection of desired . alternatives A(n) _____ occurs when the organizational accomplishment is less than established goals. A.

B . C . D .

25

stre ngt h threa t diagn osis opport unity

_____ is the step in the decision-making process in which managers underlying causal factors associated with the decision situation.

B . C . D . E .

Diagnosis Recognitio n Judgment Identificati on

Which of the following is the first step in the managerial decision making process? A.