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Management, 3e (Hitt) Chapter 12 Individual and Group Decision Making 1) A problem exists when a manager sees a way for the firm to achieve a more desirable state than the one it's currently in. Answer: FALSE Page Ref: 333 Difficulty: Easy Classification: Conceptual Objective: 1 2) The classical model argues that managers will choose the alternative that maximizes the desired outcome. Answer: TRUE Page Ref: 335 Difficulty: Easy Classification: Conceptual Objective: 1 3) It is important to monitor and evaluate results in order to detect problems with the original decision and its implementation. Answer: TRUE Page Ref: 336 Difficulty: Easy Classification: Conceptual Objective: 1 4) While the rational model shows how decisions should be made, it falls short of describing how decisions are actually made. Answer: TRUE Page Ref: 337 Difficulty: Easy Classification: Conceptual Objective: 1 5) The bounded rationality model focuses on the decision maker as an optimizer. Answer: FALSE Page Ref: 338 Difficulty: Easy Classification: Conceptual Objective: 2

6) High levels of certainty for both the problem formulation and the problem solution phases characterize the programmed decision-making process. Answer: TRUE Page Ref: 339 Difficulty: Easy Classification: Conceptual Objective: 3 7) Standard operating procedures (SOP) are often used for nonprogrammed decisions. Answer: FALSE Page Ref: 339 Difficulty: Easy Classification: Conceptual Objective: 3 8) In implementing the choice, group responsibility is generally superior to individual responsibility. Answer: FALSE Page Ref: 341 Difficulty: Easy Classification: Conceptual Objective: 4 9) Victims of groupthink tend to collectively rationalize and discount warning signs that should lead them to reconsider earlier decisions. Answer: TRUE Page Ref: 342 Difficulty: Easy Classification: Conceptual Objective: 6 10) In a group decision-making process, appointing a devil's advocate will prevent groupthink. Answer: TRUE Page Ref: 343 Difficulty: Easy Classification: Conceptual Objective: 6 11) Escalation of commitment can lead to positive consequences for organizations. Answer: FALSE Page Ref: 345 Difficulty: Easy Classification: Conceptual Objective: 6

12) High involvement while evaluating results is significantly related to higher levels of satisfaction and work group performance. Answer: TRUE Page Ref: 346 Difficulty: Easy Classification: Conceptual Objective: 3 13) Participation decreases the likelihood that employees will work for rewards and outcomes they value. Answer: FALSE Page Ref: 347 Difficulty: Easy Classification: Conceptual Objective: 3 14) In high-velocity environments, decision-making groups must not be afraid to act. Answer: TRUE Page Ref: 349 Difficulty: Easy Classification: Conceptual Objective: 3 15) Conducting a dialectical inquiry can be a particularly good way to overcome groupthink and escalation-of-commitment pitfalls. Answer: TRUE Page Ref: 350 Difficulty: Easy Classification: Conceptual Objective: 6 16) During the brainstorming process, individual members meet as a group, but they begin by silently and independently generating ideas to solve a problem. Answer: FALSE Page Ref: 350 Difficulty: Easy Classification: Conceptual Objective: 6 17) The nominal group technique is ineffective against groupthink. Answer: FALSE Page Ref: 351 Difficulty: Easy Classification: Conceptual Objective: 6

18) The Delphi technique is used to improve problem formulation. Answer: FALSE Page Ref: 351 Difficulty: Easy Classification: Conceptual Objective: 6 19) Technology is helpful for routine but complex decisions. Answer: TRUE Page Ref: 352 Difficulty: Easy Classification: Conceptual Objective: 6 20) Compared to computer-mediated groups, face-to-face groups take longer to complete their tasks and members experience less satisfaction. Answer: FALSE Page Ref: 352 Difficulty: Easy Classification: Conceptual Objective: 6 21) The process of decision making involves several steps that can be divided into distinct categories. The formulation phase involves ________. A) generating alternatives B) diagnosing the factors affecting the problem or opportunity C) selecting the preferred solution D) implementing the decided course of action Answer: B Page Ref: 332 Difficulty: Easy Classification: Conceptual Objective: 1 22) The process of decision making involves several steps that can be divided into distinct categories. The solution phase involves ________. A) diagnosing the factors affecting the problem or opportunity B) identifying a problem or opportunity C) acquiring information D) implementing the decided course of action Answer: D Page Ref: 332 Difficulty: Easy Classification: Conceptual Objective: 1

23) Which of the following represents the earliest attempt to model decision-making processes? A) the retrospective decision model B) the bounded rationality model C) the rational model D) the administrative model Answer: C Page Ref: 333 Difficulty: Easy Classification: Conceptual Objective: 1 24) In a classical model, once you have identified a problem or opportunity, the next step is to ________. A) analyze the alternatives generated B) determine the criteria for selecting among the alternatives to deal with it C) generate alternatives that achieve the results you want D) select feasible alternatives Answer: B Page Ref: 333 Difficulty: Moderate Classification: Conceptual Objective: 1 25) Kenneth is a manager for a content management firm. He realizes that the firm requires five technicians to maintain and update the firm's servers. Which of the following actions would suggest that Kenneth is developing objectives and criteria according to the classical model? A) Kenneth decides to poach technicians from its competitor to understand its database management techniques. B) Kenneth realizes that the firm's data storage capacity has to be doubled in the next six months. C) Kenneth decides that these technician require 5 percent interpersonal skills, 50 percent technical knowledge, 15 percent motivation, and 30 percent problem solving ability. D) Kenneth selects twenty resumes from a job portal. Answer: C Page Ref: 333 Difficulty: Moderate Classification: Application Objective: 1 AACSB: Analytic skills

26) Even when a situation is similar to another situation that occurred in the past, it's often worthwhile to pursue new, creative alternatives. Which of the following is a valid rationale for this statement? A) Pursuing new, creative alternatives for a situation helps an organization gain the reputation of being an innovative firm. B) No two situations are identical and subtle differences may make a past solution less effective today. C) Using past solutions for new problems is discouraged in firms that operate in today's dynamic environment. D) Pursuing new, creative alternatives for a situation makes it easier for the manager to implement and monitor them. Answer: B Page Ref: 335 Difficulty: Moderate Classification: Conceptual Objective: 1 27) While ________ in the classical model, you need to determine which alternatives would produce minimally acceptable results, eliminate alternatives that are unlikely to achieve the minimally acceptable outcome, and examine the feasibility of the remaining alternatives. A) analyzing alternatives B) selecting alternatives C) generating alternatives D) developing objectives and criteria Answer: A Page Ref: 335 Difficulty: Moderate Classification: Conceptual Objective: 1 28) In the classical model of decision making, the ________ asserts that managers choose the alternative that they believe maximizes the desired outcome. A) retrospective decision model B) bounded rationality model C) subjectively expected utility model D) administrative model Answer: C Page Ref: 335 Difficulty: Easy Classification: Conceptual Objective: 1

29) In which of the following steps of the classical model do managers access sources and reasons for potential resistance to the decision? A) monitoring and evaluation results B) implementing the decision C) selecting alternatives D) generating alternatives Answer: B Page Ref: 336 Difficulty: Easy Classification: Conceptual Objective: 1 30) During the implementation step of the classical model, managers ________. A) determine the chronology and sequence of actions designed to overcome resistance to the decision B) eliminate alternatives that are unlikely to achieve the minimally acceptable outcome C) determine which of the remaining alternatives will produce the most satisfactory outcome D) choose the alternative that maximizes the desired outcome Answer: A Page Ref: 336 Difficulty: Easy Classification: Conceptual Objective: 1 31) Lance Crooger, the CEO of Heithz Co., realizes that the company is losing its competitive advantage due to lack of transparency and communication within the organization. He notices that customers are shifting to competitors' products because of Heithz's lack of effective customer service—agents who are directly in touch with the customers did not have decisionmaking authority. After following the rational model of decision-making process, Lance concludes that decentralizing the organizational hierarchy will solve most of the problems and provide Heithz's customer service agents with decision-making ability, resulting in better services. However, Lance realizes that most of Heithz's senior management will be against this decision because they will feel that their subordinates will receive more power. Lance is now determining ways to tackle senior management resistance. Which step of the rational model is Lance presently in? A) analyzing alternatives B) selecting alternatives C) implementing the decision D) monitoring and evaluating results Answer: C Page Ref: 336 Difficulty: Moderate Classification: Application Objective: 1 AACSB: Analytic skills

32) It is important to monitor and evaluate results in a decision-making process in order to ________. A) assess sources and reasons for potential resistance to the decision B) detect problems with the original decision and its implementation C) determine the chronology and sequence of actions designed to overcome resistance to the decision D) choose the alternative that maximizes the desired outcome Answer: B Page Ref: 336 Difficulty: Easy Classification: Conceptual Objective: 1 33) Which of the following assumption is made while pursing the rational model of decision making? A) The problem or opportunity is unclear. B) Decision makers are not rational. C) The firm's objectives are unclear. D) Decision makers are not biased. Answer: D Page Ref: 336 Difficulty: Moderate Classification: Conceptual Objective: 1 34) ________ is the tendency for information to lose its certainty as it is passed along. A) Information bias B) Cognitive complexity C) Stereotyping D) Uncertainty absorption Answer: D Page Ref: 337 Difficulty: Easy Classification: Conceptual Objective: 1 35) Which of the following defines selective perception? A) a tendency to ignore or avoid certain information, especially ambiguous information B) a tendency for information to lose its certainty as it is passed along C) deciding about an alternative on the basis of characteristics ascribed by others D) a reluctance to give or receive negative information Answer: A Page Ref: 337 Difficulty: Easy Classification: Conceptual Objective: 1

36) Preston rejects Jose for the position of customer-relations manager because of his perception that Mexicans are disloyal. This is an example of ________. A) cognitive complexity B) stereotyping C) uncertainty absorption D) information bias Answer: B Page Ref: 337 Difficulty: Easy Classification: Application Objective: 1 AACSB: Analytic skills 37) "I hate Irish men because they are drunkards." This statement is an example of ________. A) stereotyping B) information bias C) cognitive complexity D) selective perception Answer: A Page Ref: 337 Difficulty: Easy Classification: Application Objective: 1 AACSB: Analytic skills 38) Kiera, an HR executive, updates Mason, the accounts manager: "We have received 500 resumes for the position of accountants. It's gonna take forever to screen these. Any ideas?" Mason suggests, "Rule out anyone without 2 years of accounting experience." This is an example of ________. A) uncertainty absorption B) selective perception C) cognitive complexity D) information bias Answer: C Page Ref: 337 Difficulty: Moderate Classification: Application Objective: 1 AACSB: Analytic skills

39) The administrative model is also known as the ________. A) bounded rationality model B) retrospective decision model C) implicit favorite model D) rational model Answer: A Page Ref: 337 Difficulty: Easy Classification: Conceptual Objective: 2 40) The ________ assumes that people usually settle for acceptable rather than maximum options because the decisions they confront typically demand greater information-processing capabilities than they possess. A) retrospective decision model B) administrative model C) rational model D) implicit favorite model Answer: B Page Ref: 337 Difficulty: Moderate Classification: Conceptual Objective: 2 41) Rather than using explicit criteria and weights to evaluate alternatives, the bounded rationality model argues that people use ________. A) holism B) experience C) heuristics D) perception Answer: C Page Ref: 337 Difficulty: Easy Classification: Conceptual Objective: 2 42) Heuristic is a rule that guides the search for alternatives into areas that have ________. A) high probabilities for yielding success B) interchangeable alternatives C) maximum options D) information-processing capabilities Answer: A Page Ref: 337 Difficulty: Easy Classification: Conceptual Objective: 2

43) Seth Craig, a senior manager in a financial consulting firm, is interviewing candidates for the position of accounting executive. He has short-listed three candidates—Kenneth, Nora, and Lance—for the final round of interview. Seth is well aware that Lance has had performance problems in his previous job, but still favors him for this position. Which of the following is most similar to this situation? A) Quest Inc., a mobile phone manufacturer, is losing market share. Austin, a senior marketing manager, consults a marketing research firm to identify the problem. The market research analysis report by the firm suggests that Quest lacks product innovation and after-sales support. Austin is aware that his research department needs improvement and his customer-service agents lack interpersonal skills, but forms his own team to conduct a market research again, because he does not like the research firm's report. B) Roselyn, an HR executive working for a construction equipment manufacturing firm, has 300 applicants for a sales manager's opening in her firm. She needs to close this position by the end of the week and decides to eliminate any applicant with less than 5 years of sales experience. She is aware that she might miss out on good candidates if she takes this route, but is helpless due to time constraints. C) Tender, a toy manufacturing firm, uses a traditional supply chain to market its products. It realizes that the sales of its products have dipped significantly in one of the areas of the city. Conducting marketing research reveals that its competitors deal directly with customers, which allows them to provide attractive offers to customers. Tender decides to pursue disintermediation, dealing directly with its customers, before its starts losing marketing share. D) Leander favors Janis for the position of product manager because she has graduated from a highly reputed business school under full scholarship. Leander is aware that Janis does not have sufficient experience, but does not think that is important. Answer: A Page Ref: 337 Difficulty: Difficult Classification: Critical Thinking Objective: 2 AACSB: Reflective thinking skills 44) ________ is the tendency for decision makers to accept the first alternative that meets their minimally acceptable requirements rather than push further for an alternative that produces the best results. A) Altruism B) Satisficing C) Groupthink D) Rational ignorance Answer: B Page Ref: 338 Difficulty: Easy Classification: Conceptual Objective: 2

45) The ________ focuses on the decision maker as a satisficer. A) retrospective decision model B) implicit favorite model C) rational model D) bounded rationality model Answer: D Page Ref: 338 Difficulty: Easy Classification: Conceptual Objective: 2 46) The ________ focuses on how decision makers attempt to rationalize their choices after they are made. A) retrospective decision model B) administrative model C) rational model D) bounded rationality model Answer: A Page Ref: 338 Difficulty: Easy Classification: Conceptual Objective: 2 47) The retrospective decision model is also known as the ________. A) implicit favorite model B) rational model C) administrative model D) bounded rationality model Answer: A Page Ref: 338 Difficulty: Easy Classification: Conceptual Objective: 2 48) ________ is an individual's tendency to highlight the positive features of their implicit favorite over the alternatives. A) Rational ignorance B) Selective perception C) Cognitive complexity D) Perceptual distortion Answer: D Page Ref: 338 Difficulty: Easy Classification: Conceptual Objective: 2

49) It is Christmas and Lora and her parents are shopping. Lora's attention is caught by a pair of Levi's jeans, which she immediately likes. Although there are several other brands available in the shelf and Levi's is comparatively expensive, Lora insists that Levi's jeans are better in quality and design. She manages to convince her parents that her choice is the best and buys the pair. This is an example of ________. A) perceptive distortion B) selective perception C) cognitive complexity D) uncertainty absorption Answer: A Page Ref: 338 Difficulty: Moderate Classification: Application Objective: 2 AACSB: Analytic skills 50) Which of the following statements is true about programmed decisions? A) Top managers usually face these decisions. B) They are made in response to problems that are either complex or novel. C) These decisions are made when the nature of the problem is well-defined. D) Past decisions are of little help while making these decisions. Answer: C Page Ref: 339 Difficulty: Moderate Classification: Conceptual Objective: 3 51) Which of the following is an example of a programmed decision? A) improving sales in an area that has until recently seen a dip in sales B) analyzing the feasibility of starting a new subsidiary in a different country C) creating rules and procedures to maintain a safe work environment D) coming up with the best way to communicate with the target market Answer: C Page Ref: 339 Difficulty: Moderate Classification: Application Objective: 3 AACSB: Analytic skills

52) Which of the following statements is true about nonprogrammed decisions? A) These decisions are made when the nature of the problem is well-defined. B) Lower-level managers typically encounter these decisions. C) These decisions are usually made through structured, bureaucratic techniques. D) Past decisions are of little help while making these decisions. Answer: D Page Ref: 339 Difficulty: Moderate Classification: Conceptual Objective: 3 53) Managers have a tendency to let their programmed activities overshadow their nonprogrammed activities because ________. A) the outcomes of nonprogrammed decisions are more uncertain B) the outcomes of programmed decisions are recognized and appreciated more by top management C) the outcomes of nonprogrammed decisions are more predictable and routine D) the outcomes of programmed decisions directly affect the employees of the organization Answer: A Page Ref: 339 Difficulty: Easy Classification: Conceptual Objective: 3

54) Clifton, a project manager, has to make a series of decisions, both simple and complex, by the end of the month. Which of the following suggests that Clifton has the tendency known as Gresham's law of planning? A) Clifton gives priority to complicated problems, like planning a course of action to improve sales volumes in certain localities of the city and calculating the feasibility of opening new subsidiaries in other states. He then moves on to simpler pro...