1) A decision criterion defines what is necessary or pertinent to resolving a difficulty.

You are watching: When problems are ________, managers must rely on ________ in order to develop unique solutions.

Answer: TRUE

2) Implementing an alternate describes the procedure of choosing the ideal alternate.

Answer: FALSE

3) Decision making is a component of the planning, arranging, leading, and controlling attributes and also thus, the significance of management.

Answer: TRUE

4) One presumption of rational decision making is that the decision maker is not conscious of all feasible alternatives and after-effects.

Answer: FALSE

5) According to the idea of bounded rationality, supervisors make decisions rationally, yet are limited by their capacity to procedure information.

Answer: TRUE

6) The phenomenon of escalation of commitment describes an raised commitment to a previous decision despite evidence that it may have actually been wrong.

Answer: TRUE

7) Intuitive decision making complements rational decision making however not bounded rational decision making.

Answer: FALSE

8) A programmed decision is a recurring decision that can be tackled by a regimen strategy.

Answer: TRUE

9) Nonprogrammed decision making relies on measures, rules, and also policies.

Answer: FALSE

10) Risk is the condition in which a decision maker is able to estimate the likelihood of particular outcomes.

Answer: TRUE

11) The sunk expenses error occurs once decision machines forobtain that present selections cannot correct the previous.

Answer: TRUE

12) Highly trusted organizations (HROs) are easily tricked by their success.

Answer: FALSE

13) Which of the following statements is true concerning problem identification?

A) Problems are generally evident.

B) A symptom and also a problem are one and the same.

C) Generally, what is a problem for one manager is a problem for all various other supervisors.

D) Effectively identifying troubles is not straightforward.

Answer: D

14) To recognize the ________, a manager have to determine what is appropriate or important to refixing a problem.

A) bounded rationality of a decision

B) escalation of commitment

C) weight of the decision criteria

D) decision criteria

Answer: D

15) Creativity is the majority of essential in which of the following procedures of the decision-making process?

A) analyzing alternatives

B) allocating weights to the decision criteria

C) occurring alternatives

D) identifying decision criteria

Answer: C

16) In the decision-making procedure, while ________, the decision maker puts the decision right into action by conveying it to those influenced by it and also getting their commitment to it.

A) selecting an alternative

B) evaluating a decision's effectiveness

C) implementing an alternative

D) analyzing alternatives

Answer: C

17) It is assumed that a rational decision maker ________.

A) encounters unclear and ambiguous problems

B) is limited by his or her capacity to procedure information

C) is unconscious of all the feasible options and consequences

D) is fully objective and also logical

Answer: D

18) When managers make decisions that are rational but restricted by their ability to procedure the indevelopment, they are adhering to the principle of ________.

A) cognitive decision making

B) bounded rationality

C) escalation of commitment

D) intuitive decision making

Answer: B

19) Toby is searching for a new apartment. He is specifically looking for one that is located in the heart of the city and also have to be obtainable for $600 per month. However before, Toby is likewise willing to pay as much as $850 per month for a location that is positioned slighted amethod from the city center. According to him, the second option "will certainly also carry out." This is an example of ________.

A) rational decision making

B) bounded rationality

C) intuitive decision making

D) non direct thinking

Answer: B

20) In intuitive decision making, managers ________.

A) regularly tfinish to overlook their feelings or emotions

B) usage data from their subaware mind to aid make their decisions

C) use easily accessible evidence to improve their decision making skills

D) carry out not depend on their past experiences to make decisions

Answer: B

21) Structured difficulties align well through which type of decisions?

A) programmed

B) analogous

C) organic

D) nonlinear

Answer: A

22) What is a difference between a policy and a rule?

A) A policy develops basic parameters for the decision maker.

B) A plan specifies what must or should not be done.

C) A plan is even more explicit.

D) A preeminence frequently contains an ambiguous term.

Answer: A

23) Unstructured problems ________.

A) describe the usual difficulties faced by organizations

B) are primarily addressed utilizing procedures, rules, and policies

C) are accompanied by ambiguous or infinish information

D) perform not require the decision maker to go through an affiliated decision process

Answer: C

24) When problems are ________, supervisors have to count on ________ in order to develop distinct services.

A) structured; nonprogrammed decision making

B) structured; pure intuition

C) unstructured; nonprogrammed decision making

D) unstructured; programmed decision making

Answer: C

25) If an individual knows the price of three comparable cars at different dealerships, he is operating under which of the following decision-making conditions?

A) risk

B) supposition

C) certainty

D) speculation

Answer: C

26) Positive managers follow a maximax option when they ________.

A) maximize the maximum possible payoff

B) maximize the minimum possible payoff

C) minimize the maximum regret

D) minimize the minimum regret

Answer: A

27) The ________ thinking style is identified by a choice for inner sources of indevelopment and also handling this information with inner insights, feelings, and also hunches to guide decisions and actions.

A) energetic trial and error

B) nondirect

C) straight

D) organic

Answer: B

28) Rules of thumb that managers use to simplify decision making are well-known as ________.

A) heuristics

B) folksonomies

C) algorithms

D) sophisms

Answer: A

29) The ________ defines just how decision makers fixate on initial indevelopment as a starting allude and then, when collection, fail to adequately change for subsequent indevelopment.

A) anchoring effect

B) selective perception effect

C) confirmation bias

D) framing bias

Answer: A

30) To make reliable decisions in today's fast-moving civilization, supervisors must ________.

A) build institutions that shun complexity

B) recognize as soon as it is time to contact it quits

C) neglect social differences

D) build institutions that depend on their previous successes

Answer: B

Is the Picture Clear? (Scenario)

Sharon was the local manager of a big cable tv firm. She faced many difficulties and decisions everyday, such as just how to price each sector, whom to hire, what kind of modern technology to purchase, and also how to manage the increasing customer complaints. She essential some aid sorting these concerns out.

31) When a customer calls and requests a refund for a partial month's usage of the cable business, the fact that such cases are regimen and also the majority of most likely have a typical response would certainly make the response a ________ decision.

A) unstructured

B) nonprogrammed

C) speculative

D) programmed

Answer: D

32) Normally Sharon follows a ________, a collection of interconnected sequential procedures for responding to a structured problem.

A) rule

B) policy

C) procedure

D) code

Answer: C

Decision Making Biases and Errors (Scenario)

Newcastle United, a soccer club, was relegated from the top trip two periods back. Following relegation, the club's board sacked the manager and hired a new manager to replace him. The club won back proactivity to the league and also delighted in an excellent seaboy. Andy Carroll, the star player for Newcastle, was the top scorer in the league for that seachild. However before, the club, needing to strengthen the team by buying brand-new players, marketed Andy Carroll to Liverpool soccer club to buy 3 average players. The club is presently enduring a dip in develop and also is in risk of being relegated aacquire.

33) Which of the adhering to statements, if true, would show the presence of self-serving bias on the part of the manager?

A) The manager assumes moral duty for the club's disappointing performance and also provides to reauthorize from his place.

B) The manager buys Andy Carroll ago from Liverpool at a much greater price to revive the team's fortunes.

C) The manager blames the board for offering the peak scorer and replacing him via below-par players.

D) The manager threatens to quit if the board refprovides to buy earlier Andy Carroll from Liverpool immediately.

Answer: C

34) Which of the following statements, if true, best shows sunk price error on the component of the board?

A) The board buys, a now out-of-form, Andy Carroll earlier from Liverpool at a much greater price in the hopes of reversing the team's create.

B) The board admits that it underapproximated Andy Carroll's actual industry worth while selling him to Liverpool.

C) The board blames the manager for buying 3 under-par players instead of one excellent replacement for Andy Carroll.

D) The board backs the manager–who is confident that the team will certainly be back in form–to enhance the team's performance with its present players.

Answer: A

35) List and also talk about the eight procedures in the decision-making procedure.


Step 1: Identifying a problem  The decision-making process begins via the existence of a problem or a discrepancy between an existing and also a desired state of affairs. However, a discrepancy without pressure to take action becomes a problem that deserve to be postponed.

Tip 2: Identify decision criteria - Once the manager has actually determined a difficulty that requirements attention, the decision criteria essential to readdressing the trouble should be established. That is, managers need to identify what is relevant in making a decision.

Tip 3: Allocating weights to the criteria - The decision maker should weigh the items in order to give them the correct priority in the decision. A basic strategy of doing this is to offer the a lot of vital criterion a weight of 10 and then assign weights to the remainder versus that traditional.

Tip 4: Developing choices - The fourth action requires the decision maker to list the viable choices that might settle the trouble. No attempt is made in this step to evaluate the different, just to list them.

Step 5: Examining choices - Once the choices have actually been identified, the decision maker have to critically analyze each one. From this comparison, the strengths and weaknesses of each alternative become apparent.

Tip 6: Selecting an different - The 6th step involves selecting the ideal different from among those taken into consideration.

Tip 7: Implementing the different - Implementation requires conveying the decision to those impacted by it and gaining their commitment to it. If the people that must bring out a decision participate in the procedure, they are more most likely to enthusiastically assistance the outcome than if they are simply told what to carry out.

Step 8: Examining decision efficiency - The last action in the decision-making procedure requires appincreasing the outcome of the decision to view if the difficulty has actually been readdressed. If the desired outcome has not been achieved, the manager may think about returning to a previous step or might also think about founding the totality decision process over.

36) Briefly comment on the presumptions of rationality and also the validity of those presumptions.

Answer: A decision maker who is perfectly rational is totally objective and logical. The trouble faced is clear and unambiguous. The decision maker has actually a clear and particular goal. He is conscious of all possible alternatives and aftermath. Making decisions repeatedly leads to choosing the different that maximizes the likelihood of achieving that goal.

These assumptions use to any type of decision - personal or managerial. For managerial decision making, a secondary presumption is that decisions are made in the finest interests of the company. However before, many of these presumptions of rationality are not very realistic.

37) What is meant by bounded rationality and satisficing?

Answer: Despite the unrealistic presumptions of perfect rationality, supervisors are meant to be rational when making decisions. It is construed that "good" decision devices are intended to carry out specific things and also exhilittle good decision-making behaviors as they identify troubles, consider alternatives, gather indevelopment, and act decisively however prudently. When they do so, they display others that they are skilled and also that their decisions are the outcome of intelligent deliberation. However before, a more realistic approach to describing how managers make decisions is the concept of "bounded rationality." According to this principle, supervisors make decisions rationally, but are restricted by their capability to procedure information.

Since they cannot possibly analyze all indevelopment on all options, supervisors "satisfice," rather than maximize. That is, they accept services that are "good enough." Thus, they come to be rational within the limits of their capability to process information.

38) Define intuitive decision making and identify the five various aspects of intuition.

Answer: Intuitive decision making is the process of making decisions on the basis of suffer, feelings, and built up judgment. Intuitive decision making have the right to complement both rational and bounded rational decision making. A manager that has actually had actually suffer with a similar type of difficulty or instance regularly acts conveniently through limited indevelopment because of that past suffer.

The 5 various aspects of intuition are:

a. Affect-initiated decisions - Managers make decisions based on feelings or emotions.

b. Cognitive-based decisions - Managers make decisions based upon abilities, understanding, and training.

c. Experience-based decisions - Managers make decisions based on their past experiences.

d. Submindful mental handling - Managers usage information from their subaware to help them make decisions.

e. Values or ethics-based decisions - Managers make decisions based on moral worths or society.

39) Discuss structured problems, programmed decisions, unstructured problems, and also nonprogrammed decisions.

Answer: Some problems are straightforward. The decision maker's goal is clear, the difficulty is familiar, and also indevelopment about the problem is conveniently identified and complete. Hence, these are dubbed structured problems. For circumstances, as soon as a server spills a drink on a customer's coat the customer is upcollection and also the manager requirements to do something. Because it is not an unusual incident, tright here is some standardized routine for managing it. For example, the manager provides to have the coat cleaned at the restaurant's price. This is called a programmed decision, a repetitive decision that can be tackled by a routine approach. Due to the fact that the problem is structured, the manager does not need to go to the trouble and also cost of going with an connected decision procedure.

Not all the difficulties supervisors confront have the right to be solved using programmed decisions. Many business situations involve unstructured troubles, which are troubles that are new or unexplained and also for which information is ambiguous or infinish. Whether to develop a new manufacturing facility in China is an instance of an unstructured problem. When difficulties are unstructured, managers count on nonprogrammed decision making in order to develop distinctive options. Nonprogrammed decisions are distinctive and also nonrecurring and also involve custom-made remedies. Lower-level supervisors largely count on programmed decisions bereason they confront familiar and repeated difficulties. As supervisors relocate up the organizational power structure, the difficulties they challenge come to be more unstructured. However before, few managerial decisions in the genuine world are either completely programmed or nonprogrammed. Many fall somewright here in in between.

40) Discuss the 3 forms of programmed decisions that a manager depends on to resolve structured problems.

Answer: Usually a manager relies on one of 3 forms of programmed decisions to counter structured problems: procedure, preeminence, or plan.

A procedure is a collection of sequential measures a manager supplies to respond to a structured problem. Identifying the problem is a little bit tough. Once it is clear, so is the procedure. For instance, a purchasing manager receives a repursuit from a wareresidence manager for 15 PDA handhelds for the inventory clerks. The purchasing manager knows how to make this decision by complying with the establiburned purchasing procedure.

A ascendancy is an explicit statement that tells a manager what deserve to or cannot be done. Rules are typically provided because they are easy to follow and encertain consistency. For instance, rules about lateness and absenteeism permit supervisors to make disciplinary decisions quickly and sensibly.

The 3rd type of programmed decisions is a policy, which is a reminder for making a decision. In comparison to a ascendancy, a policy establishes general parameters for the decision maker rather than particularly stating what have to or should not be done. Policies generally contain an ambiguous term that leaves interpretation approximately the decision maker.

41) Discuss the three different decision-making conditions that supervisors commonly challenge.

Answer: When making decisions, managers usually confront 3 various conditions: certainty, danger, and also uncertainty.

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a. Certainty - The best situation for making decisions is just one of certainty, which is a instance wright here a manager can make precise decisions because the outcome of eexceptionally different is known.

b. Risk - These are problems in which the decision maker is able to estimate the likelihood of certain outcomes. Under risk, managers have actually historical information from past personal experiences or secondary indevelopment that allows them asauthorize probabilities to different options.

c. Suspicion - This is a instance in which a decision maker has actually neither certainty nor reasonable probcapability approximates obtainable. Under these problems, the alternative of alternate is affected by the limited amount of easily accessible information and by the mental orientation of the decision maker. An optimistic manager follows a maximax option (maximizing the maximum feasible payoff); a pessimist adheres to a maximin option (maximizing the minimum possible payoff); and also a manager that desires to minimize his maximum "regret" opts for a minimax choice.