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1) In decision making, a problem can be defined as a discrepancy between what exists and what the
problem solver desires to exist. ✔
4) Managers identify a problem by comparing the current state of affairs to some standard. ✔
Answer: TRUE
6) Identifying the wrong problem is just as much a failure for a manager as identifying the right
problem and failing to solve it. ✔
7) The final step of the decision-making process is to implement the alternative that has been
selected. X
9) Because heuristics simplify the decision-making process, they are unlikely to lead to errors. X
10) Decision makers who "cherry-pick" information that matches what they already know are guilty of
confirmation bias. ✔
11) A basketball coach who takes a very good shooter out of a game because she missed her last two
shots has availability bias. ✔
12) A rational decision will never fail to provide the best and most successful solution to a problem. X
13) Maximizing value means a decision will have the best possible outcome for the parties involved. ✔
14) One assumption of bounded rationality is that managers can analyze all relevant information
about all alternatives for a situation. X
16) One assumption of bounded rationality is that managers usually make rational decisions. ✔
19) The expression "throwing good money after bad" is an example of an escalation of commitment.
✔
23) Implementing a procedure requires more judgment and interpretation than implementing a
policy. X
25) Managerial decisions are likely to become more programmed as managers rise in an
organizational hierarchy. X
27) Uncertainty involves a situation in which the probability of a certain outcome is known to be
small. X
28) A manager is more confident of his assessment of a situation if it involves risk rather than
uncertainty. ✔
29) Group decisions tend to provide more complete information than individual decisions. ✔
30) An advantage of group decisions is that they increase the perception of the legitimacy of the
solution. ✔
32) Groups tend to be more efficient and less effective than individual decision making. ✔
33) Two major advantages of electronic meetings are anonymity and honesty. ✔
34) 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. ✔
35) Creative solutions to problems are valued because they are new and different from traditional
solutions. X
36) Decision making begins with ________.
A) selecting alternatives
B) identifying decision criteria
C) identifying a problem
D) eliminating false alternatives
38) 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
40) 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
41) 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
42) 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
43) 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
44) 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
45) Which 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
46) Which of the following would be a fairly objective criterion by which a bicycle buyer could
assess different bike models?
A) handling
B) weight
C) quality of craftsmanship
D) style
47) A manager chooses to ignore a rigorous decision-making process and select TV monitor A over
monitor B because he "trusts" company A more than company B. If the decision he made was
rational, which 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.
48) In allocating weights to the decision criteria, which of the following is most helpful to
remember?
A) All weights must be the same.
B) The total of the weights must sum to 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.
50) 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
51) Which 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.
52) 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
53) 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
54) 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
56) The three main models that managers use to make decisions are ________.
A) rational, bounded rational, and intuitive
B) rational, irrational, bounded rational
C) intuitive, unintuitive, rational
D) bounded rational, intuitive, systematic
59) 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
62) Which term best characterizes a decision that has bounded rationality?
A) virtually perfect
B) rigorous and comprehensive
C) not good enough
D) good enough
63) 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
64) Expert systems are primarily used to help what kinds of decision makers?
A) lower-level managers
B) top managers
C) senior managers
D) experts
65) 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
66) 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
69) Which 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
70) 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
78) Which 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.
84) 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
88) 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
89) A football coach makes the decision to punt or not to punt on fourth down based on whether or
not 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
90) Which pair or pairs of terms is true? (This question can have more than one correct answer)
A) structured problem, programmed decision
B) structured problem, structured decision
C) unstructured problem, programmed decision
D) unstructured problem, nonprogrammed decision
91) 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
95) 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
96) 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
97) ________ is a situation in which a decision maker has only incomplete information about
outcomes and does not have ability to reasonably estimate outcomes that are not known.
A) Certainty
B) Risk
C) Uncertainty
D) High certainty
98) A low-level manager is most likely to solve problems under which condition?
A) certainty
B) low risk
C) uncertainty
D) low certainty
99) A top manager is most likely to solve problems under which condition?
A) certainty
B) risk
C) uncertainty
D) high certainty
100) A manager has a choice of three investment funds. To assess them, he looks at their past
investment records over the previous five years. The manager is operating under which condition?
A) certainty
B) probability
C) uncertainty
D) risk
101) A manager has a choice of three bank CDs that pay different amounts of interest over different
time periods. The manager is operating under which condition?
A) jeopardy
B) certainty
C) uncertainty
D) risk
102) 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
103) A key to what is commonly used to assess risk is for a decision maker to examine the ________
an investment.
A) the promises made by a company for
B) the ads posted by a company for
C) historical data for
D) the minor details of
106) 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
107) Group decisions generally feature ________ acceptance than decisions made by an individual.
A) greater
B) less
C) neither greater or less
D) more enthusiastic
108) 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
109) 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
110) 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
111) Which 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) 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
115) ________ 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
117) Which 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.
118) Which of the following is the most effective number of people to have in a group?
A) 5-7
B) 2-4
C) 10-15
D) 16-25
119) Which of the following is used to exclusively generate creative ideas in a group setting?
A) brainstorming
B) nominal group technique
C) groupthink
D) electronic meetings
121) Which 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
122) The ________ blends the nominal group technique with sophisticated computer technology.
A) personal meeting
B) electronic meeting
C) virtual meeting
D) preliminary meeting
123) 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
124) 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
125) 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
126) 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
127) The use of ringisei in Japanese organizations reflects which of the following values in Japanese
culture?
A) tradition-following
B) consensus-seeking
C) risk taking
D) go-it-alone
128) French management style tends to be ________ in style.
A) permissive
B) group oriented
C) rule following
D) autocratic
129) 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
130) ________ helps people find better solutions to problems using innovative problem-solving
methods.
A) Planning
B) Creativity
C) Organization
D) Structure
131) According to one study, about ________ of men and women were somewhat creative.
A) 1 percent
B) 10 percent
C) 30 percent
D) 60 percent
132) 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