Quiz 1

Following are model answers for the quiz.

1. What are the differences between following?

a. Rationality and bounded rationality (1+1)
Full marks to anyone who has mentioned at least two differences from the following
• Rationality:
• Perfect information
• No emotion
• No preference for any alternate except goal
• Always logical
• No bias
• Unlimited cognitive ability/no time pressure
• Bounded rationality
• Imperfect information
• Emotions are always involved
• Personal/ethical preferences may outweigh other alternatives
• Not always logical
• Multiple psychological biases
• Limited cognitive ability and time pressure (heuristics)
b. Coalition model of decision-making and Garbage can model of decision making (1+1)
Coalition: Political decision making
Organization has no goal of itself, a dominant coalition/leader determines the goal, which may be changed
when the leader changes
Garbage Can: chaotic decision making. Organization is a controlled chaos, where attention brings together
goals, solution and problems; Solutions are fitted to problems on ad-hoc basis; Goals and preferences are
unstable and transient.
2. Give two examples of how managers can use conflict in a constructive manner? (0.5+0.5)
Devil’s Advocate: assign a person to critique any opinion offered, prevents group think
Dialectical inquiry: assign two teams to argue for and against an alternate, then decide in favor of one or synthesize
the two alternates
3. What are four important characteristics of managerial decision making? (0.5+0.5+0.5+0.5)
Risk: The state that exists when probability of success is less than 100%
Uncertainty: The state that exists when decision maker has less than 100% information
Conflict: Opposing pressure from different sources, occurring at psychological or interpersonal level
Lack od structure: the normal state of affairs in management where some decisions may be routine, but most are
about novel, complex situations (p81-83 of bateman and snell)
4. Describe components of Porters 5 forces analysis? (0.5+0.5+0.5+0.5+0.5)
New entrants: which compete with already established companies
Competitors: Rival companies which share potential customers and have similar products so demand of one may
affect the demand of other
Substitutes and complements: Substitutes are potential threats, used as an alternative to company’s product;
complement is a potential opportunity where demand of one product also increases demands of another product.
 Suppliers: Provide resources needed by the company, which may be people, information, raw material, technology,
or financial capital.
Customers: Purchase goods and services offered by the organization. May be final customer or intermediate
customer for a B2B organization.
5. What are common critiques offered on Taylorism? (1.5)
Any three of the following get full marks
For employees
◦ Humans are not exactly automatons; they are not infinitely interchangeable, and they do not work like machines.
◦ They get bored and crave creativity and freedom of trying new ideas and things
◦ They do not like to be controlled which often amounts to losing personal dignity
◦ More importantly, money is not the only motivator for humans
For Organizations
◦ Weakening of trade unions
For Earth
◦ Waste created by mass production
6. What are some of the characteristics of front-line managers and their decision-making process?(2)
Primary job: Implementing organizational goals and policies and service delivery
◦ Job characteristics:
◦ Day to day decision making regarding clients (unprogrammed decision making)
◦ Degree of autonomy in decision making (discretion)
◦ Difficult to control
◦ Vague job descriptions (Increased uncertainty and risk)
7. How is decision making different in scientific management and human relations approaches? (2)
There is no decision making in scientific management. The only possible decision for a complete SM organization is to
implement best available scientific practice.
Human relations approach favored rational choice model, though increasing bounded rationality (which emphasizes
personal biases and preferences; cultural norms; incomplete information and satisficing) is becoming the most
commonly used model of decision making.
8. How will you decide which members of your team to include in group decisions? (2)

Do subordinate have a personal stake in

outcome

YES No

Occasionally
Definitely
YES Include (margins
Do subordinate have Include
with expertise)
expertise

Occasionally
Definitely
NO Include (margins
exclude
with stake)
9. What is groupthink? When do you think a team is particularly vulnerable to group think? (1+1)
Groupthink is a phenomenon when a group of people get together and start to think collectively.
Where people may not express potential alternates due to fear of exclusion
Conditions:
 Opinion of team leader is known
 Team is highly cohesive
 Team is isolated from outside influences
 Team has recent decision failures
10. What are non-decisions? (1)
Decisions which are made tacitly—either individually or in groups—without ever being publicly discussed or
questions.
Non-decision-making involves suppressing challenges to the status quo and suppressing the addition of new issues to
an agenda.