68) A(n) ________ typically contains an ambiguous term that leaves interpretation up to the
decision maker.
A) rule
B) procedure
C) edict
D) policy
69) Unstructured problems ________.
A) refer to the usual problems faced by organizations
B) are generally solved using procedures, rules, and policies
C) are accompanied by ambiguous or incomplete information
D) do not require the decision maker to go through an involved decision process
70) After nearly 30 years of growth, sales at Ida’s company have begun to decline. None of the
managers have been able to determine the cause. Some say the entire economy is in recession;
others blame a change in suppliers; still others say the work ethic among employees just isn’t
what it used to be. This is an example of ________.
A) a structured problem
B) an unstructured problem
C) a programmed problem
D) a non-programmed problem
71) Nonprogrammed decisions ________.
A) involve standardized solutions
B) are usually made by lower-level managers
C) are associated with clear and specific goals
D) are unique and nonrecurring
72) When problems are ________, managers must rely on ________ in order to develop unique
solutions.
A) structured; nonprogrammed decision making
B) structured; pure intuition
C) unstructured; nonprogrammed decision making
D) unstructured; programmed decision making
73) What is the psychological orientation of a decision maker who makes a “maximin” choice?
A) optimist
B) realist
C) pessimist
D) idealist
74) Lower-level managers typically confront ________.
A) unstructured problems
B) new and unusual problems
C) programmed decisions
D) nonprogrammed decisions
75) Ian is a plant manager in a multi-site corporation. He frequently deals with situations
involving new customers and new products. These are often ________.
A) non-linear problems and risky decisions
B) structured problems and programmed decisions
C) uncertain problems and linear decisions
D) unstructured problems and nonprogrammed decisions
76) First-line managers tend to deal with problems that are ________ while upper-level
managers handle the ________ problems.
A) unstructured; structured
B) routine and repetitive; unusual and difficult
C) interpersonal; customer
D) machine-related; interpersonal
77) ________ is a situation in which a manager has the ability to make accurate decisions
because the outcome of every alternative is known.
A) Certainty
B) Risk
C) Bureaucracy
D) Contingency
78) It is time for Jane to order laminated plywood again. She typically orders from one of three
vendors. She knows the price, delivery time, and quality of each vendor. In this situation, Jane
has ________.
A) certainty
B) uncertainty
C) risk
D) structure
79) The manager of an apparel store estimates how much to order for the current spring season
based on last spring’s sales figures. The store manager is operating under which of the following
decision-making conditions?
A) uncertainty
B) risk
C) structure
D) certainty
80) ________ is a situation in which a decision maker cannot make reasonable probability
estimates.
A) Necessity
B) Risk
C) Uncertainty
D) Certainty
81) In the late 1970s, Apple launched the Apple computer for individual use. It was a radical
concept; there was no precedent for this type of product. Under these circumstances, Apple faced
a situation of ________.
A) certainty
B) uncertainty
C) risk
D) necessity
82) Which of the following best describes the psychological orientation of an individual making
a “maximax” choice?
A) optimist
B) cynic
C) pessimist
D) defeatist
83) James has calculated the possible profits from three different scenarios for the expansion of
his restaurant, each for a different amount of advertising and promotion. He has chosen to
implement the scenario that offers the greatest profit. James has decided to ________.
A) maximax
B) maximin
C) minimax
D) minimin
84) Depending on the weather and the amount of advertising, Kyle has developed six scenarios
for his summer profits from his lawn care business. His business has failed to reach his
expectations in the past, so he fears the worst. Kyle will likely choose the option that ________.
A) maximizes the maximum possible payoff
B) maximizes the minimum possible payoff
C) minimizes the maximum regret
D) minimizes the minimum losses
85) A programmed decision is a repetitive decision that can be handled by a routine approach.
86) Rules and procedures are the same.
87) A policy is an explicit statement that tells a manager what can or cannot be done.
88) Nonprogrammed decision making relies on procedures, rules, and policies.
89) Risk is the condition in which a decision maker is able to estimate the likelihood of certain
outcomes.
90) Discuss structured problems, programmed decisions, unstructured problems, and
nonprogrammed decisions.
91) Discuss the three types of programmed decisions that a manager depends on to resolve
structured problems.
92) Discuss the three different decision-making conditions that managers usually face.
93) Rules of thumb that managers use to simplify decision making are known as ________.
A) heuristics
B) folksonomies
C) algorithms
D) sophisms
94) “Red sky at night, sailor’s delight; red sky at morning, sailor’s warning” is an example of a
________.
A) proverb
B) heuristic
C) rule
D) practice
95) Lucas always seems to “know” exactly what to do in any given situation. At least that’s what
he’ll tell you. But his ideas don’t always work and his overall performance as scored by his
supervisor isn’t nearly as great as he thinks it is. Lucas is exhibiting the ________.
A) selective perception bias
B) the anchoring effect
C) self-serving bias
D) overconfidence bias
96) Many new car buyers choose to buy a car with little or no money down and payments for
many years because of the ________.
A) overconfidence bias
B) immediate gratification bias
C) framing bias
D) availability bias
97) The ________ describes how decision makers fixate on initial information as a starting point
and then, once set, fail to adequately adjust for subsequent information.
A) anchoring effect
B) selective perception effect
C) confirmation bias
D) framing bias
98) Sophie is in charge of recruitment at her company. During a particular interview, the first
thing Sophie noticed about the applicant was that he was improperly attired. Though the
candidate possessed the necessary qualifications and effectively answered all her questions,
Sophie rejected him. This is an example of the ________.
A) availability bias
B) self-serving bias
C) anchoring effect
D) confirmation bias
99) “There are no coincidences. If something bad has happened to you, you must have done
something to deserve it.” This statement might be made by someone with the ________.
A) framing bias
B) self-serving bias
C) availability bias
D) randomness bias
100) Lila believes the global climate is changing. Every storm, every volcano eruption, every
earthquake is, in her mind, evidence of this climate change. Lila has fallen victim to ________
bias.
A) framing
B) selective perception
C) confirmation
D) representation
101) When decision makers seek out information that reaffirms their past choices and discount
information that contradicts past judgments, they are exhibiting the ________ bias.
A) hindsight
B) availability
C) representation
D) confirmation
102) Beth hired Tom, trained him, coached him, and expected he would be her eventual
replacement when she moved up in the company. She noted each of his accomplishments with
pride but wrote off as vicious gossip the comments from Tom’s co-workers that he was making
too many mistakes. Beth is experiencing the ________.
A) selective perception bias
B) confirmation bias
C) framingbias
D) anchoring effect
103) Mildred was persuaded by a fast-talking salesperson to carry an expensive brand of yarns in
her retail needlecraft shop. Seldom does a customer buy this brand, but on those rare occasions
Mildred tells herself she made the right decision. The yarns have been sitting on the shelf for
several months and she has yet to profit from them. Mildred suffers from the ________.
A) immediate gratification bias
B) selective perception bias
C) confirmation bias
D) hindsight bias
104) The ________ occurs when decision makers select and highlight certain aspects of a
situation while excluding others.
A) framing bias
B) availability bias
C) representation bias
D) confirmation bias
105) The Prime Minister of Transylvania prefers darkened rooms, flinches in bright light, and
has unusually long incisors. Despite his long and successful career, his political opponents claim
he is a vampire. This is an example of the ________.
A) representation bias
B) confirmation bias
C) selective perception bias
D) randomness bias
106) It hasn’t rained in several days; therefore it is unlikely to rain today. This is an example of
the ________.
A) self-serving bias
B) availability bias
C) representation bias
D) randomness bias
107) The last time the Whigs took over Congress, stock prices rose dramatically and
unemployment fell to record lows. Once again, the Whigs are in power, so Jason expects his
stock portfolio to grow significantly. Jason’s thinking may be influenced by the ________.
A) representation bias
B) selective perception bias
C) randomness bias
D) anchoring effect
108) The last time he flew Jet Value Air, Juan’s plane developed a fuel leak and had to make an
emergency landing. The time before that, his plane was grounded because of an electrical
problem. Juan is sure his current trip will be fraught with problems and he will once again be
delayed. This is an example of the ________ bias
A) confirmation
B) selective perception
C) availability
D) randomness
109) “We can’t stop now. We’ve already invested $100,000 in the project.” This speaker is acting
on the ________.
A) anchoring effect
B) availability bias
C) representation bias
D) sunk costs error
110) Whenever anyone praises Mark for his good performance, he has the tendency to attribute
his success to his personal qualities such as his ability to thrive under pressure and his eye for
detail. However, any negative performance feedback is always met with excuses such as
unsupportive team members or insufficient time. This is an example of the ________.
A) self-serving bias
B) confirmation bias
C) representation bias
D) hindsight bias
111) Marty had arranged for a high-profile speaker to deliver the keynote address at her college’s
annual function. However, due to unforeseen circumstances, the speaker was forced to drop out
at the last moment. Marty reacts to this news by saying, “I knew all along that this would
happen.” This is an example of the ________.
A) anchoring effect
B) availability bias
C) self-serving bias
D) hindsight bias
112) The anchoring effect describes when decision makers fixate on initial information as a
starting point and then, once set, fail to adequately adjust for subsequent information.
113) The availability bias describes the actions of decision makers who try to create meaning out
of random events.
114) The sunk costs error occurs when decision makers forget that current choices cannot correct
the past.
115) Explain any five decision biases or errors that managers make.
116) The decisions many managers make in today’s business world typically involve ________.
A) little risk, complete information, and long decision timelines
B) some risk, nearly complete information, and moderate timelines
C) no risk, certainty of the outcomes, and time pressure
D) risk, incomplete information, and time pressure
117) A few decades ago, Walmart opened stores in Germany. After a few years, it closed all of
them. The shopping habits of Europeans differed so much from that of Americans that the stores
could not become profitable. What was Walmart’s mistake?
A) It did not understand cultural differences.
B) It did not create standards for good decision making.
C) It did not know when it was time to call it quits.
D) It did not use an effective decision-making process.
118) To make effective decisions in today’s fast-moving world, managers need to ________.
A) build organizations that shun complexity
B) know when it is time to call it quits
C) ignore cultural differences
D) build organizations that rely on their past successes
119) After the city of Washington, D.C announced it was raising the minimum wage to $12.50
per hour, WalMart halted construction of a supercenter there, despite having already invested
years in negotiations with the City and tens of thousands of dollars in construction. The top
managers at WalMart remembered the importance of ________.
A) knowing when to call it quits
B) understanding cultural differences
C) building relationships
D) creating standards for good decision-making
120) An effective decision-making process ________.
A) focuses on matters of importance
B) focuses on consistency more than logic
C) avoids subjective and intuitive thinking
D) is complex to use but reliable
121) Design thinking suggests that managers should look at problem identification
collaboratively and integratively with the goal of ________.
A) unveiling a rational approach to address the situation
B) analyzing the situation with deductive reasoning
C) developing solutions which somehow seem inevitable
D) gaining a deep understanding of the situation
122) Managers need to understand cultural differences to make effective decisions in today’s
fast-moving world.
123) Design thinking is an interesting new line of thinking with broad implications for making
effective business decisions by integrating emotional elements into the process.
124) What can a manager do to make effective decisions in today’s fast-moving world?
125) What are the six characteristics of an effective decision-making process.