5-1
Chapter 05 Decision Making, Learning, Creativity, and
Entrepreneurship Answer Key
True / False Questions
1.
The classical decision-making model assumes that managers have all of the information
they need in order to make the optimum decision.
TRUE
The classical model assumes managers have access to all the information they need to
make the optimum decision, which is the most appropriate decision possible in light of
what they believe to be the most desirable consequences for the organization.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Classical Decision-Making Model
2.
When a manager chooses an acceptable alternative instead of the optimum alternative,
we say that a satisficing decision has occurred.
TRUE
When managers satisfice, they search for and choose acceptable, or satisfactory, ways to
respond to problems and opportunities rather than trying to make the optimal decision.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Satisficing
3.
The first step in decision making that a manager needs to take is generate a set of
feasible alternative courses of action in response to the opportunity or threat.
FALSE
The first step in the decision-making process is to recognize the need for a decision.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions
4.
While assessing the practicality of alternatives, managers must decide whether they have
the capabilities and resources required to implement the alternative, and they must be
sure that the alternative will not threaten the attainment of other organizational goals.
TRUE
While assessing the practicality of alternatives, managers must decide whether they have
the capabilities and resources required to implement the alternative, and they must be
sure that the alternative will not threaten the attainment of other organizational goals.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions
5.
The final step in the decision-making process is the implementation of the alternative
solution.
FALSE
The final step in the decision-making process is learning from feedback. Effective
managers always conduct a retrospective analysis to see what they can learn from past
successes or failures.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions
6.
In the decision-making process, to compare what actually happened to what was expected
to happen as a result of the decision is a procedure of choosing among alternatives.
FALSE
To compare what actually happened to what was expected to happen as a result of the
decision is a procedure of learning from feedback.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions
7.
Rationalization is a critical analysis of a preferred alternative to ascertain its strengths and
weaknesses before it is implemented.
FALSE
Devil’s advocacy is a critical analysis of a preferred alternative to ascertain its strengths
and weaknesses before it is implemented.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques
that can improve it.
Topic: Devil’s Advocacy
8.
When a member of a group challenges the decision that is being made by the group in an
attempt to make the group carefully consider the pros and cons of a particular alternative,
this member is playing the role of the devil’s advocate.
TRUE
Typically one member of the decision-making group plays the role of devil’s advocate. The
devil’s advocate critiques and challenges the way the group evaluated alternatives and
chose one over the others. The purpose of devil’s advocacy is to identify all the reasons
that might make the preferred alternative unacceptable after all.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques
that can improve it.
Topic: Devil’s Advocacy
9.
The ability of a decision maker to discover novel ideas that lead to feasible alternatives in
decision making is known as creativity.
TRUE
The ability of a decision maker to discover novel ideas that lead to feasible alternatives in
decision making is known as creativity.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve
their decisions.
Topic: Creativity
10.
The nominal group technique is especially useful when an issue is not controversial and
when different managers are expected to champion a similar course of action.
FALSE
The nominal group technique is especially useful when an issue is controversial and when
different managers might be expected to champion different courses of action.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve
their decisions.
Topic: Learning Organization
11.
Delphi technique is a written approach to creative problem solving.
TRUE
Delphi technique is a written approach to creative problem solving.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve
their decisions.
Topic: Learning Organization
12.
Entrepreneurs are likely to be high on the personality trait of openness to experience.
TRUE
Entrepreneurs are likely to be high on the personality trait of openness to experience,
meaning they are predisposed to be original, to be open to a wide range of stimuli, to be
daring, and to take risks.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning
organization, and differentiate between entrepreneurs and intrapreneurs.
Topic: Entrepreneurship
13.
Individuals who believe that they are responsible for what happens to them and that their
own actions determine important outcomes are said to have an external locus of control.
FALSE
Entrepreneurs are likely to have an internal locus of control, believing that they are
responsible for what happens to them and that their own actions determine important
outcomes such as the success or failure of a new business.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning
organization, and differentiate between entrepreneurs and intrapreneurs.
Topic: Entrepreneurship
14.
Entrepreneurship encompasses all the decisions involved in planning, organizing, leading,
and controlling resources.
FALSE
Entrepreneurship is not the same as management. Management encompasses all the
decisions involved in planning, organizing, leading, and controlling resources.
Entrepreneurship is noticing an opportunity to satisfy a customer need and then deciding
how to find and use resources to make a product that satisfies that need.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning
organization, and differentiate between entrepreneurs and intrapreneurs.
Topic: Entrepreneurship
15.
Product champions are a group of intrapreneurs who are deliberately separated from the
normal operation of an organization to encourage them to devote all their attention to
developing new products.
FALSE
A skunkworks is a group of intrapreneurs who are deliberately separated from the normal
operation of an organization to encourage them to devote all their attention to developing
new products. The idea behind the product champion role is that employees who feel
ownership for a project are inclined to act like outside entrepreneurs and go to great
lengths to make the project succeed.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
organization, and differentiate between entrepreneurs and intrapreneurs.
Topic: Skunkworks
Multiple Choice Questions
16.
Decisions that have been made many times in the past and for which managers have rules
and guidelines about how to make similar decisions in the future are known as ________
decisions.
A.
nonprogrammed
B.
heuristic
C.
D.
intuitive
Programmed decision making is a routine, virtually automatic process. Programmed
decisions are decisions that have been made so many times in the past that managers
have developed rules or guidelines to be applied when certain situations inevitably occur.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
17.
When an organization’s accounting department decides to send out a bill to a new
customer, this represents a(n) _____ decision.
A.
B.
nonprogrammed
C.
intuitive
D.
groupthink
Programmed decision making is a routine, virtually automatic process. Programmed
decisions are decisions that have been made so many times in the past that managers
have developed rules or guidelines to be applied when certain situations inevitably occur.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
18.
Karen, a manager, orders raw materials when the raw materials inventory reaches a
certain point. This is an example of which type of decision?
A.
Intuition
B.
Satisficing
C.
Nonprogrammed
D.
Programmed
Programmed decision making is a routine, virtually automatic process. Programmed
decisions are decisions that have been made so many times in the past that managers
have developed rules or guidelines to be applied when certain situations inevitably occur.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
19.
A manager of a charity asks the board of directors for permission to hire temporary help
when the regular secretary goes on vacation. This is an example of which type of
decision?
A.
Programmed
B.
Groupthink
C.
Nonprogrammed
D.
Intuition
Programmed decision making is a routine, virtually automatic process. Programmed
decisions are decisions that have been made so many times in the past that managers
have developed rules or guidelines to be applied when certain situations inevitably occur.
This is a programmed decision because a rule has been established to be applied when a
certain situation occurs.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
20.
Martin, a plant foreman, asks the plant superintendent to allow him to hire an additional
worker whenever overtime hours for the previous month increase by more than 25 percent.
This is an example of which type of decision?
A.
Intuition
B.
Groupthink
C.
Satisficing
D.
Programmed
Programmed decision making is a routine, virtually automatic process. Programmed
decisions are decisions that have been made so many times in the past that managers
have developed rules or guidelines to be applied when certain situations inevitably occur.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
21.
Casey, the accountant for a small firm, pays the real estate taxes seven days before they
are due. This represents which type of decision?
A.
Satisficing
B.
Programmed
C.
Intuition
D.
Nonprogrammed
Programmed decision making is a routine, virtually automatic process. Programmed
decisions are decisions that have been made so many times in the past that managers
have developed rules or guidelines to be applied when certain situations inevitably occur.
This is a programmed decision because a rule has been established to be applied when a
certain situation occurs.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
22.
What do managers do to regulate routine activities?
A.
They create a mission statement.
B.
They establish rules and guidelines.
C.
They create cross-functional teams.
D.
They facilitate a strong organizational culture.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
23.
An organization’s finance department decides to go to the company’s usual bank and take
out a loan because the company’s revenues for the month are projected to be less than its
expenses. What type of decision does this represent?
A.
Intuition
B.
Groupthink
C.
Programmed
D.
Nonprogrammed
Programmed decision making occurs when managers have the information they need to
create rules that will guide decision making.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
24.
Which of the following is a programmed decision?
A.
How much to invest in a new product
B.
Whether to expand into a new market
C.
When to time a new advertising campaign
D.
When to bill customers
Examples of programmed decisions include deciding how much inventory to hold, when to
pay bills, when to bill customers, and when to order materials and supplies. All the other
distracters are examples of nonprogrammed decisions.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Programmed Decisions
25.
Nonroutine decisions made in response to novel situations in business are known as
________ decisions.
A.
intuitive
B.
creative
C.
D.
nonprogrammed
Nonprogrammed decisions are made in response to unusual or novel opportunities and
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Non-Programmed Decisions
26.
Dynamic Explosives is trying to decide whether or not to launch a new product nationally.
This represents a(n) ________________ decision.
A.
B.
intuitive
C.
groupthink
D.
nonprogrammed
Nonprogrammed decisions are made in response to unusual or novel opportunities and
threats. Examples of nonprogrammed decision making include decisions to invest in a new
technology, develop a new kind of product, launch a new promotional campaign, enter a
new market, expand internationally, or start a new business.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Non-Programmed Decisions
27.
Star, Inc., is attempting to decide whether or not it should change its manufacturing
process to a new type of technology. This represents a(n) ________ decision.
A.
B.
nonprogrammed
C.
groupthink
D.
intuitive
Nonprogrammed decisions are made in response to unusual or novel opportunities and
threats. Examples of nonprogrammed decision making include decisions to invest in a new
technology, develop a new kind of product, launch a new promotional campaign, enter a
new market, expand internationally, or start a new business.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Non-Programmed Decisions
28.
Action Co. is attempting to decide whether or not to launch a new $10 million advertising
campaign for a product whose sales have been lagging well below the projected sales for
the product. This represents which type of decision for the organization?
A.
Groupthink
B.
Intuitive
C.
Nonprogrammed
D.
Programmed
In nonprogrammed decision making, rules do not exist because the situation is unexpected
or uncertain and managers lack the information they would need to develop rules to cover
it. Examples of nonprogrammed decision making include decisions to invest in a new
technology, develop a new kind of product, launch a new promotional campaign, enter a
new market, expand internationally, or start a new business.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and
nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Topic: Non-Programmed Decisions