29.
An organization that has been focusing on a target market located in the eastern part of
the United States is attempting to decide whether to expand its sales to the West Coast of
the United States. Which of the following types of decisions is being taken by the
organization?
A.
Intuition
B.
Nonprogrammed
C.
Groupthink
D.
Satisficing
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
30.
When fire chiefs manage firefighters battling hazardous, out–of-control fires, they
frequently have to depend on their professional instincts to make on-the-spot decisions
that will protect the lives of the firefighters and save the lives of others, control the fires,
and preserve decisions made in emergency situations involving high ambiguity and rapidly
changing conditions. This is an example of which of the following types of decision
making?
A.
Programmed
B.
Routine
C.
Groupthink
D.
Intuition
Managers may rely on their intuition—feelings, beliefs, and hunches that come readily to
mind, require little effort and information gathering, and result in on-the-spot decisions.
Intuitive decisions are made when managers have to make nonprogrammed decisions.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
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
31.
The classical model of decision making specifies how decisions should be made by
managers; this is a way of saying that this model of decision making is ________.
A.
heuristic
B.
prescriptive
C.
incomplete
D.
intuitive
The classical model is prescriptive, which means that it specifies how decisions should be
made. Managers using the classical model make a series of simplifying assumptions about
the nature of the decision-making process.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
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: Classical Decision-Making Model
32.
The classical model of decision making assumes that _________.
A.
the number of alternatives a manager must identify is so great that it is difficult for the
manager to even come close to evaluating it all before making a decision
B.
managers have little information to use in making a decision
C.
managers have access to all the information they need to make the optimum decision
D.
managers have neither the time nor the money to search for all possible alternative
solutions and evaluate all the potential consequences of those alternatives
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: Understand
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: Classical Decision-Making Model
33.
The most appropriate decision in light of what managers believe to be the most desirable
consequences for the organization is called the ________.
A.
tactical decision
B.
optimum decision
C.
rational decision
D.
operational decision
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
34.
Which of the following explains the reasons for the inherently uncertain and risky nature of
decision making and the making of satisfactory rather than optimum decisions by the
managers?
A.
Logical model
B.
Administrative model
C.
Perspective model
D.
Rational model
The administrative model is an approach to decision making that explains why decision
making is inherently uncertain and risky and why managers usually make satisfactory
rather than optimum decisions.
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
35.
In the administrative model of decision making, when the number of possible alternatives
to a decision is so large that the manager cannot possibly evaluate all of them before
making a decision, which of the following has occurred?
A.
Satisficing
B.
Bounded rationality
C.
Brainstorming
D.
Devil’s advocacy
March and Simon coined the term “bounded rationality” to describe the situation in which
the number of alternatives a manager must identify is so great and the amount of
information so vast that it is difficult for the manager to even come close to evaluating it
all before making a 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: Bounded Rationality
36.
Managers in the field of biotechnology know that new drugs have a 10 percent chance of
passing advanced clinical trials and always assign probabilities to the results of clinical
trials. This is an example of ________.
A.
risk
B.
uncertainty
C.
bounded rationality
D.
incomplete information
Risk is present when managers know the possible outcomes of a particular course of
action and can assign probabilities to them.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
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
37.
When managers know the possible outcomes of a decision and can assign probabilities to
each of these outcomes in terms of their likelihood of occurrence in the future, this is
known as ________.
A.
uncertainty
B.
certainty
C.
risk
D.
bounded rationality
Risk is present when managers know the possible outcomes of a particular course of
action and can assign probabilities to them.
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
38.
A software firm is considering introducing a new product on the market. However,
managers cannot estimate the probability of success for the new product. Which of the
following best describes the situation?
A.
Risk
B.
Uncertainty
C.
Bounded rationality
D.
Incomplete information
When uncertainty exists, the probabilities of alternative outcomes cannot be determined
and future outcomes are unknown. Managers are working blind. Because the probability of
a given outcome occurring is not known, managers have little information to use in making
a decision.
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: Classical Decision-Making Model
39.
When managers cannot assign probabilities of future occurrence to possible alternatives
with a decision, this is known as ________.
A.
certainty
B.
risk
C.
bounded rationality
D.
uncertainty
When uncertainty exists, the probabilities of alternative outcomes cannot be determined
and future outcomes are unknown. Managers are working blind. Because the probability of
a given outcome occurring is not known, managers have little information to use in making
a 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: Classical Decision-Making Model
40.
When the meaning of the information available to a manager is unclear and can be
interpreted in several ways, the information is ________.
A.
certain
B.
ambiguous
C.
bounded
D.
irrational
A reason as to why information is incomplete is that much of the information managers
have at their disposal is ambiguous information. Its meaning is not clear; it can be
interpreted in multiple and often conflicting ways. In a similar fashion, managers often
interpret the same piece of information differently and make decisions based on their own
interpretations.
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
41.
A manager considers a limited sample of the potential alternative solutions for a problem
and selects one that is acceptable instead of attempting to select the optimum solution.
This type of decision is called ________.
A.
programmed
B.
intuition
C.
certainty
D.
satisficing
Satisficing is exploring a limited sample of all potential alternatives. 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: 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: Satisficing
42.
An organization decides to ask three advertising agencies to pitch a proposal to handle the
organization’s business, instead of asking all of the advertising agencies in the city where
this organization’s headquarters is located to pitch the account. What type of decision
does this represent?
A.
Programmed
B.
Nonprogrammed
C.
Satisficing
D.
Certainty
When managers satisfice, they consider only a limited number of alternatives, and make
an acceptable choice among them, rather than considering every possible alternative.
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: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
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
43.
The purchasing manager for Telsa Motor Co. decides to call three suppliers of automobile
windshields for a bid on an order for 1,000 windshields for a new Ford car, instead of
calling a hundred possible windshield suppliers for such a bid. What type of decision does
this represent?
A.
Nonprogrammed
B.
Illusion of control
C.
Satisficing
D.
Programmed
When managers satisfice, they consider only a limited number of alternatives, and make
an acceptable choice among them, rather than considering every possible alternative.
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: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
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
44.
Based on the work of March and Simon’s administrative model of decision making, the
first step in the managerial decision–making process is to _________.
A.
choose among alternatives
B.
assess alternatives
C.
implement the chosen alternative
D.
recognize the need for a decision
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
45.
Which step of the decision-making process requires managers to be sure all the
information available is brought to bear on the problem or issue at hand while ranking the
alternatives?
A.
Assess alternatives
B.
Choose among alternatives
C.
Recognize the need for a decision
D.
Generate alternatives
Choose among alternatives is the fourth step of the decision-making process. Once the
set of alternative solutions has been carefully evaluated, the next task is to rank the
various alternatives and make a decision. When ranking alternatives, managers must be
sure all the information available is brought to bear on the problem or issue at hand.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions
46.
Stephen, a production manager, was engaged in the development of a core component of
a machine. He realized that the component would not be ready for QC testing as per the
fixed deadline and suggested allotting two more weeks for its complete development or
sending only a part of it for testing in the first cycle. Which decision–making step does this
represent?
A.
Assess alternatives
B.
Choose among alternatives
C.
Recognize the need for a decision
D.
Generate alternatives
Having recognized the need to make a decision, a manager must generate a set of feasible
alternative courses of action to take in response to the opportunity or threat.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions
47.
Margaret, a marketing manager, wants to budget the advertising for a new product launch.
She is trying to determine the amount of money that her company can afford to spend on
advertising this new product. In the context of decision–making, which of the following
criteria of alternative courses of action is Margaret implementing?
A.
Legality
B.
Ethicalness
C.
Economic feasibility
D.
Practicality
Managers must decide whether the alternatives are economically feasible—that is,
whether they can be accomplished given the organization’s performance goals.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions
48.
When managers decide that they have the capabilities and resources required to
implement an alternative, and they are sure that the alternative will not threaten the
attainment of other organizational goals, they are focusing on which of the following
criteria of alternative courses of action?
A.
Legality
B.
Ethicalness
C.
Economic feasibility
D.
Practicality
Managers must decide whether they have the capabilities and resources required to
implement the alternative, and they must be sure the alternative will not threaten the
attainment of other organizational goals. At first glance an alternative might seem
economically superior to other alternatives; but if managers realize it is likely to threaten
other important projects, they might decide it is not practical after all.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions
49.
Esteban, a manager, performs a financial analysis of several investment alternatives in
order to determine which alternative is most likely to impact the organization’s
profitability. Esteban is focusing on ______.
A.
bounded rationality
B.
ethicalness
C.
economic feasibility
D.
dialectical inquiry
Managers must decide whether the alternatives are economically feasible—that is,
whether they can be accomplished given the organization’s performance goals.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Topic: Non-Programmed Decisions