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Indicate whether the statement is true or false.
1. Groupthink refers to the tendency of people in groups to suppress contrary opinions.
a. True
b. False
2. Two employees in Stacey’s department quit, which is normal for her department. She is faced with the decision to fill
these positions. This would be considered a nonprogrammed decision.
a. True
b. False
3. Managers will frequently look for new information that contradicts their instincts or original point of view.
a. True
b. False
4. The most effective managers are consistent in using their own decision style rather than shifting among styles.
a. True
b. False
5. Most people underestimate their ability to predict uncertain outcomes.
a. True
b. False
6. Making a choice is the most significant part of the decision-making process.
a. True
b. False
7. Step 1 in the managerial decision-making process is recognition of decision requirement.
a. True
b. False
8. Evidence shows that people who make poor decisions under the influence of strong emotions tend to continue that
behavior in the future.
a. True
b. False
9. Point–counterpoint is a decision-making technique in which people are assigned to express competing points of view.
a. True
b. False
10. Brainstorming uses a face-to-face interactive group to spontaneously suggest as many ideas as possible for solving a
problem.
a. True
b. False
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11. Most bad decisions are errors in judgment that originate in the human mind’s limited capacity and in the natural biases
of the manager.
a. True
b. False
12. The behavioral style is often adopted by managers who like to consider complex solutions based on as much data as
they can gather.
a. True
b. False
13. People who prefer simple, clear-cut solutions to problems use the directive style.
a. True
b. False
14. The approach that managers use to make decisions usually falls into one of three types—the classical model, the
administrative model, and the political model.
a. True
b. False
15. Risk propensity refers to the willingness to undertake risk with the opportunity of gaining an increased payoff.
a. True
b. False
16. When considering decisions, the mind often gives disproportionate weight to the last information it receives.
a. True
b. False
17. Administrative and political decision-making procedures and intuition have been associated with high performance in
unstable environments in which decisions must be made rapidly and under more difficult conditions.
a. True
b. False
18. Satisficing means that decision makers choose the first solution alternative that satisfies minimal decision criteria
regardless of whether better solutions are expected to exist.
a. True
b. False
19. The formulation stage involves the use of managerial, administrative, and persuasive abilities to ensure that the chosen
alternative is carried out.
a. True
b. False
20. Good intuitive decision making is based on an ability to recognize patterns at lightning speed.
a. True
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b. False
Indicate the answer choice that best completes the statement or answers the question.
21. Melissa is a manager at InStylez Clothing. Her job is very complex and she feels that she does not have enough time
to identify and/or process all the information she needs to make decisions. Melissa’s situation is most consistent with
which of the following concepts?
a. Bounded rationality
b. The classical model of decision making
c. Satisficing
d. Brainstorming
e. Scientific management
22. During the fallout of the global financial crisis of the late 2000s, finance companies had to make important decisions
in a highly ambiguous environment. The decision to buy out failed banks could best be described as which of the
following types of decision?
a. Bounded
b. Programmed
c. Conventional
d. Wicked decision problem
e. Irrational decision
23. The tendency of organizations to invest time and money in a solution despite strong evidence that is not appropriate is
referred to as:
a. technological decisions.
b. collective intuition.
c. decision learning.
d. team delay.
e. escalating commitment.
24. Finance managers at Big Bend Inc. made a financial blunder when they solely looked at the previous year’s sales to
estimate sales for the coming year. Of which of the following management biases is this an example?
a. Being influenced by emotions
b. Perpetuating the status quo
c. Seeing what you want to see
d. Justifying past decisions
e. Being influenced by initial impressions
25. Shirley works in the human resource department at Turtle Shells, Inc. She believes she is seeing an increase in
drinking problems among the workforce. She thinks she needs to investigate further. She is at which of the following
stages of the managerial decision-making process?
a. Diagnosis and analysis of causes
b. Development of alternatives
c. Recognition of decision requirement
d. Evaluation and feedback
e. Selection of desired alternative
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26. When managers base decisions on what has worked in the past and fail to explore new options, they are:
a. perpetuating the status quo.
b. being influenced by emotions.
c. being overconfident.
d. justifying past decisions.
e. seeing what they want to see.
27. Bierderlack has a policy that states that more than three absences in a six-month period shall result in a suspension.
Colleen, the manager, has just decided to suspend one of her shift employees for violating this policy. This is an example
of:
a. a programmed decision.
b. a nonprogrammed decision.
c. an insignificant decision.
d. poor management.
e. a personal grudge.
28. Managers with a(n) __________ style may make decisions that help others achieve their goals.
a. behavioral
b. conceptual
c. directive
d. analytical
e. classical
29. The __________ model closely resembles the real environment in which most managers and decision-makers operate.
a. normative
b. administrative
c. descriptive
d. classical
e. political
30. Examples of nonprogrammed decisions would include the decision to:
a. reorder supplies.
b. develop a new product or service.
c. perform routine maintenance on one of the machines in manufacturing.
d. terminate an employee for violation of company rules.
e. fill a position.
31. Genna is collecting data on how well the organization has done since its new strategy was implemented. She is in
which of the following stages of the managerial decision-making process?
a. Development of alternatives
b. Implementation of chosen alternative
c. Evaluation and feedback
d. Recognition of decision requirement
e. Selection of desired alternative
32. Which of the following defines a technique that uses a face-to-face group to spontaneously suggest a broad range of
alternatives for decision making?
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a. Brainstorming
b. Groupthink
c. Point–counterpoint
d. Brainwriting
e. Devil’s advocate
33. All of the following are cognitive biases that can affect a manager’s judgment, EXCEPT:
a. being influenced by initial impressions.
b. justifying past decisions.
c. seeing what you don’t want to see.
d. perpetuating the status quo.
e. overconfidence.
34. As a top manager, Joanna works with others within her team every day in making important corporate decisions. Her
preferred decision-making approach is to generate as many alternatives to problems as possible in a short amount of time.
This approach is referred to as:
a. groupthink.
b. devil’s advocacy.
c. point–counterpoint.
d. escalating commitment.
e. brainstorming.
35. Riley is a manager at the Tinker Tools. She is expected to make decisions that are in the organization’s best economic
interests. Her decisions should be based on which of the following models?
a. The administrative model of decision making
b. The garbage can model of decision making
c. The scientific management model of decision making
d. The classical model of decision making
e. The humanistic model of decision making
36. Managers are considered to have a(n) __________ style when they prefer to consider complex solutions based on as
much data as they can gather.
a. behavioral
b. conceptual
c. directive
d. analytical
e. classical
37. Bobby, a product manager, wants to increase the market share of his product. He is unsure about how to go about it,
not knowing for sure how costs, price, the competition, and the quality of his product will interact to influence market
share. Bobby is operating under a condition of:
a. risk.
b. ambiguity.
c. certainty.
d. uncertainty.
e. brainstorming.
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38. Which of the following styles is used by people who prefer simple, clear-cut solutions to problems?
a. Behavioral
b. Conceptual
c. Directive
d. Analytical
e. Classical
39. __________ decisions are associated with decision rules.
a. Nonprogrammed
b. Unique
c. Programmed
d. Ill-structured
e. Novel
Enter the appropriate word(s) to complete the statement.
40. __________ means that all the information the decision maker needs is fully available.
41. The __________ model of decision making describes how managers actually make decisions in difficult situations,
such as those characterized by nonprogrammed decisions, uncertainty, and ambiguity.
42. __________ decisions are made in response to situations that are unique, are poorly defined and largely unstructured,
and have important consequences for the organization.
43. __________ decision making involves a commitment to making more informed and intelligent decisions based on the
best available facts and evidence.
44. __________ means that the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to
define, and information about outcomes is unavailable.
45. The __________ stage involves the use of managerial, administrative, and persuasive abilities to ensure that the
chosen alternative is carried out.
46. The step in the decision-making process in which managers analyze the underlying causal factors associated with the
decision situation is called __________.
47. People with a(n) __________ style rely on information from both people and systems and like to solve problems
creatively.
48. A(n) __________ is a choice made from available alternatives.
49. __________ exists when managers see potential of enhancing performance beyond current levels.
50. The __________ style is often the style adopted by managers having a deep concern for others as individuals.
51. __________ is the willingness to undertake risk with the opportunity of gaining an increased payoff.
52. People with a(n) __________ style usually are concerned with the personal development of others and may make
decisions that help others achieve their goals.
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53. __________ is important because decision making is an ongoing process.
54. Differences among people with respect to how they perceive problems and make decisions can be explained by a
concept called __________.
55. A(n) __________ is assigned the role of challenging the assumptions and assertions made by the group.
56. In the __________, managers invest time in reviewing the results of decisions and learn from them.
57. Managers who use a(n) __________ style are efficient and rational and prefer to rely on existing rules or procedures
for making decisions.
58. __________ means that decision makers choose the first solution alternative that satisfies minimal decision criteria.
59. List the guidelines of innovative group decision making in today’s businesses.
60. List four of the eight questions Kepner and Tregoe recommend that managers ask when diagnosing and analyzing
causes.
61. Briefly describe the assumptions underlying the classical model of decision making.
62. Explain the difference between programmed and nonprogrammed decisions and give an example of each.
63. Compare decision conditions of certainty, risk, uncertainty, and ambiguity.
64. Briefly describe the four major personal decision styles.
65. What are the six steps in the managerial decision-making process?
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Answer Key
1. True
2. False
3. False
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52. behavioral
53. Feedback
54. decision style
55. devil’s advocate
56. after-action review
57. directive
58. Satisficing
59. 1. Start with brainstorming.
2. Use hard evidence.
3. Engage in rigorous debate.
4. Avoid groupthink.
5. Know when to bail.
6. Do a postmortem.
60. 1. What is the state of disequilibrium affecting us?
2. When did it occur?
3. Where did it occur?
4. How did it occur?
5. To whom did it occur?
6. What is the urgency of the problem?
7. What is the interconnectedness of events?
8. What result came from which activity?
61. The classical model of decision making is based on four assumptions.
1. The decision maker operates to accomplish goals that are known and agreed on. Problems are precisely formulated and
defined.
2. The decision maker strives for conditions of certainty, gathering complete information.
3. The criteria for evaluating the alternatives are known. The decision maker selects the alternative that will maximize the
economic return to the organization.
4. The decision maker is rational and uses logic to assign values, order preferences, evaluate alternatives, and make the
decision that will maximize the attainment of organizational goals.
62. Programmed decisions involve situations that have occurred enough to enable decision rules to be developed and
applied in the future. Examples include job skills required to fill certain positions, the reorder point for manufacturing
inventory, and selection of freight routes for product deliveries.
Nonprogrammed decisions are made in response to situations that are unique, are poorly defined and largely unstructured,
and have important consequences for the organization. Examples are decisions to build a new factory, develop a new
product or service, and enter a new geographical market.
63. Decisions made under the condition of certainty have a high possibility of success. All of the information that the
decision maker needs is available. The decision maker knows the alternatives, the objectives, and the outcomes. Risk is a
situation where the decision maker knows the alternatives and the objectives. However, the outcomes are not known with
certainty, but the probabilities of the outcomes are known. Under conditions of uncertainty, the decision maker does not
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