Management, 3e (Hitt)
Chapter 12 Individual and Group Decision Making
1) A problem exists when a manager sees a way for the firm to achieve a more desirable state
than the one it’s currently in.
2) The classical model argues that managers will choose the alternative that maximizes the
desired outcome.
3) It is important to monitor and evaluate results in order to detect problems with the original
decision and its implementation.
4) While the rational model shows how decisions should be made, it falls short of describing
how decisions are actually made.
5) The bounded rationality model focuses on the decision maker as an optimizer.
6) High levels of certainty for both the problem formulation and the problem solution phases
characterize the programmed decision-making process.
7) Standard operating procedures (SOP) are often used for nonprogrammed decisions.
8) In implementing the choice, group responsibility is generally superior to individual
responsibility.
9) Victims of groupthink tend to collectively rationalize and discount warning signs that should
lead them to reconsider earlier decisions.
10) In a group decision-making process, appointing a devil’s advocate will prevent groupthink.
11) Escalation of commitment can lead to positive consequences for organizations.
12) High involvement while evaluating results is significantly related to higher levels of
satisfaction and work group performance.
13) Participation decreases the likelihood that employees will work for rewards and outcomes
they value.
14) In high-velocity environments, decision-making groups must not be afraid to act.
15) Conducting a dialectical inquiry can be a particularly good way to overcome groupthink and
escalation-of-commitment pitfalls.
16) During the brainstorming process, individual members meet as a group, but they begin by
silently and independently generating ideas to solve a problem.
17) The nominal group technique is ineffective against groupthink.
18) The Delphi technique is used to improve problem formulation.
19) Technology is helpful for routine but complex decisions.
20) Compared to computer-mediated groups, face-to-face groups take longer to complete their
tasks and members experience less satisfaction.
21) The process of decision making involves several steps that can be divided into distinct
categories. The formulation phase involves ________.
A) generating alternatives
B) diagnosing the factors affecting the problem or opportunity
C) selecting the preferred solution
D) implementing the decided course of action
22) The process of decision making involves several steps that can be divided into distinct
categories. The solution phase involves ________.
A) diagnosing the factors affecting the problem or opportunity
B) identifying a problem or opportunity
C) acquiring information
D) implementing the decided course of action
23) Which of the following represents the earliest attempt to model decision-making processes?
A) the retrospective decision model
B) the bounded rationality model
C) the rational model
D) the administrative model
24) In a classical model, once you have identified a problem or opportunity, the next step is to
________.
A) analyze the alternatives generated
B) determine the criteria for selecting among the alternatives to deal with it
C) generate alternatives that achieve the results you want
D) select feasible alternatives
25) Kenneth is a manager for a content management firm. He realizes that the firm requires five
technicians to maintain and update the firm’s servers. Which of the following actions would
suggest that Kenneth is developing objectives and criteria according to the classical model?
A) Kenneth decides to poach technicians from its competitor to understand its database
management techniques.
B) Kenneth realizes that the firm’s data storage capacity has to be doubled in the next six months.
C) Kenneth decides that these technician require 5 percent interpersonal skills, 50 percent
technical knowledge, 15 percent motivation, and 30 percent problem solving ability.
D) Kenneth selects twenty resumes from a job portal.
26) Even when a situation is similar to another situation that occurred in the past, it’s often
worthwhile to pursue new, creative alternatives. Which of the following is a valid rationale for
this statement?
A) Pursuing new, creative alternatives for a situation helps an organization gain the reputation of
being an innovative firm.
B) No two situations are identical and subtle differences may make a past solution less effective
today.
C) Using past solutions for new problems is discouraged in firms that operate in today’s dynamic
environment.
D) Pursuing new, creative alternatives for a situation makes it easier for the manager to
implement and monitor them.
27) While ________ in the classical model, you need to determine which alternatives would
produce minimally acceptable results, eliminate alternatives that are unlikely to achieve the
minimally acceptable outcome, and examine the feasibility of the remaining alternatives.
A) analyzing alternatives
B) selecting alternatives
C) generating alternatives
D) developing objectives and criteria
28) In the classical model of decision making, the ________ asserts that managers choose the
alternative that they believe maximizes the desired outcome.
A) retrospective decision model
B) bounded rationality model
C) subjectively expected utility model
D) administrative model
29) In which of the following steps of the classical model do managers access sources and
reasons for potential resistance to the decision?
A) monitoring and evaluation results
B) implementing the decision
C) selecting alternatives
D) generating alternatives
30) During the implementation step of the classical model, managers ________.
A) determine the chronology and sequence of actions designed to overcome resistance to the
decision
B) eliminate alternatives that are unlikely to achieve the minimally acceptable outcome
C) determine which of the remaining alternatives will produce the most satisfactory outcome
D) choose the alternative that maximizes the desired outcome
31) Lance Crooger, the CEO of Heithz Co., realizes that the company is losing its competitive
advantage due to lack of transparency and communication within the organization. He notices
that customers are shifting to competitors’ products because of Heithz’s lack of effective
customer service—agents who are directly in touch with the customers did not have decision-
making authority. After following the rational model of decision-making process, Lance
concludes that decentralizing the organizational hierarchy will solve most of the problems and
provide Heithz’s customer service agents with decision-making ability, resulting in better
services. However, Lance realizes that most of Heithz’s senior management will be against this
decision because they will feel that their subordinates will receive more power. Lance is now
determining ways to tackle senior management resistance. Which step of the rational model is
Lance presently in?
A) analyzing alternatives
B) selecting alternatives
C) implementing the decision
D) monitoring and evaluating results
32) It is important to monitor and evaluate results in a decision-making process in order to
________.
A) assess sources and reasons for potential resistance to the decision
B) detect problems with the original decision and its implementation
C) determine the chronology and sequence of actions designed to overcome resistance to the
decision
D) choose the alternative that maximizes the desired outcome
33) Which of the following assumption is made while pursing the rational model of decision
making?
A) The problem or opportunity is unclear.
B) Decision makers are not rational.
C) The firm’s objectives are unclear.
D) Decision makers are not biased.
34) ________ is the tendency for information to lose its certainty as it is passed along.
A) Information bias
B) Cognitive complexity
C) Stereotyping
D) Uncertainty absorption
35) Which of the following defines selective perception?
A) a tendency to ignore or avoid certain information, especially ambiguous information
B) a tendency for information to lose its certainty as it is passed along
C) deciding about an alternative on the basis of characteristics ascribed by others
D) a reluctance to give or receive negative information
36) Preston rejects Jose for the position of customer-relations manager because of his perception
that Mexicans are disloyal. This is an example of ________.
A) cognitive complexity
B) stereotyping
C) uncertainty absorption
D) information bias
37) “I hate Irish men because they are drunkards.” This statement is an example of ________.
A) stereotyping
B) information bias
C) cognitive complexity
D) selective perception
38) Kiera, an HR executive, updates Mason, the accounts manager: “We have received 500
resumes for the position of accountants. It’s gonna take forever to screen these. Any ideas?”
Mason suggests, “Rule out anyone without 2 years of accounting experience.” This is an example
of ________.
A) uncertainty absorption
B) selective perception
C) cognitive complexity
D) information bias
39) The administrative model is also known as the ________.
A) bounded rationality model
B) retrospective decision model
C) implicit favorite model
D) rational model
40) The ________ assumes that people usually settle for acceptable rather than maximum
options because the decisions they confront typically demand greater information-processing
capabilities than they possess.
A) retrospective decision model
B) administrative model
C) rational model
D) implicit favorite model
41) Rather than using explicit criteria and weights to evaluate alternatives, the bounded
rationality model argues that people use ________.
A) holism
B) experience
C) heuristics
D) perception
42) Heuristic is a rule that guides the search for alternatives into areas that have ________.
A) high probabilities for yielding success
B) interchangeable alternatives
C) maximum options
D) information-processing capabilities
43) Seth Craig, a senior manager in a financial consulting firm, is interviewing candidates for the
position of accounting executive. He has short-listed three candidates—Kenneth, Nora, and
Lance—for the final round of interview. Seth is well aware that Lance has had performance
problems in his previous job, but still favors him for this position. Which of the following is
most similar to this situation?
A) Quest Inc., a mobile phone manufacturer, is losing market share. Austin, a senior marketing
manager, consults a marketing research firm to identify the problem. The market research
analysis report by the firm suggests that Quest lacks product innovation and after-sales support.
Austin is aware that his research department needs improvement and his customer-service agents
lack interpersonal skills, but forms his own team to conduct a market research again, because he
does not like the research firm’s report.
B) Roselyn, an HR executive working for a construction equipment manufacturing firm, has 300
applicants for a sales manager’s opening in her firm. She needs to close this position by the end
of the week and decides to eliminate any applicant with less than 5 years of sales experience. She
is aware that she might miss out on good candidates if she takes this route, but is helpless due to
time constraints.
C) Tender, a toy manufacturing firm, uses a traditional supply chain to market its products. It
realizes that the sales of its products have dipped significantly in one of the areas of the city.
Conducting marketing research reveals that its competitors deal directly with customers, which
allows them to provide attractive offers to customers. Tender decides to pursue
disintermediation, dealing directly with its customers, before its starts losing marketing share.
D) Leander favors Janis for the position of product manager because she has graduated from a
highly reputed business school under full scholarship. Leander is aware that Janis does not have
sufficient experience, but does not think that is important.
44) ________ is the tendency for decision makers to accept the first alternative that meets their
minimally acceptable requirements rather than push further for an alternative that produces the
best results.
A) Altruism
B) Satisficing
C) Groupthink
D) Rational ignorance
45) The ________ focuses on the decision maker as a satisficer.
A) retrospective decision model
B) implicit favorite model
C) rational model
D) bounded rationality model
46) The ________ focuses on how decision makers attempt to rationalize their choices after they
are made.
A) retrospective decision model
B) administrative model
C) rational model
D) bounded rationality model
47) The retrospective decision model is also known as the ________.
A) implicit favorite model
B) rational model
C) administrative model
D) bounded rationality model
48) ________ is an individual’s tendency to highlight the positive features of their implicit
favorite over the alternatives.
A) Rational ignorance
B) Selective perception
C) Cognitive complexity
D) Perceptual distortion
49) It is Christmas and Lora and her parents are shopping. Lora’s attention is caught by a pair of
Levi’s jeans, which she immediately likes. Although there are several other brands available in
the shelf and Levi’s is comparatively expensive, Lora insists that Levi’s jeans are better in quality
and design. She manages to convince her parents that her choice is the best and buys the pair.
This is an example of ________.
A) perceptive distortion
B) selective perception
C) cognitive complexity
D) uncertainty absorption
50) Which of the following statements is true about programmed decisions?
A) Top managers usually face these decisions.
B) They are made in response to problems that are either complex or novel.
C) These decisions are made when the nature of the problem is well-defined.
D) Past decisions are of little help while making these decisions.
51) Which of the following is an example of a programmed decision?
A) improving sales in an area that has until recently seen a dip in sales
B) analyzing the feasibility of starting a new subsidiary in a different country
C) creating rules and procedures to maintain a safe work environment
D) coming up with the best way to communicate with the target market
52) Which of the following statements is true about nonprogrammed decisions?
A) These decisions are made when the nature of the problem is well-defined.
B) Lower-level managers typically encounter these decisions.
C) These decisions are usually made through structured, bureaucratic techniques.
D) Past decisions are of little help while making these decisions.
53) Managers have a tendency to let their programmed activities overshadow their
nonprogrammed activities because ________.
A) the outcomes of nonprogrammed decisions are more uncertain
B) the outcomes of programmed decisions are recognized and appreciated more by top
management
C) the outcomes of nonprogrammed decisions are more predictable and routine
D) the outcomes of programmed decisions directly affect the employees of the organization
54) Clifton, a project manager, has to make a series of decisions, both simple and complex, by
the end of the month. Which of the following suggests that Clifton has the tendency known as
Gresham’s law of planning?
A) Clifton gives priority to complicated problems, like planning a course of action to improve
sales volumes in certain localities of the city and calculating the feasibility of opening new
subsidiaries in other states. He then moves on to simpler problems, like creating the
compensation systems for sales executives and the hiring process of the organization.
B) Clifton alternates between a simple and a complex problem. He solves a complex problem,
like calculating the feasibility of opening subsidiaries in other states and then solves a simpler
problem, like creating rules that would avoid cafeteria overcrowding. He follows this process till
all his decisions are made.
C) Clifton starts the process by making easy decisions, like forming rules that would reduce
accidents at workplaces and avoid cafeteria overcrowding. He then concentrates on the plan of
action for complicated problems, like a sales dip in one of the areas of the city and the feasibility
of opening subsidiaries in other states.
D) Clifton prioritizes complex problems, like planning a course of action to improve sales
volumes in certain localities and calculating the feasibility of opening subsidiaries in other states.
He believes that simpler problems can be escalated or passed down, but his expertise is required
mostly on complex issues.
55) Which of the following statements is true about individual and group decision making?
A) When evaluating alternatives, group judgment is often superior to individual judgment.
B) When identifying alternatives, group efforts ensure that different and unique solutions are
identified.
C) When choosing alternatives, individual effort often leads to greater acceptance of the final
outcome.
D) When implementing a choice, group responsibility is generally superior to individual
responsibility.