Fundamentals of Management, 10e (Robbins)
Chapter 4 Foundations of Decision Making
1) Decision making begins with ________.
A) selecting alternatives
B) identifying decision criteria
C) identifying a problem
D) eliminating false alternatives
2) Which of the following defines a problem in the decision-making process?
A) a discrepancy between what exists and what the decision maker desires to exist
B) a discrepancy between the ideal and the practical
C) something that causes irritation
D) something that calls for attention
3) The decision-making process consists of a series of eight steps that identify a problem and
work toward ultimately ________.
A) determining if there is a solution to the problem
B) solving the problem
C) making a plan to solve the problem
D) breaking down the problem into a series of steps
4) To identify a problem, a manager ________.
A) compares one set of standards or goals to a second set of standards or goals
B) looks for unhappy customers
C) uses intuition to see that things don’t look right
D) compares the current state of affairs with some standard or goal
5) A manager can faithfully execute the decision-making process but still end up with nothing of
value if ________.
A) he fails to identify the correct problem
B) he fails to assign number values to different criteria
C) he solves the problem inefficiently
D) he fails to correctly identify the steps of the process
6) A manager is considering purchasing new computers for her department. The manager spends
time assessing the computers her department now has. Which stage of the decision-making
process is she going through?
A) identification of a problem
B) identification of decision criteria
C) development of alternatives
D) implementation of an alternative
7) A manager is determining what kind of new computers she should purchase for her
department. She has made a list of five different computer models for consideration. Which stage
of the decision-making process is this?
A) selection of an alternative
B) identification of decision criteria
C) development of alternatives
D) analysis of alternatives
8) After purchasing new computers for her department, a manager is now comparing the
performance of the new computers to the computers they replaced. Which stage of the decision-
making process is she carrying out?
A) analysis of alternatives
B) evaluation of decision effectiveness
C) selection of an alternative
D) implementation of an alternative
9) For a high-tech bicycle buyer, decision criteria would be determined by ________.
A) whatever most bike buyers recommend
B) expert ratings in bike magazines
C) technical specifications
D) personal preferences of the buyer
10) Which of the following is LEAST likely to be a decision criterion for a high-tech bicycle
buyer who cares primarily about performance?
A) warranty
B) gear mechanism
C) frame composition
D) brake assembly
11) Which of the following would be a fairly objective criterion by which a bicycle buyer could
assess different bike models?
A) color
B) weight
C) quality of craftsmanship
D) style
12) A manager chooses to ignore a rigorous decision-making process and selects TV monitor A
over monitor B because he “trusts” company A more than company B. If the decision he made
was rational, which of the following is true?
A) Monitor A is really the better choice.
B) The manager should have included “trust” as a criterion.
C) Monitor B is really the better choice.
D) The manager must have made a mistake in calculating his weighted criteria.
13) In allocating weights to the decision criteria, which of the following is most helpful to
remember?
A) All weights must be the same.
B) The total of the weights must equal 100.
C) The high score should be a 10, and no two criteria should be assigned the same weight.
D) Assign the most important criterion a score, and then assign weights against that standard.
14) What is a heuristic?
A) a complicated and systematic method of decision making
B) a purely intuitive method of decision making
C) a totally unreliable method of decision making
D) a shortcut or rule of thumb that is used for decision making
15) Because they are not systematic or comprehensive, using heuristics in place of an eight-step
decision-making process can lead to ________.
A) errors and biases
B) consistently better decisions
C) more imaginative decisions
D) decisions that more directly solve problems
16) Which of the following is NOT a reason why managers often resort to using heuristics?
A) They seem to eliminate complexity.
B) They seem to eliminate ambiguity.
C) They save time.
D) They thoroughly explore all alternatives.
17) A banker opts for short-term gain despite indications that his decision might not pay off in
the long run. Which error or bias is the banker guilty of?
A) overconfidence
B) immediate gratification
C) selective perception bias
D) representation
18) A scientist cites two studies that show a positive effect for her drug and ignores five other
studies that show a negative effect. Which error or bias is she committing?
A) hindsight
B) anchoring effect
C) confirmation bias
D) self-serving
19) One legislator sees decreased tax revenue as the key problem in the budget. A second
legislator sees increased spending as the problem. Each of these legislators has a(n) ________.
A) representation bias
B) self-serving bias
C) availability bias
D) framing bias
20) Which of the following is NOT a common decision-making error or bias?
A) sunk costs
B) randomness
C) forest for the trees
D) overconfidence bias
Decisions, Decisions (Scenario)
Sondra needed help. Her insurance company’s rapid growth was necessitating making some IT
changes, but what changes? Should they modify the servers that they currently use or purchase
an entirely new system? Sondra was confused and needed help in making the correct decision.
21) According to the decision-making process, the first step Sondra should take is to ________.
A) analyze alternative solutions
B) identify decision criteria
C) evaluate her decision’s effectiveness
D) identify the problem
22) Sondra has decided to collect information about the features the company needs for its
system. Which stage of the decision-making process is she carrying out?
A) identify alternative solutions
B) identify decision criteria
C) evaluate her decision’s effectiveness
D) allocate weights to the criteria
23) Sondra has determined that the speed of the system she settles on is twice as important as the
capacity of the system. Which stage of the decision-making process is she carrying out?
A) allocation of weights to criteria
B) selecting an alternative
C) implementing the alternative
D) identifying the problem
24) Sondra has decided to purchase a new system. After obtaining permission, she has ordered
the system from a reputable company. Which stage of the decision-making process is she
carrying out in making the order?
A) analyzing alternative solutions
B) selecting an alternative
C) implementing the alternative
D) identifying the problem
25) The very last step Sondra should take, according to the decision-making process, is to
________.
A) analyze alternative solutions
B) select alternatives
C) implement the alternative
D) evaluate the decision’s effectiveness
26) In decision making, a problem can be defined as a discrepancy between what exists and what
the problem solver desires to exist.
27) A decision criterion defines factors that are relevant in a decision.
28) Managers identify a problem by comparing the current state of affairs to some standard.
29) All criteria are equally important in the decision-making process.
30) Identifying the wrong problem is just as much a failure for a manager as identifying the right
problem and failing to solve it.
31) The final step of the decision-making process is to implement the alternative that has been
selected.
32) A heuristic can simplify the decision-making process.
33) Because heuristics simplify the decision-making process, they are unlikely to lead to errors.
34) Decision makers who seek information that matches what they already know are guilty of
confirmation bias.
35) A basketball coach who takes a very good shooter out of a game because she missed her last
two shots has availability bias.
36) In a short essay, list and discuss the first four steps in the decision-making process. Give an
example of each step.
37) In a short essay, list and discuss the final four steps in the decision-making process. Give an
example of each step.
38) The three main models that managers use to make decisions are ________.
A) rational, bounded rational, and intuitive
B) rational, irrational, and bounded rational
C) intuitive, unintuitive, and rational
D) bounded rational, intuitive, and systematic
39) It is assumed that a rational decision maker ________.
A) would never make a wrong choice
B) would be subjective and impractical
C) would face only difficult decisions
D) would be objective and logical
40) What does it mean for a decision maker to maximize value?
A) to make the decision to be as clear and logical as possible
B) to make the achievement of goals as likely as possible
C) to waste as little time and energy as possible
D) to make decision making as simple as possible
41) Maximizing value for an organization means making sure that ________.
A) the organization makes money
B) the best interests of the organization are addressed
C) the decision made is as rational as possible
D) the decision is as simple as possible
42) Which of the following is NOT assumed in a rational decision?
A) a clear and specific goal
B) a clear and unambiguous problem
C) most alternatives and consequences are known
D) value is maximized
43) It is assumed that in most cases the decisions of all managers are limited by ________.
A) greed and short-sightedness
B) having too much information
C) not being able to analyze all information for all alternatives
D) not being able to act rationally or in the best interests of their organization
44) Which term best characterizes a decision that has bounded rationality?
A) virtually perfect
B) rigorous and comprehensive
C) not good enough
D) just good enough
45) Software programs that use a series of questions to aid humans in decision making are called
________.
A) text reading software
B) expert systems
C) group systems
D) support software
46) Expert systems are primarily used to help what kinds of decision makers?
A) lower-level managers
B) top managers
C) senior managers
D) experts
47) Neural networks are able to outdo the performance of humans by ________.
A) analyzing symbols
B) handling up to three variables at once
C) handling hundreds of variables at once
D) reading facial expressions
48) Neural networks differ from expert systems in that they can ________.
A) draw conclusions from data
B) ask questions to the decision maker
C) perform sophisticated calculations
D) learn from experience
49) Neural networks outperform expert systems in uncovering ________.
A) credit card fraud
B) false positives for pregnancy
C) potential credit card customers
D) credit problems in bank mortgages
50) Herbert Simon won the Nobel Prize in economics for his work in describing ________.
A) how people spend money
B) how most people are perfectly rational
C) how people make decisions
D) how people avoid decisions
51) Which of the following is the best definition for the word satisfice?
A) very satisfying
B) not sufficient
C) accepts a less than perfect solution
D) requires a perfect solution
52) Herbert Simon found that in making decisions, most people satisficed because they had
limited ability to ________.
A) be truthful and honest in situations that deal with other people
B) think independently
C) deal with difficult situations
D) grasp present conditions and anticipate future conditions
53) A person who satisfices fails to ________.
A) maximize his or her decision
B) understand his or her position
C) accept the truth of a situation
D) make any kind of decision