54) Sticking to a decision despite evidence that it is a mistake is called ________.
A) escalation of commitment
B) escalation of rationality
C) satisficing commitment
D) error enhancement
55) Escalation of commitment can occur when people don’t ________.
A) want to make a decision
B) want to admit that an earlier decision was flawed
C) accept current conditions
D) understand that conditions have changed
56) Which model of decision making takes advantage of unconscious reasoning?
A) rational
B) nonrational
C) intuitive
D) factual
57) Compared to fully rational decision making, what is a major advantage of intuitive decision
making?
A) total reliability
B) fully quantified
C) thoroughness
D) speed
58) What percentage of managers typically use intuitive decision making rather than formal
analysis to make decisions?
A) 95%
B) 75%
C) 50%
D) less than 10%
59) Intuitive decision making ________.
A) should be avoided by managers in making day to day decisions
B) is often described as conscious decision making
C) can complement other decision making approaches
D) takes more time than other approaches as it requires managers to shift through feelings and
emotions and place them in context with actual facts.
60) Which of the following is NOT a way in which intuition guides people who are making
decisions?
A) Intuition provides ethics and values guidelines.
B) Intuition provides a formal analysis method.
C) Intuition provides experiences to draw from.
D) Intuition draws on knowledge, skills, and training.
61) Emotions and feelings ________ decision making.
A) often have no effect on
B) can improve
C) always decrease performance in
D) are more important than facts and logic in
62) A rational decision will never fail to provide the best and most successful solution to a
problem.
63) Being completely rational is a realistic goal for today’s managers.
64) One assumption of bounded rationality is that managers can analyze all relevant information
about all alternatives for a situation.
65) A synonym for the word satisfice is maximize.
66) One assumption of bounded rationality is that managers usually attempt to make rational
decisions.
67) Intuitive decision making is systematic, logical, and orderly.
68) Intuitive decision making should not be a part of a manager’s decision-making process.
69) The expression “throwing good money after bad” is an example of an escalation of
commitment.
70) Personal judgments and emotions should always be strictly ignored in a decision-making
process.
71) In a short essay, discuss bounded rationality and satisficing.
72) In a short essay, discuss the assumptions of rationality and the validity of those assumptions.
73) Structured problems are ________.
A) ambiguous
B) undefined and vague
C) clear and straightforward
D) incomplete
74) Unstructured problems are ________.
A) perfectly rational
B) clear and straightforward
C) situations in which all options are known
D) situations in which all options are not known
75) Which of the following is an example of a structured problem?
A) designing a new MP3 player
B) hiring a lawyer
C) deciding shipping options for a vacuum cleaner
D) drafting a quarterback for a pro football team
76) Which of the following is an example of an unstructured problem?
A) finding the list price of different copy machines
B) choosing the best wardrobe for an executive
C) comparing gas mileage for different car models
D) measuring pollution levels in a power plant
77) Structured problems typically have ________ while unstructured problems typically have
________.
A) only one solution; many solutions
B) many solutions; one solution
C) many solutions; fewer solutions
D) two solutions; three solutions
78) Programmed decisions work well for solving ________.
A) structured problems
B) unstructured problems
C) both structured and unstructured problems
D) poorly defined problems
79) Programmed decisions draw heavily on which of the following?
A) mistakes made in the past
B) past solutions that were successful
C) past solutions that were unsuccessful
D) innovative, new solutions
80) Which of the following is NOT a type of programmed decision?
A) systematic procedure
B) policy
C) brainstorm
D) rule
81) Following the directions to put together an elliptical exercise machine is an example of
which way to solve a problem?
A) procedure
B) rule
C) general practice
D) policy
82) A football coach makes the decision to punt or not to punt on fourth down based on whether
he is past his own 50-yard line. Which decision-making method does the coach use?
A) a policy
B) a hunch
C) a procedure
D) a rule
83) Which pair of terms is correctly matched up?
A) structured problem, programmed decision
B) structured problem, structured decision
C) unstructured problem, programmed decision
D) structured problem, nonprogrammed decision
84) A judge consults guidelines before handing down an award for damages in a legal case.
What kind of decision making is she doing?
A) following a policy
B) following a rule
C) programmed
D) following a procedure
85) Top managers in an organization tend to ________.
A) make programmed decisions
B) solve structured problems
C) make nonprogrammed decisions
D) solve well-defined problems
86) Which three conditions do decision makers face?
A) certainty, risk, uncertainty
B) certainty, uncertainty, confidence
C) risk, high risk, low risk
D) certainty, risk, high risk
87) In a condition of certainty, ________.
A) most outcomes are known
B) the decision is already made
C) all outcomes of all alternatives are known
D) some alternatives are not known
88) If a car buyer knows the inventory dealer price of the same car at different dealerships, he or
she is operating under what type of decision-making condition?
A) risk
B) uncertainty
C) certainty
D) factual
89) A retail clothing store manager who estimates how much to order for the current spring
season based on last spring’s outcomes is operating under what kind of decision-making
condition?
A) seasonal
B) risk
C) uncertainty
D) certainty
90) ________ is a situation in which a decision maker has incomplete information about
outcomes and does not have the ability to reasonably estimate outcomes that are not known.
A) Certainty
B) Risk
C) Uncertainty
D) High certainty
91) A low-level manager is most likely to solve problems under which condition?
A) certainty
B) low risk
C) uncertainty
D) low certainty
92) A top-level manager is most likely to solve problems under which condition?
A) certainty
B) risk
C) uncertainty
D) high certainty
93) A manager has a choice of three investment funds. To assess them, he looks at their past
investment records over the previous five years. The manager is operating under which
condition?
A) certainty
B) probability
C) uncertainty
D) risk
94) A manager has a choice of three bank CDs that pay different amounts of fixed interest over
different time periods. The manager is operating under which condition?
A) jeopardy
B) certainty
C) uncertainty
D) risk
95) A manager wants to invest in one of three start-up companies. All three of the companies
seem to have a good business plan. None of the companies has a track record. The manager is
operating under which condition?
A) uncertainty
B) certainty
C) low certainty
D) risk
96) A key to what is commonly used to assess risk is for a decision maker to examine the
________ an investment.
A) promises made by a company for
B) ads posted by a company for
C) historical data for
D) minor details of
97) Programmed decisions tend to be routine.
98) A rule is simpler than a policy or a procedure to implement.
99) Implementing a procedure requires more judgment and interpretation than implementing a
policy.
100) A highway speed limit is an example of a policy.
101) Managerial decisions are likely to become more programmed as managers rise in an
organizational hierarchy.
102) Most managerial decisions include an element of risk.
103) Uncertainty involves a situation in which the probability of a certain outcome is known to
be small.
104) A manager is more confident of his or her assessment of a situation if it involves risk rather
than uncertainty.
105) In a short essay, discuss the differences among a procedure, a rule, and a policy. Include
specific examples of each to support your answer.
106) Managers in organizations make group decisions ________.
A) frequently
B) never
C) almost never
D) rarely