59) Unstructured problems ________.
A) refer to the usual problems faced by organizations
B) are generally solved using procedures, rules, and policies
C) are accompanied by ambiguous or incomplete information
D) do not require the decision maker to go through an involved decision process
60) After nearly 30 years of growth, sales at Ida’s company have begun to decline. None of the
managers have been able to determine the cause. Some say the entire economy is in recession;
others blame a change in suppliers; still others say the work ethic among employees just isn’t
what it used to be. This is an example of ________.
A) a structured problem
B) an unstructured problem
C) a programmed problem
D) a non-programmed problem
61) Nonprogrammed decisions ________.
A) involve standardized solutions
B) are usually made by lower-level managers
C) are associated with clear and specific goals
D) are unique and nonrecurring
62) When problems are ________, managers must rely on ________ in order to develop unique
solutions.
A) structured; nonprogrammed decision making
B) structured; pure intuition
C) unstructured; nonprogrammed decision making
D) unstructured; programmed decision making
63) Lower-level managers typically confront ________.
A) unstructured problems
B) new and unusual problems
C) programmed decisions
D) nonprogrammed decisions
64) Ian is a plant manager in a multi-site corporation. He often deals with situations involving
new customers and new products. These are often ________.
A) non-linear problems and risky decisions
B) structured problems and programmed decisions
C) uncertain problems and linear decisions
D) unstructured problems and unprogrammed decisions
65) ________ is a situation where a manager has the ability to make accurate decisions because
the outcome of every alternative is known.
A) Certainty
B) Risk
C) Bureaucracy
D) Contingency
66) It is time for Jane to order aluminum tubing again. She typically orders from one of three
vendors. She knows the price, delivery time, and quality of each vendor. In this situation, Jane
has ________.
A) certainty
B) uncertainty
C) risk
D) structure
67) The manager of an apparel store estimates how much to order for the current spring season
based on last spring’s sales figures. The store manager is operating under which of the following
decision-making conditions?
A) uncertainty
B) risk
C) structure
D) certainty
68) ________ is a situation in which a decision maker cannot make reasonable probability
estimates.
A) Necessity
B) Risk
C) Uncertainty
D) Certainty
69) In the late 1970s, Apple launched the Apple computer for individual use. It was a radical
concept; there was no precedent for this type of product. Under these circumstances, Apple
faced a situation of ________.
A) certainty
B) uncertainty
C) risk
D) necessity
70) Which of the following best describes the psychological orientation of an individual making
a “maximax” choice?
A) optimist
B) cynic
C) pessimist
D) defeatist
71) James has calculated the possible profits from three different scenarios for the expansion of
his recreation park, each for a different amount of advertising and promotion. He has chosen to
implement the scenario that offers the greatest profit. James has decided to ________.
A) maximax
B) maximin
C) minimax
D) minimin
72) What is the psychological orientation of a decision maker who makes a “maximin” choice?
A) optimist
B) realist
C) pessimist
D) idealist
73) Depending on the weather and the amount of advertising, Kyle has developed six scenarios
for his summer profits from his lawn care business. His business has failed to reach his
expectations in the past, so he fears the worst. Kyle will likely choose the option that ________.
A) maximizes the maximum possible payoff
B) maximizes the minimum possible payoff
C) minimizes the maximum regret
D) minimizes the minimum losses
74) A programmed decision is a repetitive decision that can be handled by a routine approach.
75) Rules and procedures are the same.
76) A policy is an explicit statement that tells a manager what can or cannot be done.
77) Nonprogrammed decision making relies on procedures, rules, and policies.
78) Risk is the condition in which a decision maker is able to estimate the likelihood of certain
outcomes.
79) Discuss structured problems, programmed decisions, unstructured problems, and
nonprogrammed decisions.
80) Discuss the three types of programmed decisions that a manager depends on to resolve
structured problems.
81) Discuss the three different decision-making conditions that managers usually face.
82) The ________ thinking style is characterized by a person’s preference for using external data
and facts and processing this information through rational, logical thinking to guide decisions
and actions.
A) linear
B) non-linear
C) programmed
D) non-programmed
83) The ________ thinking style is characterized by a preference for internal sources of
information and processing this information with internal insights, feelings, and hunches to guide
decisions and actions.
A) non-programmed
B) nonlinear
C) linear
D) programmed
84) Before making a decision, Kathryn gathers as much information as she can then analyzes it
to check for trends and patterns. Kathryn prefers ________.
A) linear thinking
B) non-linear thinking
C) intuitive thinking
D) judgmental thinking
85) Rules of thumb that managers use to simplify decision making are known as ________.
A) heuristics
B) folksonomies
C) algorithms
D) sophisms
86) Lucas always seems to “know” exactly what to do in any given situation. At least that’s what
he’ll tell you. But his ideas don’t always work and his overall performance as scored by his
supervisor isn’t nearly as great as he thinks it is. Lucas is exhibiting the ________.
A) selective perception bias
B) the anchoring effect
C) self-serving bias
D) overconfidence bias
87) Many new car buyers choose to buy a car with little or no money down and payments for
many years because of the ________.
A) overconfidence bias
B) immediate gratification bias
C) framing bias
D) availability bias
88) The ________ describes how decision makers fixate on initial information as a starting point
and then, once set, fail to adequately adjust for subsequent information.
A) anchoring effect
B) selective perception effect
C) confirmation bias
D) framing bias
89) Sophie is in charge of recruitment at her company. During a particular interview, the first
thing Sophie noticed about the applicant was that he was improperly attired. Though the
candidate possessed the necessary qualifications and effectively answered all her questions,
Sophie rejected him. This is an example of the ________.
A) availability bias
B) self-serving bias
C) anchoring effect
D) confirmation bias
90) Lila believes the global climate is changing. Every storm, every volcano eruption, every
earthquake is, in her mind, evidence of this climate change. Lila has fallen victim to ________.
A) framing bias
B) selective perception bias
C) confirmation bias
D) representation bias
91) When decision makers seek out information that reaffirms their past choices and discount
information that contradicts past judgments, they are exhibiting the ________.
A) hindsight bias
B) availability bias
C) representation bias
D) confirmation bias
92) Mildred was persuaded by a fast-talking salesperson to carry an expensive brand of yarns in
her retail needlecraft shop. Seldom does a customer buy this brand, but on those rare occasions
Mildred tells herself she made the right decision. The yarns have been sitting on the shelf for
several months and she has yet to profit from them. Mildred suffers from the ________.
A) immediate gratification bias
B) selective perception bias
C) confirmation bias
D) hindsight bias
93) The ________ occurs when decision makers select and highlight certain aspects of a
situation while excluding others.
A) framing bias
B) availability bias
C) representation bias
D) confirmation bias
94) It hasn’t rained in several days; therefore it is unlikely to rain today. This is an example of
the ________.
A) self-serving bias
B) availability bias
C) representation bias
D) randomness bias
95) The premier of Transylvania prefers darkened rooms, flinches in bright light, and has
unusually long incisors. His political opponents claim he is a vampire. This is an example of the
________.
A) representation bias
B) confirmation bias
C) selective perception bias
D) randomness bias
96) Whenever anyone praises Mark for his good performance, he has the tendency to attribute
his success to his personal qualities such as his ability to thrive under pressure and his eye for
detail. However, any negative performance feedback is always met with excuses such as
unsupportive team members or insufficient time. This is an example of the ________.
A) self-serving bias
B) confirmation bias
C) representation bias
D) hindsight bias
97) “There are no coincidences. If something bad has happened to you, you must have done
something to deserve it.” This statement might be made by someone with the ________.
A) framing bias
B) self-serving bias
C) availability bias
D) randomness bias
98) “We can’t stop now. We’ve already invested $100,000 in the project.” This speaker is acting
on the ________.
A) anchoring effect
B) availability bias
C) representation bias
D) sunk costs error
99) Martie had arranged for a high-profile speaker to deliver the keynote address at her college’s
annual function. However, due to unforeseen circumstances, the speaker was forced to drop out
at the last moment. Martie reacts to this news by saying, “I knew all along that this would
happen.” This is an example of the ________.
A) anchoring effect
B) availability bias
C) self-serving bias
D) hindsight bias
100) The anchoring effect describes when decision makers fixate on initial information as a
starting point and then, once set, fail to adequately adjust for subsequent information.
101) The availability bias describes the actions of decision makers who try to create meaning out
of random events.
102) The sunk costs error occurs when decision makers forget that current choices cannot correct
the past.
103) Explain any six decision biases or errors that managers make.
104) A few decades ago, Walmart opened stores in Germany. After a few years, it closed all of
them. The shopping habits of Europeans differed so much from that of Americans that the stores
could not become profitable. What was Walmart’s mistake?
A) It did not understand cultural differences.
B) It did not create standards for good decision making.
C) It did not know when it was time to call it quits.
D) It did not use an effective decision-making process.
105) To make effective decisions in today’s fast-moving world, managers need to ________.
A) build organizations that shun complexity
B) know when it is time to call it quits
C) ignore cultural differences
D) build organizations that rely on their past successes
106) An effective decision-making process ________.
A) focuses on matters of importance
B) focuses on consistency more than logic
C) avoids subjective and intuitive thinking
D) is complex but reliable
107) Design thinking suggests that managers should look at problem identification
collaboratively and integratively with the goal of ________.
A) unveiling a rational approach to address the situation
B) analyzing the situation with deductive reasoning
C) developing solutions which somehow seem inevitable
D) gaining a deep understanding of the situation
108) Managers need to understand cultural differences to make effective decisions in today’s
fast-moving world.
109) Design thinking is an interesting new line of thinking with broad implications for making
effective business decisions by integrating emotional elements into the process.
110) What can a manager do to make effective decisions in today’s fast-moving world?