1. The process of choosing one alternative from among a set of alternatives is called _____.
a.
rational ignorance
b.
altruism
c.
bounded rationality
d.
decision making
e.
groupthink
2. Which of the following statements is true about the decision-making process?
a.
It exclusively applies to problem situations.
b.
It requires that the nature of a particular situation be defined.
c.
It seldom applies to situations that are positive.
d.
It typically involves only one individual and seldom applies to groups.
e.
It results in the generation of only one alternative.
Moderate
p. 100
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Bloom’s: Comprehension
Digital Story: Connect
3. Ryan, the production manager at the Tan Shoes Company, chose the cheapest leather-cutting machine from a set of five
machines from different manufacturers. Ryan was engaged in _____.
a.
decision making
b.
optimizing
c.
rationalizing
d.
brainstorming
e.
social loafing
a
Decision making is the act of choosing one alternative from among a set of alternatives.
Easy
p. 100
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Bloom’s: Knowledge
Digital Story: Engage
4. Which of the following statements is true about the process of decision making?
a.
b.
c.
d.
e.
Moderate
p. 100
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Connect
5. A(n) _____ decision is a decision that is relatively structured or recurs with some frequency (or both).
a.
custom-made
b.
novel
c.
unstructured
d.
intuitive
e.
programmed
e
Easy
p. 101
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
alternative from among a set of alternatives.
Challenging
p. 100
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Perform
6. Decisions regarding standard organizational transactions are most likely to be _____ decisions.
a.
unstructured
b.
infrequent
c.
programmed
d.
intuitive
e.
irrational
c
organizational transactions are programmed decisions.
Easy
p. 101
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Engage
7. Nutrimax Inc. sponsors a football championship in Oriel in August every year. The championship is organized by the
Oriel Football Association (OFA) to encourage new talent, and Nutrimax bears all the expenses incurred during the
championship. The Oriel regional manager of Nutrimax sends across a check to the OFA in July of each year in order for
them to prepare for the championship. The regional manager’s decision about when to send the check to OFA is a(n)
_____ decision.
a.
programmed decision
b.
unstructured decision
c.
intuitive decision
d.
contingency decision
e.
satisficing decision
a
Challenging
p. 101
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Perform
8. When the inventory manager of Cuisine Royale, a restaurant, decides to order a batch of brown bread because the stock
is almost empty, she’s making a(n) _____ decision.
Digital Story: Engage
a.
programmed
b.
unstructured
c.
intuitive
d.
irrational
e.
strategic
9. A nonprogrammed decision:
a.
is relatively more frequent that programmed decisions.
b.
is highly structured.
c.
requires more time and resources than programmed decisions.
d.
is typically regarding daily organizational transactions.
e.
typically applies to basic operating systems and procedures.
c
situation from all perspectives.
Easy
p. 101
LO: MGMT.GRIF.16. 4-1 – 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Engage
10. Decisions made by top managers involving strategy, such as signing mergers or making acquisitions, are examples of
_____ decisions.
a.
frequent
b.
nonprogrammed
c.
structured
d.
operational
e.
programmed
a
Challenging
p. 101
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Bloom’s: Application
Digital Story: Perform
11. Programmed decisions:
a.
can only be made by the top management.
b.
generally deal with long-term matters such as expanding business in another country.
c.
lack structure.
d.
recur more frequently than nonprogrammed decisions.
e.
are typically made by shareholders.
Programmed decisions are relatively structured or recur with some frequency (or both).
Moderate
p. 101
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Connect
12. Venus Electronics Inc. decided to explore markets in different countries. It has now set up a branch in Selenasia. This
is an example of a(n) _____ decision.
a.
structured
b.
nonprogrammed
c.
standard
d.
programmed
e.
operational
Challenging
p. 101
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Moderate
p. 101
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Connect
13. Which of the following illustrates a programmed decision?
a.
A cafe owner buys a hundred cartons of coffee every month.
b.
A fast food chain decides to enter into a new franchise agreement.
c.
A content development company decides to sue a competitor for copyright infringement.
d.
A health drink manufacturing company decides to launch a new product in the market.
e.
An IT company decides to lay off a hundred employees.
a
(or both).
Challenging
p. 101
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Perform
14. Which of the following statements is true in the context of decision making under a state of risk?
a.
The decision maker clearly knows the alternatives.
b.
The decision maker uses probability estimates to assess alternatives.
c.
The decision maker is least likely to choose a bad alternative.
d.
The decision maker has an accurate understanding of payoffs of all the alternatives.
e.
The decision maker seldom considers his or her past experience while making the decision.
Moderate
p. 102
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Bloom’s: Comprehension
Digital Story: Connect
15. In decision making, a condition of _____ exists when a decision maker knows what the alternatives are and what
conditions are associated with each alternative.
a.
risk
The Nature of Decision Making
Bloom’s: Application
Digital Story: Perform
b.
uncertainty
c.
certainty
d.
imperfect information
e.
ambivalence
16. When Irene wants to buy new laptops for her marketing executives and she has to pick them up from a single brand
that is preinstalled with the marketing software that her company needs, she’s making a decision under a condition of
_____.
a.
imperfect information
b.
ambiguity
c.
risk
d.
certainty
e.
unclear alternatives
Challenging
p. 102
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Perform
17. When decision making is under a condition of uncertainty:
a.
the alternatives are not known.
b.
no ambiguity is involved.
c.
errors are least likely to occur.
d.
the consequences of solutions are known.
e.
the decision situation is simple.
a
c
Easy
p. 102
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Engage
18. Which of the following statements is true in the context of decision making under a condition of uncertainty?
a.
A decision maker greatly relies on intuition, judgment, and experience.
b.
A decision maker clearly knows all the risks associated with alternatives to a problem.
c.
A decision maker puts in least effort and uses a pre-determined structure for decision making.
d.
A decision maker is able to estimate the payoffs and risks associated with alternatives.
e.
A decision maker identifies only two alternatives to the decision situation.
a
always play major roles in the decision-making process under conditions of uncertainty.
Moderate
p. 103
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Connect
19. Professor Campbell needs to recommend a biology textbook for his senior class. Only two well-known publishers,
Educate and WordTree, publish biology textbooks in the state, and both publishers are known for the clarity and
extensiveness of their content. When Campbell chooses a textbook from one of the two publishers, he is making a
decision in a state of _____.
a.
certainty
b.
irrationality
c.
risk
d.
imperfect information
e.
ambiguity
a
Moderate
p. 103
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Connect
20. Managers are most prone to error in a condition of _____.
a.
certainty
b.
uncertainty
c.
risk
d.
rationality
e.
perfect information
most prone to error.
Easy
p. 103
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Engage
21. When making a decision under a condition of risk:
a.
the decision maker is relatively more likely to make errors.
b.
the decision maker clearly knows the consequences of alternatives.
c.
the decision maker needs to put in the least amount of time and resources.
d.
the decision maker relies exclusively on information and not on experience or intuition.
e.
the decision maker clearly knows the payoffs associated with the alternatives.
a
Moderate
p. 102
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Challenging
p. 102
MGMT.GRIF.16. 4-1 – LO: 4-1
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Individual Dynamics
The Nature of Decision Making
Digital Story: Perform
22. The _____ decision model is a prescriptive approach that tells managers how they should make decisions; it assumes
that managers are logical and rational and that their decisions will be in the organization’s best interests.
a.
behavioral
b.
classical
c.
administrative
d.
bureaucratic
e.
probabilistic
Easy
p. 104
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Knowledge
Digital Story: Engage
23. According to the classical decision model, managers:
a.
evaluate all aspects of a decision situation logically and rationally.
b.
are inefficient at eliminating uncertainty.
c.
never have adequate information about decision situations.
d.
never make errors even under uncertain conditions.
e.
can never assess alternatives appropriately.
a
Moderate
p. 104
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Connect
24. The first step in rational decision making is _____.
a.
identifying alternatives
b.
implementing an alternative
c.
selecting the best alternative
Digital Story: Connect
d.
recognizing and defining the decision situation
e.
evaluating alternatives
25. Tina works at a coffee shop. One of the four coffee machines at the coffee shop has not been functioning well; the
same machine has broken down thrice in two weeks. Now, Tina is looking at the machine and trying to decide if the
problem is a bad machine or if people are just using the machine wrong. Tina is currently _____.
a.
implementing an alternative
b.
evaluating the results of a chosen alternative
c.
consulting with other decision makers
d.
recognizing and defining the decision situation
e.
eliminating feasible alternatives
rational decision making is recognizing that a decision is necessary.
p. 105
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Application
Digital Story: Perform
26. Libra Inc. chose to settle a lawsuit for $75 million. In the context of the rational decision-making model, when
executives of the company begin to compare the cost of the settlement to those of other financial institutions, they will be
_____.
a.
developing a set of rational alternatives
b.
evaluating the possible alternatives
c.
consulting with other decision makers
d.
recognizing and defining the decision situation
e.
following up and evaluating the results of a chosen alternative
p. 105
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Engage
27. After being laid off by their companies, many individuals recognized three options they could choose from before they
could secure new jobs: to spend less, to use savings, or to use credit. In the context of the steps involved in the rational
decision-making model, they were _____.
a.
monitoring implementation
b.
selecting the best alternative
c.
identifying alternatives
d.
implementing alternatives
e.
evaluating decision effectiveness
p. 105
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Application
Digital Story: Perform
28. In general, while identifying alternatives, the more important the decision, _____.
a.
the more alternatives should be generated
b.
the lesser the time needed to make the decision
c.
the lesser the chances of managers making the right decision
d.
the more the tendency of managers to ignore intuitions
e.
the lesser the chances of managers using expert opinion to make the decision
p. 109
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Application
Digital Story: Perform
29. Christine, a teacher, notices that the performances of her students at class tests have been declining. While attempting
to find a solution to the problem, she thinks of three choices: rewarding students who get good grades, holding class tests
more often, or punishing students when they perform poorly in the tests. Which step of the rational decision-making
process is Christine in?
a.
Identifying alternatives
b.
Implementing an alternative
c.
Defining the decision situation
d.
Selecting the best alternative
e.
Evaluating the decision effectiveness
p. 105
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Perform
30. The rational decision-making process:
a.
begins when a decision maker chooses the best solution.
b.
involves the evaluation of different alternatives.
c.
ends when alternatives have been identified.
d.
does not include the implementation of an alternative.
e.
ends when a decision situation has been defined.
Evaluating alternatives is the third step in the rational decision-making process.
p. 107
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
p. 105
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Engage
31. Delta Corp. introduced a new set of policies, giving its employees more flexibility in work timings. This decision was
made in response to complaints from employees about fatigue. Which step of the rational decision-making process is
illustrated in the scenario?
a.
Defining the situation
b.
Evaluating the possible alternatives
c.
Selecting the alternative
d.
Implementing an alternative
e.
Evaluating decision effectiveness
p. 108
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Application
Digital Story: Perform
32. When the prices of oil came down, the demand for sport utility vehicles (SUVs) increased. Automakers chose to
increase production of full-size SUVs as the profit from large vehicles is greater than that from small vehicles. Which step
in the rational decision-making model is illustrated in the scenario?
a.
Developing a set of rational alternatives
b.
Evaluating the possible alternatives
c.
Selecting the best alternative and implementing it
d.
Recognizing and defining the decision situation
e.
Evaluating decision effectiveness
p. 108
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Application
Digital Story: Perform
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Connect
33. In which step of the rational decision-making model does the decision maker test the feasibility and satisfactoriness of
alternatives before choosing one?
a.
Identifying alternatives
b.
Implementing the chosen alternative
c.
Defining the situation
d.
Following up the implementation
e.
Evaluating alternatives
34. Peter was looking for alternatives to double his plant’s production capacity, and he considered acquiring the
production plant of a rival company. The engineers in Peter’s company advised him against it because acquiring the new
plant would only increase their company’s production by 15 percent. Therefore, Peter’s idea failed the test for _____ in the
context of the rational decision-making process.
a.
feasibility
b.
satisfactoriness
c.
bounded rationality
d.
satisficing
e.
escalation of commitment
Challenging
p. 107
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
35. In the rational decision-making model, once the alternatives have been evaluated, the next step is to _____.
a.
select the best alternative
b.
implement the chosen alternative
e
Moderate
p. 107
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Comprehension
Digital Story: Connect
c.
evaluate the results of the chosen alternative
d.
identify the available alternatives
e.
define the decision situation
36. An alternative should be eliminated during evaluation if:
a.
it is supported by the most number of individuals.
b.
it involves minimal costs.
c.
it is found to have passed the satisfactoriness test.
d.
it has several unaffordable consequences.
e.
it requires minimal resources.
p. 108
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Engage
37. Which of the following statements is true in the context of selecting the best alternative?
a.
The decision maker can only select one best alternative.
b.
The decision maker can develop subjective estimates and weights for choosing an alternative.
c.
The decision maker must choose the alternative that involves the most costs.
d.
The decision maker must only stick to completely rational, mathematical analysis while selecting an
alternative.
e.
The decision maker can choose an alternative that does not pass the consequence, satisfactoriness, and
feasibility test.
p. 108
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Knowledge
Digital Story: Engage
38. In the rational decision-making process, optimization means:
a.
identifying obvious, standard alternatives.
b.
choosing the alternative with the best overall expected outcomes.
c.
gathering the most complete information before making the decision.
d.
developing the maximum number of creative, innovative alternatives.
e.
choosing an alternative that is feasible even if it is not satisfactory or has undesirable consequences.
p. 108
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Connect
39. The final step in the decision-making process requires that managers _____.
a.
evaluate the results of the chosen alternative
b.
select the best alternative
c.
implement the chosen alternative
d.
identify the available alternatives
e.
define the decision situation
p. 109
p. 108
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Comprehension
Digital Story: Connect
40. A plant manager had taken a few measures to try to reduce worker turnover. For four months he monitored the
implementation of the measures. He now finds that the turnover rate is reduced by 10 percent. Which step of the rational
decision-making model is illustrated in the scenario?
a.
Evaluating the results
b.
Identifying alternatives
c.
Recognizing the decision situation
d.
Selecting the best alternative
e.
Developing a set of alternatives
p. 109
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Application
Digital Story: Perform
41. _____ is one of the factors that makes an alternative infeasible.
a.
Decrease in expenditure
b.
Increase in production capacity
c.
Low costs
d.
Increased satisfactoriness
e.
Legal barriers
p. 107
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Bloom’s: Comprehension
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Engage
42. According to the evidence-based management approach, managers must _____.
a.
discourage employees from telling the unpleasant truth
b.
be committed to fact-based decision making
c.
avoid experimentation
d.
completely rely on the recommendations made by others
e.
base decisions on untested but strongly held beliefs
Easy
p. 110
MGMT.GRIF.16. 4-2 – LO: 4-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Rational Perspectives on Decision Making
Digital Story: Engage
43. Which of the following statements is true about the administrative model of decision making?
a.
It suggests that most managers make decisions rationally and logically.
b.
It suggests that decisions that are based on instincts are better than the ones based on logic.
c.
It suggests that managers tend to satisfice when making decisions.
d.
It suggests that managers have the most accurate information about decision situations.
e.
It suggests that managers should not make decisions based on mathematical analysis.
c
Moderate
p. 111
MGMT.GRIF.16. 4-3 – LO: 4-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Individual Dynamics
Behavioral Aspects of Decision Making
Digital Story: Connect
44. Political forces, intuition and escalation of commitment, risk propensity, and ethics constitute the _____ aspects of
decision making.
a.
rational
b.
administrative
c.
classical
Digital Story: Connect
d.
behavioral
e.
sequential
45. _____ was one of the first experts to develop the administrative model of decision making.
a.
Elton Mayo
b.
George Bennett
c.
Martin Johnson
d.
Jack Welch
e.
Herbert Simon
e
Easy
p. 111
MGMT.GRIF.16. 4-3 – LO: 4-3
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Behavioral Aspects of Decision Making
Bloom’s: Knowledge
Digital Story: Engage
46. The administrative model of decision making argues that decision makers _____ while making decisions.
a.
use complete and perfect information
b.
do not use intuition while making decisions
c.
are constrained by bounded rationality
d.
completely avoid escalation of commitment
e.
use only instincts
c
Easy
p. 111
MGMT.GRIF.16. 4-3 – LO: 4-3
United States – BUSPROG: Analytic
United States – AK – DISC: Individual Dynamics
Behavioral Aspects of Decision Making
Bloom’s: Knowledge
Digital Story: Engage