Chapter 07 Individual and Group Decision Making: How Managers Make
Things Happen Answer Key
True / False Questions
1.
Sue tends to have strong beliefs. When confronted with decision making, she tends to make
her decisions based on her beliefs, even if evidence shows those beliefs are wrong. This is
known as the past-beliefs perception.
2.
Tom is in the marketing department with Home Made Soups. He was given the responsibility
of determining if customers like the new spicy chicken noodle soup. It is believed that over
4,000 customers purchased the new soup last month. If Tom surveys 25 of those customers,
this is an appropriate sample size for decision making.
3.
Decision making is the process of identifying and choosing alternative courses of action.
4.
Psychologist Daniel Kahneman describes two kinds of thinking: System 1, which is intuitive
and largely unconscious, and System 2, which is analytical and conscious.
5.
Some engineers design electronic products, such as DVD remote controls, with so many
buttons that these devices are ultimately useful only to other engineers. As one writer noted,
“People who design products are experts cursed by their knowledge, and they can’t imagine
what it’s like to be as ignorant as the rest of us.” This is known as the curse of knowledge.
6.
The rational model of decision making explains how managers should make decisions.
7.
The rational model of decision making is also called the logical model.
8.
The steps in the rational decision-making process are (1) identify the problem or opportunity,
(2) think up alternative solutions, (3) evaluate the solution chosen, (4) evaluate alternatives
and select a solution, and (5) implement the solution chosen.
9.
As a manager evaluates alternative solutions to a problem, that is the time to identify
opportunities.
10.
When confronted with a problem, the decision to be made is how to make improvements. This
is known as diagnosis or analyzing the underlying causes.
11.
The basic reason female investors make trades much less often than men is that women do a
lot more research, and tend to base their investment decisions on considerations other than
just numbers.
12.
When evaluating the alternatives of a decision, people need to base decisions strictly on cost,
quality and feasibility.
13.
Doug, the CEO of an auto dealership, has to significantly reduce the hours of many
employees due to the high costs from the Affordable Care Act. Doug knows that he is typically
successful in implementing the correct alternative in decisions, even with sensitive issues like
this, because he carefully plans how he will execute decisions and he is sensitive toward
those who are affected. Careful planning and being sensitive typically will result in successful
implementation.
14.
Dwayne, the sales manager of IT Sales, mentioned to his assistant, Marla, “I just got off the
phone with one of our best customers and he told me about quite a few customer service
issues, and I’m glad he took the time to call. You know most people will not call companies
when they have a problem; they just tell friends, family, and coworkers.” This statement about
who customers call when complaining about faulty customer service is accurate.
15.
When the alternative chosen in a decision does not look like it is working, do not change
things. You should always give it more time to work correctly.
16.
The rational model assumes that managers have complete information, and they are able to
make an unemotional analysis, and make the best decision for the organization.
17.
Nonrational models of decision making assume that managers have complete information and
are able to make the best decision for the organization, describing how managers ought to
make decisions. It doesn’t describe how managers actually make decisions.
18.
Gretchen, the office manager in a small company, was told by her boss to start shopping for a
new office copier, in addition to her many other duties. Although she spent some time
shopping for the copier, she was limited by the lack of time, how much she has to spend, and
the complexity of choices to select from. This is an example of an individual limited by
bounded rationality.
19.
With satisficing, managers look for alternatives until they find one that is satisfactory, not
optimal.
20.
Satisficing is a weak method of decision making because the advantages gained by just
making a quick decision to have an answer and not delaying a decision until all information is
in and all alternatives are weighed, usually results in major problems.
21.
Going with your gut, or intuition, is using conscious thoughts or logical inference to make a
choice.
22.
A benefit of the intuition model for making decisions is that it can slow decisions, which is
useful when decisions involve many details.
23.
Companies that use evidence-based management seldom defeat their competition.
24.
Steve, an owner of IT Services, realized that because customers have so many low– or no-
cost options available for training, offering training for Microsoft applications was not in huge
demand. Therefore, Steve and his partner made a decision to change the original direction of
the company and focus more on computer sales and repair. Steve is an example of how
managers need to think and act as if their organization is an unfinished prototype that won’t be
ruined by dangerous new ideas or is impossible to change.
25.
Evidence-based management should not be used by the upper management.
26.
Stanford professor Jeffrey Pfeffer suggests companies incur big costs when they cut their
labor forces, and should turn to evidence-based decision making for accurate guidance.
27.
In business, the use of time-series forecasts, which predict future data based on patterns of
historical data, is an application of evidence-based management.
28.
Microsoft studies correlations between its successful workers and the schools and companies
they arrived from, an application of business analytics.
29.
People with a low tolerance for ambiguity and an orientation toward task and technical
concerns in making decisions have an analytical decision-making style.
30.
Greg is the general manager in a fast-paced restaurant, and when working with his
employees, he emphasizes speed and results. Sue, his assistant manager, told Greg’s boss
that “I like Greg most of the time, but he is very autocratic and controlling.” Greg utilizes a
behavioral style of management.
31.
Anne, the department manager, has a good working relationship with her employees,
believing in an open door policy, and she encourages the open exchange of opinions in her
department. Anne utilizes the directive style of management.
32.
Research shows that most managers have characteristics that fall into one dominant decision–
making style, and this varies little across occupations, job level, and countries.
33.
There is usually one best decision-making style that applies to any situation.
34.
When an individual is aware of his or her decision-making style, this assists the individual in
identifying his or her strengths and weaknesses as a decision maker, facilitating the potential
for self-improvement.
35.
An ethics officer is someone trained about matters of ethics in the society, particularly about
resolving issues with competition.
36.
A decision tree, which is the hierarchy or chain of command used by many organizations when
discussing alternatives, must be followed when getting decisions approved.
37.
Harvard Business School Professor Constance Bagley suggests that organizations should
never use a decision tree to help with ethical decisions.
38.
Last year, Paul’s home of 50 years, which contained so many family, school, and career
memories, was destroyed in a fire. It is normal for this event to have a negative impact on
Paul’s life and decision making abilities for at least three years.
39.
When faced with a decision, Myles asks himself “Why not just take the easiest way out?” This
approach is known as relaxed change, and is a form of evidence-based decision making.
40.
David, the IT department chair at a community college, has been having problems with his
students not coming to class, so their grades are suffering. If David were to use defensive
avoidance to respond to this situation, he could respond with procrastinating, passing the
buck, or denying the risk of any negative consequences.
41.
In deciding to decide, a manager agrees that he or she will first research the problem before
taking any further steps.
42.
When Donald, a management trainee, asked Rebecca, the HR manager, how she makes the
decision on who to hire, Rebecca responded with several simple steps that she called “rules of
thumb.” Rebecca’s decision-making process, or rules of thumb, is a strategy known as
heuristics.
43.
The confirmation bias is when people seek information to support their point of view and
discount data that do not.
44.
With an escalation of commitment bias, decision makers increase their commitment to a
project despite negative information about it.
45.
Research has found that groups tend to make higher-quality decisions than when any
individual acts alone.
46.
Utilizing a group to make a decision has the advantages of having a greater pool of
knowledge, gaining different perspectives, providing intellectual stimulation, having a better
understanding of decision rationale, and having a deeper commitment to the decision.
47.
Two disadvantages that can occur with group-aided decision making is that either a few
people dominate or satisficing occurs.
48.
Groupthink occurs when group members strive to disagree simply due to issues related to
either not believing in the group leader or personal differences.
Topic: Groupthink
49.
When two customers hit their heads on a new store display, Jim, the manager, decides to just
take it down instead of bringing up the issue at the next district sales meeting. This way, Jim
avoids the negative aspects involved with group decision making.
50.
The larger and more diverse the group, the higher the quality of the decision.
51.
Says one expert in decision making, consensus is reached “when all members can say they
either agree with the decision or had their ‘day in court” and were unable to convince the
others of their viewpoint. In the final analysis, everyone agrees to support the outcome.”
52.
One management expert advises that to achieve a consensus, groups should use active
listening skills, involving as many members as possible.
53.
A management expert suggests that to reach a consensus, groups should try to achieve
consensus by putting questions to a vote.
54.
With groups, a consensus is not usually required with decisions.
55.
During the Apollo 13 emergency, at various times during that crisis the flight commander
brought Mission Control workers and experts together to generate multiple ideas and
alternatives for solving the problems. This was an example of brainstorming.
Multiple Choice Questions
56.
When confronted with a choice, people with strong prior beliefs tend to make their decisions
based on their beliefs even if their beliefs are false. This is known as ____.
57.
A choice made from among available alternatives is a ____.
58.
George, a longtime hotel manager, was meeting with Sally, a new manager, and telling her
about a recent decision related to whether or not to fire a front desk employee who has had
customer service issues. George discussed the four stages of the decision process. He said, “I
first identified the problem, and then, I gathered alternative solutions. I then evaluated each
choice and selected a solution. I then implemented my decision to add training. Finally, I
followed up with an evaluation of what I set in place.” With this decision, George is using the
______.
59.
The model of decision making that explains how managers should make decisions, assuming
managers will make logical decisions that will be the optimum in furthering the organization’s
best interests, is known as the ____.