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Date:
Chapter 08—Decision Making and Problem Solving
True / False
1. Decision making is choosing one alternative from among several.
a.
True
b.
False
2. Nonprogrammed decisions require problem solving that identifies answers to unique questions or issues.
a.
True
b.
False
3. Programmed decisions are common at the higher levels of the organization.
a.
True
b.
False
4. Decisions in organizations can be classified according to their frequency and information conditions.
a.
True
b.
False
5. Decision rules are used to make programmed decisions.
a.
True
b.
False
6. Susan's recent decision about which company her conglomerate should buy was a programmed decision.
a.
True
b.
False
7. A nonprogrammed decision usually recurs often enough for decision rules to be developed.
a.
True
b.
False
8. The decision maker who lacks enough information to estimate the probability of outcomes faces a condition of
certainty.
a.
True
b.
False
9. The rational decision-making process begins with the identification of a problem.
a.
True
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Chapter 08—Decision Making and Problem Solving
b.
False
10. The rational decision-making process assumes that managers follow an unsystematic, random process when
evaluating alternatives.
a.
True
b.
False
11. The behavioral model focuses on human behaviors and tendencies when evaluating the decision-making process.
a.
True
b.
False
12. Post-decision dissonance is doubt about a choice already made.
a.
True
b.
False
13. The final stage of the rational decision-making process involves implementing the decision.
a.
True
b.
False
14. Contingency plans are alternative actions that can be taken if the primary course of action is disrupted or rendered
inappropriate.
a.
True
b.
False
15. A crucial assumption of the behavioral approach to decision-making is that decision makers operate with bounded
rationality rather than with the perfect rationality assumed by the rational approach.
a.
True
b.
False
16. Suboptimizing involves selecting the first acceptable solution that meets minimal requirements.
a.
True
b.
False
17. The practical approach combines elements of both the rational and behavioral approaches.
a.
True
b.
False
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Chapter 08—Decision Making and Problem Solving
18. Insight represents a period of less intense conscious concentration during which knowledge and ideas develop.
a.
True
b.
False
19. Verification is the final step in the creative process.
a.
True
b.
False
20. The creative process generally involves seven different steps that have to occur before a creative idea can be
generated.
a.
True
b.
False
21. The Delphi technique is a method to systematically gather the judgments of experts who work closely together at a
common worksite.
a.
True
b.
False
22. Group polarization is the tendency for group members to converge on a common decision outcome or solution.
a.
True
b.
False
23. An illusion of invulnerability and stereotyped views of "enemy" leaders are symptoms of groupthink.
a.
True
b.
False
24. In problem-solving tasks, groups usually develop more and better solutions than do individuals.
a.
True
b.
False
25. In the nominal group technique, group members share their ideas with each other and then vote on them in private.
a.
True
b.
False
26. The administrative model of decision making does not attempt to prescribe how managers should make decisions.
a.
True
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Chapter 08—Decision Making and Problem Solving
b.
False
Multiple Choice
27. Decision making is
a.
finding the answer to a question.
b.
choosing one alternative from among several.
c.
staffing positions within the organizational hierarchy.
d.
motivating employees to pursue organizational goals.
e.
fixing problems that arise in the operations of the business.
28. A decision maker's actions should be guided by
a.
personal opinions.
b.
a goal.
c.
an operating budget.
d.
interpersonal relationships.
e.
a code of honor.
29. Which of the following statements about programmed decisions is FALSE?
a.
Information is readily available.
b.
Specific methods for handling them exist.
c.
They are highly structured.
d.
Judgment and creativity are the basis of solution.
e.
Goals are clear and well known.
30. Which of the following statements about nonprogrammed decisions is FALSE?
a.
The decisions are poorly structured.
b.
The problem situation is nonroutine.
c.
The consequences of decision making are far reaching.
d.
The decisions are rarely a responsibility of top management.
e.
Goals are often vague.
31. Decisions that recur infrequently and have no decision rules are ____ decisions.
a.
certain
b.
risk
c.
programmed
d.
nonprogrammed
e.
uncertain
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Chapter 08—Decision Making and Problem Solving
32. Nonprogrammed decisions are usually made by
a.
all employees within an organization.
b.
union workers.
c.
upper management.
d.
middle management.
e.
lower management.
33. One basis for making programmed decisions is
a.
a lack of information.
b.
a set of decision rules.
c.
creativity.
d.
movement.
e.
group formation.
34. If a customer voices a complaint about food taste and temperature, certain restaurants always offer a complimentary
meal. This represents
a.
a standard decision.
b.
a decision rule.
c.
a nonprogrammed decision.
d.
experience.
e.
cognitive dissonance.
35. Nonprogrammed decisions are most common at what level of the organization?
a.
Lower
b.
Top
c.
Managerial
d.
Subordinate
e.
Middle
36. ____ decisions tend to involve situations that occur often in a company.
a.
Nonprogrammed
b.
Procedural
c.
Repetitive
d.
Major
e.
Programmed
37. If a Human Resources manager can estimate the probability that a certain percentage of employees will take advantage
of a proposed benefit plan, the manager is operating under a condition of
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Chapter 08—Decision Making and Problem Solving
a.
certainty.
b.
estimation.
c.
risk.
d.
uncertainty.
e.
rationalization.
38. What information condition lies between certainty and uncertainty in making decisions?
a.
Risk
b.
Coin tossing
c.
Problem solving
d.
Decision rules
e.
Guesswork
39. The rational decision-making approach assumes decision makers
a.
have complete information.
b.
are objective.
c.
are systematic in their approach to decisions.
d.
work in an organization that encourages logical choices.
e.
all of these
40. According to the rational decision-making approach, what is the second step of the decision-making process?
a.
Identify the problem
b.
Generate alternatives
c.
Evaluate alternatives
d.
State the situational goal
e.
Determine the decision type
41. Which of the following represents the step of the rational decision-making approach in which the outcomes of the
decision are compared to the desired goal?
a.
Analyze the decision
b.
Control: measure and adjust
c.
Determine the goal
d.
Collect data
e.
Analyze the situation
42. The decision-making conditions of certainty, uncertainty, and risk are relevant while the decision maker is
a.
stating the situational goal.
b.
identifying the problem.
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c.
evaluating alternatives.
d.
generating alternatives.
e.
determining the decision type.
43. Jim is using the rational decision-making process to decide a course of action for the marketing department. While
selecting a preferred alternative, a fellow worker asks, "What if something unexpected happens during the implementation
of the alternative we have selected?" This type of question is an example of ____.
a.
implementing the plan.
b.
developing marketing strategies.
c.
planning for contingencies.
d.
negative thinking.
e.
groupthink.
44. Contingency plans are a part of what phase of the decision-making process?
a.
Stating the goal
b.
Evaluating alternatives
c.
Choosing an alternative
d.
Implementation
e.
Alternative generation
45. When ______________ arises, a decision maker questions the decision made and searches for information to bolster
it.
a.
post-decision uncertainty
b.
conflict reduction
c.
rationalization bias
d.
post-decision dissonance
e.
positive reinforcement
46. According to the rational decision-making approach, evaluate the alternatives
a.
puts the decision into action.
b.
involves assessing all possible alternatives.
c.
involves selecting an alternative with the highest payoff.
d.
is the most crucial step.
e.
diagnoses the problem.
47. The last step in the rational decision-making process is
a.
Create a contingency plan
b.
Determine the type of decision
c.
Evaluate alternatives
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Chapter 08—Decision Making and Problem Solving
d.
Control: Measure and Adjust
e.
Implement the plan
48. The behavioral approach to decision-making is characterized by all of the following EXCEPT
a.
it uses procedures
b.
it uses rules of thumb
c.
it uses suboptimizing
d.
it uses logic
e.
it uses satisficing
49. ____ refers to the inability of human beings to process an unlimited amount of information, causing most decisions to
be made in a partially irrational manner.
a.
Post-decision dissonance
b.
Groupthink block
c.
Satisficing
d.
Bounded rationality
e.
Suboptimizing
50. When ____, the decision maker knowingly accepts less than the best possible outcome.
a.
optimizing
b.
suboptimizing
c.
compromising
d.
satisficing
e.
narrowing
51. The sales department at a local company determines that Product A will moderately boost sales and have a shorter
production schedule, so it is decided that this product will be manufactured and sold without considering other options. In
choosing this product, the sales department is
a.
controlling.
b.
engaged in bounded rationality.
c.
suboptimizing.
d.
satisficing.
e.
using procedures and rules of thumb.
52. An innate belief about something without conscious consideration is called
a.
escalation of commitment.
b.
coalition.
c.
intuition.
d.
groupthink.
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e.
self-reaction.
53. Jim purchases stock in a public company and refuses to sell it even after repeated drops in the original price he paid
for the stock. Jim has decided to purchase more of the stock in anticipation of making a profit, and has decided to keep the
stock in the face of increasing losses. Jim is suffering from
a.
organizational delusion.
b.
problem misidentification.
c.
escalation of commitment.
d.
groupthink.
e.
suboptimizing.
54. Managers who are cautious and try to adhere to the rational decision-making model
a.
are more likely to make mistakes.
b.
frequently make decisions that lead to big losses.
c.
have a lower risk propensity than other managers.
d.
frequently make decisions that lead to big successes.
e.
suffer from bounded rationality.
55. ____ is the extent to which a decision maker is willing to gamble when making a decision.
a.
Individual ethics
b.
Risk propensity
c.
Individual stressors
d.
Organizational culture
e.
Leadership style
56. A person's beliefs about what constitutes right and wrong behavior are called
a.
hypervigilance.
b.
ethics.
c.
self-reactions.
d.
rationalizations.
e.
escalations of commitment.
57. Which of the following statements about ethical dilemmas is FALSE?
a.
They may center on direct personal gain.
b.
They may center on indirect personal gain.
c.
They may center on risk propensity.
d.
They may center on simple personal preferences.
e.
All of these are true
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Chapter 08—Decision Making and Problem Solving
58. According to research, the common attributes of creative individuals include which of the following?
a.
Being forced to work at a very young age
b.
Living in a highly developed country
c.
Changing basic personality attributes as a teenager
d.
Being raised in an environment that nurtured creativity
e.
Having fewer brothers and sisters
59. Being able to see differences between situations, phenomena, or events is a creative ability called ____ thinking.
a.
referent
b.
convergent
c.
divergent
d.
emergent
e.
parallel
60. The creative process normally begins with a period of ____.
a.
Verification
b.
Insight
c.
Incubation
d.
Preparation
e.
Application
61. While driving home from a hard day at work, Susan finally realizes the solution to the problem she had been having
with a certain customer. Susan just reached which stage of the creative process?
a.
Instigation
b.
Insight
c.
Incubation
d.
Verification
e.
Preparation
62. One important method for enhancing creativity is to make it a part of the organization's ____.
a.
standard operating procedures.
b.
decision-making processes.
c.
culture.
d.
strategic plans.
e.
none of the above.
63. Which of the following includes conditions conducive to groupthink?
a.
Group cohesiveness, leader's promotion of personal preferences, insulation from expert opinions
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Chapter 08—Decision Making and Problem Solving
b.
Group cohesiveness, members' promotion of personal preferences, best decision is goal
c.
Group cohesiveness, leader promotion of personal preferences, critical thinking urged
d.
Members' promotion of personal preferences, best decision is goal, critical thinking urged
e.
Group cohesiveness, member's promotion of personal preferences, insulation from expert opinions
64. All of the following are symptoms of groupthink EXCEPT
a.
an illusion of invulnerability.
b.
collective efforts to rationalize or discount warnings.
c.
a lack of idea promotion from the group leader.
d.
stereotyped views of enemy leaders.
e.
direct pressure on members who present contrary views.
65. All of the following are features of group discussion that contribute to group polarization EXCEPT
a.
group members could take an extreme view of an opinion
b.
task uncertainty can be impacted by the decision
c.
persuasive arguments can encourage polarization
d.
members may feel they are not individually responsible
e.
members will accept a more radical decision from their own
66. Which of the following statements about brainstorming is FALSE?
a.
It's used in the idea generation phase of decision making.
b.
Members present ideas and clarify them.
c.
Ideas are recorded in secret.
d.
Ideas are recorded on a flip chart.
e.
It does not provide resolution to the problem.
67. All of the following are used in the nominal group technique of decision-making EXCEPT
a.
individuals convene to address an issue.
b.
the issue is described to the group.
c.
each proposed idea must be wholly original.
d.
initially, no discussion among the members is permitted.
e.
members take turns reporting their ideas.
68. The Delphi technique is designed for use by groups
a.
that are very large
b.
that are very small.
c.
that do not meet face-to-face.
d.
that have suffered from groupthink in the past.
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Chapter 08—Decision Making and Problem Solving
e.
that are familiar with the rules of brainstorming.
69. According to the rational decision-making approach, what is the fifth step of the decision-making process?
a.
Identify the problem
b.
Generate alternatives
c.
Evaluate alternatives
d.
State the situational goal
e.
Determine the decision type
70. According to the rational decision-making approach, what is the fourth step of the decision-making process?
a.
Identify the problem
b.
Generate alternatives
c.
Evaluate alternatives
d.
State the situational goal
e.
Determine the decision type
71. According to the rational decision-making approach, what is the third step of the decision-making process?
a.
Identify the problem
b.
Generate alternatives
c.
Evaluate alternatives
d.
State the situational goal
e.
Determine the decision type
72. According to the rational decision-making approach, what is the first step of the decision-making process?
a.
Identify the problem
b.
Generate alternatives
c.
Evaluate alternatives
d.
State the situational goal
e.
Determine the decision type
73. Being able to see similarities between situations, phenomena, or events is a creative ability called ____ thinking.
a.
referent
b.
convergent
c.
divergent
d.
emergent
e.
parallel
74. The second step of the creative process is __________.
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Chapter 08—Decision Making and Problem Solving
a.
verification
b.
insight
c.
incubation
d.
preparation
e.
application
75. The third step of the creative process is ___________.
a.
verification
b.
insight
c.
incubation
d.
preparation
e.
application
76. The fourth step of the creative process is ___________.
a.
Verification
b.
Insight
c.
Incubation
d.
Preparation
e.
Application
77. According to prospect theory, people are more motivated by
a.
the threat of losing something than by the prospect of gaining something.
b.
the prospect of gaining something than by the threat of losing something.
c.
internal values than by external rewards.
d.
external rewards than by internal values.
e.
none of these
78. In ________, the decision maker examines alternatives only until a solution that meets minimal requirements is found.
a.
optimizing
b.
suboptimizing
c.
compromising
d.
satisficing
e.
narrowing
79. A(n) _______ is an informal alliance of individuals or groups formed to achieve a common goal.
a.
group
b.
coalition
c.
team
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d.
armada
e.
union
80. Satisficing refers to making a(n) _________ rather than _________ decision.
a.
intuitive, rational
b.
short-term, long-term
c.
correct, incorrect
d.
optimal, satisfactory
e.
satisfactory, optimal
81. Which of the following is true about intuition?
a.
it is largely arbitrary
b.
it evolves over time
c.
it's not based on rationality
d.
it's similar to guessing
e.
all of these
82. What term refers to the tendency of people to make more extreme decisions in a group than when alone?
a.
brainstorming
b.
groupthink
c.
escalation of commitment
d.
group polarization
e.
risk propensity
83. What mode of thinking occurs when people are deeply involved in a cohesive in-group and members’ strivings for
unanimity override their motivation to realistically appraise alternative courses of action?
a.
brainstorming
b.
groupthink
c.
escalation of commitment
d.
group polarization
e.
risk propensity
84. In the study of groupthink, what term refers to self-appointed members who shield the group from conflicting
information?
a.
group rationalizers
b.
group poles
c.
risky shifters
d.
self censors
e.
mindguards
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Chapter 08—Decision Making and Problem Solving
85. When groupthink occurs, silence is viewed as agreement. This most directly contributes to the
a.
shared illusion of invulnerability.
b.
shared illusion of unanimity.
c.
stereotyped views of "enemy" leaders.
d.
unquestioned belief in the group's inherent morality.
e.
collective efforts to rationalize or dismiss warnings.
86. To help prevent groupthink, leaders should assign the role of “_____________” to each group member to allow each
member to freely voice objections and doubts.
a.
warning dismisser
b.
risky shifter
c.
unquestioned believer
d.
mindguard
e.
critical evaluator
87. Which of the following is true about brainstorming?
a.
the number of ideas should be limited
b.
ideas should be criticized and judged quickly
c.
ideas should not be written down
d.
implausible ideas should not be suggested
e.
none of these
88. Which of the following is a structured variation of a small-group discussion to reach consensus?
a.
prospect theory
b.
brainstorming
c.
the Delphi technique
d.
the nominal group technique
e.
none of these
89. The Delphi technique uses which of the following to gather opinions from experts?
a.
conference calls
b.
group meetings
c.
interviews
d.
questionnaires
e.
stream-of-consciousness journals
90. The Delphi technique is a useful way to gather opinions from experts who
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Chapter 08—Decision Making and Problem Solving
a.
don't like each other.
b.
desire anonymity.
c.
live far away from each other.
d.
all of these
e.
none of these
91. Creative thinking is enhanced by which of the following?
a.
attraction to complexity
b.
high levels of energy
c.
intelligence
d.
openness
e.
all of these
92. The risk of groupthink may be curbed by increasing the ____________ of senior management.
a.
homogeneity
b.
size
c.
male-to-female ratio
d.
diversity
e.
none of these
93. What term refers to the act of persisting with a failing course of action?
a.
brainstorming
b.
groupthink
c.
escalation of commitment
d.
group polarization
e.
risk propensity
94. Which of the following does NOT tend to be one of the toughest managerial decisions?
a.
opening a business
b.
deciding which new product to launch
c.
buying or selling a business
d.
hiring and firing
e.
creating work schedules
95. It is possible for the same decision to be ____________ for an experienced manager but ___________ for a more
junior manager.
a.
tactical, strategic
b.
strategic, tactical
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Chapter 08—Decision Making and Problem Solving
c.
nonprogrammed, programmed
d.
programmed, nonprogrammed
e.
none of these
96. Nonprogrammed decisions require managers to use ____________ rather than ___________.
a.
individuals, groups
b.
groups, individuals
c.
creativity, decision rules
d.
decision rules, creativity
e.
strategic thinking, critical thinking
97. The information needed to make a programmed decision is ________ available, and the problem is ___________
structured.
a.
readily, highly
b.
not readily, not highly
c.
not readily, highly
d.
readily, not highly
e.
somewhat readily, somewhat highly
98. Which of the following is NOT a category of prescriptions for preventing groupthink?
a.
process prescriptions
b.
individual prescriptions
c.
leader prescriptions
d.
group prescriptions
e.
organizational prescriptions
99. A group member who discusses group deliberations with an expert outsider and reports her findings to the group is
most likely trying to prevent
a.
brainstorming.
b.
groupthink.
c.
escalation of commitment.
d.
group polarization.
e.
risk propensity.
Completion
100. ____________________ decisions are well structured, recurring, and made according to decision rules.
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Chapter 08—Decision Making and Problem Solving
101. A ______ decision involves a nonroutine, poorly structured problem and cannot be made with existing decision
rules.
102. A(n) ____________ plan is an alternative course of action that can be taken if the primary course of action is
unexpectedly disrupted or rendered inappropriate.
103. One of the strengths of the ___________________________________ to decision-making is that is forces the
decision maker to consider a decision in a logical, sequential manner, and the in-depth analysis of alternatives enables the
decision maker to choose on the basis of information rather than emotion or social pressure.
104. Post-decision ____________________ refers to the doubt, tension, or regret that often follows making a decision
when more than one alternative was attractive.
105. Examining alternatives only until a solution that meets minimal requirements is found and then ceasing to look for a
better one is called ____________________.
106. ____________________ is knowingly accepting less than the best possible outcome.
107. ___________ is person’s ability to generate new ideas or to conceive of new perspectives on existing ideas.
108. When using the _______________ group technique, group members follow a generate-discussion-vote cycle until
they reach a decision.
109. The ____________________ technique is a decision-making method designed for groups that do not meet face to
face.
Matching
Match each of the following situations with the stage of the rational approach to decision making it most clearly
illustrates.
a.
Bob looks up business school rankings to determine which schools would consider his GPA and GMAT score
competitive.
b.
Bob decides which business schools he'd like to attend.
c.
If all of the business schools he applies to reject him, Bob will try to raise his GMAT score and apply again next
year.
d.
Bob completes and sends out applications to the business schools he'd like to attend.
e.
Bob wants to go to a good business school.
f.
After determining which high-quality schools he has a reasonable shot of getting into, Bob uses a combination of
factors -- price, location, and teacher ratings -- to compare them.
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Chapter 08—Decision Making and Problem Solving
110. state the goal
111. choose an alternative
112. generate alternatives
113. evaluate alternatives
114. devise a contingency plan
115. implement the plan
Match each of the following situations with the concept it most clearly illustrates.
a.
Hugh needs to buy a new laptop. He searches online until he finds the first laptop that fits his price and
performance needs, then he immediately buys it.
b.
In a hand of poker, Kevin makes a bid and Julie calls. Later, Kevin makes a higher bid, and Julie calls again. At the
end of the hand, when Julie goes all in, Kevin's almost certain she has the better cards. However, because he's
already invested so much in the hand, Kevin feels obliged to call.
c.
On paper, the candidate seems excellent, so Nina invites him for an interview, which goes swimmingly. Still,
something about the guy seems "off" to Nina, and though she can't put her finger on what it is, she hires someone
else.
d.
Simone knows that the laptop she's about to buy from the electronics store is both more expensive and of lower
quality than a laptop she could buy online. However, she desperately needs a laptop immediately, so goes ahead
with the purchase.
116. escalation of commitment
117. satisficing
118. suboptimizing
119. intuition
Ordering
120. Order the steps of the creative process.
a.
insight
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Chapter 08—Decision Making and Problem Solving
b.
incubation
c.
verification
d.
preparation
Essay
121. Compare and contrast the classifications of programmed and nonprogrammed decisions. Give an example of each
type of decision.
122. Discuss the various steps of the rational decision-making process, then apply the steps to either a personal or
professional decision that you had to make.
123. Describe, discuss, and give examples of the behavioral approach to decision-making.
124. Discuss the factors that make a person more creative. Analyze your own approach to decision making based on these
factors.
125. Discuss the primary conditions that foster the development of groupthink, and outline at least four symptoms of a
group in which groupthink has taken hold.
