Chapter 9—Managing Decision Making and Problem Solving Key
1. Decision making is perhaps the most basic and fundamental of all managerial activities.
2. Managers make decisions about problems but not opportunities.
3. An effective decision may be one that minimizes loss, expenses, or employee turnover.
4. When the bell rings at a firehouse, the firefighters make programmed decisions.
5. Zhenfu invested his savings in a bank certificate of deposit because that is where he has always put his
savings, and because he is very concerned about the safety of his investment. Zhenfu knows at the end of two
years he will have $52,546.73. He is operating under the decision-making condition known as risk.
6. Many decisions regarding basic operating systems and procedures and standard organizational transactions
are nonprogrammed decisions.
7. Few organizational decisions are made under conditions of uncertainty.
8. A manager can use her past experiences, relevant information, the advice of others, and her own judgment to
decrease the risk associated with a decision.
9. The stimulus for a decision may be positive or negative.
10. A plant manager notices that overtime seems to be excessive. This will stimulate a decision.
11. The first step in evaluating an alternative is to determine to what extent it will be affordable.
12. When an employee comes to you with a feasibility evaluation of a decision alternative, he will give you
information about how practical the alternative is for the organization.
13. You are trying to hire a new engineer. She has all of the qualifications you want, with one exception. As a
decision alternative, this engineer fails the test of feasibility.
14. The proper sequence for evaluating a decision alternative is satisfactoriness, probable consequences, and
feasibility.
15. As it relates to decision making, the term best alternative implies decision accuracy and efficiency.
16. In the decision-making process, the follow-up step is most closely related to the management function of
controlling.
17. The behavioral model of decision making assumes that the manager has perfect information.
18. When managers apply their values to decision making there is an opportunity for better ethics, which is a
good aspect of bounded rationality.
19. The administrative model of decision making describes how decisions should be made as opposed to
prescribing how they actually are made.
20. According to bounded rationality, people’s habits and skills limit their decisions.
21. An informal alliance of individuals or groups formed to achieve a common goal is referred to as
groupthink.
22. A decision maker’s staying with a decision even when it appears to be wrong is called risk propensity.
23. Values are an innate belief about something without conscious consideration.
24. Risk propensity is defined as a manager’s willingness to gamble when making a decision.
25. When a communications president agrees to be interviewed for 60 Minutes, she can be described as having a
high degree of risk propensity.
26. Each component of managerial ethics involves a wide variety of decisions, all of which are likely to have an
ethical component.
27. In more and more organizations today, important decisions are made by individuals rather than by groups
and teams.
28. Existing groups or teams can be ad hoc committees, task forces, or newly constituted work teams.
29. As a result of increased information, groups and teams typically can identify and evaluate more alternatives
than can one person.
30. The biggest drawback of group and team decision making is the additional time and hence the greater
expense entailed.
31. ____ is the act of choosing one alternative from many.
32. When Mildred chooses to focus on a work task instead of listening to a colleague she is engaged in
33. When a student chooses to study instead of going out with friends, he is engaged in
34. The first step in the decision-making process is
35. Decision making is a part of which management function?
36. The best alternative is the most ____ alternative.
37. Which of the following statements about programmed decisions is FALSE?
38. Decisions that are routine and deal with situations in which the factors are familiar and have occurred in the
past are called ____ decisions.
39. When Canine Companions for Independence trainers train a dog to be a service dog they start from a basic
training approach. Dogs communicate through body language that the trainer knows. The trainer routinely
makes ____ decisions.
40. Cargill recalled 185,000 pounds of ground turkey due to salmonella contamination. It made a(n) ____
decision.
41. The Detroit Three auto makers and United Auto Workers negotiated a labor deal with pay raises for entry
level workers. This is an example of a(n) ____ decision.
42. Yum Brands is expanding its Chinese presence into smaller cities like Yiyang and Zhengzhou because
larger cities are saturated. This is an example of a(n) ____ decision.
43. Airlines increased prices for last minute tickets usually purchased by corporate travelers. This was the 10th
increase in one year. This is an example of a(n) ____ decision.
44. Students in management 101 sit in the same seat every class even though seats are not assigned. This is an
example of a ____ decision.
45. When the manager knows what the alternatives are and the probabilities associated with each alternative are
guaranteed, the manager is experiencing
46. Sy.Med Development, Inc. is the only company that has credentialing application software for physicians
and managed care organizations. Credentialing applications must be submitted to each insurance provider
annually and can be a very labor-intensive process. Sy.Med is the only company that has developed such
software, and it provides complete support for the software. A physician’s office in Montana that wants to buy
or use the software would be making the purchase decision
47. The U.S. government has never faltered on its debt payments, although it came close in August, 2011.
Investing in treasury bills is an example of
48. When the manager understands the available options but the probabilities associated with each option are
uncertain, the manager is experiencing
49. Greece was on the verge of defaulting on its debt. It decided to dock a month’s pay from all elected officials
as part of austerity measures. This is an example of decision making
50. Baldur chose to cut cable service to his home to save money. He knew he could still get local over-the-air
service for free and view some entertainment on the Web. He knew each cost and his viewing options. This is
an example of
51. The key to making effective decisions under conditions of risk is to
52. In which of the following decision-making conditions is the decision maker aware of all of the alternatives
and able to assign probabilities to the costs and payoffs of each alternative?
53. Consumers looking for discounts can check prices online before they shop. This way they will choose under
conditions of
54. The manager who has difficulty identifying alternatives and assessing their probabilities is experiencing
55. Under which decision-making condition is the decision maker unaware of all the alternatives and the risks
and consequences associated with each alternative?
56. The decision to hire a janitorial service, buy a fleet of sales vehicles, or hire a public relations expert are all
examples of decisions made
57. The decision by executives at NBC to air Up All Night to see if it could find a show to improve its
primetime viewership was an example of a decision made
58. Most of the significant decisions in contemporary organizations are made under which decision-making
condition?
59. Which of the following decision-making models is a prescriptive model?
60. A disadvantage of the ____ decision-making model is that it does not use ethics.
61. Which of the following decision-making models is based on the belief that human behavior is unerringly
rational?
62. Which of the following statements about the classical model of decision making is FALSE?
63. Which of the following decision-making models involves recognizing and defining the situation, developing
alternatives, selecting an alternative, implementing the chosen alternative, and following up?
64. Based on the rational decision-making model, you would expect the first thing that happened at the other
major networks as a result of the success of the American Idol television series was to
65. Managers at LEO Corporation scrutinize problems until they have all of the information they feel they need
to make a decision and discuss every alternative while focusing on facts and eliminating assumptions. Which
decision-making model does this most closely resemble?
66. The rational model of decision making assumes all of the following EXCEPT
67. What is the fourth step in rational decision making?
68. Oprah Winfrey and Regis Philbin retired from daytime talk shows about the same time. Television
executives saw an opportunity to fill the void. The executives were in which step of the rational
decision-making process?
69. Oprah Winfrey and Regis Philbin retired from daytime talk shows about the same time. Television
executives saw an opportunity to fill the void. The show Anderson launched before Regis left but after Oprah
stopped. The executives were in which step of the rational decision-making process?
70. Your assistant comes to you with the feasibility evaluation of a decision alternative. What should he be
describing to you?
71. When evaluating decision alternatives, the first question to be asked is whether an alternative is within the
realm of probability and practicality for the organization. This refers to which of the following alternative
evaluation criteria?
72. When the space shuttle Columbia needed to reenter the atmosphere the crew knew there was damage on the
outside of the aircraft. If there had been room and supplies the crew could have gone to the space station. Which
criterion for evaluating a decision alternative did the space station fail to meet?
73. Will has a stack of resumes. He throws out all the ones without a masters degree. Which criterion for
evaluating a decision alternative do these candidates fail to meet?
74. Decisions that are unethical may pass one or two decision criteria, but they fail the ____ test.
75. As it relates to selecting the alternative in a decision-making situation, optimization means choosing the
76. In which stage of the decision-making/problem-solving process is resistance to change most likely to be a
problem?
77. It is important to follow up and evaluate the effectiveness of a decision to
78. The last step of the rational decision-making process is most closely related to which function of
management?
79. Joyce wants to decrease turnover. She can change hiring practices, improve benefits, improve wages, or
provide an annual bonus. She chooses a year-end bonus because it keeps payroll lower and should quickly
affect turnover. This example suggests that Joyce is at which step in the decision-making process?
80. Oprah Winfrey and Regis Philbin retired from daytime talk shows about the same time. Television
executives saw that Anderson Cooper filled in for Regis in 32 appearances, so they created a new show around
Cooper. The ____ model can be used to explain why they chose Cooper without evaluating other alternatives.
81. When a manager makes a decision in spite of having imperfect information, this is known as
82. The decision that the manager makes using the behavioral model of decision making
83. ____ occurs when the decision maker is constrained by his or her own values, experiences, skills, and
reflexes. He or she also has less than complete knowledge and information.
84. ____ may explain why publishers are more likely to publish a children’s book by a recognizable celebrity
like Katie Couric than to consider a beautifully illustrated and written book by an unknown author.
85. Entrepreneurs often have a hard time psychologically if they decide to sell the business. It feels like their
child because they created it and helped it grow. This is an example of
86. Bounded rationality is assumed in
87. ____ is the selection of the first minimally acceptable alternative.
88. Silpada Designs and jewelry, sold at home parties, looked no further than Avon as the big sister to buy the
company because the sales force structure aligned with Silpada. It engaged in