Chapter 9--Managerial Decision Making Student: ___________________________________________________________________________
1.
Making a choice is the most significant part of the decision-making process. True False
2.
A decision is a choice made from available alternatives. True False
3.
Programmed decisions are decisions that are made for situations that have occurred often in the past and allow decision rules to be developed to guide future decisions. True False
4.
Two employees in Stacey's department quit which is normal for her department. She is faced with the decision to fill these positions. This would be considered a nonprogrammed decision. True False
5.
Gerald's Groceries and Marty's Market decided to merge their operations, something neither company has tried before. This would be considered a nonprogrammed decision. True False
6.
In the real world, few decisions are certain. True False
7.
The main difference between risk and uncertainty is that with risk you know the probabilities of the outcomes. True False
8.
Uncertainty means that a decision has clear-cut goals, and that good information is available, but the future outcomes associated with each alternative are subject to chance. True False
9.
.A situation where the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable refers to ambiguity. True False
10 The classical decision making model assumes that the decision-maker is rational, and makes the . optimal decision each time. True False 1
11 The approach that managers use to make decisions usually falls into one of three types – the classical . model, the administrative model, and the political model. True False 12 The growth of quantitative decision techniques that use computers has reduced the use of the classical . approach. True False 13 The administrative model of decision making describes how managers actually make decisions in . difficult situations. True False 14 Normative decision theory recognizes that managers have only limited time and cognitive ability and . therefore their decisions are characterized by bounded rationality. True False 15 The classical model of decision-making works best in organizations that are made up of groups with . diverse interests, goals, and values. True False 16 According to the classical model of decision making, managers’ searches for alternatives are limited . because of human, information, and resource constraints. True False 17 According to the administrative model of decision making, managers' searches for alternatives are . limited because of human, information, and resource constraints. True False 18 Satisficing behavior occurs when we choose the first solution alternative that satisfies minimal . decision criteria regardless of whether better solutions are expected to exist. True False 19 Intuition is a quick apprehension of a decision situation based on past experience but without . conscious thought. True False 20 According to both research and managerial experience, intuitive decisions are best and always work . out. True False 21 The process of forming alliances among managers is called coalition building. . True False 2
22 The political model consists of vague problems and goals, limited information about alternatives and . their outcomes, and a satisficing choice for resolving problems using intuition. True False 23 Good intuitive decision making is based on an ability to recognize patterns at lightning speed. . True False 24 Administrative and political decision making procedures and intuition have been associated with high . performance in unstable environments in which decisions must be made rapidly and under more difficult conditions. True False 25 Managers confront a decision requirement in the form of either a problem or an opportunity. . True False 26 Nonprogrammed decisions require six steps, however, programmed decisions being structured and . well understood require only one step. True False 27 Step one in the managerial decision-making process is recognition of decision requirement. . True False For a non-programmed decision, feasible alternatives are hard to identify and in fact are already available within the organization's rules and procedures. True False The best alternative is the one in which the solution best fits the overall goals and values of the organization and achieves the desired results using the fewest resources. True False The formulation stage involves the use of managerial, administrative, and persuasive abilities to ensure that the chosen alternative is carried out. True False Risk propensity refers to the willingness to undertake risk with the opportunity of gaining an increased payoff. True False In the implementation stage, decision makers gather information that tells them how well the decision was implemented and whether it was effective in achieving its goals. True False 3
Feedback is the part of monitoring that assesses whether a new decision needs to made. True False People who prefer simple, clear-cut solutions to problems use the directive style. True False Managers with an analytical decision style like to consider complex solutions based on as much data as they can gather. True False The behavioral style is often adopted by managers who like to consider complex solutions based on as much data as they can gather. True False Individuals with a conceptual decision-making style are more socially oriented than those with an analytical style. True False The most effective managers are consistent in using their own decision style rather than shifting among styles. True False Most bad decisions are errors in judgment that originate in the human mind's limited capacity and in the natural biases of the manager. True False Justifying past decisions is a common bias of managers. True False Managers will frequently look for new information that contradicts thier instincts or original point of view.. True False Most people underestimate their ability to predict uncertain outcomes. True False Brainstorming uses a face-to-face interactive group to spontaneously suggest a wide range of alternatives for decision making. True False
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Brainwriting refers to the tendency of people in groups to suppress contrary opinions. True False Groupthink refers to the tendency of people in groups to suppress contrary opinions. True False Devil's advocate technique is similar to brainstorming in that both techniques prevent individuals from challenging other group member's assumptions. True False Point-counterpoint is a decision-making technique in which people are assigned to express competing points of view. True False Managers are often referred to as: A.
decision makers. B peace makers. . C conflict . creators. Dan unnecessary layer of employees. E profit . suppressor. _____ is a vital part of good management because decisions determine how the organization solves its problems, allocates resources, and accomplishes its goals. A.
Orga nizin g B Competiti ve visioning C Proper . alignment DGood decision making E Leadersh . ip 5
Which of the following is a choice made from available alternatives? A. B. C. D . E .
De cisi on Plan Goal Tacti c Strate gy
Mark, a production manager at Kaylie's Kookware, recently chose to schedule his workers to work overtime. His alternative was to hire more workers. He is now monitoring the consequences of his choice. This is an example of _____. A.
pla nni ng B decisi onmakin g C organ . izing D contr . olling E leadi . ng
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_____ refers to the process of identifying problems and then resolving them. A.
Or gan izin g B Contro . lling C Decisio nmaking D Planni . ng E Leadi . ng _____ decisions are associated with decision rules. A.
N on pr og ra m m ed B Uni . que C Progr amm ed D Illstruct ured E Nov . el
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Programmed decisions are made in response to _____ organizational problems. A.
un us ual B recur . ring C signif . icant D . E .
min or uniq ue
Bierderlack has a policy that states that more than three absences in a six-month period shall result in a suspension. Colleen, the manager, has just decided to suspend one of her shift employees for violating this policy. This is an example of: A.
a progra mmed decisio n.
Ba . nonprogramme d decision. C an insignificant . decision. D . E .
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poor management. personal grudge.
Nordstrom Department store's "No questions asked Return's Policy" is an example of a(n): A.
programm ed decision. B nonprogrammed . decision. C. novel decision. D poor management. . E unstructured . decision. If your instructor has an attendance policy, she/he is using a(n): A.
progra mmed decisi on. B unique . approach. C condition of . ambiguity. D nonprogram med decision. E none of . these. Nonprogrammed decisions are made in response to situations that are: A. unique. B. unstructured. C. important to the organization. D. all of these E unique and important to the . organization.
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Examples of nonprogrammed decisions would include the decision to: A.
reorde r suppli es. Bdevelop a new product or service. perform routine maintenance on one of the machines in manufacturing . terminate an employee for violation of company rules. E fill a . position. Good examples of _____ decisions are strategic decisions. A.
B . C . D . E .
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non prog ram med program med insignifi cant recurri ng structur ed
When a small community hospital decides to add a radiation therapy unit, it is considered a: A.
B . C .
program med decision . structured decision. nonprogrammed decision.
D poor . management decision. E certainty . decision. Two area banks, Bank A and Bank B, decided to merge their operations. This is an example of a: A.
programme d decision. B nonprogrammed . decision. C. decision rule. D structured decision. . E bad community . decision. At the start of every shift, Carl, a delivery truck driver, plans out his route based on the addresses that he will be visiting to drop off packages. This can best be described as what kind of decision? A.
Pro gra mm ed B Nonpro gramm ed C Wick . ed D Admini . strative E Intuiti . ve 11
Associated with the condition of _____ is the lowest possibility of failure. A. B . C . D. E .
ambi guity uncertai nty certaint y risk all of these
Which of the following means that all the information the decision-maker needs is fully available? A.
Certai nty B. Risk C Uncertaint . y D Ambiguity . E None of . these Bobby, a product manager, wants to increase the market share of his product. He is unsure about how to go about it, not knowing for sure how costs, price, the competition, and the quality of his product will interact to influence market share. Bobby is operating under a condition of _____. A. B . C. D . E .
12
risk ambiguity certainty uncertainty brainstormi ng
Under conditions of _____, statistical analyses are useful. A.
cer tai nty B ambig . uity C. risk D uncert . ainty E confli . ct Which of the following means that a decision has clear-cut goals and that good information is available, but the future outcomes associated with each alternative are subject to chance? A.
Certai nty B. Risk C Uncertainty . D Ambiguity . E Brainstormi . ng _____ means that managers know which goals they wish to achieve, but information about alternatives and future events is incomplete. A. B. C . D . E .
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Cert aint y Risk Uncerta inty Ambigu ity Advoca cy
When managers know which goals they wish to achieve, but information about alternatives and future events is incomplete, the condition of _____ exists. A. B . C . D . E .
risk uncertain ty ambiguit y certainty problemat ic
Which of the following has the highest possibility of failure? A.
The cond ition of certa inty
BThe condition of ambiguity CThe condition of uncertainty D The condition of risk E All of . these
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The four positions on the possibility of failure scale include certainty, risk, ambiguity, and _____. A. B . C . D . E .
unce rtain ty conflict necessit y indecisi on possibili ty
_____ is by far the most difficult situation for a decision-maker. A.
Certai nty B. Risk C Uncertainty . D Ambiguity . E Brainstormi . ng Which of the following means that the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable? A.
Certai nty B. Risk C Uncertainty . D Ambiguity . E Brainstormi . ng
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The condition under which ambiguity occurs is when: A.
alternatives are difficult to define. B objectives are well . defined. C information about outcomes is readily available. D all the alternatives are . known. E decisions are already . made. _____ decisions are associated with conflicts over goals and decision alternatives, rapidly changing circumstances, fuzzy information, and unclear links among decision elements. A.
Non pro gra mm ed B Progra . mmed C . D .
Wicke d Conven tional
E Irration . al
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During the fallout of the global financial crisis of the late 2000s, finance companies had to make important decisions in a highly ambiguous environment. The decision to buyout failed banks could best be described as what type of decision? A.
Bounde d B. Programmed C Conventional . D Wicked decision . problem E Irrational . decision The classical model of decision making is based on _____ assumptions. A.
philos ophic al B. irrational C economic . D uncertaint . y E technologic . al Riley is a manager at the Tinker Tools. She is expected to make decisions that are in the organization's best economic interests. Her decisions should be based on which of the following models? A. B . C .
The administrative model of decision making The garbage can model of decision making The scientific management model of decision making
D The classical model of decision making . E The humanistic model of decision . making
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Which of these assumptions are included in the classical model of decision making? A.
Problems are unstructured and ill defined. B The decision-maker strives for . conditions of certainty. C Criteria for evaluating . alternatives are unknown. DThe decision-maker selects the alternatives that will minimize the economic return to the organization. E The situation is always . uncertain. Which approach defines how a decision-maker should make decisions? A. B . C . D . E .
Nor mati ve Scientifi c Descripti ve Reflectiv e Humanist ic
_____ is the approach that defines how a decision maker should make decisions and provides guidelines for reaching an ideal outcome for the organization. A.
Admi nistrat ive B Descriptiv . e C Normative . D Bounded . rationality E None of . these 18
All of the following are characteristics of the classical decision making model except: A. B. C . D . E .
clear-cut problems and goals. conditions of certainty. rational choice by individual for maximizing outcomes. limited information about alternatives and their outcomes. all of these are characteristics of classical decision making model.
The _____ model of decision making is most valuable when applied to _____. A.
administrative; programmed decisions B classical; nonprogrammed . decisions C classical; programmed decisions . D classical; ambiguous decisions . E administrative; structured . decisions _____ approach describes how managers actually make decisions, where as _____ approach defines how a decision-maker should make decisions. A. B . C . D . E .
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Normative; descriptive Normative; classical Descriptive; normative Descriptive; administrative Normative; administrative
Which model of decision making is associated with satisficing, bounded rationality, and uncertainty? A.
Cla ssic al Admin istrativ e C Quanti . tative D . E .
Ratio nal Politi cal
The growth of quantitative decision techniques that use computers has expanded the use of which decision-making approach? A. B . C. D. E .
Admi nistra tive Classical Intuitive Political Bureaucrat ic
The _____ model of decision making describes how managers actually makes decisions in situations characterized by nonprogrammed decisions, uncertainty, and ambiguity. A. B . C .
nor mat ive classic al adminis trative
Dscientifi c manage ment E objecti . ve 20
The concept that people have the time and cognitive ability to process only a limited amount of information on which to base decisions is known as: A.
satisficin g. B bounded . rationality. C classical model of decision making. D normative . approach. E scientific . approach. Melissa is a manager at InStylez Clothing. Her job is very complex and she feels that she does not have enough time to identify and/or process all the information she needs to make decisions. Melissa's situation is most consistent with which of the following concepts? A.
Bounded rationality B The classical model of decision making C. Satisficing D. Brainstorming E Scientific . management The essence of _____ is to choose the first solution available. A.
bounded rationality
B. creativity C. decision maximization D. satisficing E the classical model of decision . making
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Rodney doesn’t always realize that within his role as an air traffic controller, he must continuously perceive and process information based on knowledge and experience that he is not consciously aware of. This describes what type of decisionmaking? A.
Ad min istr ativ e B Right. brained C . D . E .
Satisfi cing Ratio nal Intuiti ve
Intuition is based on _____, but lacking in _____. A.
B . C .
conscious thought; practicalit y experience; applicability a solid analysis; applicability
D experience; . conscious thought E thought-process; . guts
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Most managers settle for a _____ rather than a _____ solution. A.
B . C . D . E .
minimizi ng; maximizi ng satisficing; maximizing top-level; bottomline maximizing; satisficing challenging; simple
All of the following are characteristics of the administrative decision making model except:
A. vague problem and goals. B. conditions of certainty. C limited information about alternatives and their outcomes. . D. satisfying choice. E all of these are characteristics of administrative decision maki . model. Which of the following is the process of forming alliances among managers during the decision making process? A. B. C . D. E .
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Networ king Socializing Coalition building Satisficing Passing the buck
The _____ model of decision-making is useful for making nonprogrammed decisions when conditions are uncertain, information is limited, and there are managerial conflicts about what goals to pursue or what course of action to take. A. B . C . D. E .
classic al functional bureaucrati c political administrati ve
The _____ model closely resembles the real environment in which most managers and decisionmakers operate. A.
nor mat ive B admini . strative C descri . ptive D . E .
classi cal politic al
Jefferson Inc. is an information technology consulting firm located in Washington D.C. Decisions at Jefferson are complex and involve many people, with a significant amount of disagreement and conflict. Which decision-making model fits best for this organization? A.
Politi cal B Functiona . l C Classical . D Administra . tive E Bureaucrat . ic 24
All of these are basic assumptions of the political model except: A.
organizations are made up of groups with diverse interests, goals, and values. B. information is clear and complete. C managers do not have the time, resources, or mental capacity to identify all dimensions of the problem. D managers engage in the push and pull of debate to . decide goals and discuss alternatives. E all of these are basic assumptions of the political . model. Shirley works in the human resource department at Turtle Shells, Inc. She believes she is seeing an increase in drinking problems among the workforce. She thinks she needs to investigate further. She is at what stage of the managerial decision making process? A.
Diagnosis and analysis of causes B Development of alternatives . C Recognition of decision . requirement D Evaluation and feedback . E Selection of desired . alternatives A(n) _____ occurs when the organizational accomplishment is less than established goals. A. B . C . D .
stre ngt h threa t diagn osis opport unity
E proble . m 25
_____ is the step in the decision-making process in which managers analyze underlying causal factors associated with the decision situation. A. B . C . D . E .
Analy sis Diagnosis Recognitio n Judgment Identificati on
Which of the following is the first step in the managerial decision making process? A.
Evaluation and feedback B Development of alternatives . C Recognition of decision . requirement D Diagnosis and analysis of . causes E Selection of desired . alternatives _____ is the last step in the decision making process. A. B . C . D . E .
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Evaluation and feedback Development of alternatives Implementation of chosen alternative Selection of desired requirement Recognition of decision requirement
The recognition of the decision requirement step in the managerial decision making process requires managers to: A. B . C .
develop alternative solutions. integrate information in novel ways. use the classical model of decision making.
D focus on generating ideas. . E select undesirable . alternatives. "When did it occur" and "how did it occur" are questions associated with which step of the decision making process? A.
Diagn osis and analys is of causes BRecognition of decision requirement C Development of alternatives DSelection of desired alternative E None of . these
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When managers ask questions such as “What is the state of disequilibrium affecting us?”, they are in which stage of the managerial decision-making process? A. B . C .
Selection of a desired alternative Development of alternatives Diagnosis and analysis of causes
D Recognition of . decision requirement E Evaluation and . feedback When quality control measures at the local tire plant were found to be inadequate, managers were asking themselves, “How did this occur?” and “What is the result?” The company is in which stage of the managerial decision-making process? A. B . C .
Selection of a desired alternative Development of alternatives Diagnosis and analysis of causes
D Recognition of . decision requirement E Evaluation and . feedback
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The decision-maker must _____ once the problem has been recognized and analyzed. A.
B . C . D . E .
evaluate and provide feedback choose among alternatives generate alternatives prioritize the alternatives reanalyze the problem
For a programmed decision: A.
alternatives are usually difficult to identify. B alternatives are usually . easy to identify. C there are usually few . alternatives. Dthere are usually few alternatives and they are difficult to identify. E there are no . alternatives.
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Ryan is a manager at Dream Catchers. Dream Catchers is currently operating in an environment of high uncertainty. As a result, Ryan will: A.
most likely be making programmed decisions. B probably have an easy time generating . alternatives. C probably have a difficult time . generating alternatives. D most likely rely on the classical model . of decision making. E wait until environment becomes . certain. Once the desired alternative is developed, it should be _____. A. B . C . D . E .
anal yze d evaluat ed selecte d recogni zed identifi ed
Which of the following refers to the willingness to undertake risk with the opportunity to increase one's return? A. Tunnel vision B. Risk propensity C. Risk averse D. Thrill seeking E Ineffective investment . philosophy
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The _____ step in the decision making process involves using managerial, administrative, and persuasive abilities to translate the chosen alternative into action. A.
rec ogn itio n B analys . is C evaluat . ion D implem . entation E feedba . ck
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Feedback is important because: A.
decis ion maki ng is a conti nuou s proc ess. it provides decisionmakers with new information . it helps determine if a new decision needs to be made. it provides decisionmakers with new information and it helps determine if a new decision needs to be made. E all of . these.
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Genna is collecting data on how well the organization has done since their new strategy was implemented. She is in what stage of the managerial decision making process? A.
The generation of alternatives B Implementation of the chosen . alternative C Evaluation and feedback . D Recognition of the decision . requirement E Selection of desired . alternative Which style is used by people who prefer simple, clear-cut solutions to problems? A. B . C . D . E .
Beh avi oral Concep tual Directi ve Analyt ical Classic al
Personal _____ style refers to differences among people with respect to how they perceives problems and make decisions. A.
B . C . D . E .
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ris k tak ing behav ior decisi on strate gic analy sis
Research has identified four major decision styles. These include all of the following except _____. A. B . C . D .
beh avi oral concep tual analyti cal authori tative
E directi . ve Managers are considered to have a(n) _____ style when they prefer to consider complex solutions based on as much data as they can gather. A. B . C . D . E .
beh avi oral concep tual directi ve analyti cal classic al
Which of these styles is adopted by managers who have a deep concern for others as individuals? A.
Beha viora l B Classica . l C Analytic . D Logical . E Conceptu . al
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People with a(n) _____ style usually are concerned with the personal development of others and may make decisions that help others achieve their goals. A. B . C. D . E .
class ical analytic logical behavior al concept ual
Finance managers at Big Bend Inc. made a financial blunder when they solely looked at the previous year’s sales to estimate sales for the coming year. Of which management bias is this an example? A. B. C. D. E .
Being influenced by emotions Perpetuating the status quo Seeing what you want to see Justifying past actions Being influenced by initial impressions
All of the following are cognitive biases that can affect manager's judgment except: A.
being influen ced by initial impres sions. B justifying past . decisions. Cseeing what you don't want to see. D perpetuating the status quo. E overconfiden . ce.
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When managers base decisions on what has worked in the past and fail to explore new options, they are: A.
perpetuating the status quo. B being influenced by . emotions. C. being overconfident. D justifying past actions. . E seeing what they want to . see. The ability to make _____ decisions is a critical skill in today's fast-moving organizations. A. fast B widely . supported C . D . E .
highquality frequen t all of these
As a top manager, Joanna works with others within her team every day in making important corporate decisions. Her preferred decision-making approach is to generate as many alternatives to problems as possible in a short amount of time. This approach is referred to as _____. A. B . C .
groupt hink devil’s advocacy pointcounterpoint
D escalating . commitment E brainstormi . ng
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Which of the following defines a technique that uses a face-to-face group to spontaneously suggest a broad range of alternatives for decision making? A.
Brainst orming B. Groupthink C Point. counterpoint D Brainwriting . E Devil's . advocate The _____ is the individual who is assigned the role of challenging assumptions made by the group. A.
group gadfly B multiple . advocate C devil's . advocate D brainstormer . E inferior . member Which of the following is a decision-making technique in which people are assigned to express competing points of view? A.
Point count erpoi nt B Devil's . advocate C. D . E .
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Debate Groupthin k Brainwriti ng
_____ refers to the tendency of people in groups to suppress contrary opinions. A.
Pointcounte rpoint B Groupthink . C Devil’s . advocacy D Escalating . commitment E Brainstormi . ng The tendency of organizations to invest time and money in a solution despite strong evidence that is not appropriate is referred to as: A.
technologi cal decisions. collective intuition.
B . C decision learning. . D. team delay. E escalating . commitment.
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Scenario - Vaughn Bately Vaughn Bately manages a group of eight electrical engineers at Defiance Designs. His team is highly trained and well respected by experts both inside and outside the company. Recently one of Vaughn's engineers suggested a new technique for the development and use of an argon laser. There appeared to be rich potential for this technology, but Vaughn wasn't certain that developing this technology was the best use of his limited resources. Vaughn was facing a significant decision. If Vaughn uses the classical model of decision making, which of these assumptions would he reject? a. b. c. d. e.
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The decision ma and evaluating a The desired decision will maximize attainment of organizational objectives. The decision-maker strives for complete certainty, gathering complete informat Problems are precisely formulated and defined. All of these are accepted.
Scenario - Vaughn Bately Vaughn Bately manages a group of eight electrical engineers at Defiance Designs. His team is highly trained and well respected by experts both inside and outside the company. Recently one of Vaughn's engineers suggested a new technique for the development and use of an argon laser. There appeared to be rich potential for this technology, but Vaughn wasn't certain that developing this technology was the best use of his limited resources. Vaughn was facing a significant decision. If Vaughn uses the administrative model of decision making, which of these assumptions would he reject? a. b. c. d. e.
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Decision-maker solution. The search for alternatives is limited because of information, human and resour Rational procedures will normally lead to the best solution in a complex organi Decision objectives are often vague, conflicting, and lack consensus among ma All of these are accepted.
Scenario - Vaughn Bately Vaughn Bately manages a group of eight electrical engineers at Defiance Designs. His team is highly trained and well respected by experts both inside and outside the company. Recently one of Vaughn's engineers suggested a new technique for the development and use of an argon laser. There appeared to be rich potential for this technology, but Vaughn wasn't certain that developing this technology was the best use of his limited resources. Vaughn was facing a significant decision. Which of the following steps would Vaughn not take in making his decision? a. b. c. d. e.
Sense and recog Implement the chosen alternative. Create a set of alternatives Diagnose and analyze problem causes. All of these would be included.
A(n) _____ is a choice made from available alternatives. ________________________________________ _____ is the process of identifying problems and opportunities and then resolving them. ________________________________________ _____ decisions involve situations that have occurred often enough to enable decision rules to be developed and applied in the future. ________________________________________ _____ decisions are made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization. ________________________________________ _____ means that all the information the decision-maker needs is fully available. ________________________________________ 41
_____ means that a decision has clear-cut goals and that good information is available, but the future outcomes associated with each alternative are subject to chance. ________________________________________ Under conditions of _____, managers know what goal they wish to achieve, but information about alternatives and future events is incomplete. ________________________________________ _____ means that the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable. ________________________________________ The _____ model of decision making is based on economic assumptions. ________________________________________ A normative decision making model defines how a manager _____ make decisions. ________________________________________ In many respects, the _____ model represents an "ideal" model decision-making and can't usually be attained by real people in real organizations. ________________________________________ The _____ model of decision making describes how managers actually make decisions in difficult situations, such as those characterized by nonprogrammed decision, uncertainty, and ambiguity. ________________________________________ A(n) _____ approach describes how managers actually make decisions, not how they should. ________________________________________ The recognition that people have limits on how rational they can be is known as _____. ________________________________________ ______ means that decision-makers choose the first solution alternative that satisfies minimal decision criteria. ________________________________________ _____ represents a quick apprehension of a decision situation based on past experience but without conscious thought. ________________________________________
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_____ is the process of forming alliances among managers. ________________________________________ A(n) _____ occurs when organizational accomplishment is less than established goals. ________________________________________ _____ exists when managers see potential of enhancing performance beyond current levels. ________________________________________ The step in the decision making process in which managers analyze the underlying causal factors associated with the situation is called _____. ________________________________________ _____ is the willingness to undertake risk with the opportunity of gaining an increased payoff. ________________________________________ The _____ stage involves the use of managerial, administrative, and persuasive abilities to ensure that the chosen alternative is carried out. ________________________________________ _____ is important because decision making is a continuous, never ending process. ________________________________________ Differences among people with respect to how they perceive problems and make decisions is called _____. ________________________________________ The _____ style is often the style adopted by managers having a deep concern for others as individuals. ________________________________________ People with a(n) _____ style usually are concerned with the personal development of others and may make decisions that help others achieve their goals. ________________________________________ A(n) _____ is assigned the role of challenging the assumptions and assertions made by the group. ________________________________________
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List four of the eight questions Kepner and Tregoe recommend that managers ask when diagnosing and analyzing causes.
List the three guidelines of innovative group decision-making in today's businesses.
Explain the difference between programmed and nonprogrammed decisions and give an example of each.
Compare decision conditions of certainty, risk, uncertainty, and ambiguity.
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Briefly describe the assumptions underlying the classical model of decision making.
Explain the four underlying assumptions of the administrative model.
List and describe the four basic assumptions of the political model.
What are the six steps in the managerial decision making process?
Explain how a manager selects the desired decision in the managerial decision making process.
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Briefly describe the four major personal decision styles.
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Chapter 9--Managerial Decision Making Key 1. FALSE 2. TRUE 3. TRUE 4. FALSE 5. TRUE 6. TRUE 7. TRUE 8. FALSE 9. TRUE 10. TRUE 11. TRUE 12. FALSE 13. TRUE 14. FALSE 15. FALSE 16. FALSE 17. TRUE 18. TRUE 19. TRUE 20. FALSE 21. TRUE 22. FALSE 23. TRUE 24. TRUE 25. TRUE 26. FALSE 27. TRUE FALSE TRUE FALSE
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TRUE FALSE TRUE TRUE TRUE FALSE TRUE FALSE TRUE TRUE FALSE FALSE TRUE FALSE TRUE FALSE TRUE A D A B C C B A A A D B A C B A C
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A D C B C B B A D D A C D C D B A C D C C B B C B A D E D B B C D E
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A B C E B C A B A C C C B C C B D E C C C D D A D E C A E E A C A B
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E e c e decision Decision making Programmed Nonprogrammed Certainty Risk uncertainty Ambiguity classical should classical administrative descriptive bounded rationality Satisficing Intuition Coalition building problem Opportunity diagnosis Risk propensity implementation Feedback decision style behavioral behavioral devil's advocate Students can answer with any four of the following questions: (1) What is the state of disequilibrium affecting us? (2) When did it occur? (3) Where did it occur? (4) How did it occur? (5) To whom did it occur? (6) What is the urgency of the problem? (7) What is the interconnectedness of events? (8) What result came from which activity? Start with brainstorming, Know when to bail, Avoid groupthink, Engage in rigorous debate
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Programmed decisions involve situations that have occurred enough to enable decision rules to be developed and applied in the future. Examples include job skills required to fill certain positions, the reorder point for manufacturing inventory, and selection of freight routes for product deliveries. Nonprogrammed decisions are made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization. Examples are decisions to build a new factory, develop a new product or service, and enter a new geographical market. Decisions made under the condition of certainty have a high possibility of success. All of the information that the decision-maker needs is available. The decision-maker knows the alternatives, the objectives, and the outcomes. Risk is a situation where the decision-maker knows the alternatives and the objectives. However, the outcomes are not known with certainty, but the probabilities of the outcomes are known. Under conditions of uncertainty, the decision-maker does not know the probabilities of the outcomes, while she knows some of the alternatives and the objectives. With ambiguity, the objectives are unclear, alternatives are difficult to define, and information about outcomes is incomplete or unavailable. The classical model of decision making is based on four assumptions. First, the decision-maker attempts to accomplish goals that are known and agreed upon. In addition, problems are specified and defined precisely. Second, the decision-maker attempts to gather complete information, going for a condition of certainty. Third, the criteria for evaluating the alternatives are known and the decision-maker will select the alternative that maximizes the economic return to the organization. Fourth, the decision-maker is rational and relies upon logic to make sense of the information available. (1) The decision maker operates to accomplish goals that are vague and conflicting. (2) All alternatives and the potential results are based on simplistic views of organizational events. (3) Alternatives are limited based on human constraints. (4) Managers settle for satisficing. (1) Organizations are made up of groups with diverse interests, goals, and values. Managers disagree about problem priorities and may not understand or share the goals and interests of other managers. (2) Information is ambiguous and incomplete. The attempt to be rational is limited by the complexity of many problems as well as personal and organizational constraints. (3) Managers do not have the time, resources, or mental capacity to identify all dimensions of the problem and process all relevant information. Managers talk to each other and exchange viewpoints to gather information and reduce ambiguity. (4) Managers engage in the push and pull of debate to decide goals and discuss alternatives. Decisions are the result of bargaining and discussion among coalition members. The six steps are (1) recognize the decision requirement; (2) diagnose and analyze the causes; (3) develop alternatives; (4) select the desired alternative; (5) implement the chosen alternative; and (6) evaluate and determine feedback. The manager tries to select the choice with the least amount of risk and uncertainty. Because some risk is inherent for most nonprogrammed decisions, managers try to gauge prospects for success. Under conditions of uncertainty, they might have to rely on their intuition and experience to estimate whether a given course of action is likely to succeed. Basing choices on overall goals and values can also effectively guide selection of alternatives. Decision about how to cope should be selected by relying on the company's values and goals of treatment of employees and building long-term relationships. Making choices depends on managers' personality factors and willingness to accept risk and uncertainty. Directive, analytical, conceptual, and behavioral style.
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