Chapter 6 Decision Decision Making: The Essence of the Manager’s Job TRUE/FALSE QUESTIONS THE DECISION-MAKING PROCESS
1.
A discrep discrepancy ancy between between an an existin existing g and and a desired desired state state of affairs affairs is an an opportu opportunity nity.. (False; moderate; p. 134)
2.
The first step in the decision-m decision-making aking process process is is identif identifying ying a proble problem. m. (True; easy; p. 134)
3.
The final step in the decision-making process is implementing the chosen alternative. (False; moderate; p. 138)
4.
It is poss possib ible le that at the end of the decision-making process that you may be required to start the decision process over again. (True; easy; p. 138)
5.
The price of a particula particularr compute computerr brand brand is a possib possible le decisi decision on criterion. criterion. (True; moderate; p. 136)
6.
A decision decision criterion criterion defines defines what is relevant relevant in a decision. decision. (True; moderate; p. 136)
7.
The step in the decision-making process that involves choosing a best alternative is termed implementation. (False; moderate; p. 138)
THE MANAGER AS DECISION MAKER
8.
Decision Decision making making is synonymou synonymouss with managing. managing. (True; easy; p. 134)
9.
Managerial Managerial decision decision making making is assumed assumed to be rational. rational. (True; moderate; p. 134)
10.
One assumption assumption of rationality rationality is is that we cannot cannot know all of of the alternatives. (False; difficult; p. 139)
11.
Accepting solutions that are “good enough” is termed satisfying. (False; easy; p. 140)
12.
Managers tend to operate under assumptions of bounded rationality. (True; moderate; p. 140)
13.
Managers regularly use their intuition in decision making. (True; easy; p. 141)
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14.
Rational analysis and intuitive decision making are complementary. (True; moderate; p. 141)
15.
A policy is an explicit explicit statement that tells a manager what what he or she ought or ought not to do. (False; moderate; p. 142)
16.
Programmed Programmed decisions decisions tend to be repetitiv repetitivee and routine. routine. (True; easy; p. 142)
17.
Rules and policies policies are basically basically the same. (False; moderate; p. 142)
18.
Nonprogra Nonprogrammed mmed decisions decisions are uniqu uniquee and nonrecurri nonrecurring. ng. (True; moderate; p. 143)
19.
Most managerial decisions in the real world are fully nonprogrammed. (False; easy; p. 143)
20.
Organizational efficiency is facilitated facilitated by the the use use of of programmed programmed decision decision making. (True; moderate; p. 142)
21.
The ideal situation for making decisions is low risk. (False; moderate; p. 142)
22.
Risk is a situation in which a decision maker has neither certainty certainty nor reasonable probability probability estimates. (False; difficult; p. 144)
23.
An optimistic manager will follow a maximin approach. (False; moderate; p. 146)
24.
People who have a low tolerance for ambiguity ambiguity and are rational in in their way way of thinking thinking are said to have a directive style. (True; moderate; p. 147)
25.
Decision Decision makers makers with an analyti analyticc style style have have a much smaller lower tolerance lower tolerance for ambiguity than do directive types. (False; moderate; p. 147)
26.
Individuals with a conceptual conceptual style style tend to be very broad broad in their their outlook and will look at many alternatives. alternatives. (True; moderate; p. 147)
27.
Behavioral-style decision makers work well with others. (True; easy; p. 147)
28.
Risk is the condition condition in which which the decision decision maker is able to estimate the likelihood of certain outcomes. outcomes. (True; easy; p. 144)
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MANAGING WORKFORCE DIVERSITY
29.
According to to the boxed feature, feature, “Managing Workforce Diversity,” Diversity,” diverse diverse employees tend to make decisions decisions faster than a homogeneous group of employees. (False; moderate; p. 149)
30
Programmed Programmed decision decision making making facili facilitates tates organizati organizational onal efficiency efficiency.. (True; moderate; p. 149)
MULTIPLE-CHOICE QUESTIONS For each of the following choose the answer that most completely answers the question. THE DECISION-MAKING PROCESS
31.
Decision making is (simplistically) typically described as which of the the following? following? a. decid deciding ing what what is correc correctt b. putt puttin ing g pref prefer eren ence cess on paper c. choosi choosing ng among among altern alternati atives ves d. processin processing g informatio information n to completio completion n (c; moderate; p. 134)
32.
A series of eight eight steps that begins begins with identif identifying ying a problem problem and decision decision criteria criteria and allocating allocating weights weights to those those criteria; moves to developing, analyzing, and selecting an alternative that can resolve the problem; implements the alternative; and concludes with evaluating the decision’s effectiveness is the ___________. ___________. a. decis decision ion-ma -makin king g proces processs b. mana manage geri rial al proc proces esss c. maxi maximi min n styl stylee d. bounde bou nded d ration rationali ality ty approa approach ch (a; easy; p. 134)
33.
A(n) ____________ ____________ is the existence of of a discrepancy discrepancy between between existing existing and a desired state of affairs. a. oppor pportu tun nity ity b. solution c. weakness d. problem (d; easy; p. 134)
34.
The first step step in the decision-making process is which of the following? following? a. develo developin ping g decisi decision on criter criteria ia b. alloca allocatin ting g weight weightss to the criter criteria ia c. anal analyz yzin ing g alte altern rnat ativ ives es d. iden identi tify fyin ing g a prob proble lem m (d; moderate; p. 134)
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35.
In identifying the problem, a manager _________________. _________________. a. compares compares the current current state state of of affairs affairs with where they want to be b. expects expects problems problems to be defined defined by neon lights lights c. looks looks for discrepan discrepancies cies that can be postpone postponed d d. will not act when there is pressure pressure to make a decision decision (a; easy; p. 135)
36.
The process of selecting selecting decision criteria is accomplished by ______________ ________________. __. a. massaging massaging the data that will support support a given given decision decision b. flipping flipping a coin coin to produce produce a 50-50 50-50 chance chance of being being right right c. determinin determining g what is relevant relevant in making making the decision decision d. examining examining the difference difference in the opportun opportunities ities available available (c; challenging; p. 136)
37.
Which of the the following following statements is true concerning concerning problem identification? a. Proble Problems ms are genera generally lly obv obviou ious. s. b. A symptom symptom and a problem problem are basically basically the same. c. Well-trai Well-trained ned managers managers generally generally agree on what is considered considered a proble problem. m. d. The problem problem must must be such such that it exerts exerts some type of pressure pressure for on the manager to act. e. To be consid considered ered a proble problem, m, managers managers must must be aware aware of the the discrepan discrepancy cy but not have have the resources resources necess necessary ary to take action. (d; moderate; p. 134)
38.
If all criteria in the decision decision making making are equal, weighting weighting the criteria criteria ______________. ______________. a. improves improves decision decision making making when large numbers numbers of criteria criteria are involved involved b. is not not need needed ed c. produc produces es excell excellent ent decisi decisions ons d. impr improv oves es the the crit criter eria ia (b; easy; p. 136)
39.
The final step in the decision-making process is to _______________. _______________. a. pick pick the criter criteria ia for the the next next decisi decision on b. reevaluate reevaluate the weigh weightings tings of the the criteri criteriaa until until they indicate indicate the correct correct outcome outcome c. evalu evaluate ate the outcom outcomee of the decisi decision on d. reassign reassign the ratings ratings on the criteria criteria to find different different outcomes outcomes (c; challenging; p. 138)
40.
Which of the following must be present in order order to initiate the decision-making decision-making process? a. plen plenty ty of time time b. pres pressu sure re to act act c. a lack lack of auth author orit ity y d. a lack lack of reso resour urce cess (b; moderate; p. 134)
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41.
To determine determine the _____________, _____________, a manager must determine what what is relevant or important important to resolving the problem. a. geocen geocentri tricc behavi behavior or needed needed b. number number of allow allowabl ablee altern alternati atives ves c. weight weighting ing of decisi decision on criter criteria ia d. deci decisi sion on crit criter eria ia (d; moderate; p. 136)
42.
If a manager manager was purchasing purchasing a compute computerr system, system, issues issues such as price price and model model are examples examples of which which part of the the decision-making process? a. prob proble lem m iden identi tifi ficat catio ion n b. criter criteria ia weight weight alloca allocatio tion n c. identifyi identifying ng decision decision criteria criteria d. eval evalua uati ting ng deci decisi sion on effe effect ctiv iven enes esss (c; difficult; p. 136)
43.
Which of the followi following ng is the step in the decision-m decision-making aking process process that follows follows identif identifying ying a problem problem and decision decision criteria? a. alloca allocatin ting g weight weightss to the criter criteria ia b. anal analyz yzin ing g the the alte altern rnat ativ ives es c. select selecting ing the the best best altern alternati ative ve d. implem implement enting ing the the altern alternati ative ve (a; moderate; p. 136)
44.
In allocating allocating weights weights to the decision decision criteria, which of the following following is helpful to remember? a. All weight weightss must must be the same. same. b. The total total of the weights weights should should sum to 1.0. c. Every factor criterion considered, regardless of its importance, must receive some weighting. d. Assign the most important criterion a score, score, and then assign weights against that standard. (d; difficult; p. 136)
45.
In step Step six 6 of the decision decision-makin -making g process, process, each alternative alternative is evaluated by appraisin appraising g it against the _____________. a. subjectiv subjectivee goals goals of the decision decision maker b. criteria ria c. asse assess ssed ed valu values es d. implem implement entati ation on strate strategy gy (b; moderate; p. 138)
46.
Selecting an alternative alternative in the decision-making decision-making process is is accomplished accomplished by __________________. __________________. a. choosing choosing the alternativ alternativee with the highest highest score b choosi choosing ng the one you like like best best c. selecting selecting the alternati alternative ve that has the lowest lowest price d. selecting selecting the alternati alternative ve that is the most reliable reliable (a; easy; p. 138)
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47.
______________ includes conveying a decision to those those affected and getting getting their their commitment to it. a. select selecting ing an altern alternati ative ve b. evalu evaluati ation on of decisi decision on effect effective ivenes nesss c. implem implement entati ation on of the altern alternati atives ves d. analy analyzin zing g altern alternati atives ves (c; moderate; p. 138)
48.
Which of the followin following g is important important in effectively effectively implementin implementing g the chosen alternati alternative ve in the decision-mak decision-making ing process? a. gettin getting g upp upperer-man manage agemen mentt suppor supportt b. double-ch double-checkin ecking g your analysis analysis for potentia potentiall errors b. allowing allowing those those impact impacted ed by the outcome outcome to participat participatee in the process process d. ignoring ignoring criticism criticism concerning concerning your chosen chosen alternati alternative ve (c; moderate; p. 138)
49.
Which of the following is the the final step in the decision-making decision-making process? a. identi identifyi fying ng the proble problem m b. evaluating evaluating the decision’ decision’ss effective effectiveness ness c. identi identifyi fying ng decisi decision on criter criteria ia d. selecting selecting an alternativ alternativee that can resolve resolve the problem problem (c; easy; p. 138)
50.
Which of the following following is important to to remember in evaluating evaluating the effectiveness of of the decision-making process? a. ignore ignore critic criticism ism concern concerning ing the decision decision-making decision- making process b. you may have have to start start the whole whole decisi decision on proces processs over over c. Restart Restart the the decisi decision-ma on-making king process process if the decision decision is is less less than than 50 50 percent percent effective. effective. d. Ninety Ninety percent percent of proble problems ms with with decisio decision n making making occur in the the implem implementat entation ion step. step. (b; difficult; p. 138)
THE MANAGER AS DECISION MAKER
51.
Managers Managers are assumed to be ___________ ______________; ___; they make consisten consistent, t, value-maximiz value-maximizing ing choices choices within specified specified constraints. a. rational b. leaders c. orga rganized d. sat satisfi isfice cerrs (a; easy; p. 139)
52.
It is assumed that a perfectly perfectly rational decision maker ______________. ______________. a. does does not follow follow ration rational al assump assumptio tions ns b. does not consider consider value value maximizin maximizing g as an objectiv objectivee c. offers offers incons inconsist istent ent decisi decisions ons d. would would be object objectiv ivee and logica logicall (d; moderate; p. 139)
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53.
Rational managerial managerial decision decision making assumes that decisions are made in the best ______________ ______________ interests of the organization. a. economic b. pay-off c. stat statiistic tical d. budgetary (a; moderate; p. 139)
54.
Managers can make rational decisions if _________________. _________________. a. the the prob proble lem m is simp simple le b. the the goal goalss are are clea clear r c. the altern alternati atives ves are limite limited d d. all all of the the abov abovee (d; challenging; p. 140)
55.
Managers can make rational decisions if ______________. ______________. a. the costs of finding finding and evaluatin evaluating g alternativ alternatives es is low b. the organizati organizational onal culture culture does not encourage encourage risk taking taking c. outcom outcomes es are concre concrete te and measur measurabl ablee d. a and c (d; challenging; p. 140)
56.
Which of the the following following is not a valid valid assumption assumption about rationality? a. the proble problem m is clear clear and unambi unambiguo guous us.. b. a single single well-defin well-defined ed goal is to be achieved. achieved. c. pref prefer eren ence cess are are clea clear. r. d. preferences preferences are constantl constantly y changing. changing. (d; difficult; p. 140)
57.
In “bounded “bounded rationality,” rationality,” managers managers construct construct __________ ______________ ____ models models that extract the essential essential features features from problems. a. multiple b. binding c. inte intera racctiv tive d. simpli simplifie fied d (d; difficult; p. 140)
58.
Accord According ing to the text text book , because managers can’t possibly analyze all information on all alternatives, managers ______________, ______________, rather than ______________. a. maxi maximi mize; ze; sati satisf sfic icee b. maxi maximi mize; ze; mini minimi mize ze c. sati satisf sfic ice; e; mini minimi mize ze d. sati satisf sfic ice; e; maxi maximi mize ze (d; moderate; p. 140)
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59.
When managers managers circumvent the rational rational decision-making decision-making model model and find ways to satisfice, satisfice, they are following following the concept of _________________. _________________. a. juri jurisp spru rud dence ence b. boun bounde ded d rati ration onal alit ity y c. leastleast-sq squar uared ed exempt exemption ionss d. self-m self-moti otivat vated ed decisi decisions ons (b; moderate; p. 140)
60.
The type type of decision decision making making in which the solutio solution n is conside considered red “good “good enough” enough” is kno known wn as which which of the following? a. intuition b. rationalization c. max maximi imizing zing d. satis satisfic ficing ing (d; moderate; p. 140)
61.
When a decision decision maker chooses chooses an alternative alternative under under perfect rational rationality, ity, she chooses chooses a __________ ______________ ____ decision decision,, whereas under bounded rationality she chooses a ______________ decision. a. mini minim mizin izing g; satisfyingsatisficing b. satisf satisfici icing ng;; maximi maximizin zing g c. maximi maximizin zing; g; satisf satisfici icing ng d. maximi maximizin zing; g; minimi minimizin zing g (c; difficult; p. 140)
62.
An increased increased commitmen commitmentt to a previous decisi decision on despite despite evidence evidence that it it may have been wrong, wrong, is referred referred to as _______________. a. econ econom omie iess of comm commit itme ment nt b. escala escalatio tion n of commit commitmen mentt c. dimen dimensi sion onal al comm commit itme ment nt d. expans expansion ion of commit commitmen mentt (b; moderate; p. 141)
63.
Managerial decisions are strongly influenced by ________________. ________________. a. the organi organizat zation ion’s ’s cultur culturee b. inte intern rnal al poli politi tics cs c. powe powerr cons consid ider erat atio ions ns d. all all of the the abov abovee (d; easy; p. 141)
64.
Intuitive Intuitive decision decision making making is is _____ _________ ________ ______. __. a. not utiliz utilized ed in organi organizat zation ionss b. a conscious conscious process process based on accumulate accumulated d judgment judgment c. a subconsc subconscious ious process process based on experienc experiencee d. important important in supporting supporting escalation escalation of commitment commitment (c; moderate; p. 141)
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65.
In studying studying intuitive decision making, researcher have found found that __________________. __________________. a. managers managers do not make decisions decisions based on feelings feelings or emotions emotions b. managers managers use data from their their subcons subconscious cious mind to help make their their decisio decisions ns c. rational rational thinking thinking always always works works better better than intuitiv intuitivee d. accumulate accumulated d experience experience does not support support intuitiv intuitivee decisions decisions (b; moderate; p. 141)
66.
Accord According ing to the text text book , all of the following are aspects of intuition except __________________. __________________. a. experi experienc enceded-bas based ed decis decision ionss b. affect affect-in -initi itiate ated d decisi decisions ons c. cognit cognitive ive-ba -based sed decisi decisions ons d. prog progra ramm mmed ed deci decisi sion onss (d; easy; p. 141)
67.
Accord According ing to the text text book , _____________ are straightforward, familiar, and easily defined problems. a. poorly poo rly struct structure ured d proble problems ms b. well-s well-stru tructu ctured red proble problems ms c. uniq unique ue prob proble lems ms d. nonpro non progra gramme mmed d proble problems ms (b; moderate; p. 142)
68.
Well-structured problems align well with which type of decision making? a. progr rogram amm med b. sat satisfi isfici cin ng c. intuition d. gut fee feeling ling (a; moderate; p. 142)
69.
The most efficient way to handle handle well-structured well-structured problems is through through ______________ ______________ decision making. making. a. linear b. unique c. focused d. progr rogram amm med (d; moderate; p. 142)
70.
______________ ______________ decision decision making is relatively simple and tends to rely heavily heavily on previous solutions. solutions. a. Nonp Nonpro rogr gram amme med d b. Linear c. Sat Satisfi isfici cin ng d. Prog Progra ramm mmed ed (d; moderate; p. 142)
71.
Programmed decision making tends to rely on which which of the following? following? a. the problem problem solver’s solver’s ability ability to think on his or her feet b. the developmen developmentt of a clear set of alternativ alternativee solutions solutions c. prev previo ious us solu soluti tion onss d. identific identification ation of the actual actual problem problem (c; easy; p. 142)
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72.
A procedure procedure ________ ____________ _______. ___. a. is an expli explicit cit statement statement detailing detailing exactly exactly how to deal with a decisi decision on b. is a series series of interrelat interrelated ed sequen sequential tial steps steps to respond respond to to a structured structured problem problem c. is a set of guide guidelines lines that channel channel a manager’s manager’s thinking thinking in dealin dealing g with with a problem problem d. allows allows a manager manager to use broad decisiondecision-makin making g authority authority (a; moderate; p. 142)
73.
A ______________ ______________ is an explicit statement that tells tells a manager what what he or she can or cannot not to do. a. proc rocedure b. policy c. rule d. solution (c; moderate; p. 142)
74.
A policy policy ________ ____________. ____. a. typica typically lly contai contains ns an ambigu ambiguous ous term term b. is used frequently frequently when a manager manager faces a well-stru well-structure ctured d problem problem c. allows allows little little discretio discretion n on the part of the manager manager d. offers offers strict strict rules as to how a problem problem should should be solved solved (a; moderate; p. 142)
75.
Which of the following factors contrasts the difference difference between between a policy and a rule? a. a polic policy y establ establish ishes es parame parameter terss b. a rule rule establ establish ishes es parame parameter terss c. a poli policy cy is more more expl explic icit it d. a rule rule is more more ambi ambigu guou ouss (a; difficult; p. 142)
76.
Accord According ing to the text text book , a ______________ ______________ typically contains an ambiguous term that leaves interpretation up to the decision maker. a. system b. rule c. solution d. policy (d; moderate; p. 142)
77.
A business business school’s statement that that it “strives for productive relationships with local local organizations” organizations” is an example of a ________________. a. rule b. policy c procedure d. comm commit itme men nt (b; moderate; p. 142)
78.
Poorly Poorly structured structured problems problems _________ _____________ ____.. a. are are easi easily ly solv solved ed b. presen presentt new or unu unusua suall circum circumsta stance ncess c. force managers managers to deal with incomplet incompletee or ambiguous ambiguous informatio information n d. b and c (d; moderate; p. 143) Nonprogrammed decisions are best described as ________________. ________________.
79.
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a. recurr recurring ing,, but but diffic difficult ult to make make b. very similar similar to problems problems in other other areas of the organizati organization on c. requiring requiring more aggressiv aggressivee action action on the decision decision maker’s maker’s thought thought processes processes d. unique unique and non nonrecu recurri rring ng (d; moderate; p. 143) 80.
When When proble problems ms are ___ ______ ______ ______ _____, __, managers managers must rely rely on ___ ______ ______ ______ _____ __ in order order to develo develop p uniqu uniquee solutions. a. well structure structured; d; nonprogr nonprogrammed ammed decision decision making making b. well well struct structure ured; d; pure pure intui intuitio tion n c. poorly poorly structured structured;; nonprogra nonprogrammed mmed decision decision making making d. poorly poorly structured structured;; programmed programmed decision decision making making (c; moderate; p. 143)
81.
Which of the following terms is associated with nonprogrammed decisions? a. unique b recurring c. routine d. repe repeti titi tiv ve (a; moderate; p. 143)
82.
Lower-level managers typically confront what type of decision decision making? a. unique b. nonro onrout utin inee c. progr rogram amm med d. nonp nonpro rogr gram amme med d (c; moderate; p. 142)
83.
When lower-level lower-level managers deal with well-structured problems and they rely on procedures procedures and rules to solve the the problems, this refers to a relationship between types of problems and types of decisions known as ________________. a. prep prepro rogr gram ammi ming ng b. focus focused ed decisi decision on making making c. inte integr grat atio ion n d. sep separat ration ion (c; moderate; p. 143)
84.
Which of the the following following is likely to make the the most programmed decisions? a. the the CEO CEO of Peps PepsiC iCo. o. b. the vice president president of General General Motors Motors Cadillac Cadillac Division. Division. c. the head of the Minute Minute Maid Division Division at Coca-Cola. Coca-Cola. d. the manage managerr of the the local local McDona McDonald’ ld’s. s. (d; easy; p. 142)
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85.
As decisions move from programmed to more nonprogrammed, ______________. ______________. a. compu computer terss can make make more more decis decision ionss b. compu computer terss can make make fewer fewer decisi decisions ons c. manage managers rs have have less less input input in the proces processs d. none none of the the abov abovee (b; easy; p. 143)
86.
Which of the following following is an accurate statement concerning concerning the the impact of programmed decisions on organizations? organizations? a. They maximize maximize the need for managers managers to exercise exercise discretio discretion. n. b. They decrease decrease the need for high-cost high-cost managerial managerial talent. talent. c. They increase increase the amount amount of judgment judgment needed by managers. managers. d. They decrease decrease organizati organizational onal efficiency efficiency.. (b; moderate; p. 142)
87.
________ ____________ ______ __ is a situation situation in which a manager can make accurate accurate decisions decisions because because the outcome outcome of every alternative is known. a. Certainty b. Risk c. Uncer ncerttaint ainty y d. Maximax e. Maximin (a; easy; p. 144)
88.
If an individual individual knows knows the price price of three three similar cars at different dealerships, he he or she is operating operating under what what type of decision-making condition? a. risk b. uncer ncerttain ainty c. certainty d. factual (c; easy; p. 144)
89.
Nonprogrammed decisions are typically typically made under under a condition of _______________ ________________. _. a. certainty b. low low leve levels ls of risk risk c. uncer ncerttain ainty d. reli reliab abil iliity (c; moderate; p. 145)
90.
Organizational efficiency is improved by the use of _________________. _________________. a. prog progra ramm mmed ed deci decisi sion onss b. nonpro non progra gramme mmed d decisi decision onss c. less less plan planni ning ng d. lower lower expectatio expectations ns and lower demands demands by top manager manager (a; moderate; p. 142)
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91.
A retail retail cloth clothing ing store store manager manager who estimate estimatess how much to order for the current current spring spring season season based on last spring’s outcomes is operating under what kind of decision-making condition? a. seasonal b. risk c. uncer ncerttain ainty d. certainty (b; difficult; p. 142)
92.
______________ ______________ is a situation in which a decision maker has neither neither certainty certainty nor reasonable reasonable probability probability estimates estimates available. a. Certainty b. Risk c. Uncer ncerttaint ainty y d. Maximax (c; easy; p. 145)
93.
A person at a horse horse racetrack racetrack who bets all all of his/her money money on the odds-bas odds-based ed long shot shot to “win” (rather (rather than “place” or “show”) is making what kind of choice? a. maximax b. maximin c. minimax d. minimin (a; moderate; p. 146)
94.
Which of the the following following best describes “maximizing the minimum possible payoff”? a. maximax b. maximin c. minimax d. minimin (b; moderate; p. 146)
95.
An individual individual making a “maximin” type of choice has what type of psychological psychological orientation orientation concerning concerning uncertain uncertain decision making? a. optimist b. realist c. pessimist d. sat satisfi isfice cer r (c; moderate; p. 146)
96.
Which Which of the following following would best best describe describe the psychologic psychological al orientatio orientation n of an individual individual making a “maximax” “maximax” type of choice? a. optimist b. realist c. pessimist d. sat satisfi isfice cer r (a; moderate; p. 146)
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97.
Optimistic managers could could be expected to to utilize utilize their their maximax orientation when they they _______________. _______________. a. maximi maximize ze the maximu maximum m payoff payoff b. maximi maximize ze the minimu minimum m payoff payoff c. minimi minimize ze the maximu maximum m regret regret d. minimi minimize ze the minimu minimum m regret regret (a; easy; p. 146)
98.
Decision Decision makers makers are are affected affected by _____ _________ ________ ________ ____.. a. the decision-m decision-making aking approach approach being taken b. the type type of proble problem m being being consid considere ered d c. the decision decision maker’s maker’s problem-so problem-solving lving style style d. all all of the the abov abovee (d; moderate; p. 147)
99. 99.
Acco Accord rdin ing g to the the tex textt book , a manager who desires to minimize his or her maximim “regret” will opt for a ______________ ______________ choice. a. maximax b. maximin c. minimax d. minimin (c; moderate; p. 146)
100. All of the the following are mentioned in the textbook text book as as decision-making styles except _________________> _________________> a. directive b. egot egotis isttical ical c. analytic d. conc concep eptu tual al (b; moderate; p. 147)
SCENARIOS AND QUESTIONS For each of the following choose the answer that most completely answers the question. THE DECISION-MAKING PROCESS
Decisions, Decisions (Scenario) Sondra needed help. Her insurance company’s rapid growth was necessitating making some changes, but what changes? Should they add to the existing information system? Buy a new system? She was given the responsibility of analyzing the company’s present information system and decide what the company should do that would give them plenty of room. She was confused and needed help in making the correct decision. 101. According to the decision-making decision-making process, the first first step Sondra should take would would be to _____________. _____________. a. analy analyze ze altern alternati ative ve soluti solutions ons b. identi identify fy decisi decision on criter criteria ia c. evaluate evaluate her decision’s decision’s effectiven effectiveness ess d. iden identi tify fy the the prob proble lem m (d; moderate; p. 134) 102. According to the decision-making decision-making process, the second second step Sondra should take take would be to ____________. ____________.
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a. analy analyze ze altern alternati ative ve soluti solutions ons b. identi identify fy decisi decision on criter criteria ia c. evaluate evaluate her decision’s decision’s effectiven effectiveness ess d. alloca allocate te weigh weights ts to the criter criteria ia (b; moderate; p. 136) 136) 103. The very last step Sondra should should take, according to the decision-making process, process, would be to __________. __________. a. analy analyze ze altern alternati ative ve soluti solutions ons b. sele select ct alte altern rnat ativ ives es c. implem implement ent the altern alternati ative ve d. evaluate evaluate the decision’ decision’ss effectiven effectiveness ess (d; easy; p. 138) 104. When Sondra Sondra is conveying conveying her decision decision to those those affected and getting their their commitment commitment to it, she is performing performing which step in the decision-making process? a. analy analyzin zing g altern alternati ative ve solut solution ionss b. select selecting ing altern alternati atives ves c. implem implement enting ing the the altern alternati ative ve d. identi identifyi fying ng the proble problem m (c; moderate; p. 138) 105. Allocatin Allocating g weights to the criteria criteria is the step in the decision-m decision-making aking process process that occurs between identifying identifying the decision criteria and ______________. ______________. a. develo developin ping g the the altern alternati atives ves b. select selecting ing altern alternati atives ves c. implem implement enting ing the the altern alternati ative ve d. identi identifyi fying ng the proble problem m (a; difficult; p. 138)
Colleen is a student, and her older brother has loaned her an old car. The car is in need of several repairs before she will feel comfortable driving it. 106. Colleen needs a vehicle, but she she has to decide if if the vehicle is worth repairing. repairing. She is facing a(n) a(n) _____________, _____________, a discrepancy between an existing and a desired state of affairs. a. alte altern rnaativ tive b. weig weight hted ed prob proble lem m set set c. problem d. certai certainty nty avoida avoidance nce situa situatio tion n (c; moderate; p. 134) 107. In talking talking with an automotiv automotivee repair repair person, person, Colleen Colleen needs to prioritiz prioritizee the repairs. repairs. Her first concern concern is safety safety of the vehicle. This step in the decision-making process is called __________________. a. weight weighting ing the the decisi decision on criter criteria ia b. analy analysis sis of altern alternati atives ves c. identi identific ficati ation on of decis decision ion criter criteria ia d. select selection ion of an altern alternati ative ve (c; moderate; p. 136) 108. Colleen decides to to have all of the problems fixed fixed on the car. She assumes that the repair person has found all all the problems and that there will be no problem correcting the imperfections within a specified budget. This is an example of a __________ decision.
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a. paroc rochial b. irra irrattional onal c. ethical d. rational (d; challenging; p. 139) 109. Colleen’s brother has has a different view view of the repairs. He assumes that the repair person is using the the best information available, but there may be other unexpected repairs that might surface and that a higher budget might be more reasonable. He is using ______________. ______________. a. ration rational al decisi decision on making making b. risk risk avo avoidan idance ce c. boun bounde ded d rati ration onal alit ity y d. Stag Stagee 4 deci decisi sion on maki making ng (c; challenging; p. 140) 110. Colleen’s brother feels the the car is worth repairing because he has owned owned several cars made by the same manufacturer manufacturer as this car, and he has driven this car for several years. He is using _________ to decide decide the car has value despite of its need of repair. a. intui intuitiv tivee decisi decision on making making b. selective selective coordinati coordination on of thought thought processes processes c. sunk costs d. retu return rn on inve invest stmen mentt (a; challenging; p. 141)
THE MANAGER AS A DECISION MAKER
The First Job (Scenario) Upon graduation, you search for a job with the university’s job placement center. Although you have studied and prepared to work in an advertising agency, the first job that you are offered is a supervisor in a manufacturing company working the afternoon shift from 3:00 P.M. until 11:00 P.M. 111. Although the job job in the manufacturing firm was good good enough, you acted in a __________ __________ manner by accepting accepting a job. a. self self-r -rig ight hteo eous us b. boun bounde dedl dly y rati ration onal al c. sat satisfa isfact cto ory d. liberal (b; moderate; p. 140)
112. If you had made a larger search using the the Internet and other employment employment search processes, you might have have been able to find more employment opportunities. opportunities. This would have been a more _________ decision-making decision-making process. a. nonp nonpro rogr gram amma mabl blee b. uncertain c. risky
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d. perf perfec ectl tly y rati ration onal al (d; moderate; p. 139) 113. Under bounded rationality, you would be expected to search for a job by ________________ ________________.. a. looking looking at all all the the opportuni opportunities ties that can be analyz analyzed ed in in the the time time availa available ble b. looking looking at all the opportuni opportunities ties available available c. looking looking “outside “outside the box” in your search search d. analyzing analyzing all the opportuni opportunities ties until until you find the perfect perfect job (a; challenging; p. 140) 114. If you use a shortened process process of searching for a job, it is likely likely you ___________ ___________ rather than maximized in your decision process. a. minimized b. rati ration onal aliz ized ed c. sat satisfi isfice ced d d. agreed (c; challenging; p. 140) 115. During your job search, search, you depend on __________ __________ decision making by making your decision on accumulated judgment and experience. a. expe experi rien enttial ial b. legal c. intuitive d. for formida midab ble (c; challenging; p. 141)
THE MANAGER AS DECISION MAKER
Is the Picture Clear? (Scenario) Sharon was the regional manager of a large cable television company. She faced many problems and decisions daily , such as how to price each market, who to hire, what kind of technology she should purchase, and how she should handle increasing customer complaints. She needed some help sorting these issues out. 116.. Issues 116 Issues,, which that are straightforward,, straightforward, , where the problem is familiar, and that are easily defined, such as how to handle handle late payment by customers customers or customers customers wanting to receive receive refunds, refunds, are known known as _________ _____________ _____ _ problems. a. routine b. standard c. well well-s -str truc uctu ture red d d. conv conven enti tion onal al (c; moderate; p. 142) 117. Unfortuna Unfortunately tely,, Sharon also faces issues issues that havecontaining information that is ambiguous or incomplete, such as what kind of technology to purchase. These are known as ______________ problems. a. poor poorly ly stru struct ctur ured ed b. variable c. random d. hithit-an andd-mi miss ss (a; moderate; p. 142)
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118.. When 118 When a custom customer er calls calls up and want wantss reque requests sts a refund for a partial month’s usage of cable, the fact that such situations are routine and most likely have a standard response would make the response a ______________ decision. a. standard b. routine c. policy d. progr rogram amm med (d; moderate; p. 142) 119.. Someti 119 Sometimes mes Sharon Sharon follow followss a ___ ______ ______ ______ _____ __,, a series series of interre interrelat lated ed sequen sequentia tiall steps steps for respon respondin ding g to a structured problem. a. rule b. policy c. proc rocedure d. sugg sugges esti tio on (c; moderate; p. 142) 120.. Someti 120 Sometimes mes Sharon Sharon instru instructs cts her local local manage managers rs to follow follow ___ ______ ______ ______ _____ __ when when confro confronte nted d with with proble problem m situat situation ionss These These estab establis lish h parame parameter terss for the the manag manager er making making the the decis decision ion rath rather er than than speci specific ficall ally y statin stating g what should or should not be done. a. rules b. proce rocedu dure ress c. policies d. orders (c; moderate; p. 142) Decision-Making Conditions (Scenario) Sandy Jo is the manager for TrucksRUs, a medium-sized hauling hauling service located in the Southeast. Southeast. She is responsible for schedulin scheduling g trucks, initiating initiating new routes, routes, and staffing staffing both existing existing and new routes. She is currently currently strugglin struggling g with existing information about the profitability of existing and future truck routes. 121. Joe, Sandy Sandy Jo’s Jo’s best driver driver , tells her that he believes that he can estimate that there is a 75 percent probability that they can get the business of Pork Brothers, Inc. if they initiate a truck route through rural North Carolina. Joe is operating under a condition of ______________. a. certainty b. risk c. uncer ncerttain ainty d. maximax (b; difficult; p. 144) 122. Sandy Jo can make accurate decisions decisions if she is willing to pay $5,000 $5,000 for research about the profitability profitability of various truck routes. If she pays for the research, she believes believes that she is operating under under a condition of ____________. ____________. a. certainty b. risk c. uncer ncerttain ainty d. maximax (a; difficult; p. 144) 123. Sandy Jo knows knows that she is operating operating in an uncertain uncertain environme environment. nt. She is basically basically an optimist, optimist, and we would, would,
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therefore, expect her to follow a ______________ ______________ strategy. a. certainty b. risk c. uncer ncerttain ainty d. maximax (d; moderate; p. 146) 124. Sandy Jo knows knows that she is operating operating in an uncertain uncertain environme environment. nt. She is basically basically a pessimist, pessimist, and we would, therefore, expect her to follow a ______________ ______________ strategy. a. certainty b. risk c. minimax d. maximin (d; moderate; p. 146) 125. Sandy Jo wishes to minimize minimize her regret and will probably probably opt for a ______________ ______________ strategy. a. certainty b. risk c. minimax d. maximax (c; moderate; p. 146) Managing Your Career (Scenario) Michelle has a new job and is learning to perform the tasks assigned to her. Different situations demand different decision-making processes.
126. Michelle finds a situation that that instructs her in specific, interrelated, interrelated, sequential steps steps to respond to a problem. This is referred to as a _____________. _____________. a. rule b. policy c. broa broad d guid guidel elin inee d. proc rocedure (d; challenging.; p. 142)
127. Michelle finds finds a company directive that that specifically restricts her from taking certain actions. actions. This is a _____________. a. rule b. policy c. broa broad d guid guidel elin inee d. proc rocedure (a; moderate; p. 142) 128. As she learns learns the general general guidelines guidelines of the the job, Michelle is given more decision-making decision-making authority. authority. The guidelines guidelines establish parameters for decision making and are referred as a _____________. a. rule b. policy
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c. broa broad d guid guidel elin inee d. proc rocedure (b; challenging; p. 142) 129. Michelle eventually finds finds a problem that has no cut-and-dry cut-and-dry solution. The problem problem is unique and will never never occur again. This problem is referred to as _____________. _____________. a. flexible b. progr rogram amm med c. adapt aptable d. nonp nonpro rogr gram amme med d (d; moderate; p. 143) 130. Michelle’s superior superior is more comfortable comfortable with Michelle making programmed decisions decisions because _______________ _______________.. a. using using discretio discretion n to make nonprogra nonprogrammed mmed decisions decisions can cost money money b. Michelle Michelle may may develo develop p sound sound judgment judgment skills skills and and use use this this to to find find anothe anotherr job job c. the superior superior is uncomforta uncomfortable ble with delegation delegation of decisions decisions d. a and b (d; challenging; p. 142)
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ESSAY QUESTIONS THE DECISION-MAKING PROCESS
131. In a short essay, essay, list and discuss discuss the eight eight steps in the decision-making process. Answer a. Step Step 1: Identify Identifying ing a problem problem—th —thee decision decision-ma -makin king g process process begins begins with with the existe existence nce of a problem problem or a discrepancy between an existing and a desired state of affairs. However, a discrepancy without pressure to take action becomes a problem that can be postponed. b. Step Step 2: Identi Identify fy decisio decision n criteria criteria—on —once ce the manager manager has identifi identified ed a proble problem m that that needs attent attention ion,, the the decision criteria important to resolving the problem must be identified. That is, managers must determine what’s relevant in making a decision. c. Step 3: 3: Allocatin Allocating g weights weights to to the criteria criteria—at —at this this step, step, the decisi decision on maker maker must weigh the items items in order order to give them the correct priority in the decision. A simple approach is to give the most important criterion a weight of 10 and then assign weights to the rest against that standard. d. Step 4: Developing alternatives—the fourth step requires the decision maker to to list the viable alternatives that could resolve resolve the problem. problem. No attempt attempt is is made made in in this this step to evaluate evaluate the alternati alternative, ve, only only to list them. e. Step 5: Analyzing alternatives—once the alternatives have been identified, the decision maker must critically analy analyze ze each each one. one. From From this this compari comparison son,, the stren strength gthss and weakn weakness esses es of each each alter alternat native ive becom becomee evident. f. Step Step 6: Selectin Selecting g an alternat alternative ive—th —thee sixth sixth step is the importa important nt act of choosin choosing g the best alter alternat native ive from from among those considered. considered. All the pertinent criteria criteria in the decision have now been been determined , and weighted, and the alternatives have been identified and analyzed. g. Step 7: Implementing the alternative—implementat alternative—implementation ion involves conveying the decision to those affected by it and getting getting their commitment commitment to it. If the people who must carry out a decision decision participate participate in the process, process, they’re more likely to enthusiastically support the outcome than if they are just told what to do. h. Step 8: Evalua Evaluating ting decisio decision n effectiven effectiveness—t ess—the he last step step in the the decision-m decision-making aking proces processs involves involves appraisi appraising ng the outcome outcome of the decision decision to see if the the proble problem m has been resolv resolved. ed. Did the alternat alternative ive chosen chose n and implemented accomplish the desired result? If not, the manager may consider returning to a previous step or may even consider starting the whole decision process over. (difficult; p. 134)
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THE MANAGER AS DECISION MAKER
132. In a short essay, discuss the the assumptions of rationality rationality and the validity of those assumptions. Answer A decision maker who was perfectly rational rational would be fully objective and logical. logical. He or she would carefully define a proble problem m and would would have have a clear clear and specifi specificc goal. goal. Moreov Moreover, er, making making decis decision ionss using using rationa rationalit lity y would would consisten consistently tly lead toward selecting selecting the alternative alternative that maximizes maximizes the likelihoo likelihood d of achieving achieving that goal. The assumptions of rationality rationality apply to any decision. Rational managerial decision decision making assumes that decisions are made in the best economic interests of the organization That is, the decision maker is assumed to be maximizing the organi organizat zation ion’s ’s inter interest ests, s, not his his or her own intere interests sts.. Manage Manageria riall decisi decision on making making can follow follow ration rational al assumptions if the following conditions are met: The manager is faced with a simple problem in which the goals are clear and the alternatives limited, in which the time pressures are minimal, minimal , and the cost of seeking out and evaluating alternatives is low, for which the organizational culture supports innovation and risk taking, and in which outcomes outcomes are relatively relatively concrete concrete and measurable measurable However, However, most decisions decisions that managers managers face in the real world world don’t meet all those tests. (moderate; p. 139)
133. In a short short essay, discuss discuss bounded rationality and and satisficing. satisficing. Answer Despite the limits to perfect rationality, managers are expected to follow a rational process when making decisions. However, certain aspects of of the decision-making process are not realistic as as managers make decisions. decisions. Instead, managers tend to operate under assumptions of bounded rationality , ; that is, they behave rationally within the parameters of a simplified decision-making process that is limited by an individual’s ability to process information. Managers satisfice, rather than maximize, maximize , because they can’t possibly analyze all information on all alternatives. That is, they accept solutions that are “good enough.” They are being rational within the limits of their information information-processing informationprocessing ability. (easy; p. 140)
134. In a short short essay, essay, discuss discuss the difference difference between well-struct well-structured ured and poorly-st poorly-structu ructured red problems. problems. Include Include specific specific exampl examples es of each each type type of proble problem m to suppor supportt you yourr answer answer.. Next Next , discuss the type of decisions that would be
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used to address each of these problems. Answer a. Well-s Well-stru tructu ctured red probl problems— ems—the the goal goal of the the decis decision ion marker maker is clear, the problem is familiar, and information about the problem is easily defined and complete. Examples of these types of problems might include a customer wanting to return a purchase to a retail store, a supplier being late with an important delivery, a news team responding to an unexpected and fast-breaking event, or a college’s handling of a studen studentt wantin wanting g to drop drop a class. class. Such Such situat situation ionss are called called well-s well-stru tructu ctured red proble problems ms becaus becausee they they are straightforward, familiar, and easily defined problems. In handling these problem situations, the manager uses a programmed decision. Decisions are programmed to the extent that that they are repetitive and routine routine and to the extent extent that a defini definite te approach approach has been worked worked out for handling handling them. them. Since Since the proble problem m is well structured, the manager doesn’t have to go to the trouble and expense of going through an involved decision progress. Programmed decision making is relatively simple and tends to rely heavily on previous solutions. b. Poorly-st Poorly-structu ructured red problems—th problems—these ese problems problems are new or unusual unusual,, and information for them is ambiguous or incomplete. For example, the selection of an architect to design a new corporate manufacturing facility in Bangkok is an example of a poorly-structured problem. When problems are poorly structured, managers must rely on nonproprammed nonprogrammed decision making in order to develop unique solutions. Nonprogrammed decisions are unique and nonrecurring. When a manager confronts a poorly-structured problem, problem, or one that is unique, there is no cut-and-dry solution. It requires a custom-made response through nonprogrammed decision making. (difficult; p. 142)
135. In a short essay, essay, discuss the the differences differences between between a procedure, procedure, a rule, and a policy. Include Include specific specific examples examples of each to support your answer. Answer a. A procedure procedure is is a series series of interr interrelate elated d sequentia sequentiall steps steps that a manager manager can use use for respo responding nding to a structu structured red proble problem. m. The only only real real diffic difficul ulty ty is is in in ident identify ifying ing the proble problem. m. Once Once the proble problem m is is clear clear,, so is the the procedure. For instance, a purchasing manager manager receives a request from the sales department department for 15 PalmPilots for use by the company’s company’s customer service representatives. representatives. The purchasing manager manager knows that there there is a definite procedure for handling handling this decision. The decision-making process process in this case is merely executing a simple series of sequential steps. b. A rule rule is an explicit explicit stateme statement nt that that tells tells a manager manager what he or she she can can or cannot cannot do. Managers Managers frequentl frequently y use use rules when they confront a well-structured problem because they are simple to follow and ensure consistency. For example, rules about lateness and absenteeism permit supervisors to make disciplinary decisions rapidly and with a relatively high degree of fairness. c. A policy policy provid provides es guidel guidelines ines to channel channel a manager’s manager’s thinking thinking in a specific specific directi direction. on. In contra contrast st to a rule, rule, a policy establishes parameters for the decision maker rather than specifically stating what should or should not be done. Policies typically contain an ambiguous term that leaves interpretation interpretation up to the decision maker. For instance, each of the following is a policy statement: “The customer always comes first and should always be satisfied,” “We promote from within, whenever possible,” and “Employee wages shall be competitive within community standards.” (moderate; p. 142)
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