Fundamentals of Management, 7e (Robbins/DeCenzo/Coulter) Chapter Foundations of Decision Making 1) In decision making, a problem can be defined as a discrepancy between what exists and what the problem solver desires to exist Answer: TRUE Explanation: A problem is a difference between a desired state and an existing state For example, suppose a person is hungry—the existing state of not having food The desired state is to obtain food So the problem is defined as the difference between the no-food state and the food state Diff: Page Ref: 58 Objective: 3.1 2) The second step in the decision-making process is identifying a problem Answer: FALSE Explanation: The identification of a problem is the first step in the decision-making process Once you have identified a problem, you can decide how to solve it Diff: Page Ref: 59 Objective: 3.1 3) A decision criterion defines factors that are relevant in a decision Answer: TRUE Explanation: Decision criteria are comprised of factors that will affect a decision If the decision is between driving or riding a bike to work, criteria might include cost, weather, convenience, ecological considerations, time, clothing, and so on Diff: Page Ref: 59 Objective: 3.1 4) Managers identify a problem by comparing the current state of affairs to some standard Answer: TRUE Explanation: The standard for comparison might be a goal that has been set, or comparison with some historical standard or standard set by a competitor For example, a manager might detect a discrepancy between a goal of 100 units sold and the existing state of only 50 units sold This discrepancy constitutes a problem that must be solved Diff: Page Ref: 59 Objective: 3.1 5) All criteria are equally important in the decision-making process Answer: FALSE Explanation: Criteria have differing values, depending on their importance The importance of an individual criterion is indicated by how it is weighted The greater the weight assigned to the criterion, the greater its importance Diff: Page Ref: 59 AACSB: Analytic Skills Objective: 3.1 Copyright © 2011 Pearson Education, Inc 6) Identifying the wrong problem is just as much a failure for a manager as identifying the right problem and failing to solve it Answer: TRUE Explanation: Problem identification is a critical part of problem solving and decision making Solving the wrong problem does nothing to further a manager's goals so it is no value Diff: Page Ref: 59 AACSB: Analytic Skills Objective: 3.1 7) The final step of the decision-making process is to implement the alternative that has been selected Answer: FALSE Explanation: Implementation of the best alternative is the second-to-last step in the process The final step of the process is to appraise the result of the decision to see if it solved the problem Diff: Page Ref: 61 Objective: 3.1 8) A heuristic can simplify the decision-making process Answer: TRUE Explanation: A heuristic is a rule of thumb that is used to simplify the decision-making process by allowing the decision maker to focus on just a few variables, rather than all variables When used wisely, heuristics make decision making easier and simpler Diff: Page Ref: 62 Objective: 3.1 9) Because heuristics simplify the decision-making process, they are unlikely to lead to errors Answer: FALSE Explanation: By virtue of their simplicity, heuristics can lead to many different kinds of biases and errors Using heuristics lures decision makers into ignoring critical elements of the situation and oversimplifying the problem Diff: Page Ref: 62 AACSB: Analytic Skills Objective: 3.1 10) Decision makers who "cherry-pick" information that matches what they already know are guilty of confirmation bias Answer: TRUE Explanation: Confirmation bias means that the decision maker has already made up his or her mind and is seeking only the information that will confirm that position Cherry-picking is a way of preferentially selecting information that supports your position and ignoring all other information Diff: Page Ref: 62 AACSB: Analytic Skills Objective: 3.1 Copyright © 2011 Pearson Education, Inc 11) A basketball coach who takes a very good shooter out of a game because she missed her last two shots has availability bias Answer: TRUE Explanation: Availability bias is the tendency to over-accentuate recent history and discount long-term patterns This basketball coach is ignoring long-term patterns—the player is a good shooter—in favor of very recent history—two missed shots—so he is displaying availability bias Diff: Page Ref: 63 AACSB: Analytic Skills Objective: 3.1 12) A rational decision will never fail to provide the best and most successful solution to a problem Answer: FALSE Explanation: A rational decision is logical, objective and will maximize the likelihood of solving a problem or achieving a goal That said, a decision can be arrived at through a rational process and still be wrong due to the decision maker lacking complete information about the situation Diff: Page Ref: 64 AACSB: Analytic Skills Objective: 3.2 13) Maximizing value means a decision will have the best possible outcome for the parties involved Answer: TRUE Explanation: Maximizing value is a matter of making a decision that results in the ideal, or best possible solution A baseball manager, for example, wants to make a decision that will not only score runs, a favorable outcome, but win the game, the ideal or maximal outcome Diff: Page Ref: 65 AACSB: Analytic Skills Objective: 3.2 14) One assumption of bounded rationality is that managers can analyze all relevant information about all alternatives for a situation Answer: FALSE Explanation: The idea of bounded rationality says that decision makers can never analyze all information for the alternatives involved So decision makers need to put limits on how much information they will analyze Diff: Page Ref: 65 AACSB: Analytic Skills Objective: 3.2 Copyright © 2011 Pearson Education, Inc 15) A synonym for the word satisfice is maximize Answer: FALSE Explanation: The words satisfice and maximize are opposites rather than synonyms When a manager does not have enough information to maximize, or find the best possible solution to a problem, he or she must compromise, or satisfice When you satisfice you accept not the best solution, but a solution that is "good enough." Diff: Page Ref: 65 AACSB: Analytic Skills Objective: 3.2 16) One assumption of bounded rationality is that managers usually make rational decisions Answer: TRUE Explanation: Bounded rationality assumes that managers are logical, objective, and fairly rational when they make decisions However, since managers often don't have access to all of the relevant information for a given situation, they must bound their rationality within the limits of the information they actually have Diff: Page Ref: 66 AACSB: Analytic Skills Objective: 3.2 17) Intuitive decision making is systematic, logical, and orderly Answer: FALSE Explanation: Intuitive decisions may be perfectly sound, but they are not arrived at through a systematic analysis of alternatives Instead, intuitive decisions are quickly made and rely on experience, unconscious reasoning, feelings, and hunches Diff: Page Ref: 66 AACSB: Analytic Skills Objective: 3.2 18) Intuitive decision making cannot be a part of the rational decision-making process Answer: FALSE Explanation: Intuitive decisions are not arrived at in a deliberative, systematic manner, but they can be objective and logical, so they are considered rational Diff: Page Ref: 66 AACSB: Analytic Skills Objective: 3.2 19) The expression "throwing good money after bad" is an example of an escalation of commitment Answer: TRUE Explanation: Throwing good money after bad typically denotes a situation in which money has already been wasted on an unsuccessful venture—"bad money." Throwing more "good money" into the situation simply because of the "bad money" already committed is a clear example of escalation of commitment Diff: Page Ref: 66 AACSB: Analytic Skills Objective: 3.2 Copyright © 2011 Pearson Education, Inc 20) Emotions should always be strictly ignored in a decision-making process Answer: FALSE Explanation: Decisions that were accompanied by strong feelings were found to be more reliable than those that did not have an emotional component, according to one study, especially in cases in which decision makers acknowledged their feelings So emotions should not be ignored during the decision-making process Diff: Page Ref: 67 AACSB: Analytic Skills Objective: 3.2 21) Programmed decisions tend to be routine Answer: TRUE Explanation: A programmed decision is a routine decision that works well in solving structured problems that present no ambiguity or unknown elements Programmed decisions can usually be solved using a systematic procedure, rule, or policy Diff: Page Ref: 68 AACSB: Analytic Skills Objective: 3.3 22) A rule is simpler than a policy or a procedure to implement Answer: TRUE Explanation: A rule is a simple statement that can be applied directly to a situation For example, a broker can easily follow a rule to sell a specific stock when it reaches a specific price point A procedure or policy may have an identical outcome, but a more complicated series of steps must be taken to arrive at that outcome Diff: Page Ref: 68-69 AACSB: Analytic Skills Objective: 3.3 23) Implementing a procedure requires more judgment and interpretation than implementing a policy Answer: FALSE Explanation: A procedure is a series of steps that must be followed to arrive at a decision, each of the steps being clear and straightforward A policy provides guidelines rather than steps for the decision maker to follow Each guideline must be interpreted and evaluated for the situation at hand Therefore a policy requires much more judgment and interpretation than a procedure Diff: Page Ref: 69 AACSB: Analytic Skills Objective: 3.3 24) A highway speed limit is an example of a policy Answer: FALSE Explanation: A highway speed limit is an example of a rule, not a policy Policies require the decision maker to exercise judgment and interpretation Following a speed limit, on the other hand, involves no interpretation The driver simply must not exceed the posted speed Diff: Page Ref: 69 Objective: 3.3 Copyright © 2011 Pearson Education, Inc 25) Managerial decisions are likely to become more programmed as managers rise in an organizational hierarchy Answer: FALSE Explanation: Problems that managers face become more unique, ambiguous, and difficult as the status of a manager rises, not more programmed Top managers are paid more than lower-level managers specifically because they are expected to make difficult decisions More routine decisions are made by lower-level managers Diff: Page Ref: 70 Objective: 3.3 26) Most managerial decisions include an element of risk Answer: TRUE Explanation: Few situations involve certainty, in which a manager knows all outcomes in a situation and can choose between them Instead, situations usually involve risk, in which the manager must estimate the probability of different outcomes Diff: Page Ref: 70 Objective: 3.3 27) Uncertainty involves a situation in which the probability of a certain outcome is known to be small Answer: FALSE Explanation: In an uncertain situation, the probabilities of specific outcomes are not known and cannot be reasonably estimated Therefore, the probability that any outcome is high or low cannot be determined Diff: Page Ref: 70 AACSB: Analytic Skills Objective: 3.3 28) A manager is more confident of his assessment of a situation if it involves risk rather than uncertainty Answer: TRUE Explanation: With risk, a manager is able to estimate the likelihood of specific outcomes With uncertainty, not enough is known even to make estimates So a manager would be more confident of a position involving risk Diff: Page Ref: 70 AACSB: Analytic Skills Objective: 3.3 29) Group decisions tend to provide more complete information than individual decisions Answer: TRUE Explanation: Because "two heads are better than one" groups tend to identify more alternatives and consider more information before coming to a decision Diff: Page Ref: 71 Objective: 3.4 Copyright © 2011 Pearson Education, Inc 30) An advantage of group decisions is that they increase the perception of the legitimacy of the solution Answer: TRUE Explanation: When decisions that affect many people are made without their consent, they tend to be less well accepted than group decisions in which all parties are consulted A group decision is perceived to be more legitimate because it was made in a more democratic manner Diff: Page Ref: 71 AACSB: Communication Objective: 3.4 31) A drawback of group decision making is groupthink Answer: FALSE Explanation: When a group experiences groupthink, members not freely express their opinions for fear of standing out and having to assume responsibility for their actions Groupthink often results in bland, unimaginative decisions that fail because they are too timid Diff: Page Ref: 72 AACSB: Communication Objective: 3.4 32) Groups tend to be more efficient and less effective than individual decision making Answer: TRUE Explanation: The reverse is usually true Because achieving consensus within a group takes time, group decision making often takes longer than individual decision making it less efficient However, groups are typically more thorough than individuals, so group decisions are often more effective at achieving goals than decisions made by individuals Diff: Page Ref: 73 Objective: 3.4 33) Two major advantages of electronic meetings are anonymity and honesty Answer: TRUE Explanation: Electronic meetings allow participants to type in comments without needing to identify themselves This creates an atmosphere in which people feel more free to express their true feelings Diff: Page Ref: 74 AACSB: Technology Objective: 3.4 34) A country with high uncertainty avoidance and high power distance is more likely to engage in groupthink than a country with low uncertainty avoidance and low power distance Answer: TRUE Explanation: High uncertainty avoidance makes managers avoid difficult decisions and be overly agreeable and accommodating High power distance allows high-status individuals to dominate groups Both of these attributes would contribute to groupthink, the tendency of groups to avoid controversy and conform to conventional positions Diff: Page Ref: 75 AACSB: Analytic Skills Objective: 3.5 Copyright © 2011 Pearson Education, Inc 35) Creative solutions to problems are valued because they are new and different from traditional solutions Answer: FALSE Explanation: Creative solutions are valued only if they solve problems in ways that are superior to conventional solutions Often, solving a problem in a creative way can give a company a competitive edge on its competitors Diff: Page Ref: 71 Objective: 3.5 36) Decision making begins with A) selecting alternatives B) identifying decision criteria C) identifying a problem D) eliminating false alternatives Answer: C Explanation: C) The process of decision making begins with the identification of a problem Once the problem has been identified the decision maker goes through a series of steps to solve the problem Selecting alternatives is part of the decision-making process but it is a step that comes much later, after criteria have been identified, weighed against one another, developed into alternatives, and analyzed as alternatives Eliminating false alternatives, is something that a decision maker might do, but it is not a recognized part of the process Diff: Page Ref: 58 Objective: 3.1 37) Which of the following defines a problem in the decision-making process? A) a discrepancy between what exists and what the decision maker desires to exist B) a discrepancy between the ideal and the practical C) something that causes irritation D) something that calls for attention Answer: A Explanation: A) Though problems certainly can irritate, and merit attention, these characteristics are not universal enough by themselves to define what a problem is in the decision-making process In this process, a problem is defined as a discrepancy, or difference between how things are and how the decision maker wants things to be A problem is not a difference between the ideal and the practical, but rather just a situation in which things are less than satisfactory, and the decision maker intends to take action to make them satisfactory Diff: Page Ref: 58 Objective: 3.1 Copyright © 2011 Pearson Education, Inc 38) The decision-making process consists of a series of eight steps that identify a problem and work toward ultimately A) determining if there is a solution to the problem B) solving the problem C) making a plan to solve the problem D) breaking down the problem into a series of steps Answer: B Explanation: B) The goal of the decision-making process is to solve the problem that has been identified The process assumes that there is a solution to the problem, so determining if there is a solution to the problem is not correct The process includes making a plan to solve the problem and breaking the problem down into steps However, ultimately the decision maker wants to implement the best alternative to solve the problem, then evaluate this alternative to see if it actually resulted in a successful solution Diff: Page Ref: 58 AACSB: Analytic Skills Objective: 3.1 39) To identify a problem, a manager A) compares one set of standards or goals to a second set of standards or goals B) looks for unhappy customers C) uses intuition to see that things don't look right D) compares the current state of affairs with some standard or goal Answer: D Explanation: D) A manager compares what she has now to some standard or goal to identify a problem The standard or goal may represent some level of performance from the past, or it could be an as yet unreached level that the manager thinks can be attained Looking for unhappy customers or using intuition to see when things don't look right may be ways to identify problems but they are not general problem identification methods Finally, comparing one set of standards or goals to a second set is incorrect because a problem is always identified by comparing an actual state to a standard or goal, not one set of standards or goals to another Diff: Page Ref: 58 Objective: 3.1 40) A manager can faithfully execute the decision-making process, but still end up with nothing of value if A) he fails to identify the correct problem B) he fails to assign number values to different criteria C) he solves the problem inefficiently D) he fails to correctly identify the steps of the process Answer: A Explanation: A) Assigning number values to decision criteria may often be helpful in the decision-making process, but they are not required for a successful outcome Solving the problem inefficiently may not be ideal, but it is not without value Identifying the steps of the process have little to with the success of the process That leaves failing to identify the correct problem—it does no good to solve a problem if it is the wrong problem Solving the wrong problem has no benefit for the organization or its goals Diff: Page Ref: 59 AACSB: Analytic Skills Objective: 3.1 Copyright © 2011 Pearson Education, Inc 41) A manager is considering purchasing new computers for her department The manager spends time assessing the computers her department now has Which stage of the decisionmaking process is she going through? A) identification of a problem B) identification of decision criteria C) development of alternatives D) implementation of an alternative Answer: A Explanation: A) The first thing the manager needs to is identify the problem More specifically, she needs to determine whether she actually has a problem or not If the computers her department now has are performing satisfactorily, she may decide that she doesn't have a problem and doesn't need to purchase new computers The other choicesidentifying criteria, developing alternatives, or implementing an alternativeall come later in the process, after the manager has determined what her problem is Diff: Page Ref: 58-59 AACSB: Analytic Skills Objective: 3.1 42) A manager is determining what kind of new computers she should purchase for her department She has made a list of five different computer models for consideration Which stage of the decision-making process is this? A) selection of an alternative B) identification of decision criteria C) development of alternatives D) analysis of alternatives Answer: C Explanation: C) Having a list of models means that the manager is beyond identifying decision criteria She has identified a group of possible choices—in other words, she has developed a list of alternatives Analysis of the alternatives will be the next step in the process, followed by actually selecting one particular alternative The manager would have identified decision criteria earlier in the process Diff: Page Ref: 58-59 AACSB: Analytic Skills Objective: 3.1 10 Copyright © 2011 Pearson Education, Inc 114) Since all members of a group are rarely equal in status, most groups suffer from A) minority domination B) majority domination C) too much diversity D) gridlock Answer: A Explanation: A) Minority domination is the result of one, or a few group members asserting their will and opinions over other members of the group, distorting the decision-making process Minority domination can diminish the legitimacy of a decision, causing observers to feel that the decision does not reflect a true group consensus The other choices here not match the description Majority domination would have a large faction of a group taking over, while too much diversity would be the opposite of minority domination, and might result in gridlock Diff: Page Ref: 72 AACSB: Communication Objective: 3.4 115) can cause people in a group to fail to express their true opinions A) Ambiguous responsibility B) Group imbalance C) Pressure to conform D) Years of experience Answer: C Explanation: C) Individuals often don't want to be the "squeaky wheel" in a group, so rather than speak up, they feel pressure to conform and go along with the prevailing group views Ambiguous responsibility might encourage, rather than discourage, people to speak up, since it would allow them to escape consequences for their views Years of experience also might encourage people to express their views, since experience might make them feel more comfortable in the group Finally, a group that lacks balance would not predictably affect how eagerly people in a group speak up Diff: Page Ref: 72 AACSB: Communication Objective: 3.4 116) Which of the following is a primary characteristic of groupthink? A) conflict among group members B) failure to reach consensus within a group C) complete conformity among group members D) a group that is candid and open Answer: C Explanation: C) Groupthink is the tendency of group members to conceal their real views and conform to avoid controversy, so it is best described by the choice that highlights conformity Conflict or candidness among group members would not be evident in groupthink—in fact the opposite of these conditions would be likely to prevail: total accord and a lack of openness Finally, a group that suffered from groupthink would likely reach consensus easier than other groups, making failure to reach consensus within a group an incorrect response Diff: Page Ref: 72 AACSB: Communication Objective: 3.4 35 Copyright © 2011 Pearson Education, Inc 117) Which of the following is NOT a factor that can increase the probability of groupthink? A) Influential group members dominate the discussion and the decision-making process B) Group leaders stress the importance of consensus above all other concerns C) The group has more than 40 group members D) Group leaders solicit ideas from all group members without passing judgment on their ideas Answer: D Explanation: D) Groupthink, the tendency of group members to conform in an artificial way, can be the result of overly dominant group leaders, a group that is too large, or too much emphasis put on being agreeable Groupthink would not be likely to result from leaders who solicit ideas from members in a noncritical way, as this would make group members comfortable in expressing themselves This makes group leaders soliciting ideas from all members without passing judgment the correct response Diff: Page Ref: 72 AACSB: Communication Objective: 3.4 118) Which of the following is the most effective number of people to have in a group? A) 5-7 B) 2-4 C) 10-15 D) 16-25 Answer: A Explanation: A) Research has shown that free expression within a group can be inhibited when a group is either too small or too large Studies have shown that the ideal group size has about to participants, making that the correct response Diff: Page Ref: 73 AACSB: Communication Objective: 3.4 119) Which of the following is used to exclusively generate creative ideas in a group setting? A) brainstorming B) nominal group technique C) groupthink D) electronic meetings Answer: A Explanation: A) Nominal group technique and electronic meetings are meetings in which groups cannot only generate ideas, but also come to decisions, so neither is exclusively an ideagenerating technique Brainstorming is used exclusively for generating ideas, so it is the correct response here Groupthink is a negative condition that afflicts groups so it is an incorrect response Diff: Page Ref: 73 AACSB: Communication Objective: 3.4 36 Copyright © 2011 Pearson Education, Inc 120) Which of the following is NOT allowed in a brainstorming session? A) clear definition of the problem B) criticism or dismissal of poor ideas C) large number of alternatives D) recording of all alternatives Answer: B Explanation: B) The essence of brainstorming requires that all ideas be treated in roughly equal ways The important thing for brainstorming is simply to generate ideas, not to stand in judgment of ideas, which makes criticism or dismissal of poor ideas the correct response A brainstorming session would definitely feature a clear definition of the issue, generation of a large number of alternatives, and the recording of those alternatives for later analysis, so all three of these choices are incorrect Diff: Page Ref: 73 AACSB: Communication Objective: 3.4 121) Which of the following group techniques allows group members to meet together, but at the same time facilitates independent decision making? A) brainstorming B) nominal group technique C) large meetings of over 50 individuals D) small meetings of less than 10 individuals Answer: B Explanation: B) Neither large or small meetings can ensure independent thought—both meeting forms can fall victim to groupthink or domination by a few individuals Nominal group technique can generate independent thought, as it allows group members to express opinions secretly so they can be assessed on their own merits Brainstorming is an idea-generating technique only, so it cannot result in independent decision making Diff: Page Ref: 73 AACSB: Communication Objective: 3.4 122) The blends the nominal group technique with sophisticated computer technology A) personal meeting B) electronic meeting C) virtual meeting D) preliminary meeting Answer: B Explanation: B) Of the choices, only the electronic meeting combines the anonymous aspect of nominal group technique with computer technology In an electronic meeting, participants type in comments without identifying themselves, thus ensuring that all comments will be taken on an equal basis A personal meeting, virtual meeting, or preliminary meeting cannot supply the anonymity of an electronic meeting, so all three choices are incorrect Diff: Page Ref: 74 AACSB: Communication Objective: 3.4 37 Copyright © 2011 Pearson Education, Inc 123) What advantages does videoconferencing provide for group decision making? A) anonymous expression of opinions B) less groupthink C) less minority domination D) savings on travel and time Answer: D Explanation: D) Videoconferencing is a face-to-face encounter so it does not provide anonymous expression of opinions, reduce groupthink, or reduce minority domination What videoconferencing does is save on travel and time Individuals thousands of miles away can meet face-to-face without the expenditure of money and time it would take to meet in person This makes savings on travel and time the correct response Diff: Page Ref: 74 AACSB: Communication Objective: 3.4 124) Mid-level managers in a country with high power distance are than managers from a low power distance country A) more likely to make risky decisions B) less likely to make risky decisions C) less likely to make safe, conservative decisions D) more likely to disagree with their leaders' decisions Answer: B Explanation: B) High power distance means that leaders have a disproportionate amount of power when compared to subordinates—usually resulting in mid-level managers making inordinately safe decisions to avoid disapproval from their superiors This makes "less likely to make risky decisions" the correct response Similarly, high power distance would decrease, rather than increase, the likelihood of mid-level managers disagreeing with leaders Diff: Page Ref: 74-75 AACSB: Communication Objective: 3.5 125) Mid-level managers in a country with low uncertainty avoidance are than managers from a high uncertainty avoidance country A) more likely to make risky decisions B) less likely to make risky decisions C) less likely to make foolish decisions D) more likely to avoid making decisions Answer: A Explanation: A) Low uncertainty avoidance means that managers tend not to shy away from uncertainty—usually resulting in them being more likely to make risky decisions Managers seeking to avoid risk might avoid making any kind of decision Foolish decisions might be risky so being less likely to make a foolish decision would also be incorrect Diff: Page Ref: 74 AACSB: Communication Objective: 3.5 38 Copyright © 2011 Pearson Education, Inc 126) Individualistic countries like the United States tend to have than group-oriented countries like Japan A) more conformity and more cooperation B) more conformity and less cooperation C) less conformity and more cooperation D) less conformity and less cooperation Answer: D Explanation: D) An individualistic country has its strengths and weaknesses It would tend to feature less cooperativeness (an overall weakness) and less conformity (an overall strength) than a more group-oriented culture This makes less conformity and less cooperation the correct choice Diff: Page Ref: 74-75 AACSB: Communication Objective: 3.5 127) The use of ringisei in Japanese organizations reflects which of the following values in Japanese culture? A) tradition-following B) consensus-seeking C) risk taking D) go-it-alone Answer: B Explanation: B) Ringisei is a reflection of how Japanese culture values form a consensus so all participants share the responsibility of a decision This makes consensus-seeking the correct choice Ringisei does not specifically reflect tradition, though Japanese cultures place great value on tradition Ringisei is more or less the opposite of both risk taking and go-it-alone so both of those responses are incorrect Diff: Page Ref: 75 AACSB: Diversity Objective: 3.5 128) French management style tends to be in style A) permissive B) group oriented C) rule following D) autocratic Answer: D Explanation: D) French managers tend to be domineering in style, highlighting the absolute authority of the superior manager This makes "autocratic" the correct response and rules out "permissive" as this is somewhat the opposite of autocratic Group oriented or rule following management does not fit the French style as closely as the correct choice Diff: Page Ref: 75 AACSB: Communication Objective: 3.5 39 Copyright © 2011 Pearson Education, Inc 129) When dealing with international organizations, managers must be in order to accommodate the managing styles of different cultures A) as flexible as possible B) as inflexible as possible C) as strict as possible D) as thorough Answer: A Explanation: A) Flexibility is the key when dealing with managers from different cultures who may have very different ideas about decision making than domestic managers This rules out both inflexible and strict because both choices identify a less-flexible approach Thoroughness can be helpful, but it would not help avoid misunderstanding as much as flexibility in dealing with foreign management Diff: Page Ref: 75 AACSB: Communication Objective: 3.5 130) helps people find better solutions to problems using innovative problem-solving methods A) Planning B) Creativity C) Organization D) Structure Answer: B Explanation: B) Creativity focuses on using innovation to solve problems using novel approaches and methods While planning, organization, and structure can all aid in problem solving, none of those choices specifically employs innovation—so they are incorrect choices Diff: Page Ref: 75 AACSB: Communication Objective: 3.5 131) According to one study, about of men and women were somewhat creative A) percent B) 10 percent C) 30 percent D) 60 percent Answer: D Explanation: D) The study of 461 men and women found that only about percent of them could be categorized as "highly creative," but a full 60 percent were at least "somewhat creative." This means that 60 percent is the correct response for this question Diff: Page Ref: 75 Objective: 3.5 40 Copyright © 2011 Pearson Education, Inc 132) One well-accepted model states that individual creativity requires , or a commanding understanding of a subject matter A) expertise B) task motivation C) high interest D) intuition Answer: A Explanation: A) A complete understanding of a subject matter or expertise is a necessary component of creativity, according to the model Task motivation, high interest, and intuition are all required for creativity, but none of them describe a thorough understanding of a subject Diff: Page Ref: 75 Objective: 3.5 133) Which of the following is NOT a characteristic of a creative problem solver? A) self confidence B) tolerance for ambiguity C) frustrates easily D) accepts risks readily Answer: C Explanation: C) A creative person has faith in his or her ability to solve problems, can hold conflicting ideas without abandoning them, and will take intellectual risks A trait that a creative person cannot have is to be easily frustrated as the creative process usually requires finding countless "wrong" answers to a question before a "right" answer emerges Diff: Page Ref: 76 AACSB: Analytic Skills Objective: 3.5 134) Which of the following traits all creative people seem to share? A) They like to save time B) They get along well with others C) They love their work D) They don't like to work hard Answer: C Explanation: C) A large part of creativity is perseverance, so individuals who not truly love what they usually not have the stamina to solve the problems they are faced with Getting along well with others and saving time not help individuals persevere or aid in the creative process in some other way, so they are incorrect responses Not liking to work hard is the opposite of the case for creative people, as they typically work much harder than other people in pursuit of their goals Diff: Page Ref: 76 AACSB: Analytic Skills Objective: 3.5 41 Copyright © 2011 Pearson Education, Inc 135) Which of the following tends to impede a person's creativity? A) providing time and resources B) clearly defined goals C) being watched while you work D) internal motivation Answer: C Explanation: C) Internal motivation, clearly defined goals, time and resources all serve to increase, rather than decrease creativity The only item listed that impedes creativity is surveillance—being watched—as it puts undue pressure on the problem solver and distracts him or her from the goal That makes being watched while you work the correct response Diff: Page Ref: 76 AACSB: Analytic Skills Objective: 3.5 Decisions, Decisions (Scenario) Sondra needed help Her insurance company's rapid growth was necessitating making some IT changes, but what changes? Should they modify the servers that they currently used, or purchase an entirely new system? Sondra was confused and needed help in making the correct decision 136) According to the decision-making process, the first step Sondra should take is to A) analyze alternative solutions B) identify decision criteria C) evaluate her decision's effectiveness D) identify the problem Answer: D Explanation: D) The first step in any problem-solving situation is to identify the problem Sondra's problem appears to be: should she buy a new system or fix the old system? Identifying decision criteria, analyzing possible solutions, and evaluating the process will come later in the process Diff: Page Ref: 58 AACSB: Analytic Skills Objective: 3.1 137) Sondra has decided to collect information about the features the company needs for its system Which stage of the decision-making process is she carrying out? A) identify alternative solutions B) identify decision criteria C) evaluate her decision's effectiveness D) allocate weights to the criteria Answer: B Explanation: B) In collecting information Sondra is identifying the key points, or criteria, that are important to her company After these criteria are analyzed, she will go on to identify a list of solutions and assign weights to those solutions Diff: Page Ref: 58-59 AACSB: Analytic Skills Objective: 3.1 42 Copyright © 2011 Pearson Education, Inc 138) Sondra has determined that the speed of the system she settles on is twice as important as the capacity of the system Which stage of the decision-making process is she carrying out? A) allocation of weights to criteria B) selecting an alternative C) implementing the alternative D) identifying the problem Answer: A Explanation: A) In determining that one criterion is more important than another, Sondra is weighting the criteria Before doing that she needed to identify her problem After assigning weights she will develop and analyze alternatives, then select an alternative, and finally implement that alternative Diff: Page Ref: 58-60 AACSB: Analytic Skills Objective: 3.1 139) Sondra has decided to purchase a new system After obtaining permission, she has ordered the system from a reputable company Which stage of the decision-making process is she carrying out in making the order? A) analyzing alternative solutions B) selecting an alternative C) implementing the alternative D) identifying the problem Answer: C Explanation: C) In deciding on a new system, Sondra selected an alternative Prior to that she first identified the problem and after identifying criteria, weighting the criteria, and developing alternatives, she analyzed those alternatives Note that selecting an alternative is not the correct response, because in ordering the new system Sondra was going beyond merely selecting an alternative and actually implementing the selected alternative, making implementing the alternative the correct response Diff: Page Ref: 58-60 AACSB: Analytic Skills Objective: 3.1 140) The very last step Sondra should take, according to the decision-making process, is to A) analyze alternative solutions B) select alternatives C) implement the alternative D) evaluate the decision's effectiveness Answer: D Explanation: D) Without evaluating the decision, the problem solver is not able to assess whether or not the problem was actually solved or the situation was actually improved Evaluating the effectiveness of the decision also allows the decision maker to determine whether or not the correct problem was identified in the first place All of the other answer choices identify steps that come earlier in the decision-making process Diff: Page Ref: 61 AACSB: Analytic Skills Objective: 3.1 43 Copyright © 2011 Pearson Education, Inc 141) In a short essay, list and discuss the first four steps in the decision-making process Give an example of each step Answer: Step 1: Identification of a problem The decision-making process begins with a discrepancy between an existing and a desired state of affairs An example of identifying a problem is choosing a new car Step 2: Identification of decision criteria Once the manager has identified a problem that needs attention, the decision criteria important to resolving the problem must be identified That is, managers must determine what factors are relevant in making a decision An example of identifying decision criteria is deciding what features you need in a new car Step 3: Allocation of weights to the criteria At this step, the decision maker must compare the items in order to give them the correct priority in the decision The most important criterion is assigned the heaviest weight Other criteria are assigned weights in comparison with that standard Weights can be quantitative—with number values—or determined on a qualitative scale An example of weighting decision criteria is ranking the features of a new car in order of their importance Step 4: Development of alternatives The fourth step requires the decision maker to use the criteria to develop a list of possible alternatives that may solve the problem An example of developing alternatives is making a list of possible new cars Diff: Page Ref: 58-62 AACSB: Analytic Skills Objective: 3.1 44 Copyright © 2011 Pearson Education, Inc 142) In a short essay, list and discuss the final four steps in the decision-making process Give an example of each step Answer: Step 5: Analysis of alternatives Once the alternatives have been identified, the decision maker must critically analyze each alternative From this comparison, the strengths and weaknesses of each alternative become evident An example of analyzing alternatives is to make a table of weighted scores for possible new cars Step 6: Selection of an alternative The sixth step is the important act of choosing the best alternative from among those considered All the pertinent factors should be considered here, both objective and subjective Then a choice of a single alternative—or group of alternatives—should be selected An example of selecting an alternative is to choose a single new car from a list of alternatives Step 7: Implementation of the alternative Implementation involves carrying out the decision that was made In the car example, it involves purchasing the car that was selected Step 8: Evaluation of decision effectiveness The last step in the decision-making process involves appraising the outcome of the decision to see if the problem has been resolved Did the alternative chosen and implemented accomplish the desired result? If not, the decision maker may consider returning to a previous step or may even consider starting the whole decision process over An example of this final step would be to assess the success of the car-buying decision Was the right car selected? Did it have all of the features and characteristics that were needed? Did it perform all of the functions that were needed? Diff: Page Ref: 58-62 AACSB: Analytic Skills Objective: 3.1 45 Copyright © 2011 Pearson Education, Inc 143) In a short essay, discuss why creativity is important to decision making Describe a situation in which a creative solution is used to solve a problem Answer: Creativity is important to decision making because it allows managers to solve problems in more efficient, effective, and innovative ways Innovation is valuable because it can open up new paths of exploration for an organization, sometimes exposing needs that weren't known about and possible opportunities that weren't suspected An example of a creative solution to a problem is the recent development of a software bowling game for senior citizens Rather than try to develop a new game for children or young adults— two fairly saturated markets—the company turned its attention to a neglected market, senior citizens Could the company get seniors—who typically don't use computers—to play video games? They could if they created the right game The company worked hard to develop a program that was "friendly" to its typical user—a senior citizen who had no computer skills or knowledge The result was a huge hit Seniors all over the United States now rave about this fun new game Leagues have formed Tournaments have been organized Seniors especially enjoy the fact that they can play the game at home, and that physical disabilities don't prevent them from playing The success of the game is a good example of how being creative can solve a problem Diff: Page Ref: 75 AACSB: Analytic Skills Objective: 3.5 144) In a short essay, discuss bounded rationality and satisficing Answer: Perfect rationality requires that the decision maker face a clear and unambiguous problem with a clear and specific goal and have knowledge of all possible alternatives for his or her decision, and all outcomes and consequences that result from choosing each one of those alternatives In the real world, these conditions are almost never met Rather than address the virtually impossible chore of identifying all alternatives and outcomes of the decision, the decision maker chooses to apply bounded rationality, which limits the scope of the decision to just some, rather than all alternatives and consequences Bounded rationality requires the decision maker to satisfice, or choose a "good enough" solution to the problem rather than maximize his or her decision by identifying the perfect rational solution Diff: Page Ref: 64-65 AACSB: Analytic Skills Objective: 3.2 46 Copyright © 2011 Pearson Education, Inc 145) In a short essay, discuss the differences among a procedure, a rule, and a policy Include specific examples of each to support your answer Answer: A procedure is a series of sequential steps that a manager can use for responding to a well-structured problem An example of a procedure are instructions for how to install a new thermostat for your home heating system You follow the instructions in a step-by-step manner to remove the old thermostat and install the new one A rule is an explicit statement that tells a manager what he or she can or cannot Managers frequently use rules when they confront a well-structured problem because rules are simple to follow and ensure consistency For example, a rule at a local tennis club might dictate that if the courts are full, players can play no longer than one hour When their hour is up they can get bumped from their court A policy provides guidelines to channel a manager's thinking in a specific direction In contrast to a rule, a policy establishes parameters for the decision maker rather than specifically stating what should or should not be done Policies differ from procedures in that they typically leave quite a bit of interpretation up to the decision maker An example of a policy is guidelines that require scientists at a research lab have an advanced degree in their field, at least three years of post-doctoral work, and at least five published scientific papers to their credit These requirements are guidelines—candidates who lack all of the qualifications but have other strengths may also be considered for the job It would be up to the decision maker to determine how rigorously the policy would be followed Diff: Page Ref: 68-69 Objective: 3.3 47 Copyright © 2011 Pearson Education, Inc 146) In a short essay, identify and explain the advantages and disadvantages to group decision making Answer: Group decisions provide more complete information than individual ones, as a group will bring a diversity of experiences and perspectives to the decision process that an individual acting alone cannot In addition, because groups have a greater quantity and diversity of information, they can identify more alternatives than can an individual Furthermore, group decision making increases acceptance of a solution Finally, the group decision-making process is consistent with democratic ideals; therefore, decisions made by groups may be perceived as more legitimate than decisions made by a single person Group decisions are not without their drawbacks It takes time to assemble a group and the interaction that takes place once the group is in place is frequently inefficient Groups almost always take more time to reach a solution than an individual would take to make the decision alone Groups may also be subject to minority domination, in which one or a few group members compel others to adhere to their agenda Another problem is the pressure to conform in groups In groupthink, a form of conformity, group members withhold their views in order to avoid controversy, avoid taking responsibility for their actions, and give the appearance of agreement As a result, groupthink undermines critical thinking in the group and eventually harms the quality of the final decision And, finally, ambiguous responsibility can become a problem Group members share responsibility, so the responsibility of any single member is watered down and no one ends up taking "ownership" of the group's final decision Diff: Page Ref: 71-72 AACSB: Communication Objective: 3.4 147) In a short essay, describe how brainstorming can help avoid groupthink and enhance creativity in group decision making Answer: Brainstorming is a relatively simple technique for overcoming the pressures for conformity that retard the development of creative alternatives Brainstorming utilizes an ideagenerating process that specifically encourages any and all alternatives while withholding any criticism of those alternatives In a typical brainstorming session, participants "freewheel" as many alternatives as they can in a given time No criticism is allowed, and all the alternatives are recorded for later discussion and analysis Diff: Page Ref: 73 AACSB: Communication Objective: 3.4 48 Copyright © 2011 Pearson Education, Inc 148) In a short essay, describe how nominal group technique can help avoid groupthink and enhance creativity in group decision making Answer: Nominal group technique helps groups arrive at a satisfactory solution to a problem The technique restricts discussion during the decision-making process Group members must be present, as in a traditional committee meeting, but they are required to operate independently They secretly write a list of general problem areas or potential solutions to a problem The chief advantage of this technique is that it permits the group to meet formally but does not restrict independent thinking, as so often happens in the traditional interacting group Since opinions are expressed anonymously, participants are more candid, honest, creative, and ambitious with their comments and suggestions Diff: Page Ref: 73 AACSB: Analytic Skills Objective: 3.4 149) In a short essay, describe how electronic meetings can help avoid groupthink and enhance creativity in group decision making Answer: The most recent approach to group decision making blends the nominal group technique with sophisticated computer technology It is called the electronic meeting Once the technology for the meeting is in place, the concept is simple Participants sit around a horseshoeshaped table that is empty except for a series of computer terminals Issues are presented to the participants, who type their responses onto their computer screens Individual comments, as well as aggregate votes, are displayed on a projection screen in the room The major advantages of electronic meetings are anonymity, honesty, and speed Diff: Page Ref: 73-74 AACSB: Technology Objective: 3.4 150) In a short essay, discuss the assumptions of rationality and the validity of those assumptions Answer: A decision maker who was perfectly rational would be fully objective and logical He or she would carefully define a problem and would have a clear and specific goal Moreover, making decisions using rationality would consistently lead toward selecting the alternative that maximizes the likelihood of achieving that goal The assumptions of rationality apply to any decision Rational managerial 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 organization's interests, not his or her own interests Managerial decision making can follow rational 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; the time pressures are minimal; and the cost of seeking out and evaluating alternatives is low However, most decisions that managers face in the real world don't meet all of those tests Diff: Page Ref: 64 AACSB: Analytic Skills Objective: 3.2 49 Copyright © 2011 Pearson Education, Inc ... that conditions have changed are not situations in which escalation of commitment occurs Diff: Page Ref: 66 Objective: 3.2 74) Which model of decision making takes advantage of unconscious reasoning?... Analytic Skills Objective: 3.3 83) Which of the following is an example of an unstructured problem? A) finding the list price of different copy machines B) choosing the best wardrobe for an executive... for D) the minor details of Answer: C Explanation: C) Of the four choices listed, historical data is most important by far Promises made or ads posted by a company are of little value in assessing