Chapter 2

Question 1

What is a decision?

Answer 1

A choice among two or more alternatives.

Question 2

What is the first step in the decision-making process?

Answer 2

Identify a Problem.

Question 3

Define ‘problem’ in the context of decision making.

Answer 3

An obstacle that makes it difficult to achieve a desired goal or purpose.

Question 4

What is the second step in the decision-making process?

Answer 4

Identify the Decision Criteria.

Question 5

What are decision criteria?

Answer 5

Factors that are important to resolving the problem.

Question 6

What is the third step in the decision-making process?

Answer 6

Allocate Weights to the Criteria.

Question 7

What does it mean to allocate weights to criteria?

Answer 7

To prioritize the criteria based on their importance.

Question 8

What is the fourth step in the decision-making process?

Answer 8

Develop Alternatives.

Question 9

What is the fifth step in the decision-making process?

Answer 9

Analyze Alternatives.

Question 10

What is the sixth step in the decision-making process?

Answer 10

Select an Alternative.

Question 11

What is the seventh step in the decision-making process?

Answer 11

Implement the Alternative.

Question 12

What is the eighth step in the decision-making process?

Answer 12

Evaluate Decision Effectiveness.

Question 13

What is rational decision making?

Answer 13

Choices that are logical and consistent and maximize value.

Question 14

Define ‘bounded rationality’.

Answer 14

Decision making that’s rational, but limited by an individual’s ability to process information.

Question 15

What does ‘satisficing’ mean?

Answer 15

Accepting solutions that are ‘good enough’.

Question 16

What is intuitive decision making?

Answer 16

Making decisions on the basis of experience, feelings, and accumulated judgment.

Question 17

What is evidence-based management?

Answer 17

The systematic use of the best available evidence to improve management practice.

Question 18

What is crowdsourcing?

Answer 18

A decision-making approach where you solicit ideas and input from a network of people outside of the traditional set of decision makers.

Question 19

What are structured problems?

Answer 19

Straightforward, familiar, and easily defined problems.

Question 20

What are programmed decisions?

Answer 20

Repetitive decisions that can be handled by a routine approach.

Question 21

Define ‘unstructured problems’.

Answer 21

Problems that are new or unusual and for which information is ambiguous or incomplete.

Question 22

What are the four decision-making styles?

Answer 22

• Directive style
• Analytic style
• Conceptual style
• Behavioral style

Question 23

What characterizes the directive decision-making style?

Answer 23

Low tolerance for ambiguity and seek rationality.

Question 24

What characterizes the analytic decision-making style?

Answer 24

Seek rationality but have a higher tolerance for ambiguity.

Question 25

What is the conceptual decision-making style?

Answer 25

Intuitive decision makers with a high tolerance for ambiguity.

Question 26

What characterizes the behavioral decision-making style?

Answer 26

Intuitive decision makers with a low tolerance for ambiguity.

Question 27

What are heuristics?

Answer 27

Rules of thumb that help make sense of complex, uncertain, or ambiguous information.

Question 28

What is overconfidence bias?

Answer 28

Holding unrealistically positive views of oneself and one’s performance.

Question 29

What is the immediate gratification bias?

Answer 29

Choosing alternatives that offer immediate rewards and avoid immediate costs.

Question 30

What is the anchoring effect?

Answer 30

Fixating on initial information and ignoring subsequent information.

Question 31

What is selective perception bias?

Answer 31

Selecting, organizing and interpreting events based on the decision maker’s biased perceptions.

Question 32

What is confirmation bias?

Answer 32

Seeking out information that reaffirms past choices while discounting contradictory information.

Question 33

What is framing bias?

Answer 33

Selecting and highlighting certain aspects of a situation while ignoring other aspects.

Question 34

What is availability bias?

Answer 34

Losing decision-making objectivity by focusing on the most recent events.

Question 35

What is representation bias?

Answer 35

Drawing analogies and seeing identical situations when none exist.

Question 36

What is randomness bias?

Answer 36

Creating unfounded meaning out of random events.

Question 37

What are sunk costs errors?

Answer 37

Forgetting that current actions cannot influence past events and relate only to future consequences.

Question 38

What is self-serving bias?

Answer 38

Taking quick credit for successes and blaming outside factors for failures.

Question 39

What is hindsight bias?

Answer 39

Mistakenly believing that an event could have been predicted once the actual outcome is known.

Question 40

What is design thinking?

Answer 40

Approaching management problems as designers approach design problems.

Question 41

What is big data?

Answer 41

The vast amount of quantifiable data that can be analyzed by highly sophisticated data processing.

Question 42

What is artificial intelligence?

Answer 42

Uses computing power to solve complex problems.

Question 43

What is machine learning?

Answer 43

A method of data analysis that automates analytical model building.

Question 44

What is deep learning?

Answer 44

A subset of machine learning that uses algorithms to create a hierarchical level of artificial neural networks.

Question 45

What is analytics?

Answer 45

The use of mathematics, statistics, predictive modeling, and machine learning to find meaningful patterns in a data set.