Chapter 2 - Managerial Decision Making

Question 1

What are the 2 systems the brain uses to make decisions?

Answer 1

• Reflexive

- Reactive

Question 2

What type of decisions do the reflexive system handle?

Answer 2

Decisions that are logical, analytical, deliberate and methodical

Question 3

What type of decisions do the reactive system handle?

Answer 3

Decisions that are o quick, impulsive, intuitive, relies on emotions or habits to provide cues for what to do next

Question 4

What is the difference between programmed and nonprogrammed decisions?

Answer 4

Programmed: Decisions that are repeated over time and for which an existing set of rules can be developed to guide that process

Nonprogrammed: Decisions that are novel, unstructured decisions that are generally based on criteria that are not well-defined

Question 5

For programmed decisions, managers often develop _____, or mental shortcuts, to help reach a decision

Answer 5

Heuristics

Question 6

What are heuristics and what type of decision does it fall under??

Answer 6

• Mental shortcuts used to help reach a decision

- Programmed Decisions

Question 7

What are the 6 steps in the Decision-Making Process?

Answer 7

1. Recognize that a decision needs to be made
2. Generate multiple alternatives
3. Analyze the alternatives
4. Select an alternative
5. Implement the selected alternative
6. Evaluate its effectiveness

Question 8

What are the 6 barriers to effective decision making?

Answer 8

• Bounded Rationality
• Escalation of Commitment
• Time Constraints
• Uncertainty
• Personal Biases
• Conflict

Question 9

What is satisficing and what type of decision does it fall under?

Answer 9

• Choosing the first acceptable solution

- Programmed decisions

Question 10

What are the 7 common logical fallacies people may use when arguing their point or defending their perspective?

Answer 10

• Non Sequiter
• False Cause
• Ad Hominem
• Genetic Fallacy
• Appeal to Tradition
• Bandwagon Approach
• Appeal to Emotion

Question 11

What is Non Sequitur?

Answer 11

The conclusion presented isn’t logical or isn’t the only logical conclusion based on the argument(s)

Question 12

What is False Cause?

Answer 12

Assuming that because 2 things are related that one cause the other

Question 13

What is Ad Hominem?

Answer 13

Redirects from the argument to attack the person making the argument

Question 14

What is Genetic Fallacy?

Answer 14

You can’t trust someone because of its origins

Question 15

What is Appeal to Tradition?

Answer 15

If we have always done something one particular way, that must be the right or best way

Question 16

What is Bandwagon Approach?

Answer 16

The majority of people are doing it, therefore it must be good

Question 17

What is Appeal to Emotion?

Answer 17

Redirects the argument from logic to emotion

Question 18

What are the advantages of Group Decisions?

Answer 18

• You can incorporate different perspectives and ideas
• More ideas generated and greater intellectual stimulation as group members discuss available option
• Involving people who will be affected by a decision will allow those individuals to have a greater understanding of the issues and a greater commitment to the solutions

Question 19

What are the disadvantages of Group Decisions?

Answer 19

• Can be bogged down by conflict
• People may go to the opposite extreme and push for agreement at the expense of quality discussions
• Members may choose not to voice their concerns or objections to keep the peace (Groupthink
• Often one person in the group has more power than others and discourages those with differing opinions from speaking up to ensure only their ideas are implemented

Question 20

How can you form a Quality Group?

Answer 20

• Form groups with diverse members
• Encourage everyone to speak up
• May assign a member to play the devils advocate in order to reduce groupthink

Question 21

How can you reduce Conflict in a Group?

Answer 21

Find common ground between members and keep them focused on a common goal

Question 22

What is groupthink?

Answer 22

Where members may choose not to voice their concerns or objections to keep the peace

Question 23

What is a devils advocate?

Answer 23

Intentionally takes on the role of the critic

Pushes the other group members to think deeper about the pros and cons of proposed solutions before reaching a decision and implementing it