Module 4

Question 1

Summarize the steps in “rational” decision making.

Answer 1

-Identify and diagnose the problem
-Generate alternative solutions
-Evaluate options
-Choose a solution
-Implement the decision
-Evaluate the decision

Question 2

Generate alternative solutions

Answer 2

-ready made solutions: ideas that have been used or tried before
-custom made solutions: new creative solutions designed specifically for the problem.

Question 3

Choose a solution

Answer 3

-Maximizing is achieving the best possible outcome.
-Satisficing is choosing the first option that is minimally acceptable or adequate.

Question 4

Recognize the pitfalls you should avoid when making decisions.

Answer 4

-You never know if the decision you made was the right one.
-The best you can do is follow proper procedure.
-System 1 information processing
-System 2 information processing

Question 5

System 1 information processing

Answer 5

A type of decision-making process that is reflexive and done quickly without careful thought.

Question 6

System 2 information processing

Answer 6

A type of decision-making process that is reflexive and done slowly with deliberative thought.

Question 7

Evaluate the pros of process of group decision making.

Answer 7

-larger pool of information
-more perspective and approaches
-Intellectual stimulation
-people understand the decision
-people are committed to the decision

Question 8

Evaluate the cons of process of group decision making.

Answer 8

-One person dominates
-Satisficing
-Groupthink
-Goal displacement
-Social loafing

Question 9

How are decisions made within an organization?

Answer 9

-The constraints decision makers face that limit decisions: Resources, Consumers, Finances, Laws, and Labor
-Organizational decision processes: bounded rationality, incremental model, and garbage can model

Question 10

How are decisions made during a crisis?

Answer 10

-Crisis management: process of identifying, preparing for, and dealing with potentially catastrophic threats to an organization.
-Decisions made under pressure

Question 11

Bounded rationality

Answer 11

A less-than-perfect form of rationality in which decision makers cannot be perfectly rational because decisions are complex and complete information is unavailable or cannot be fully processed.

Question 12

Incremental model

Answer 12

model of organization decision making in which major solutions arise through a series of smaller decisions.

Question 13

Garbage can model

Answer 13

model of organizational decision making depicting a chaotic process and seemingly random decisions

Question 14

Sunrise Health Systems has hired a consultant to help with organizational decision making. The consultant’s first meeting is set up to explain to the managers of Sunrise Health Systems various models of organizational decision processes. Each of the managers seems to prefer one of the models over the others.

The vice president of human resources believes that decision makers cannot be truly rational in their decisions. He tells the group that he sees many situations with managers who do not have enough time to process all the relevant information and who regularly face very complex problems. His observation illustrates

Answer 14

Bounded rationality

Question 15

Sunrise Health Systems has hired a consultant to help with organizational decision making. The consultant’s first meeting is set up to explain to the managers of Sunrise Health Systems various models of organizational decision processes. Each of the managers seems to prefer one of the models over the others.

The vice president of production declares that her people disagree on goals and have now formed groups to advocate for their own interests. Her managers are using

Answer 15

The coalition model

Question 16

Sunrise Health Systems has hired a consultant to help with organizational decision making. The consultant’s first meeting is set up to explain to the managers of Sunrise Health Systems various models of organizational decision processes. Each of the managers seems to prefer one of the models over the others.

The president of the company tells his team that he has made an observation that the managers do not agree on goals or what actions should be taken. This situation best relates to

Answer 16

The garbage can model

Question 17

Jamila works in the marketing department at Intelligentsia, a cutting-edge start-up in the process of launching Xanadu, a smart-home/smart-garden technology system. After a very successful crowdfunding campaign and an influx of new angel investors, the company’s future is looking bright. The start-up’s founders, Han and Martine, are very rational decision makers, balancing optimism with the understanding that most start-ups, and tech start-ups in particular, face many risks at every stage of development. Their partner Gerard, however, makes decisions more subjectively and believes he is in control of all situations, even if he is not. Based on the psychological bias Gerard exhibits, which of the following most likely describes his actions?

Answer 17

He dismisses risks, is overconfident in his experience and skills, and believes that he is immune to failure.

Question 18

According to Simon’s bounded rationality, which of the following factors prevents decision makers from being truly rational?

Answer 18

The have incomplete information about alternatives and consequences.

Question 19

Gina owns a fashion-design store and knows the economy greatly affects her business. Experts are predicting four potential economic outcomes over the next five years. Therefore, Gina develops alternative courses of action based on these predictions. In this scenario, she is

Answer 19

Generating contingency plans

Question 20

Safa has identified a problem that consists of a gap between what her company is doing now and what it can do to create a more profitable future. The “problem” that Safa has identified is also a(n)

Answer 20

Opportunity

Question 21

Emil has been going through the decision-making process. He diagnosed a problem with the shipping service his company used, identified alternative shipping services, evaluated those companies, made a choice, and implemented it. Which of the following statements is an accurate description of Emil’s decision-making process?

Emil now needs to evaluate the decision he made.
The ideal decision-making process includes six phases:

Answer 21

1. identify and diagnose the problem
2. generate alternative solutions
3. evaluate alternatives
4. make the choice
5. implement the decision
6. evaluate the decision

Question 22

“We have 75 qualified candidates for the quarterly training program but only 25 slots,” said Toby Spencer, production manager. “In that case, randomly select 25, and we will train the other candidates later this year during the next rounds of training,” said Amelia Stone, division manager. Toby Spencer says, “That will work.” This is an example of

Answer 22

Satisficing

Question 23

What is the best example of a manager discounting the future?

Answer 23

A manager focusing in quarterly profits instead of long-term vision

Question 24

“My idea will make us a lot of money, and it’s by far the best idea offered!” John exclaimed. His division manager replied, “I agree that your idea has promise. However, your idea has no supporting data or facts. Meanwhile, your two colleagues submitted business plans for their ideas that specified gains of 15 and 22 percent, respectively, and their plans were submitted last week before the deadline expired.” John was using ________ to advance his position.

Answer 24

Framing effects

Question 25

What about group decision making is true?

Answer 25

If enough time is available, groups usually make higher-quality decisions than most individuals.

Question 26

In goal displacement, a decision-making group

Answer 26

Loses sight of it original goal and a new, less important goal emerges

Question 27

Devon’s workers come from a predominantly transient population. However, he believes as long as he pays his employees good wages and treats them fairly, he can keep employee turnover to a minimum. Devon’s belief is an example of which psychological bias?

Answer 27

Illusion of control