Chapter 6 Decision Making: The Essence of the Manager’s Job
THE DECISION-MAKING PROCESS
1. Problem identification is purely objective.
(False; moderate; p. 157)
2. The second step in the decision-making process is identifying a problem. (False; easy; p. 158)
3. A decision criterion defines what is relevant in a decision. (True; moderate; p. 158)
4. The fourth step of the decision-making process requires the decision maker to list viable alternatives that could resolve the problem. (True; easy; p. 159)
5. Once the alternatives have been identified, a decision maker must analyze each one. (True; moderate; p. 159)
6. The step in the decision-making process that involves choosing a best alternative is termed implementation. (False; moderate; p. 160)
THE MANAGER AS DECISION MAKER
7. Making decisions is with the essence of management.
(True; easy; p. 161)
8. Managerial decision making is assumed to be rational.
(True; moderate; p. 162)
9. One assumption of rationality is that we cannot know all of the alternatives. (False; difficult; p. 162)
10. Managers tend to operate under assumptions of bounded rationality. (True; moderate; p. 163)
11. Studies of the events leading up to the Challenger space shuttle disaster point to an escalation of commitment by decision makers. (True; moderate; p. 163)
12. Managers regularly use their intuition in decision making. (True; easy; p. 164)
13. Rational analysis and intuitive decision making are complementary. (True; moderate; p. 164)
14. Programmed decisions tend to be repetitive and routine.
(True; easy; p. 165)
15. Rules and policies are basically the same.
(False; moderate; p. 166)
16. A policy is an explicit statement that tells a manager what he or she ought or ought not to do. (False; moderate; p. 166)
17. The solution to nonprogrammed decision making relies on procedures, rules, and policies. (False; moderate; p. 166)
18. Most managerial decisions in the real world are fully nonprogrammed. (False; easy; p. 167)
19. The ideal situation for making decisions is low risk.
(False; moderate; p. 167)
20. Risk is the condition in which the decision maker is able to estimate the likelihood of certain outcomes. (True; easy; p. 167)
21. Risk is a situation in which a decision maker has neither certainty nor reasonable probability estimates. (False; difficult; p. 168)
22. People who have a low tolerance for ambiguity and are rational in their way of thinking are said to have a directive style. (True; moderate; p. 171)
23. Decision makers with an analytic style have a much lower tolerance for ambiguity than do directive types. (False; moderate; p. 171)
24. Individuals with a conceptual style tend to be very broad in their outlook and will look at many alternatives. (True; moderate; p. 171)
25. Behavioral-style decision makers work well with others.
(True; easy; p. 171)
26. Most managers have characteristics of analytic decision makers. (False; moderate; p. 171)
27. According to the boxed feature, “Managing Workforce Diversity,” diverse employees tend to make decisions faster than a homogeneous group of employees. (False; moderate; p. 172; AACSB: Diversity)
The anchoring effect describes when decision makers fixate on initial information as a starting point and then, once set, they fail to adequately adjust for subsequent information.
(True; moderate; p. 173)
28. The availability bias describes when decision makers try to create meaning out of random events. (False; moderate; p. 173)
29. The sunk cost error is when decision makers forget that current choices cannot correct the past. (True; moderate; p. 173)
DECISION MAKING FOR TODAY’S WORLD
Today’s business world revolves around making decisions, usually with complete or adequate information, and under minimal time pressure.
(False; difficult; p. 175)
30. Managers need to understand...
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