Question 1

Compare decision conditions of certainty,risk,uncertainty and ambiguity.

Accepted Answer

Decisions made under the condition of certainty have a high possibility of success.All of the information that the decision maker needs is available.The decision maker knows the alternatives,the objectives and the outcomes.Risk is a situation where the decision maker knows the alternatives and the objectives.However,the outcomes are not known with certainty,but the probabilities of the outcomes are known.Under conditions of uncertainty,the decision maker does not know the probabilities of the outcomes,while s/he knows some of the alternatives and the objectives.With ambiguity,the objectives are unclear,alternatives are difficult to define and information about outcomes is incomplete or unavailable.

Question 2

Identify and define the six biases that can adversely affect a manager's ability to make optimising decisions.

Accepted Answer

1.Being influenced by initial impressions: When considering decisions,the mind often gives disproportionate weight to the first information it receives (which can be as simple as a random comments by a colleague or a statistic read in a newspaper).For example,in business,managers frequently look at the previous year's sales when estimating sales for the coming year.However,in rapidly changing environments,giving too much weight to the past can lead to poor forecasts and misguided decisions.
2.Justifying past decisions: Many managers fall into the trap of making choices that justify their past decisions,even if those decisions no longer seem valid.For example,managers may invest tremendous time and energy in improving the performance of a problem employee whom they now realise should never have been hired in the first place.
3.Seeing what the manager wants to see: People frequently look for information that supports their existing instinct or point of view,and avoid information that contradicts it.This bias affects where managers look for information when considering decisions,as well as how they interpret the information they find.
4.Perpetuating the status quo: Managers may base decisions on what has worked in the past and fail to explore new options,dig for additional information or investigate new technologies.
5.Being influenced by problem framing: The decision response of a manager can be influenced by the mere wording of a problem.For example,consider a manager faced with a decision about salvaging the cargo of three barges that sank off the coast.If managers are given the option of approving (1)a plan that has a 100 per cent chance of saving the cargo of one of the three barges,worth $200 000 or (2)a plan that has a one-third chance of saving the cargo of all three barges,worth $600 000 and a two-thirds chance of saving nothing,most managers choose option 1.
6.Overconfidence: One of the interesting research findings on decision-making biases is that most people overestimate their ability to predict uncertain outcomes.Before making a decision,managers have unrealistic expectations of their ability to understand the risk and make the right choice.

Question 3

Groupthink is a phenomenon in which people are so committed to a cohesive in-group that their willingness to express contrary opinions overrides their motivation to realistically consider alternatives.

Accepted Answer

A) True 
 B)False  True

Question 4

__________________________ (two words),also known as electronic brainstorming,brings people together in an interactive group over a computer network to suggest alternatives to a problem situation.

Accepted Answer

The answer of __________________________ (two words),also known as electronic brainstorming,brings...

Question 5

Once the problem has been recognised and analysed,the decision maker must:

Accepted Answer

A)  generate alternatives 
B)  choose among alternatives 
C)  evaluate and provide feedback 
D)  prioritise the alternatives 
E)  reanalyse the problem. 
A)  generate alternatives 
B)  choose among alternatives 
C)  evaluate and provide feedback 
D)  prioritise the alternatives 
E)  reanalyse the problem.

Question 6

____________________ (two words)is decision-making technique in which people are assigned to express competing point of view.

Accepted Answer

The answer of ____________________ (two words)is decision-making technique in which...

Question 7

A decision is a process of identifying problems and opportunities and then resolving them.

Accepted Answer

A) True 
 B)False

Question 8

A(n)____________ is a situation which organisational accomplishments have failed to meet established goals,whereas a(n)______________ is a situation which managers see potential organisational accomplishments that exceed current goals.

Accepted Answer

A)  problem, opportunity 
B)  opportunity, problem 
C)  decision, outcome 
D)  bounded rationality, satisfice 
E)  None of these choices. 
A)  problem, opportunity 
B)  opportunity, problem 
C)  decision, outcome 
D)  bounded rationality, satisfice 
E)  None of these choices.

Question 9

The _________________ (two words)of decision making is based on the assumption that managers should make decisions that will be in the organisation's best economic interests.

Accepted Answer

The answer of The _________________ (two words)of decision making is...

Question 10

The __________ approach defines how a decision maker should make decisions.

Accepted Answer

A)  reflective 
B)  scientific 
C)  descriptive 
D)  normative 
E)  humanistic 
A)  reflective 
B)  scientific 
C)  descriptive 
D)  normative 
E)  humanistic

Question 11

Two rural banks,Morry Bank of Morrytown and Yacca Bank of Yaccatown,decided to merge their operations.This would be considered a non-programmed decision.

Accepted Answer

A) True 
 B)False

Question 12

A decision making model that describes how managers actually make decisions in situations characterised by non-program decisions is known as the administrative model.

Accepted Answer

A) True 
 B)False

Question 13

List the six steps in the managerial decision making process as indicated in the text.

Accepted Answer

-Recognition of decision requi

Question 14

All of these are basic assumptions of the political model,except:

Accepted Answer

A)  Organisations are made up of groups with diverse interests, goals and values. 
B)  Information is clear and complete. 
C)  Managers do not have the time, resources or mental capacity to identify all dimensions of the problem. 
D)  Managers engage in the push and pull of debate to decide goals and discuss alternatives. 
E)  All of these are basic assumptions of the political model. 
A)  Organisations are made up of groups with diverse interests, goals and values. 
B)  Information is clear and complete. 
C)  Managers do not have the time, resources or mental capacity to identify all dimensions of the problem. 
D)  Managers engage in the push and pull of debate to decide goals and discuss alternatives. 
E)  All of these are basic assumptions of the political model.

Question 15

__________ is the willingness to undertake risk with the opportunity to increase one's return.

Accepted Answer

A)  Tunnel vision 
B)  Risk propensity 
C)  Risk aversity 
D)  Risk neutrality 
E)  Ineffective investment philosophy 
A)  Tunnel vision 
B)  Risk propensity 
C)  Risk aversity 
D)  Risk neutrality 
E)  Ineffective investment philosophy

Question 16

Two employees in Linda's department resigned from their jobs.She is faced with the decision of who to select to fill these vacant positions.This would be considered a non-programmed decision.

Accepted Answer

A) True 
 B)False

Question 17

The _________________ (two words)defines how decision makers should make decisions and provides guidelines for reaching an ideal outcome for the organisation.

Accepted Answer

The answer of The _________________ (two words)defines how decision makers...

Question 18

Keycorp,an Australian company supplying electronic commerce solutions,has been faced with a variety of non-programmed decisions as it moves increasingly into the international arena.

Accepted Answer

A) True 
 B)False

Question 19

When individuals are unable to understand or correctly define a problem because of their lack of experience in a particular occupation,then they are said to be suffering from bounded rationality.

Accepted Answer

A) True 
 B)False

Question 20

Groupthink involves members of a group agreeing to a position in order to avoid conflict or disagreement between group members.

Accepted Answer

A) True 
 B)False

Exam 9: Managerial Decision Making

Compare decision conditions of certainty,risk,uncertainty and ambiguity.

Identify and define the six biases that can adversely affect a manager's ability to make optimising decisions.

Groupthink is a phenomenon in which people are so committed to a cohesive in-group that their willingness to express contrary opinions overrides their motivation to realistically consider alternatives.

__________________________ (two words),also known as electronic brainstorming,brings people together in an interactive group over a computer network to suggest alternatives to a problem situation.

Once the problem has been recognised and analysed,the decision maker must:

____________________ (two words)is decision-making technique in which people are assigned to express competing point of view.

A decision is a process of identifying problems and opportunities and then resolving them.

A(n)____________ is a situation which organisational accomplishments have failed to meet established goals,whereas a(n)______________ is a situation which managers see potential organisational accomplishments that exceed current goals.

The _________________ (two words)of decision making is based on the assumption that managers should make decisions that will be in the organisation's best economic interests.

The __________ approach defines how a decision maker should make decisions.

Two rural banks,Morry Bank of Morrytown and Yacca Bank of Yaccatown,decided to merge their operations.This would be considered a non-programmed decision.

A decision making model that describes how managers actually make decisions in situations characterised by non-program decisions is known as the administrative model.

List the six steps in the managerial decision making process as indicated in the text.

All of these are basic assumptions of the political model,except:

__________ is the willingness to undertake risk with the opportunity to increase one's return.

Two employees in Linda's department resigned from their jobs.She is faced with the decision of who to select to fill these vacant positions.This would be considered a non-programmed decision.

The _________________ (two words)defines how decision makers should make decisions and provides guidelines for reaching an ideal outcome for the organisation.

Keycorp,an Australian company supplying electronic commerce solutions,has been faced with a variety of non-programmed decisions as it moves increasingly into the international arena.

When individuals are unable to understand or correctly define a problem because of their lack of experience in a particular occupation,then they are said to be suffering from bounded rationality.

Groupthink involves members of a group agreeing to a position in order to avoid conflict or disagreement between group members.

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A(n) is a situation which organisational accomplishments have failed to meet established goals,whereas a(n)__ is a situation which managers see potential organisational accomplishments that exceed current goals.