Exam 7: Decision Making and Creativity

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When decision makers tend not to evaluate various alternatives when they find an opportunity.

(True/False)
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As director of new projects,you have just learned that cash flow problems have forced your organization to cut back product-development activities.This means that two of the eight projects currently being developed must be terminated,along with the employees working on those projects (about 25 per cent of employees in your unit).You have a good knowledge of these projects as well as the performance and seniority of employees who work in your unit.While some projects clearly have a high chance of success,the long-term potential of a couple of them is unknown.Identify the best level of employee involvement in this situation and describe three factors (contingencies)that support this level of involvement.

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Escalation of commitment is more likely to occur when the perceived costs of terminating the project are high or unknown.

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Decision makers typically look at alternatives sequentially and compare each alternative to an implicit favourite.

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The incubation stage of creativity is more effective when the decision maker sets aside all other activities and focuses attention on the issue or problem.

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Satisficing occurs when people continue on a failing course of action.

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The creative potential of a person tends to increase with his or her:

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Employee involvement potentially improves decision-making quality and commitment.

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Employees are more likely to be committed to implementing a solution when they are involved in making the decision.

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