Reading Guide.
1Decision-making is considered a process rather than an act of choosing among alternatives
2 A decision is a discrepancy between an existing and a desired state of affairs.
3 The decision-making process begins by identifying decision criteria.
4 The final step in the decision-making process is to implement the chosen alternative.
5 It is possible that at the end of the decision-making process you may be required to start the
decision process over again before making the final decision.
6 A decision criterion defines what is important or relevant to resolving a problem.
7 All relevant criteria are equally important in decision-making.
8 Once the alternatives to solving a problem have been identified, the next step in the decision-
making process is selecting one of these alternatives.
9 Managerial decision-making is assumed to be rational.
10 One assumption of rational decision making is that the decision maker is not aware of all
possible alternatives and consequences.
11 One assumption of rationality is that time and cost constraints exist.
12 The phenomenon of escalation of commitment refers to an increased commitment to a previous
decision despite evidence that it may have been wrong.
13 According to the concept of bounded rationality, managers make decisions rationally but are
limited by their ability to process information.
14 A satisficing decision is one that is satisfactory and sufficient in the situation, and meets an
acceptable level of performance.
15Managers regularly use their intuition in decision-making.
16 Intuitive decision making is based on values and past experiences.
17 Question: Intuitive decision making complements rational decision making but not bounded
rational decision making.
18 Evidence-based management relies heavily on the decision maker’s intuition.
19 Opinions, preferences, and values of decision-makers are an essential element of evidence-based
management.
20 A procedure is an explicit statement that tells a manager what he or she can or cannot do.
21 A policy is a series of interrelated sequential steps that a manager can use for responding to a
structured problem.
A) True
B) False
22 A programmed decision is a repetitive decision that can be handled by a routine approach.
23 Rules and policies are essentially the same.
24 Nonprogrammed decision-making relies on procedures, rules, and policies.
25 Most managerial decisions in the real world are nonprogrammed.
26 Unstructured problems require custom-made responses through programmed decision-making.
27 Risk is a condition in which a decision maker has neither certainty nor reasonable probability
estimates.
28 An optimistic manager will follow a maximin approach.
29 A manager who desires to minimize his maximum "regret" will opt for a minimax choice.
30 Nonlinear thinking style is characterized by feelings, hunches and internal insights to guide
decisions.
31 Linear thinking style ignores external data and facts and relies directly on the decision maker’s
internal information processing.
32Heuristics are "rules of thumb" that managers use to simplify decision-making.
33The confirmation bias occurs when decision makers tend to think they know more than they
actually do and hold unrealistically positive views of themselves.
34A hindsight bias occurs when decision makers increase their commitment to a previous decision
despite evidence that it may have been wrong.
35 The self-serving bias occurs when decision makers take credit for their successes and blame
failure on outside factors.
36 Availability bias distorts the decision maker’s ability to recall events in an objective manner and
focus on events that are most recent and vivid in their memory.
37 Highly reliable organizations (HROs) tap into their complexity to help them adapt more
effectively.
38 Highly reliable organizations (HROs) make decisions at the executive level.
39 Managers need to understand cultural differences to make effective decisions in today's fast-
moving world.
40 Highly reliable organizations (HROs) are easily tricked by their success.
41 Design thinking is an interesting new line of thinking with broad implications for making
effective business decisions by integrating emotional elements into the process.
Provide a short answer for the following questions.
42 After identifying a problem, the next step in the decision-making process is ______.
43 What is meant by problem identification?
44 The process of selecting decision criteria is accomplished by ______.
45 If all the decision criteria are equally important, what about weighting the criteria.
46 The final step in the decision-making process is to ______.
47 Which should be present in order to initiate the decision-making process?
48 To determine the ______, a manager must identify the factors that are relevant to resolving
the problem.
49 In the purchase of a car, the assessment of factors such as speed, fuel efficiency, and price occurs
at which step of the decision-making process?
50 What step in the decision-making process occurs before developing
alternatives?
51 In allocating weights to the decision criteria, what is helpful to remember?
52 Amanda, a single parent, is looking for a new job. Considering that she has two school-age
children, she is particularly keen on finding an employer who can provide her with alternative
work arrangements such as flexible work hours and telecommuting. In terms of the decision-
making process, these represent Amanda's ______.
53 Max is planning on going away to college next year and is currently trying to figure out which
colleges he should apply to. He would like to major in English Literature at an accredited liberal
arts college but is also looking for a university that offers financial aid and student housing.In
terms of the decision-making process, these represent Max's ______.
54 Which step in the decision-making process involves conveying the decision to those affected by
it and getting their commitment to it?
55 Which of the following is important in effectively implementing the chosen alternative in the
decision-making process?
56 What is important to remember when evaluating decision effectiveness?
57 What decisions involves the management function of planning?
58 What decision involves the management function of organizing?
59 What decision involves the management function of controlling?
60 The assumption that managers make consistent, value-maximizing choices within specified
constraints is known as which of the following?
61 A perfectly rational decision maker would ______.
62 What is an assumption of rationality?
63 When managers make decisions that are rational but limited by their ability to process the
information, they are exhibiting the concept of ______.
64 An increased commitment to a previous decision despite evidence that it may have been wrong
is a phenomenon called ______.
65 Arthur authorizes the expenditure of an additional $100,000 for the production of a new product
despite mounting concerns that it will be unprofitable. The cost of the new product has already
increased far beyond the initial plans and projections. Arthur's continuing support for this
project illustrates the phenomenon of ______.
66 Escalation of commitment refers to ______.
67 Because managers can't possibly analyze all information on all alternatives, they accept
solutions that ______rather than ______payoff.
68 The type of decision-making in which the solution is considered "good enough" is known as
69 The strap on Brad's backpack broke as he lifted it. On the way to class, he stopped at the first
store that carries backpacks and although it was not exactly what he wanted, he purchased a
new one from the front counter because it would do the job. Brad has made a(n) ______
decision.
A) satisficing
70 Relying on "gut feeling" over cognitive problem solving in decision-making is a phenomenon
called ______.
71 Toby is hunting for a new apartment. He is specifically looking for one that is located in the
heart of the city and should be available for $600 per month. However, Toby is also willing to
pay up to $850 per month for a place situated slightly away from the city centre. According to
him, the second option "will also do." This is an example of ______.
72 Intuitive decision-making ______.
73 In intuitive decision making, managers ______.
74 Decision-making where managers recognize and understand that the systematic use of the best
available data will improve their management practices and decision-making is called
______.
75 An important element in making decisions using evidence-based management (EBMgt) is to
consider ______.
76 Problems that are straightforward, familiar, and easily defined are called ______problems.
77 The most efficient way to handle a structured problem is through ______decision-making.
78 Question: A ______decision is repetitive and can be handled by a routine approach.
79 The inflight service manager for National Airlines is authorized to distribute drycleaning
vouchers to customers who complain about spilled drinks and food on their clothes during
turbulent flights. This is an example of a(n) ______decision to a ______problem.
80 A customer gives Jan a request that she has never heard before in her 15 years of experience at
the hardware store. Since the request involves the application of a new technology, Jan is not
sure what to do. This is an example of a(n) ______problem that requires a(n)
______solution.
81 When the petty cash in Elaine's drawer falls to less than $25, she places a request for additional
funds to bring the total back up to $100. This is an example of a(n) ______decision.
82 What is procedure ______?
83 A ______is an explicit statement that tells a manager what he or she can or cannot do.
84 A ______is series of interrelated sequential steps that a manager can use for responding to
85 What is a policy ______?
86 A business school's statement that it "strives for productive relationships with local
organizations" is an example of a ______.
87 To receive reimbursement for their travel expenses, managers at ABC Company must first list
each item in chronological order on an expense form, then attach all receipts to the upper-left
corner, then obtain their supervisor's authorizing signature, and, finally, forward the form to the
finance department. This is an example of a ______.
88 “No smoking allowed” is an example of a ______.
89 Whenever possible, managers at ABC Company try to promote employees from within the
organization before recruiting from external sources. This is an example of a ______.
90 “We strive to use environmentally safe materials” is an example of a ______.
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