Chapter 07 Individual & Group Decision Making: How Managers Make Things

Happen Answer Key

 
 

True / False Questions

 

* When a manager makes a decision based on the strong beliefs she already has, she is guilty of a prior-
hypothesis bias.  True
 * The process of identifying and choosing between alternative courses of action is known as option
evaluation.  False
 * The rational model of decision making assumes that managers will choose the available alternative that best
supports their existing beliefs.  False
 * The first step in the rational decision making process is to think up alternative solutions.  False

* The final step in the rational decision-making process is to implement and evaluate the chosen solution. 
True
* Opportunities should be identified in the alternative evaluation stage of the decision-making process.  False

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* Analyzing the underlying causes of a problem or an opportunity is called diagnosis.  True
* The incremental model is a nonrational model of decision making.  True
 * Satisficing occurs when a manager takes small, short-term steps to alleviate a problem.  False
 * Intuition based on feelings rather than expertise, or the involuntary emotional response to those feelings, is
known as automated experience.  True
 * A recent study says that the world's information is doubling every seven years.  False
 * Risk propensity is the willingness to gamble or to undertake risk for the possibility of getting an increased
payoff.  True
 * People with a low tolerance for ambiguity and an orientation toward task and technical concerns in making
decisions have an analytical decision-making style.  False
* A cost-benefit matrix is a graph of decisions and their possible consequences and is used to create a plan to
reach a goal.  False
 * Relaxed change is one type of effective response for a manager to take when confronted with a challenge. 
False
* Heuristics are strategies that simplify the process of making decisions.  True
* When managers use information that is readily available from memory to make judgments, it is known as a
confirmation bias.  False
* Groups make better decisions than most individuals acting alone.  True
 * The tendency for group members to agree for the sake of unanimity and thus avoid accurately assessing the
decision situation is called satisficing.  False
* Where time is of the essence, in most cases an individual should make the decision rather than a group. 
True
* Smaller-sized groups make higher-quality decisions.  True
 * Participative management has a large effect on job performance and job satisfaction.  False
* Consensus occurs when group members are able to express their opinions and reach agreement to support
the final decision.  True

* Middle and supervisory managers may be a source of resistance in participatory management. True 
* Brainstorming is a technique used to help groups generate multiple ideas and alternatives for solving
problems.  True

* Heuristics is a technique in which members of a group come together over a computer network to generate
ideas and alternatives.  False

Multiple Choice Questions

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64. Which of the following statements about biased decision making is true? 
A.  Hindsight helps you correctly assess what you should have known beforehand.
B.  When you are making a decision and you have considerable experience in that area, you are then most
likely to be overconfident.
C.  When confronted with a choice, people with strong prior beliefs tend to make their decisions based on
their beliefs even if their beliefs are false.
D.  Sometimes a single event can allow you to determine the trend.
E.  You could confidently make a decision about something by asking 20 of your friends and deciding
based on their preferences.
65. Which of the following is a step in the rational decision-making model? 
A.  Seek consensus among leadership.
B.  Identify the problem or opportunity.
C.  Improve the chosen solution.
D.  Test solutions on a small scale.
E.  Implement a holding pattern.
66. The rational model of decision making is also called the ______ model. 
A.  balanced
B.  satisficing
C.  incremental
D.  classical
E.  intuitional
 

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67. Diagnosis is used in which stage of the rational decision-making model? 
A.  Identify the problem or opportunity
B.  Think up alternative solutions
C.  Evaluate alternatives
D.  Select a solution
E.  Implement a solution

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71. Which of the following is NOT a recommended option when you discover that an action is not working
after a decision? 
A.  Give the chosen solution more time.
B.  Abandon the solution in favor of the status quo.
C.  Try another alternative.
D.  Go back to the beginning of the decision-making process.
E.  Change the chosen solution slightly.

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73. Which of the following is one of the nonrational models of decision making? 
A.  Boundary
B.  Classical
C.  Goal displacement
D.  Satisficing
E.  Attitudinal
77. Which of the following is NOT a hindrance to perfectly rational decision making? 
A.  Conflicting goals
B.  Imperfect information
C.  Information overload
D.  Limited cognitive capacity
E.  Lack of intuition
78. The incremental model of decision making suggests that managers make decisions by 
A.  using processes that have worked in past experience.
B.  experimenting with alternatives in a controlled setting, one by one.
C.  choosing something that is "good enough."
D.  taking small steps to alleviate a problem.
E.  involving several lower-level employees.
81. Making a choice without the use of conscious thought or logical interference is called 
A.  reactive decision.
B.  irrational insight.
C.  intuition.
D.  instinctual choice.
E.  heuristics.
83. Which of the following is NOT a reason why it is hard to bring the best evidence to bear on your decisions?
A.  Stories are more persuasive than evidence.
B.  People are trying to mislead you.
C.  The evidence leads to an unethical solution.
D.  The evidence doesn't quite apply.
E.  There's too much evidence.
85. Which of the following is characteristic of companies that use analytics? 
A.  Use of predictive modeling
B.  Having a single, focused application for its use
C.  Information overload
D.  Use of competitive intelligence
E.  Making decisions intuitively
88. A person with high tolerance for ambiguity has 
A.  a high need for structure or control.
B.  a strong people orientation.
C.  an analytical mind.
D.  defensive avoidance tendencies.
E.  comfort with uncertain situations.

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89. Which of the following is a decision-making style based on the dimensions of value orientation and
tolerance for ambiguity? 
A.  professional
B.  personal
C.  technological
D.  Behavioral
E.  mechanical
 

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90. An analytical decision-making style reflects a person who is ______ in his value orientation and ______ in
his tolerance for ambiguity. 
A.  task/technical; high
B.  task/technical; low
C.  people/social; high
D.  people/social; low
E.  managerial; low
91. A person with a conceptual decision-making style is __________ in her value orientation and __________
in her tolerance for ambiguity. 
A.  managerial; high
B.  task/technical; low
C.  people/social; high
D.  people/social; low
E.  managerial; low
92. A person who is oriented toward people and social concerns and has a low tolerance for ambiguity is
______ in her decision-making style. 
A.  analytical
B.  relaxed
C.  conceptual
D.  directive
E.  behavioral
93. A person who is oriented toward task and technical concerns and has a low tolerance for ambiguity is
______ in his decision-making style. 
A.  analytical
B.  behavioral
C.  conceptual
D.  directive
E.  heuristic
99. A graph of decisions and their possible consequences is known as a(n) 
A.  decision tree.
B.  Gantt chart.
C.  results chart.
D.  outcome matrix.
E.  fishbone diagram.
100. According to Harvard professor Constance Bagley, ethical decisions can be facilitated with a(n) 
A.  goal statement.
B.  improved legal department.
C.  cross-department task force.
D.  decision tree.
E.  brainstorming session.
 

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101. Which of the following questions about a proposed action is NOT a key question in Bagley's ethical
decision tree? 
A.  Is it legal?
B.  Does it maximize shareholder value?
C.  Is it ethical?
D.  Would it be ethical not to do it?
E.  Should the effect of it be disclosed to shareholders?
103. When a manager decides to take no action in the belief that there will be no great negative consequences,
she is engaged in
A.  limited reaction.
B.  relaxed avoidance.
C.  relaxed change.
D.  decreased involvement.
E.  defensive avoidance.
105. Which of the following responses to a challenge would be considered most like satisficing? 
A.  Panic
B.  Relaxed avoidance
C.  Relaxed change
D.  Decreased involvement
E.  Defensive avoidance
106. When a manager realizes that complete inaction will have negative consequences but opts for the first
available alternative that involves low risk, it is called 
A.  relaxed change.
B.  defensive avoidance.
C.  postponed action.
D.  relaxed avoidance.
E.  delayed decision.
 

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107. Passing the buck or procrastinating about a decision are examples of which type of reaction to a challenge? 
A.  Panic
B.  Relaxed avoidance
C.  Relaxed change
D.  Decreased involvement
E.  Defensive avoidance
119. The tendency for decision-makers to be influenced by the way a situation or problem is presented to them is
known as the ________ bias. 
A.  overconfidence.
B.  escalation of commitment bias.
C.  hindsight.
D.  availability.
E.  framing.
121. The idea that decision makers find the notion of an actual loss more painful than giving up the possibility of
a gain is called 
A.  a heuristic.
B.  an availability bias.
C.  a representativeness bias.
D.  the prospect theory.
E.  satisficing.
122. Which of the following is an advantage of group decision making?
A.  Groupthink
B.  Deeper commitment to the decision
C.  Less thought required
D.  A quicker decision
E.  More flexibility in the final decision
 

123. Which of the following is a disadvantage of group decision making? 

A.  Lower commitment to the decision
B.  Lower levels of confidence in judgments
C.  Different perspectives
D.  Greater discomfort with the final decision
E.  Satisficing
125. The tendency of a group to settle on a decision that is "good enough" is called 
A.  goal displacement.
B.  satisficing.
C.  groupthink.
D.  heuristics.
E.  pseudo-optimization.

127. The ______ a group is, the ______ the quality of the decision. 
A.  more diverse; lower
B.  larger; lower
C.  more confident; higher
D.  more knowledgeable; lower
E.  more creative, lower
  

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128. Which of the following characteristics of groups may lead to groupthink? 
A.  Too little information available to the group
B.  Errors in the information available to the group
C.  Overconfidence
D.  Disagreements among the members
E.  Diversity in the group
130. Which of the following statements about group decision making is true? 
A.  Individuals are always better than groups in decision making.
B.  Groups are always better than individuals in decision making.
C.  Groups minimize satisficing.
D.  Groups are faster at making decisions.
E.  Managers should utilize groups for decision making on a selective basis.
131. Which of the following is a practical guideline in determining whether to use group decision making? 
A.  When it can encourage satisficing
B.  When it can increase speed
C.  When it can produce groupthink
D.  When it can increase development
E.  When a decision occurs infrequently

132. The process of involving employees in setting goals, making decisions, solving problems, and making
changes is called 
A.  conjoint management.
B.  escalation of commitment.
C.  satisficing.
D.  goal displacement.
E.  participative management.
133. Research on the effects of participative management (PM) on employees' performance and satisfaction
indicates that 
A.  PM has no effect on either.
B.  PM has a small positive effect on both.
C.  PM has a large effect on satisfaction, but a small effect on performance.
D.  PM has a large positive effect on both.
E.  PM has a large effect on performance, but no significant effect on satisfaction.

134. Which of the following is a factor that helps participative management work? 
A.  Top management is occasionally involved.
B.  Employees trust managers.
C.  PM is implemented without interference from TQM.
D.  Employees work in interdependent jobs.
E.  Employees need more training.
135. Which of the following is NOT a rule for brainstorming suggested by IDEO?
A.  Go for quality over quantity.
B.  Defer judgment.
C.  Stay focused on the topic.
D.  Encourage wild ideas.
E.  Be visual.

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136. _________ uses physically dispersed experts who fill out questionnaires to generate ideas and the judgments
are combined into an expert consensus. 
A.  Brainstorming
B.  PM
C.  TQM
D.  Brainwriting
E.  The Delphi technique
138. Which of the following is NOT one of the suggestions for decision making recommended by management
consultant Odette Pollar? 
A.  Decide in a timely fashion.
B.  Don't agonize over minor decisions.
C.  Separate outcome from process.
D.  Never stop gathering facts.
E.  When overwhelmed, narrow your choices.
 

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