1. Highly reliable organizations (HROs) are easily tricked by their success.(2.0) B.False 2.

The phenomenon of escalation of commitment refers to an increased commitment to a previous decision despite evidence that it may have been wrong.(2.0) A.True 3. Decision making is a part of the planning, organizing, leading, and controlling functions and thus, the essence of management.(2.0) A.True 4. Managers need to understand cultural differences to make effective decisions in today's fast-moving world.(2.0) A.True 5. The availability bias describes the actions of decision makers who try to create meaning out of random events.(2.0) B.False 6. The anchoring effect describes when decision makers fixate on initial information as a starting point and then, once set, fail to adequately adjust for subsequent information.(2.0) A.True 7. A decision criterion defines what is important or relevant to resolving a problem.(2.0) A.True 8. The decision-making process begins by identifying decision criteria.(2.0) B.False 9. Nonprogrammed decision making relies on procedures, rules, and policies.(2.0) B.False 10. A policy is an explicit statement that tells a manager what can or cannot be done.(2.0) B.False 11. To make effective decisions in today's fast-moving world, managers need to ________.(2.0) B.B) know when it is time to call it quits 12. Pat is the manager of a large project that has been underway for the last eight months. It has now become apparent that, due to various external factors, the project is unlikely to succeed. Even though the best option would be to withdraw from the project, Pat continues to pump money and resources

into it in the hope that the project's prospects will change. He reasons that he doesn't want all those months of hard work to go to waste. This is an example of the ________.(2.0) C.C) sunk costs error 13. Sarah's sales figure show that she has been the top performer in her department for the last eight months. Two month prior to her annual performance review, Sarah's sales numbers fell due to her ill health causing her manager to rate her performance as just satisfactory. This is an example of the ________.(2.0) B.B) availability bias 14. The ________ occurs when decision makers select and highlight certain aspects of a situation while excluding others.(2.0) A.A) framing bias 15. When decision makers seek out information that reaffirms their past choices and discount information that contradicts past judgments, they are exhibiting the ________.(2.0) D.D) confirmation bias 16. Sophie is in charge of recruitment at her company. During a particular interview, the first thing Sophie noticed about the applicant was that he was improperly attired. Though the candidate possessed the necessary qualifications and effectively answered all her questions, Sophie rejected him. This is an example of the ________.(2.0) C.C) anchoring effect 17. The ________ describes how decision makers fixate on initial information as a starting point and then, once set, fail to adequately adjust for subsequent information.(2.0) A.A) anchoring effect 18. When decision makers tend to think they know more than they do or hold unrealistically positive views of themselves and their performance, they are exhibiting the ________.(2.0) D.D) overconfidence bias 19. Rules of thumb that managers use to simplify decision making are known as ________.(2.0) A.A) heuristics 20. All of the following are aspects of intuition EXCEPT ________.(2.0) D.D) programmed decisions 21. Managers cannot possibly analyze all information on all alternatives, they tend to ________, rather than ________.(2.0) D.D) satisfice; maximize

22. In the decision-making process, while ________, the decision maker puts the decision into action by conveying it to those affected by it and getting their commitment to it.(2.0) C.C) implementing an alternative 23. In the decision-making process, after allocating weights to the decision criteria, the decision-maker must then _________.(2.0) A.A) list viable alternatives that could resolve the problem 24. Amanda, a single parent, is looking for a new job. Considering that she has two school-going 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 ________.(2.0) A.A) decision criteria 25. Which of the following statements is true concerning problem identification?(2.0) D.D) Effectively identifying problems is not easy. 26. ________ is a situation in which a decision maker cannot make reasonable probability estimates.(2.0) C.C) Uncertainty 27. What is the psychological orientation of a decision maker who makes a "maximin" choice?(2.0) C.C) pessimist 28. ________ is a situation where a manager has the ability to make accurate decisions because the outcome of every alternative is known.(2.0) A.A) Certainty 29. Unstructured problems ________.(2.0) C.C) are accompanied by ambiguous or incomplete information 30. Which of the following is an example of a policy?(2.0) D.D) We are an equal opportunity employer with a diverse workforce. We do not discriminate against employees and applicants on the basis of sex, race, color, religion, national origin, age, disability, marital status, sexual orientation or veteran status. 31. Which of the following is an example of a procedure?(2.0) B.B) Before going on a leave of absence, fill up the application form available on the company's online leave management system. All applications will be approved/rejected within two days by the employee's immediate supervisor. 32. A policy_______

A.A) typically contains an ambiguous term 33. A procedure ________.(2.0) B.B) is a series of sequential steps a manager uses to respond to a structured problem 34. Structured problems align well with which type of decisions?(2.0) A.A) programmed 35. ________ are straightforward, familiar, and easily defined.(2.0) B.B) Structured problems 36. Newcastle United, a soccer club, was relegated from the top flight two seasons ago. Following relegation, the club's board sacked the manager and hired a new manager to replace him. The club won back promotion to the league and enjoyed a good season. Andy Carroll, the star player for Newcastle, was the top scorer in the league for that season. However, the club, needing to strengthen the team by buying new players, sold Andy Carroll to Liverpool soccer club to buy three average players. The club is presently experiencing a dip in form and is in danger of being relegated again. Which of the following statements, if true, would indicate the presence of self-serving bias on the part of the manager?(5.0) C.The manager blames the board for selling the top scorer and replacing him with below-par players. Which of the following statements, if true, best reflects sunk cost error on the part of the board? (5.0) A.The board buys, a now out-of-form, Andy Carroll back from Liverpool at a much higher price in the hopes of reversing the team's form. 37. Sharon was the regional manager of a large cable television company. She faced many problems and decisions daily, such as how to price each market, whom to hire, what kind of technology to purchase, and how to handle the increasing customer complaints. She needed some help sorting these issues out. When a customer calls and requests a refund for a partial month's usage of the cable service, the fact that such situations are routine and most likely have a standard response would make the response a ________ decision.(5.0) D. programmed Usually Sharon follows a ________, a series of interrelated sequential steps for responding to a structured problem.(5.0) C.procedure 38. Colleen is a student, and her older brother has loaned her an old car. The car is in need of several repairs before she will feel comfortable driving it.

Colleen needs a vehicle, but she has to decide if the vehicle is worth repairing. She is facing a(n) ________ that is a discrepancy between an existing and a desired state of affairs.(5.0) C. problem Before talking to a repair person, Colleen needs to prioritize the repairs. Her first concern is safety of the vehicle. This step in the decision-making process is called ________. (5.0) C. identifying the decision criteria 39. According to the concept of bounded rationality, managers make decisions rationally, but are limited by their ability to process information True 40. Intuitive decision making complements rational decision making but not bounded rational decision making. False 41. When problems are ________, managers must rely on ________ in order to develop unique solutions. unstructured; nonprogrammed decision making 42. Which of the following best describes the psychological orientation of an individual making a "maximax" choice? Optimist 43. In the decision-making process, after allocating weights to the decision criteria, the decision maker lists viable alternatives that could resolve the problem. True 44. Risk is the condition in which a decision maker is able to estimate the likelihood of certain outcomes. True 45. In intuitive decision making, managers ________. use data from their subconscious mind to help make their decisions 46. Creativity is most essential in which of the following steps of the decision-making process? developing alternatives 47. The sunk costs error occurs when decision makers forget that current choices cannot correct the past. True 48.The ________ happens when decisions makers tend to remember events that are the most recent and vivid in their memory. Availability bias

49. 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. In terms of the decision-making process, these represent Max's ________. decision criteria 50. Escalation of commitment refers to ________ an increased commitment to a previous decision despite evidence that it may have been wrong 51. ________ results in a solution that is considered "good enough." Satisficing 52. A(n) ________ decision is a repetitive decision that can be handled by a routine approach. Programmed 53. If an individual knows the price of three similar cars at different dealerships, he is operating under which of the following decision-making conditions? Certainty 54. After identifying a problem, the next step in the decision-making process is ________ identifying decision criteria 55. Sue works in the finance department of a large multinational corporation. Her manager has asked her to submit a detailed report on the department's quarterly expenses within the next two days. Being pressed for time, Sue identifies three courses of action that could help her accomplish her task-she can stretch her working hours till she finishes the report, she can ask her colleague to chip in, or she could ask her manager for additional time. Which stage is Sue at in the decision-making process? Developing alternatives 56. Implementing an alternative refers to the process of choosing the best alternative. False 57. "Smoking and the consumption of alcohol are strictly prohibited inside the work premises." This is most likely an example of a(n) ________. Rule 58. Managing Your Career (Scenario) Michelle has a new job and is learning to perform the tasks assigned to her. Different situations demand different decision-making processes.

Michelle eventually finds a problem that has no cut-and-dry solution. The problem is unique and is unlikely to occur again. This problem is ________ in nature. Nonprogrammed 59. When managers make decisions that are rational but limited by their ability to process the information, they are following the concept of ________.

Bounded rationally 60. A series of eight steps that begins with identifying a problem and concludes with evaluating a decision's effectiveness is known as ________. the decision-making process 61. Rules and policies are the same. False