Professional Documents
Culture Documents
Chapter 9 - Managerial Decision Making
Chapter 9 - Managerial Decision Making
Student: ___________________________________________________________________________
True False
True False
3. Programmed decisions are decisions that are made for situations that have occurred often in the past
and allow decision rules to be developed to guide future decisions.
True False
4. Two employees in Stacey's department quit which is normal for her department. She is faced with the
decision to fill these positions. This would be considered a nonprogrammed decision.
True False
5. Gerald's Groceries and Marty's Market decided to merge their operations, something neither company
has tried before. This would be considered a nonprogrammed decision.
True False
True False
7. The main difference between risk and uncertainty is that with risk you know the probabilities of the
outcomes.
True False
8. Uncertainty means that a decision has clear-cut goals, and that good information is available, but the
future outcomes associated with each alternative are subject to chance.
True False
9. .A situation where the goals to be achieved or the problem to be solved is unclear, alternatives are
difficult to define, and information about outcomes is unavailable refers to ambiguity.
True False
10 The classical decision making model assumes that the decision-maker is rational, and makes the
. optimal decision each time.
True False
1
11 The approach that managers use to make decisions usually falls into one of three types – the classical
. model, the administrative model, and the political model.
True False
12 The growth of quantitative decision techniques that use computers has reduced the use of the classical
. approach.
True False
13 The administrative model of decision making describes how managers actually make decisions in
. difficult situations.
True False
14 Normative decision theory recognizes that managers have only limited time and cognitive ability and
. therefore their decisions are characterized by bounded rationality.
True False
15 The classical model of decision-making works best in organizations that are made up of groups with
. diverse interests, goals, and values.
True False
16 According to the classical model of decision making, managers’ searches for alternatives are limited
. because of human, information, and resource constraints.
True False
17 According to the administrative model of decision making, managers' searches for alternatives are
. limited because of human, information, and resource constraints.
True False
18 Satisficing behavior occurs when we choose the first solution alternative that satisfies minimal
. decision criteria regardless of whether better solutions are expected to exist.
True False
19 Intuition is a quick apprehension of a decision situation based on past experience but without
. conscious thought.
True False
20 According to both research and managerial experience, intuitive decisions are best and always work
. out.
True False
True False
23 Good intuitive decision making is based on an ability to recognize patterns at lightning speed.
.
True False
24 Administrative and political decision making procedures and intuition have been associated with high
. performance in unstable environments in which decisions must be made rapidly and under more
difficult conditions.
True False
26 Nonprogrammed decisions require six steps, however, programmed decisions being structured and
. well understood require only one step.
True False
For a non-programmed decision, feasible alternatives are hard to identify and in fact are already
available within the organization's rules and procedures.
True False
The best alternative is the one in which the solution best fits the overall goals and values of the
organization and achieves the desired results using the fewest resources.
True False
The formulation stage involves the use of managerial, administrative, and persuasive abilities to ensure
that the chosen alternative is carried out.
True False
Risk propensity refers to the willingness to undertake risk with the opportunity of gaining an increased
payoff.
True False
In the implementation stage, decision makers gather information that tells them how well the decision
was implemented and whether it was effective in achieving its goals.
True False
3
Feedback is the part of monitoring that assesses whether a new decision needs to made.
True False
People who prefer simple, clear-cut solutions to problems use the directive style.
True False
Managers with an analytical decision style like to consider complex solutions based on as much data as
they can gather.
True False
The behavioral style is often adopted by managers who like to consider complex solutions based on as
much data as they can gather.
True False
Individuals with a conceptual decision-making style are more socially oriented than those with an
analytical style.
True False
The most effective managers are consistent in using their own decision style rather than shifting among
styles.
True False
Most bad decisions are errors in judgment that originate in the human mind's limited capacity and in
the natural biases of the manager.
True False
True False
Managers will frequently look for new information that contradicts thier instincts or original point of
view..
True False
True False
True False
4
Brainwriting refers to the tendency of people in groups to suppress contrary opinions.
True False
True False
Devil's advocate technique is similar to brainstorming in that both techniques prevent individuals from
challenging other group member's assumptions.
True False
True False
A. decision
makers.
B peace makers.
.
C conflict
. creators.
Dan unnecessary
layer of
employees.
E profit
. suppressor.
A. Orga
nizin
g
B Competiti
ve
visioning
C Proper
. alignment
DGood
decision
making
E Leadersh
. ip
5
Which of the following is a choice made from
available alternatives?
A. De
cisi
on
B. Plan
C. Goal
D Tacti
. c
E Strate
. gy
A. pla
nni
ng
B decisi
on-
makin
g
C organ
. izing
D contr
. olling
E leadi
. ng
6
_____ refers to the process of identifying problems
and then resolving them.
A. Or
gan
izin
g
B Contro
. lling
C Decisio
n-
making
D Planni
. ng
E Leadi
. ng
A. N
on
pr
og
ra
m
m
ed
B Uni
. que
C Progr
amm
ed
D Ill-
struct
ured
E Nov
. el
7
Programmed decisions are made in response to
_____ organizational problems.
A. un
us
ual
B recur
. ring
C signif
. icant
D min
. or
E uniq
. ue
A. a
progra
mmed
decisio
n.
Ba
. nonprogramme
d decision.
C an insignificant
. decision.
D poor
. management.
E personal
. grudge.
8
Nordstrom Department store's "No questions asked -
Return's Policy" is an example of a(n):
A. programm
ed
decision.
B nonprogrammed
. decision.
C. novel decision.
D poor management.
.
E unstructured
. decision.
A. progra
mmed
decisi
on.
B unique
. approach.
C condition of
. ambiguity.
D nonprogram
med
decision.
E none of
. these.
A. unique.
B. unstructured.
C. important to the organization.
D. all of these
E unique and important to the
. organization.
9
Examples of nonprogrammed decisions would
include the decision to:
A. reorde
r
suppli
es.
Bdevelop a
new product
or service.
perform
routine
maintenance
on one of the
machines in
manufacturing
.
terminate an
employee for
violation of
company
rules.
E fill a
. position.
A. non
prog
ram
med
B program
. med
C insignifi
. cant
D recurri
. ng
E structur
. ed
10
When a small community hospital decides to add a
radiation therapy unit, it is considered a:
A. program
med
decision
.
B structured
. decision.
C nonprogrammed
. decision.
D poor
. management
decision.
E certainty
. decision.
A. programme
d decision.
B nonprogrammed
. decision.
C. decision rule.
D structured decision.
.
E bad community
. decision.
A. Pro
gra
mm
ed
B Nonpro
gramm
ed
C Wick
. ed
D Admini
. strative
E Intuiti
. ve
11
Associated with the condition of _____ is the lowest
possibility of failure.
A. ambi
guity
B uncertai
. nty
C certaint
. y
D. risk
E all of
. these
A. Certai
nty
B. Risk
C Uncertaint
. y
D Ambiguity
.
E None of
. these
A. risk
B ambiguity
.
C. certainty
D uncertainty
.
E brainstormi
. ng
12
Under conditions of _____, statistical analyses are
useful.
A. cer
tai
nty
B ambig
. uity
C. risk
D uncert
. ainty
E confli
. ct
A. Certai
nty
B. Risk
C Uncertainty
.
D Ambiguity
.
E Brainstormi
. ng
A. Cert
aint
y
B. Risk
C Uncerta
. inty
D Ambigu
. ity
E Advoca
. cy
13
When managers know which goals they wish to
achieve, but information about alternatives and
future events is incomplete, the condition of _____
exists.
A. risk
B uncertain
. ty
C ambiguit
. y
D certainty
.
E problemat
. ic
A. The
cond
ition
of
certa
inty
BThe
condition
of
ambiguity
CThe
condition
of
uncertainty
D The
condition
of risk
E All of
. these
14
The four positions on the possibility of failure scale
include certainty, risk, ambiguity, and _____.
A. unce
rtain
ty
B conflict
.
C necessit
. y
D indecisi
. on
E possibili
. ty
A. Certai
nty
B. Risk
C Uncertainty
.
D Ambiguity
.
E Brainstormi
. ng
A. Certai
nty
B. Risk
C Uncertainty
.
D Ambiguity
.
E Brainstormi
. ng
15
The condition under which ambiguity occurs is
when:
A. alternatives
are difficult
to define.
B objectives are well
. defined.
C information about
outcomes is readily
available.
D all the alternatives are
. known.
E decisions are already
. made.
A. Non
pro
gra
mm
ed
B Progra
. mmed
C Wicke
. d
D Conven
. tional
E Irration
. al
16
During the fallout of the global financial crisis of the
late 2000s, finance companies had to make
important decisions in a highly ambiguous
environment. The decision to buyout failed banks
could best be described as what type of decision?
A. Bounde
d
B. Programmed
C Conventional
.
D Wicked decision
. problem
E Irrational
. decision
A. philos
ophic
al
B. irrational
C economic
.
D uncertaint
. y
E technologic
. al
A. The administrative
model of decision
making
B The garbage can model of decision
. making
C The scientific management model of
. decision making
17
Which of these assumptions are included in the
classical model of decision making?
A. Problems are
unstructured
and ill defined.
B The decision-maker strives for
. conditions of certainty.
A. Nor
mati
ve
B Scientifi
. c
C Descripti
. ve
D Reflectiv
. e
E Humanist
. ic
A. Admi
nistrat
ive
B Descriptiv
. e
C Normative
.
D Bounded
. rationality
E None of
. these
18
All of the following are characteristics of the
classical decision making model except:
A. administrative;
programmed
decisions
B classical; nonprogrammed
. decisions
C classical; programmed decisions
.
D classical; ambiguous decisions
.
E administrative; structured
. decisions
A. Normative;
descriptive
B Normative; classical
.
C Descriptive; normative
.
D Descriptive;
. administrative
E Normative;
. administrative
19
Which model of decision making is associated with
satisficing, bounded rationality, and uncertainty?
A. Cla
ssic
al
Admin
istrativ
e
C Quanti
. tative
D Ratio
. nal
E Politi
. cal
A. Admi
nistra
tive
B Classical
.
C. Intuitive
D. Political
E Bureaucrat
. ic
A. nor
mat
ive
B classic
. al
C adminis
. trative
Dscientifi
c
manage
ment
E objecti
. ve
20
The concept that people have the time and cognitive
ability to process only a limited amount of
information on which to base decisions is known as:
A. satisficin
g.
B bounded
. rationality.
C classical model of
decision making.
D normative
. approach.
E scientific
. approach.
A. Bounded
rationality
B The classical model
of decision making
C. Satisficing
D. Brainstorming
E Scientific
. management
A. bounded
rationality
B. creativity
C. decision maximization
D. satisficing
E the classical model of decision
. making
21
Rodney doesn’t always realize that within his role as
an air traffic controller, he must continuously
perceive and process information based on
knowledge and experience that he is not consciously
aware of. This describes what type of decision-
making?
A. Ad
min
istr
ativ
e
B Right-
. brained
C Satisfi
. cing
D Ratio
. nal
E Intuiti
. ve
A. conscious
thought;
practicalit
y
B experience;
. applicability
C a solid analysis;
. applicability
D experience;
. conscious thought
E thought-process;
. guts
22
Most managers settle for a _____ rather than a
_____ solution.
A. minimizi
ng;
maximizi
ng
B satisficing;
. maximizing
C top-level;
. bottomline
D maximizing;
. satisficing
E challenging;
. simple
A. Networ
king
B. Socializing
C Coalition
. building
D. Satisficing
E Passing the
. buck
23
The _____ model of decision-making is useful for
making nonprogrammed decisions when conditions
are uncertain, information is limited, and there are
managerial conflicts about what goals to pursue or
what course of action to take.
A. classic
al
B functional
.
C bureaucrati
. c
D. political
E administrati
. ve
A. nor
mat
ive
B admini
. strative
C descri
. ptive
D classi
. cal
E politic
. al
A. Politi
cal
B Functiona
. l
C Classical
.
D Administra
. tive
E Bureaucrat
. ic
24
All of these are basic assumptions of the political
model except:
A. Diagnosis and
analysis of
causes
B Development of alternatives
.
C Recognition of decision
. requirement
D Evaluation and feedback
.
E Selection of desired
. alternatives
A. stre
ngt
h
B threa
. t
C diagn
. osis
D opport
. unity
E proble
. m
25
_____ is the step in the decision-making process in
which managers analyze underlying causal factors
associated with the decision situation.
A. Analy
sis
B Diagnosis
.
C Recognitio
. n
D Judgment
.
E Identificati
. on
A. Evaluation and
feedback
B Development of alternatives
.
C Recognition of decision
. requirement
D Diagnosis and analysis of
. causes
E Selection of desired
. alternatives
A. Evaluation and
feedback
B Development of alternatives
.
C Implementation of chosen
. alternative
D Selection of desired requirement
.
E Recognition of decision
. requirement
26
The recognition of the decision requirement step in
the managerial decision making process requires
managers to:
A. develop
alternative
solutions.
B integrate information in
. novel ways.
C use the classical model of
. decision making.
A. Diagn
osis
and
analys
is of
causes
BRecognition
of decision
requirement
C Development
of
alternatives
DSelection of
desired
alternative
E None of
. these
27
When managers ask questions such as “What is the
state of disequilibrium affecting us?”, they are in
which stage of the managerial decision-making
process?
A. Selection of
a desired
alternative
B Development of
. alternatives
C Diagnosis and analysis
. of causes
D Recognition of
. decision requirement
E Evaluation and
. feedback
A. Selection of
a desired
alternative
B Development of
. alternatives
C Diagnosis and analysis
. of causes
D Recognition of
. decision requirement
E Evaluation and
. feedback
28
The decision-maker must _____ once the problem
has been recognized and analyzed.
A. evaluate
and
provide
feedback
B choose among
. alternatives
C generate
. alternatives
D prioritize the
. alternatives
E reanalyze the
. problem
A. alternatives
are usually
difficult to
identify.
B alternatives are usually
. easy to identify.
29
Ryan is a manager at Dream Catchers. Dream
Catchers is currently operating in an environment of
high uncertainty. As a result, Ryan will:
A. most likely be
making
programmed
decisions.
B probably have an easy time generating
. alternatives.
A. anal
yze
d
B evaluat
. ed
C selecte
. d
D recogni
. zed
E identifi
. ed
A. Tunnel vision
B. Risk propensity
C. Risk averse
D. Thrill seeking
E Ineffective investment
. philosophy
30
The _____ step in the decision making process
involves using managerial, administrative, and
persuasive abilities to translate the chosen
alternative into action.
A. rec
ogn
itio
n
B analys
. is
C evaluat
. ion
D implem
. entation
E feedba
. ck
31
Feedback is important because:
A. decis
ion
maki
ng is
a
conti
nuou
s
proc
ess.
it provides
decision-
makers
with new
information
.
it helps
determine if
a new
decision
needs to be
made.
it provides
decision-
makers with
new
information
and it helps
determine if
a new
decision
needs to be
made.
E all of
. these.
32
Genna is collecting data on how well the
organization has done since their new strategy was
implemented. She is in what stage of the managerial
decision making process?
A. The generation
of alternatives
B Implementation of the chosen
. alternative
E Selection of desired
. alternative
A. Beh
avi
oral
B Concep
. tual
C Directi
. ve
D Analyt
. ical
E Classic
. al
A. ris
k
tak
ing
B behav
. ior
C decisi
. on
D strate
. gic
E analy
. sis
33
Research has identified four major decision styles.
These include all of the following except _____.
A. beh
avi
oral
B concep
. tual
C analyti
. cal
D authori
. tative
E directi
. ve
A. beh
avi
oral
B concep
. tual
C directi
. ve
D analyti
. cal
E classic
. al
A. Beha
viora
l
B Classica
. l
C Analytic
.
D Logical
.
E Conceptu
. al
34
People with a(n) _____ style usually are concerned
with the personal development of others and may
make decisions that help others achieve their goals.
A. class
ical
B analytic
.
C. logical
D behavior
. al
E concept
. ual
A. Being influenced
by emotions
B. Perpetuating the status quo
C. Seeing what you want to see
D. Justifying past actions
E Being influenced by initial
. impressions
A. being
influen
ced by
initial
impres
sions.
B justifying past
. decisions.
Cseeing what
you don't want
to see.
D perpetuating
the status quo.
E overconfiden
. ce.
35
When managers base decisions on what has worked
in the past and fail to explore new options, they are:
A. perpetuating
the status
quo.
B being influenced by
. emotions.
C. being overconfident.
D justifying past actions.
.
E seeing what they want to
. see.
A. fast
B widely
. supported
C high-
. quality
D frequen
. t
E all of
. these
A. groupt
hink
B devil’s
. advocacy
C point-
. counterpoint
D escalating
. commitment
E brainstormi
. ng
36
Which of the following defines a technique that uses
a face-to-face group to spontaneously suggest a
broad range of alternatives for decision making?
A. Brainst
orming
B. Groupthink
C Point-
. counterpoint
D Brainwriting
.
E Devil's
. advocate
A. group
gadfly
B multiple
. advocate
C devil's
. advocate
D brainstormer
.
E inferior
. member
A. Point
-
count
erpoi
nt
B Devil's
. advocate
C. Debate
D Groupthin
. k
E Brainwriti
. ng
37
_____ refers to the tendency of people in groups to
suppress contrary opinions.
A. Point-
counte
rpoint
B Groupthink
.
C Devil’s
. advocacy
D Escalating
. commitment
E Brainstormi
. ng
A. technologi
cal
decisions.
B collective intuition.
.
C decision learning.
.
D. team delay.
E escalating
. commitment.
38
Scenario - Vaughn Bately
39
Scenario - Vaughn Bately
40
Scenario - Vaughn Bately
________________________________________
_____ is the process of identifying problems and opportunities and then resolving them.
________________________________________
_____ decisions involve situations that have occurred often enough to enable decision rules to be
developed and applied in the future.
________________________________________
_____ decisions are made in response to situations that are unique, are poorly defined and largely
unstructured, and have important consequences for the organization.
________________________________________
_____ means that all the information the decision-maker needs is fully available.
________________________________________
41
_____ means that a decision has clear-cut goals and that good information is available, but the future
outcomes associated with each alternative are subject to chance.
________________________________________
Under conditions of _____, managers know what goal they wish to achieve, but information about
alternatives and future events is incomplete.
________________________________________
_____ means that the goals to be achieved or the problem to be solved is unclear, alternatives are
difficult to define, and information about outcomes is unavailable.
________________________________________
________________________________________
A normative decision making model defines how a manager _____ make decisions.
________________________________________
In many respects, the _____ model represents an "ideal" model decision-making and can't usually be
attained by real people in real organizations.
________________________________________
The _____ model of decision making describes how managers actually make decisions in difficult
situations, such as those characterized by nonprogrammed decision, uncertainty, and ambiguity.
________________________________________
A(n) _____ approach describes how managers actually make decisions, not how they should.
________________________________________
The recognition that people have limits on how rational they can be is known as _____.
________________________________________
______ means that decision-makers choose the first solution alternative that satisfies minimal decision
criteria.
________________________________________
_____ represents a quick apprehension of a decision situation based on past experience but without
conscious thought.
________________________________________
42
_____ is the process of forming alliances among managers.
________________________________________
A(n) _____ occurs when organizational accomplishment is less than established goals.
________________________________________
_____ exists when managers see potential of enhancing performance beyond current levels.
________________________________________
The step in the decision making process in which managers analyze the underlying causal factors
associated with the situation is called _____.
________________________________________
_____ is the willingness to undertake risk with the opportunity of gaining an increased payoff.
________________________________________
The _____ stage involves the use of managerial, administrative, and persuasive abilities to ensure that
the chosen alternative is carried out.
________________________________________
________________________________________
Differences among people with respect to how they perceive problems and make decisions is called
_____.
________________________________________
The _____ style is often the style adopted by managers having a deep concern for others as
individuals.
________________________________________
People with a(n) _____ style usually are concerned with the personal development of others and may
make decisions that help others achieve their goals.
________________________________________
A(n) _____ is assigned the role of challenging the assumptions and assertions made by the group.
________________________________________
43
List four of the eight questions Kepner and Tregoe recommend that managers ask when diagnosing and
analyzing causes.
Explain the difference between programmed and nonprogrammed decisions and give an example of
each.
44
Briefly describe the assumptions underlying the classical model of decision making.
List and describe the four basic assumptions of the political model.
What are the six steps in the managerial decision making process?
Explain how a manager selects the desired decision in the managerial decision making process.
45
Briefly describe the four major personal decision styles.
46
Chapter 9--Managerial Decision Making Key
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. TRUE
6. TRUE
7. TRUE
8. FALSE
9. TRUE
10. TRUE
11. TRUE
12. FALSE
13. TRUE
14. FALSE
15. FALSE
16. FALSE
17. TRUE
18. TRUE
19. TRUE
20. FALSE
21. TRUE
22. FALSE
23. TRUE
24. TRUE
25. TRUE
26. FALSE
27. TRUE
FALSE
TRUE
FALSE
47
TRUE
FALSE
TRUE
TRUE
TRUE
FALSE
TRUE
FALSE
TRUE
TRUE
FALSE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
48
A
49
A
50
E
decision
Decision making
Programmed
Nonprogrammed
Certainty
Risk
uncertainty
Ambiguity
classical
should
classical
administrative
descriptive
bounded rationality
Satisficing
Intuition
Coalition building
problem
Opportunity
diagnosis
Risk propensity
implementation
Feedback
decision style
behavioral
behavioral
devil's advocate
Students can answer with any four of the following questions: (1) What is the state of disequilibrium affecting us? (2) When did it occur? (3) Where
did it occur? (4) How did it occur? (5) To whom did it occur? (6) What is the urgency of the problem? (7) What is the interconnectedness of events?
(8) What result came from which activity?
Start with brainstorming, Know when to bail, Avoid groupthink, Engage in rigorous debate
51
Programmed decisions involve situations that have occurred enough to enable decision rules to be developed and applied in the future. Examples
include job skills required to fill certain positions, the reorder point for manufacturing inventory, and selection of freight routes for product deliveries.
Nonprogrammed decisions are made in response to situations that are unique, are poorly defined and largely unstructured, and have important
consequences for the organization. Examples are decisions to build a new factory, develop a new product or service, and enter a new geographical
market.
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 she 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.
The classical model of decision making is based on four assumptions. First, the decision-maker attempts to accomplish goals that are known and
agreed upon. In addition, problems are specified and defined precisely. Second, the decision-maker attempts to gather complete information, going
for a condition of certainty. Third, the criteria for evaluating the alternatives are known and the decision-maker will select the alternative that
maximizes the economic return to the organization. Fourth, the decision-maker is rational and relies upon logic to make sense of the information
available.
(1) The decision maker operates to accomplish goals that are vague and conflicting. (2) All alternatives and the potential results are based on
simplistic views of organizational events. (3) Alternatives are limited based on human constraints. (4) Managers settle for satisficing.
(1) Organizations are made up of groups with diverse interests, goals, and values. Managers disagree about problem priorities and may not
understand or share the goals and interests of other managers. (2) Information is ambiguous and incomplete. The attempt to be rational is limited by
the complexity of many problems as well as personal and organizational constraints. (3) Managers do not have the time, resources, or mental capacity
to identify all dimensions of the problem and process all relevant information. Managers talk to each other and exchange viewpoints to gather
information and reduce ambiguity. (4) Managers engage in the push and pull of debate to decide goals and discuss alternatives. Decisions are the
result of bargaining and discussion among coalition members.
The six steps are (1) recognize the decision requirement; (2) diagnose and analyze the causes; (3) develop alternatives; (4) select the desired
alternative; (5) implement the chosen alternative; and (6) evaluate and determine feedback.
The manager tries to select the choice with the least amount of risk and uncertainty. Because some risk is inherent for most nonprogrammed
decisions, managers try to gauge prospects for success. Under conditions of uncertainty, they might have to rely on their intuition and experience to
estimate whether a given course of action is likely to succeed. Basing choices on overall goals and values can also effectively guide selection of
alternatives. Decision about how to cope should be selected by relying on the company's values and goals of treatment of employees and building
long-term relationships. Making choices depends on managers' personality factors and willingness to accept risk and uncertainty.
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