Multiple Choice

1. Identifying and taking action to resolve problems is called __________.

a) problem solving
b) information competency
c) information management
d) inquiring

Ans: a
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use technological, informational, and analytical competencies to
solve problems.
AACSB: Analytic

2. Which of the following terms refers to the ability to gather and use information to solve
problems?
a) Problem solving
b) Information competency
c) Information disbursement
d) Inquiring

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use technological, informational, and analytical competencies to
solve problems.
AACSB: Analytic
3. Karen, a human resource manager, studies the turnover patterns in her company. She
examines the various factors that contribute to the employee turnover and develops effective
engagement programs to improve employee loyalty. Which of the following types of
competency does this scenario illustrate?
a) Information competency
b) Analytical competency
c) Technological competency
d) Financial competency

Ans: b
Bloom’s: Application
Level: Medium
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use technological, informational, and analytical competencies to
solve problems.
AACSB: Reflective Thinking

4. A __________ is a situation where something is wrong or likely to be wrong.

a) danger
b) potential danger
c) performance threat
d) mistake

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers deal with problems posing threats and offering opportunities.
AACSB: Analytic

5. Information competency involves all of the following skills EXCEPT:

a) locating appropriate data.
b) evaluating data for information potential.
c) organizing information.
d) analyzing information to make decisions.

Ans: d
Bloom’s: Comprehension
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use technological, informational, and analytical competencies to
solve problems.
AACSB: Analytic

6. James is a proactive information gatherer and a forward-thinking manager. He is an example

of a:
a) problem seeker.
b) problem avoider.
c) problem creator.
d) problem solver.

Ans: a
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers can be problem avoiders, problem solvers, or problem seekers.
AACSB: Analytic

7. Managers who ignore information that would otherwise signal the presence of a
performance threat or opportunity, and who prefer not to make decisions are called:
a) problem seekers.
b) problem avoiders.
c) problem creators.
d) problem solvers.

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers can be problem avoiders, problem solvers, or problem seekers.
AACSB: Analytic

8. A situation that offers the possibility of a better future if the right steps are taken is called a
__________.
a) performance threat
b) potential problem
c) performance opportunity
d) future problem

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers deal with problems posing threats and offering opportunities.
AACSB: Analytic

9. Jessica approaches a problem in a flexible and spontaneous fashion. Which of the following
approaches to thinking does she employ?
a) Programmed thinking
b) Sensational thinking
c) Systemic thinking
d) Intuitive thinking

Ans: d
Bloom’s: Application
Level: Medium
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use both systematic and intuitive thinking.
AACSB: Reflective Thinking
10. If you are a systematic thinker, you will:
a) try to stay very flexible in your thinking.
b) generally be spontaneous.
c) be analytical in your approach.
d) be creative in your methods.

Ans: c
Bloom’s: Comprehension
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use both systematic and intuitive thinking.
AACSB: Analytic

11. The three different conditions or problem environments in which managers make decisions
are:
a) good, neutral, and bad.
b) certain, risk, and uncertain.
c) absolute, uncertain, and indeterminate.
d) certain, absolute, and risk.

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make decisions under conditions of certainty, risk, and
uncertainty.
AACSB: Analytic

12. A(n) __________ environment, in which managers make decisions, lacks so much
information that it is difficult to assign probabilities to the likely outcome of alternatives.
a) uncertain
b) bad
c) improbable
d) risk
Ans: a
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make decisions under conditions of certainty, risk, and
uncertainty.
AACSB: Analytic

13. __________ are managers who are comfortable with intangibles and value flexibility and
human relationships.
a) Risk takers
b) Intuitive feelers
c) Sensation thinkers
d) Intuitive thinkers

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use different cognitive styles to process information for decision
making.
AACSB: Analytic

14. __________ are comfortable with abstraction and unstructured situations. They tend to be
idealistic, prone toward intellectual and theoretical positions, and are logical and impersonal.
a) Sensation feelers
b) Intuitive thinkers
c) Sensation thinkers
d) Intuitive feelers

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use different cognitive styles to process information for decision
making.
AACSB: Analytic

15. An environment in which managers have complete information on possible alternatives and
their consequences for them to make decisions is called a __________ environment.
a) favorable
b) good
c) certain
d) risk

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make decisions under conditions of certainty, risk, and
uncertainty.
AACSB: Analytic

16. An environment for making decisions in which information is incomplete, yet one can still
reasonably estimate probabilities for the outcomes of various options is called a(n):
a) risk environment.
b) certain environment.
c) uncertain environment.
d) programmed environment.

Ans: a
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make decisions under conditions of certainty, risk, and
uncertainty.
AACSB: Analytic
17. A(n) __________ is a choice among possible alternative courses of action.
a) alternative
b) inquiry
c) guess
d) decision

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make programmed and nonprogrammed decisions.
AACSB: Analytic

18. A __________ decision applies a pre-existing solution to a routine problem.

a) correct
b) programmed
c) nonprogrammed
d) complex

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make programmed and nonprogrammed decisions.
AACSB: Analytic

19. A __________ decision crafts a unique solution to a new and unstructured problem.
a) simple
b) programmed
c) nonprogrammed
d) questionable
Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make programmed and nonprogrammed decisions.
AACSB: Analytic

20. Joe, an HR manager, responds to several routine calls that take up a considerable part of his
working hours. He tasks his team of information technology experts to develop auto-response
software that would reduce the number of times he has to be involved personally. In this
scenario, Joe has made a __________ decision to implement a __________ decision.
a) difficult; complex
b) nonprogrammed; programmed
c) programmed; nonprogrammed
d) complex; difficult

Ans: b
Bloom’s: Application
Level: Medium
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make programmed and nonprogrammed decisions when solving
problems.
AACSB: Reflective Thinking

21. Which of the following factors determines whether a decision is programmed or

nonprogrammed?
a) Whether the problem is new or routine
b) The number of people involved in the outcome
c) The amount of time available
d) The amount of money involved in the solution

Ans: a
Bloom’s: Comprehension
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make programmed and nonprogrammed decisions.
AACSB: Analytic

22. Which of the following is the first step in the decision-making process?
a) Generating alternatives
b) Evaluating results
c) Defining the problem
d) Making the decision

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 1–Identify and define the problem.
AACSB: Analytic

23. Which of the following is NOT a common error in the first step of the decision-making
process?
a) Defining the problem too narrowly
b) Focusing on symptoms rather than causes
c) Choosing the wrong problem
d) Failing to consult the stakeholders

Ans: d
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 1–Identify and define the problem.
AACSB: Analytic
24. Which of the following practices should be followed in the first stage of the decision-making
process?
a) Performing a cost-benefit analysis
b) Adopting an optimizing decision
c) Evaluating the consequences of a decision
d) Focusing on a problem rather than on its symptoms

Ans: d
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 1–Identify and define the problem.
AACSB: Analytic

25. Which of the following is the second step in the decision-making process?
a) Deciding what to do
b) Evaluating the problem
c) Generating alternative courses of action
d) Implementing the decision

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 2—Generate and evaluate alternative courses of action.
AACSB: Analytic

26. In the decision-making process, a cost-benefit analysis is used to:

a) evaluate results.
b) define a problem.
c) implement a decision.
d) generate alternative courses of action.

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 2—Generate and evaluate alternative courses of action.
AACSB: Analytic

27. Comparing the costs and benefits of each potential course of action is called:
a) evaluation of results.
b) cost-benefit analysis.
c) strategic planning.
d) application of ethics double-check.

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 2—Generate and evaluate alternative courses of action.
AACSB: Analytic

28. Which of the following is the third step in the decision-making process?
a) Gathering more information
b) Implementing the decision
c) Conducting a cost-benefit analysis
d) Deciding on a course of action

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic
29. In the decision-making process, the classical and behavioral models could be used to:
a) evaluate results.
b) implement the decision.
c) decide on a course of action.
d) conduct a cost-benefit analysis.

Ans: c
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

30. The __________ decision model describes decision making with complete information.
a) classical
b) logical
c) behavioral
d) optimizing

Ans: a
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

31. Which of the following statements is true of the classical decision model?
a) It proposes that managers take optimizing decisions after considering available alternatives.
b) It holds that managers act only in terms of their perceptions, which are frequently imperfect.
c) It takes into account the cognitive limitations that prevent managers from being fully
informed.
d) It addresses the complexities involved in decision making in uncertain and risk environments.

Ans: a
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

32. While making decisions, Jason selects the alternative that provides the absolute best
solution to a problem. In this scenario, Jason takes a(n) __________ decision.
a) intuitive
b) optimizing
c) carefully implemented
d) satisficing

Ans: b
Bloom’s: Application
Level: Medium
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Reflective Thinking

33. __________ limitations make it hard for managers to be fully informed and make perfectly
rational decisions in all situations.
a) Intuitive
b) Financial
c) Behavioral
d) Cognitive

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic
34. The __________ decision model describes decision making with limited information and
bounded rationality.
a) participative
b) classical
c) behavioral
d) delegation

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

35. A decision that chooses the first satisfactory alternative that is presented is called a(n)
__________ decision.
a) optimizing
b) reasonable
c) satisficing
d) classical

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

36. The classical decision model views managers as attempting to provide __________
decisions.
a) behavioral
b) programmed
c) optimizing
d) satisficing

Ans: c
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

37. The behavioral decision model views managers as attempting to provide __________
decisions.
a) classical
b) satisficing
c) programmed
d) optimizing

Ans: b
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

38. The fourth step in the decision-making process is to:

a) evaluate results.
b) implement the decision.
c) conduct a cost-benefit analysis.
d) generate alternatives.

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 4—Take action to implement the decision.
AACSB: Analytic

39. A lack-of-participation error occurs when:

a) employees do not understand what the management wants them to do.
b) there is a shortage of employees to implement a decision.
c) employees are not capable of implementing a decision.
d) managers fail to include the right people in the decision-making process.

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 4—Take action to implement the decision.
AACSB: Analytic

40. The final step in the decision-making process is to:

a) ensure that your options list has all possible alternatives.
b) search for the optimum decision.
c) gain support for your decision.
d) evaluate the results of your implemented decision.

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 5--Evaluate results.
AACSB: Analytic

41. At each stage of decision making, spotlight questions help managers to perform:
a) commitment escalation.
b) alternative analysis.
c) ethical reasoning.
d) financial analysis.

Ans: c
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Ethical reasoning is important at all steps in decision making.
AACSB: Ethics

42. How a person would feel if her family found out about a decision she took or if the decision
was published in the local newspaper or posted on the Internet are examples of __________
questions.
a) casual
b) spotlight
c) contingent
d) corporate

Ans: b
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Ethical reasoning is important at all steps in decision making.
AACSB: Analytic

43. The generation of a novel idea or approach that solves a problem or identifies an
opportunity is called:
a) problem solving.
b) representative thinking.
c) creativity.
d) availability heuristic.

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Creativity drives better decision making.
AACSB: Analytic

44. According to the three-component model, which of the following is NOT a driver of
personal creativity?
a) Task expertise
b) Task motivation
c) Subjective experience
d) Creativity skills

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Creativity drives better decision making. AACSB: Analytic

45. A group-based decision is not ideal for problem solving when the problem:
a) is complex and managers need a lot of information.
b) calls for a creative solution.
c) calls for alternate viewpoints.
d) needs a quick solution.

Ans: d
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Group decision making has advantages and disadvantages.
AACSB: Analytic
46. Which of the following heuristics is employed when people use a stereotype to assess the
likely occurrence of an event?
a) Escalating commitment
b) Representativeness
c) Anchoring and adjustment
d) Availability

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

47. Which of the following heuristics is employed when people adjust a previously existing
value to make a decision?
a) Escalating commitment
b) Representativeness
c) Anchoring and adjustment
d) Availability

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

48. Solving a problem based on one’s perception of the situation, positive or negative, leads to
a(n) __________.
a) confirmation error
b) programmed decision
c) framing error
d) escalating commitment
Ans: c
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

49. Cristina insists on continuing on a course of action even though it is not working. Which of
the following decision-making traps does this scenario illustrate?
a) Escalating commitment
b) Framing error
c) Anchoring heuristic
d) Availability heuristic

Ans: a
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

50. Mark attends only to information that confirms a decision already made. Which of the
following decision-making traps does this scenario illustrate?
a) Escalating commitment
b) Framing error
c) Anchoring heuristic
d) Confirmation error

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

True/False

51. Managers who are problem solvers will make decisions and try to solve problems when
required.

Ans: True
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers can be problem avoiders, problem solvers, or problem seekers.
AACSB: Analytic

52. When an individual moves higher in management ranks, the level of certainty in a problem
environment tends to increase.

Ans: False
Bloom’s: Comprehension
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make decisions under conditions of certainty, risk, and
uncertainty.
AACSB: Analytic

53. Sensation feelers prefer broad global issues. They are insightful and tend to avoid details
and are comfortable with intangibles.

Ans: False
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use different cognitive styles to process information for decision
making.
AACSB: Analytic

54. The problem with the classical decision model is that it does not take into account the
cognitive limitations that managers, as humans, have.

Ans: True
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

55. During the decision-making process, extensive information should be gathered to identify
alternative courses of action as well as their anticipated consequences.

Ans: True
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 2—Generate and evaluate alternative courses of action.
AAACSB: Analytic

56. The evaluation of a decision should not only consider whether the results were gained, but
should also determine whether any undesirable side effects occurred.

Ans: True
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 5—Evaluate results.
AACSB: Analytic

57. Managers turn to heuristics to make decisions with limited information, time, and energy.

Ans: True
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

58. A common management problem when implementing decisions is escalating commitment.

Ans: True
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

59. The problem in a crisis situation is not just that it is often unexpected, but that it must be
handled quickly in order to avoid a disaster.

Ans: True
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Managers must be prepared for crisis decision making.
AACSB: Analytic
Fill-in-the-Blank

60. __________ add value to organizations through their intellectual capabilities.

Ans: Knowledge workers

Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use technological, informational, and analytical competencies to
solve problems.
AACSB: Analytic

61. The most obvious problem-solving situation that appears as an actual or potential
performance deficiency is a(n) __________.

Ans: performance threat/problem

Bloom’s: Comprehension
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers deal with problems posing threats and offering opportunities.
AACSB: Analytic

62. __________ are decision makers who ignore information and trouble signals.

Ans: Problem avoiders

Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers can be problem avoiders, problem solvers, or problem seekers.
AACSB: Analytic
63. __________ involves problem-solving in a rational, step-by-step, analytical process.

Ans: Systematic thinking

Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use both systematic and intuitive thinking.
AACSB: Analytic

64. A(n) __________ can be made in different ways and some work better than others in
various circumstances.

Ans: decision
Bloom’s: Comprehension
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make programmed and nonprogrammed decisions.
AACSB: Analytic

65. Evaluating alternatives, in which positive and negative outcomes are examined, is done with
the help of a tool called __________.

Ans: cost-benefit analysis

Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 2—Generate and evaluate alternative courses of action.
AACSB: Analytic
66. If you are seeking the best possible solution to a problem, you are seeking to __________
your decision.

Ans: optimize
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

67. When decision makers are armed with only partial information about the available action
alternatives and their consequences, they are more likely to make __________ decisions.

Ans: satisficing
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

68. The __________ decision model accepts the presence of cognitive limitations and
recognizes risk and uncertainty in most decision environments.

Ans: behavioral
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3—Decide on a preferred course of action.
AACSB: Analytic

69. __________ occurs when extraordinary things are done by exceptional people.
Ans: Big-C creativity
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Creativity drives better decision making.
AACSB: Analytic

70. __________ occurs when average people come up with unique ways to deal with daily
events and situations.

Ans: Little-C creativity

Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Creativity drives better decision making. AACSB: Analytic

71. The __________ heuristic uses readily available information to assess a current situation.

Ans: availability
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

72. The risk associated with using a(n) __________ heuristic to take a decision is that it may
mask the truly important factors relevant to the decision.

Ans: representativeness
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

73. A(n) __________ is a form of selective perception.

Ans: confirmation error

Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic

74. A(n) __________ is an unexpected problem that can lead to disaster if not solved quickly
and appropriately.

Ans: crisis
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Managers must be prepared for crisis decision making.
AACSB: Analytic

Essay

75. Explain the advantages and disadvantages of group decision making.

Ans: In respect to advantages, group decisions can be good because they bring greater amounts
of information, knowledge, and expertise to bear on a problem. They often expand the number
and even the creativity of action alternatives examined. Participation also helps group members
gain a better understanding of any decisions reached. This increases the likelihood that they
will both accept decisions made and work hard to help implement them.
In respect to disadvantages, it is sometimes difficult and time consuming for people to make
group decisions. The more people involved, the longer it can take to reach a group decision,
and the more likely that problems will arise. There may be social pressure to conform that leads
to premature consensus and agreement in group situations. Some individuals may feel
intimidated or compelled to go along with the apparent wishes of others who have authority or
who act in aggressive and uncompromising ways. Minority domination might cause some
members to feel forced or railroaded into a decision advocated by one vocal individual or a
small coalition. And, lots of decisions suffer when they get made quickly or at the last minute
just because a group is running out of meeting time.
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Group decision making has advantages and disadvantages.
AACSB: Analytic

76. Describe the different types of managers on the basis of their approach toward
performance threats and opportunities.

Ans: Managers can be problem avoiders, problem solvers, or problem seekers on the basis of
their approach toward performance threats and opportunities.
Some managers are problem avoiders. They ignore information that would otherwise signal the
presence of a performance threat or opportunity. They are not active in gathering information
and prefer not to make decisions or deal with problems. Other managers are problem solvers.
They make decisions and try to solve problems, but only when required. They are reactive,
gathering information and responding to problems when they occur, but not before. These
managers may deal reasonably well with performance threats, but they are likely to miss many
performance opportunities.
Still other managers—the really good ones—are problem seekers. They are always looking for
problems to solve or opportunities to explore. True problem seekers are proactive as
information gatherers, and they are forward thinking. They anticipate threats and
opportunities, and they are eager to take action to gain the advantage in dealing with them.
Bloom’s: Analysis
Level: Medium
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers can be problem avoiders, problem solvers, or problem seekers.
AACSB: Reflective Thinking

77. Describe the different types of managers based on their cognitive styles.

Ans: On the basis of their cognitive styles, managers can be sensation thinkers, intuitive
thinkers, intuitive feelers, and sensation feelers.
Sensation thinkers tend to emphasize the impersonal rather than the personal and take a
realistic approach to problem solving. They like hard facts, clear goals, certainty, and situations
of high control.
Intuitive thinkers are comfortable with abstraction and unstructured situations. They tend to be
idealistic, prone toward intellectual and theoretical positions; they are logical and impersonal
but also avoid details.
Intuitive feelers prefer broad and global issues. They are insightful and tend to avoid details,
being comfortable with intangibles; they value flexibility and human relationships.
Sensation feelers tend to emphasize both analysis and human relations. They tend to be
realistic and prefer facts; they are open communicators and sensitive to feelings and values.
Bloom’s: Comprehension
Level: Easy
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers use different cognitive styles to process information for decision
making.
AACSB: Analytic

78. What makes decision making so challenging in the real world of management?

Ans: In the real world of management, available information is usually incomplete, risk
assessment is uncertain, problems get inappropriately defined, and our thinking processes
prove to be limited and plagued with biases.
Bloom’s: Evaluation
Level: Hard
Learning Objective 1: Recognize how managers use information to solve problems.
Learning Objective 2: Identify five steps in the decision-making process.
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Managers make programmed and nonprogrammed decisions when solving
problems.
Section Reference: Managers make decisions under conditions of certainty, risk, and
uncertainty.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Reflective Thinking

79. Briefly state the five steps in the decision-making process.

Ans: The five steps in the decision-making process are: 1. Finding and defining a problem, 2.
Generating and evaluating alternative solutions, 3. Making the decision and conducting an
ethics check, 4. Implementing the decision, and 5. Evaluating the results.
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 1--Identify and define the problem.
Section Reference: Step 2--Generate and evaluate alternative courses of action.
Section Reference: Step 3--Decide on a preferred course of action.
Section Reference: Step 4–Take action to implement the decision.
Section Reference: Step 5--Evaluate results.
AACSB: Analytic

80. Define the two types of decision models and relate them to the decision making
environments of certainty, risk, and uncertainty as well as to the two types of decisions.

Ans: The two types of decision models are classical and behavioral. The classical decision model
is a rational quantitative approach to decision making. It is best applied to a certain
environment in which full information is available. The objective is to arrive at the very best
(optimizing) solution. The behavioral decision model is based on bounded rationality or
recognition that rationality and logic have their limits. It is applicable to both the risk and
uncertain environments in which complete information is not available.
Bloom’s: Analysis
Level: Medium
Learning Objective 2: Identify five steps in the decision-making process.
Section Reference: Step 3--Decide on a preferred course of action.
AACSB: Reflective Thinking

81. List and define the three decision making environments and their relationship to
programmed and nonprogrammed decisions.

Ans: The three different conditions or problem environments in which managers make
decisions are certainty, risk, and uncertainty.
A certain environment is one in which there is complete information regarding alternatives and
their consequences. Programmed decisions are readily applied to this environment.
A risk environment is one in which there is a lack of information regarding alternatives and their
consequences, but it is possible to assign probabilities of occurrence to the consequences.
Some programmed decisions are possible in this environment, depending on the quality and
value of the probabilities.
An uncertain environment is the same as a risk environment, except that it is very difficult or
impossible to assign probabilities of occurrence to the consequences. Programmed decisions
are not likely or even possible in this environment. Almost all decisions will be
nonprogrammed.
Bloom’s: Synthesis
Level: Hard
Learning Objective 1: Recognize how managers use information to solve problems.
Section Reference: Managers make decisions under conditions of certainty, risk, and
uncertainty.
AACSB: Reflective Thinking

82. Why do people escalate commitment to failing actions?

Ans: Escalating commitment is a tendency to increase effort and perhaps apply more resources
to pursue a course of action that signals indicate is not working. It is an inability or
unwillingness to call it quits even when the facts suggest this is the best decision under the
circumstances. Ego and the desire to avoid being associated with a mistake can play a big role in
escalation.
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Understand current issues in managerial decision making.
Section Reference: Judgmental heuristics and other biases may cause decision-making errors.
AACSB: Analytic